Where the money went
We realise that you're no longer surprised when you see the words "fraud" and "executive" in the same sentence. You may even be suffering from post-Enron ennui, in which case you avoid stories of corporate malfeasance and turn to the comics. (Here at the Post, we have conveniently placed them on page one, disguised as political news.)
But some cases of greed are too breathtaking to go unreported. Step forward, Znetix Inc, a Seattle company whose affairs have become as tangled as the spelling of its name. Znetix raised money from 5,000 investors, claiming it was going to build a health and fitness services company that would make its investors happy and wealthy.
So where did the IPO funds go? According to the US Securities and Exchange Commission, nearly $100 million when into the pockets of Kevin Lawrence and his pals, who spent like drunken sailors on fancy toys for themselves and their friends and families.
Mr Lawrence has been arrested and faces 560 years in prison if convicted on all the charges he faces.
Meanwhile, the authorities have been attempting to make the best of it by auctioning of some of the goods seized from Znetix. Here's a partial list:
Two Cadillac Escalade sport utility vehicles, a Dodge Viper, three E-class Mercedes Benz sedans, a BMW M3, two Rolex watches, a Cartier watch with diamonds, diamond-studded earrings, a Sony high-definition TV, 360 Cranium games, dozens of fitness machines, 14 leather office chairs, Compaq and Dell desktop and laptop computers, leisure boats, motor homes and ... a cotton candy machine.
"On the first day of the auction some of the investors showed up," said Terry Moore, a spokesman for the auctioneers. "They were not too happy."
Well, at least they finally had a chance to see where their money went. |
