Naples, Florida Man Sentenced In Znetix Stock Fraud Scam

In addition to the period of incarceration, MOODY was sentenced to three years of supervised release and was ordered to pay restitution in the amount of $2,484,000. That sum represented the total amount paid to MOODY in the form of a "signing bonus" and salary, from Health Maintenance Centers, Inc. and Znetix, Inc. investor funds. As part of the conditions imposed by Judge Pechman for supervised release after he finishes his term of imprisonment, MOODY was ordered to be truthful in all of his representations regarding his background, his employment history and qualifications, and his education. Failure by Moody to do so would be a violation of supervised release and could subject him to 2 years of additional incarceration.

According to court records, the charges against MOODY arose out of the government's investigation into the offer and sale of over $80 million or more of securities by Znetix, Inc., Health Maintenance Centers, Inc., Cascade Pointe LLC, and affiliated entities. As the government's investigation continued, the total amount of money invested turned out to be significantly higher. Last month, Judge Pechman ordered KEVIN LAWRENCE, founder and former CEO of Znetix and HMC, to pay resitution in amount exceeding $91.6 million, reflecting the total amount raised from investors.

Court records show that MOODY made false representations about his background for the purpose of obtaining and maintaining employment with Znetix. Among other things, MOODY falsely represented that he was an attorney and the former General Counsel of the Ford Motor Company; that he was a personal friend of Bill and Hillary Clinton; that he was the grandson of the founder of Moodys Investors Service; and that he had a trust fund worth as much as $500 billion. MOODY entered into an employment contract with Znetix and received approximately $2.5 million under that contract between about March 2000 and March 2001. The employment contract signed by MOODY and KEVIN L. LAWRENCE on May 4, 2000, also represented that Znetix would shortly engage in an Initial Public Offering (IPO). This representation was one of the fraudulent representations described in the last Indictment returned against KEVIN L. LAWRENCE, STEVEN J. REIMER, MICHAEL J. CULP, LARRY L. BEAMAN, HARVEY W. KUIKEN, ALEX LACSON and ALFONSO LACSON, JR. KEVIN LAWRENCE pleaded guilty and was sentenced on November 25, 2003, to twenty years in prison. STEVEN REIMER has also pleaded guilty and is awaiting sentencing.

This case was investigated jointly by the Federal Bureau of Investigation, the Securities and Exchange Commission, the Internal Revenue Service, and the State of Washington Department of Financial Institutions, Securities Division. Assistant United States Attorneys Jeffrey B. Coopersmith, Richard E. Cohen, Ye-Ting Woo, and Special Assistant United States Attorney Todd Brilliant, prosecuted the case.