Lawrence to give up 'his' cars
June 9, 2008 · Updated 4:47 PM
While the United States searches for Saddam Husseins WMDs, law enforcement officials in the Puget Sound area are searching for Kevin Lawrences BMWs.
But unlike the search in the Middle East, everyone agrees the cars exist. And the effort now has the promised cooperation of the man who may really know where they can be found.
As part of Lawrences plea bargain on three felony fraud counts, the 37-year-old island native has agreed to cooperate with law enforcement to help find whatever proceeds may still remain from
the Health Maintenance Centers/ Znetix securities scam.
Lawrence pleaded guilty this week to masterminding an enterprise that bilked 5,000 investors nationwide out of as much as $100 million. Rather than use investor money to develop what was represented as a new paradigm in health care, Lawrence and associates diverted the money to finance extravagant personal lifestyles.
A court-appointed receiver, who is marshaling assets of the defunct Lawrence companies, sold what had been recovered through auctions last August. But that yielded only about $1.5 million, barely enough to pay the cost of the receivership.
Numerous assets were not recovered. According to an inventory filed in federal court in Seattle, Lawrence at one time held title to more than 125 automobiles.
Many of those have not been found, in part because Lawrence invoked his constitutional privilege against self-incrimination when asked about their whereabouts.
That has changed, though, in the wake of Mondays plea-bargain agreement, under which Lawrence is facing a 20-year prison sentence.
Lawrence agreed to answer all questions about what he did with the money, and where any assets are located, to the point of agreeing to a polygraph. Prosecutors may rescind the plea agreement if he fails to cooperate.
The asset turnover began with the agreement itself, as Lawrence agreed to forfeit a Mercedes, two Hummers, two De Tomaso Panteras, a Ferrari, a Rolex watch and several boats, motorcycles and all-terrain vehicles.
Absent Lawrences agreement, the government would have had to prove those items were purchased with proceeds from the fraud.
Lawrence also eased the receivers effort against a Seattle law firm that represented Lawrence, when he agreed to waive his attorney-client privilege for communications with the firm of Ogden, Murphy & Wallace.
Receiver Michael Grassmueck is suing the Seattle firm for $50 million, arguing that the firm had a conflict of interest when it represented both Lawrence and Znetix.
Lawrence is scheduled to be sentenced Oct. 31 in Seattle by federal Judge Marsha Pechman.
Because there is no parole in the federal system, only minimal credit for good time, Lawrence will have to serve 17 of the 20 years behind bars, prosecutors say. He has asked to serve his time at a Florida prison.
News of the plea agreement was greeted enthusiastically by former investors who have monitored the case on an internet discussion board. For months, subscribers have expressed hope that Lawrence would receive a lengthy prison term.
I am just thinking about 20 years, one former investor wrote Tuesday. I was a senior in high school 20 years ago. Twenty years from now, my 2-year-old daughter will be graduating from college. I cant even begin to picture her at 22. That is a long, long time. Better than I would have ever hoped for.