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Pastimes : Investment Chat Board Lawsuits -- Ignore unavailable to you. Want to Upgrade?

To: Arcane Lore who wrote (5690)	4/22/2004 11:54:24 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 4/22/04 - [Znetix/HMC] Seattle Post-Intelligencer: Znetix defendant seeks plea change Thursday, April 22, 2004 Znetix defendant seeks plea change By JOHN COOK SEATTLE POST-INTELLIGENCER REPORTER The Znetix stock fraud case has taken yet another odd turn. Alex Lacson, who pleaded guilty in December to obstructing the government's investigation into the $91 million stock fraud, told a federal judge this week that he wanted to withdraw the guilty plea because he received bad advice from his attorney. At Lacson's sentencing hearing on Tuesday, the Redmond resident asked that his plea be changed to not guilty. He produced a one-page hand-written letter explaining his position. Earlier in the day, Lacson attempted to gain access to U.S. District Judge Marsha Pechman's chambers in order to discuss the case with her personally. Pechman later admonished the former stock salesman for trying to circumvent the legal system. Peter Mazzone, the attorney who represented Lacson until Tuesday, said he was surprised and disappointed by the events. "I was disappointed because I felt that I worked very, very hard to get a good resolution in the case," Mazzone said. Mazzone, a lawyer with Phillips & Mazzone in Everett, said he did not know the reason for his former client's change of heart. "I don't know what he is thinking," he said. "I can't read people's minds." Lacson, whose older brother Alfonso pleaded guilty in the case in January, could not be reached for comment. His newly appointed attorney did not return calls. Pechman set a hearing for 3 p.m. on Tuesday to explore the matter. On Dec. 9, Alex Lacson admitted that he obstructed the Securities and Exchange Commission's investigation into Znetix by telling a witness not to respond to a SEC subpoena. At the time of the plea agreement, Mazzone said he would ask Pechman for probation -- a recommendation that federal prosecutors supported. But Lacson's conduct after the guilty plea caused federal prosecutors to re-examine the sentencing plan and recommend a six-month prison term. The primary issue centered on an alleged break-in on Jan. 3 at the Lacson family residence in Redmond. The only items stolen, according to statements made by the Lacsons, were binders containing documents that proved the innocence of Alfonso Lacson. The Lacsons suggested that FBI agents and Assistant U.S. Attorney Jeff Coopersmith were responsible for the robbery, a theory that federal prosecutors call "absurd." The Redmond Police Department, which investigated the crime, concluded that the incident was staged by one of the residents of the house, according to court documents. A report issued by the U.S. Probation Office on April 13 suggested incarceration for six months and supervised release for three years. Federal prosecutors agreed with the report's suggestions, given the accusations made against law enforcement officers. Alex Lacson "needs to be reminded of the seriousness of his offense and of the fact that one cannot continue to try to manipulate the system," Assistant U.S. Attorney Richard Cohen wrote in a brief filed with the court earlier this month. Lacson's effort to withdraw his guilty plea is just one of the recent developments in the massive fraud case, which federal regulators call the largest ever to originate in the state. The trial of Znetix defendants Larry Beaman, Michael Culp and Harvey Kuiken continued yesterday with a Harvard-educated law professor describing the particulars of securities law and anti-fraud provisions. The jury also heard from several investors, including a retired doctor from Portland, a 71-year-old small-business owner from Wisconsin and a nurse from Battle Ground, Wash. Lary Melby, a 41-year-old general contractor who invested $55,000 in the deal, said he was excited by Znetix and its promise of IPO riches. The Clackamas, Ore., resident said he believed in Larry Beaman, who sold him some of the stock. "Call me stupid, but I trusted him," Melby said. The government's case is expected to conclude today with testimony from FBI agents, Internal Revenue Service employees and Znetix investors. The defense plans to start calling witnesses on Monday. Clifford Baird, who ran Znetix affiliate Cascade Pointe and pleaded guilty in July 2002, is expected to be one of the first witnesses. Znetix founder Kevin Lawrence, who was sentenced to 20 years in prison for orchestrating the scheme, is expected to testify the following week. Znetix, a now-defunct Bainbridge Island company, was purportedly developing a next-generation health care and fitness system. More than 5,000 people invested before the company was shut down by federal regulators in February 2002. P-I reporter John Cook can be reached at 206-448-8075 or johncook@seattlepi.com seattlepi.nwsource.com