A federal grand jury has returned a new 114-count indictment in the criminal case against Kevin Lawrence and other figures involved in the marketing of stock in Bainbridge-based HMC and Znetix.
The new indictments also name four new criminal defendants – Steven J. Reimer, 45, of Sammamish, Larry L. Beaman, 61, of Ridgefield, Michael J. Culp, 32, of Woodinville and Harvey W. Kuiken, 50, of Newcastle.
The new indictment contains 53 counts of securities fraud, 14 counts of wire fraud, 14 counts of mail fraud, 17 counts of money laundering and 15 counts of engaging in monetary transactions with the proceeds of unlawful activity. The indictment also contains a single conspiracy count.
Lead prosecutor Jeff Coopersmith of the U.S. Attorney’s office said Monday that the new indictment doesn’t charge Lawrence with substantially different conduct than the prior indictments handed up in July, but details some additional transactions in which Lawrence was allegedly involved.
Four other Lawrence associates – Donovan Claflin, Kevin McCarthy, Clifford Baird and James Wuensche – have entered guilty pleas to charges related to the sale of stock in entities that Lawrence founded, and have agreed to cooperate with the prosecution of Lawrence.
Their sentencing has been delayed pending the outcome of Lawrence’s trial this fall.
According to civil charges filed by the federal Securities and Exchange Commission and criminal indictments handed up by the grand jury, Lawrence sold stock in Health Maintenance Centers, Znetix and entities called Cascade Pointe, raising between $80 and $91 million.
Rather than spending the money to develop the companies’ business concept of integrated fitness and medical care, Lawrence and his associates used the money to finance lavish personal lifestyles, according to the civil charges and criminal indictments.
State regulators have characterized the case as the largest home-grown securities fraud in Washington history.
Lawrence, of Bainbridge Island, pleaded not guilty to the charges. He was denied bail, and remains in federal confinement awaiting a Sept. 22 trial.
– John Waldo
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***Szigethy to leave EDC
A national search is on for a new executive director for the Kitsap Regional Economic Development Council, as Zoltan Szigethy of Bainbridge Island will retire at the end of August.
Nearing the end of a three-year stint with the KREDC, Szigethy says it’s time to move on.
“I enjoy building institutions, but I don’t necessarily enjoy running them,” he said.
Szigethy will leave the EDC just as the organization begins aggressively marketing Kitsap County’s assets to attract new businesses and entrepreneurs.
That’s possible now, officials say, since Szigethy helped install the foundation for a strong business community in Kitsap County by assisting with key policy and infrastructure improvements.
“Now it’s time to do some things to get their (businesses’) attention,” he said.
Szigethy hopes a replacement can be identified by mid-July so a new director can be installed at least by September.
Kitsap County Commissioner Chris Endresen, who previously served on the KREDC board, said Szigethy was the answer Kitsap was looking for in 2000, when officials hunted for a replacement for then-departing director Warren Olson.
Under Szigethy’s leadership the amount of industrially zoned land in Kitsap County has increased dramatically. A physical survey conducted on Kitsap County a decade ago found only about 10 industrially zoned, utility-serviced and ready-for-sale acres in the county. Today, that number is closer to 750, not including acreage available at the Port of Bremerton, which is primarily for lease.
Szigethy also helped secure a Nextel call center in Kitsap County, now the county’s largest primary employer besides the defense industry. He also played a role in encouraging the development of broadband communications in Kitsap County.
The state authorized the Kitsap Public Utility District to install a broadband backbone along existing Bonneville Power Administration lines to provide wholesale telecommunications services.
Wini Jones, president of the Bainbridge Economic Council, said support for the fiber-optic backbone was a good example of how the KREDC benefitted the island.
“The telecommunications committee is now an official committee under the KREDC wing, and its support in getting broadband to the island has been very important,” Jones said.
Szigethy, an on-again, off-again Bainbridge Island resident for the past three decades, drew from experience in the public, private and nonprofit sectors.
He also launched and ran his own real estate development company and worked in a Hungary-based institute in an effort to establish governmental reform in about 20 countries in the former Soviet Union and eastern Europe.
With personal commitments and obligations gone and the KREDC embarking on a new focus, Szigethy said it’s time to move on.
“The position has allowed me to have relationships with interesting people,” he said. “This is a winning organization.”
– Amy Crumley
and John Waldo
