U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 18563 / February 4, 2004

SECURITIES AND EXCHANGE COMMISSION v. HEALTH MAINTENANCE CENTERS, INC., ZNETIX, INC., CASCADE POINTE OF ARIZONA, LLC, CASCADE POINTE OF NEVIS, LLC, KEVIN L. LAWRENCE, DONOVAN C. CLAFLIN, CLIFFORD G. BAIRD, BAINBRIDGE HUMAN PERFORMANCE CENTERS, PLLC, KIMBERLY ALEXANDER, BONNIE M. COUCH, STACY GRAY, AND VICKI L. LAWRENCE, Civil Action No. C 02-0153 P (W.D. Wash.)

SEC SETTLES WITH DEFENDANT IN ZNETIX CASE

On December 11, 2003, the Securities and Exchange Commission entered into a settlement with relief defendant Kimberly Alexander, the sister of Kevin Lawrence, former CEO of Znetix, Inc., and Health Maintenance Centers, Inc. (HMC). As alleged in the Commission's complaint filed in federal court in Seattle, Washington, on January 23, 2002, Znetix, HMC and a related company raised more than $91 million from more than 5,000 investors nationwide with false promises of an imminent, lucrative initial public offering of Znetix.

Alexander, 40, of Poulsbo, Washington, was not charged with substantive violations of the federal securities laws. She was ordered to turn over all ill-gotten gains she obtained from the stock offerings to the Court-appointed receiver.

Previously, on February 15, 2002, the Court appointed a permanent receiver over Znetix, HMC, and related entities. Alexander then violated that court order by refusing to turn over to the Court-appointed receiver a $57,000 Dodge Ram Truck. The Commission subsequently filed a contempt action against her and on July 9, 2002, the court held Alexander in contempt. On July 10, 2002, Alexander turned over the Dodge Ram Truck.

The Commission's case is pending against the remaining defendants, Kevin L. Lawrence, Donovan C. Claflin, and Clifford G. Baird. On July 31, 2002, a federal grand jury in Seattle returned a 64 count Indictment, charging Lawrence with securities fraud, wire fraud, mail fraud, money laundering, and conspiracy to commit those offenses. Lawrence was arrested on August 1, 2002, and was ordered detained pending trial. On July 28, 2003, Lawrence pled guilty in federal court in Tacoma, Washington to several criminal charges and was subsequently sentenced to a 20 year prison term. Claflin has pled guilty to securities fraud and conspiracy and Baird to conspiracy. Both are obligated to cooperate with the government.

On December 9, 2003, the United States Attorney for the Western District of Washington announced that Alex Lacson pled guilty to felony obstruction of the Commission's investigation regarding the activities of individuals associated with Znetix and HMC. The maximum sentence for the offense of obstructing the Commission's investigation is five years imprisonment, a fine of $250,000, and supervised release following imprisonment of three years. Lacson also agreed as part of the plea agreement to pay restitution in the amount of $90,000. Lacson will be sentenced on March 12, 2004.

http://www.sec.gov/litigation/litreleases/lr18563.htm