Accountant for Znetix pleads guilty in scam
December 11, 2002
SEATTLE (AP) -- An accountant affiliated with Bainbridge Island-based Znetix Inc. and Health Maintenance Centers pleaded guilty Tuesday to conspiracy in a scam that bilked investors of an estimated $90 million.
James N. Wuensche, 54, of Scottsdale, Ariz., faces a maximum five years in prison and a $250,000 fine for one count of conspiracy to commit securities fraud, mail fraud, wire fraud and money laundering. No date has been set for his sentencing before U.S. District Judge Marsha Pechman.
Wuensche served as the controller for three companies affiliated with Znetix and HMC, the U.S. Attorney's Office said. They were: Cascade Pointe LLC, Cascade Pointe of Nevis LLC and Cascade Pointe of Arizona LLC.
Prosecutors say those companies helped raise money for Znetix and HMC, which, investors were told, were companies that had developed proprietary medical and fitness software and equipment, essentially combining medical centers with fitness clubs.
Investors were also told Znetix would soon be selling million-dollar licenses to operate health and fitness clubs, and that leading sports and entertainment figures had agreed to buy or license such clubs.
Such claims were false, prosecutors say, and the money raised was used to finance lavish lifestyles for Znetix founder Kevin L. Lawrence and other company officers
Lawrence is scheduled to be tried next September on 64 conspiracy and fraud counts. Three other defendants -- Donavon Claflin, Kevin McCarthy and Clifford Baird -- have pleaded guilty to charges in the case.