Znetix trio found guilty -- News Roundup

Three stock salesman were found guilty in federal court Monday of multiple felonies, after a seven-week trial stemming from the Znetix/Health Maintenance Centers securities scam.

Convicted before the Seattle bench of Judge Marcia Pechman were Larry L. Beaman, 62, of Ridgefield, Wash., Michael J. Culp, 33, of Bothell, and Harvey W. Kuiken, 52, of Newcastle.

A jury returned convictions on a total of 52 felony counts, including securities fraud, wire fraud, conspiracy and money laundering.

It was the latest turn in a three-year-old investigation into what prosecutors have called the largest securities fraud case in state history.

Ringleader Kevin Lawrence of Bainbridge Island pleaded guilty last July to various felony counts, and now is serving a 20-year sentence in a federal penitentiary.

Eight others involved in the massive scam – which bilked thousands of investors nationwide out of an estimated $91 million – have also pleaded guilty to various offenses.

Investors were told that the now-defunct Bainbridge-based enterprise was developing a new chain of health clubs featuring proprietary fitness technology, and that the company was planning an initial public offering.

Instead, company principals used the funds to lavish themselves with expensive cars, homes, boats and jewelry.

In the just-completed trial, prosecutors showed that Beaman used investor money to purchase over $100,000 worth of jewelry and to have over $200,000 worth of landscaping done at his residence. Culp bought new cars and a $1.1 million home in Woodinville, while Kuiken bought gemstones and a multi-million-dollar view property in Newcastle, and chartered Learjet trips to the Caribbean.

Evidence at trial showed that the trio raised some $7.7 million, most of which they spent on themselves; perhaps $2.7 million was passed along to Znetix and related entities, where it was squandered by others.

Sentencing is Sept. 17; each count carries a prison term of from five to 20 years. An investigation of other individuals associated with Znetix, HMC and related entities is ongoing, the U.S. Attorney’s Office said.

Islander guilty of bilking bank

Bainbridge resident Kenneth Dwayne Dawson pleaded guilty in Seattle federal court this week to embezzling nearly $400,000 from Washington Mutual.

Dawson served as vice president and manager of credit risk analysis in the bank’s downtown Seattle office. Court papers indicate that he created an LLC and used his position to establish it as a WAMU vendor, then authored fictitious invoices and authorized disbursements that the bank unwittingly paid out.

Checks were sent to a PO box controlled by Dawson, who deposit funds in the LLC’s business account, and later transferred the funds to a personal account at another institution.

He was fired by WAMU in December when the scheme was discovered by Wamu’s internal investigations division. The case was investigated by the FBI.

No sentencing date was set; his plea deal could allow him to dodge a prison sentence if he makes restitution to the bank, prosecutors said.

Join the chain gang Friday

Squeaky Wheels celebrates its fifth Bike to Work and School Day on May 21. Islanders are urged to use non-motorized transportation to get to work and school. Those who bike to their destinations will receive free treats at schools, the morning ferries and at noon at the Winslow Mall.

Also this week, the BHS bike club holds a free bike raffle for students – the more you ride to high school, the more you can enter.


Finding time for spirituality

On Saturday, Eagle Harbor Congregational Church and Madrona School co-sponsor a half-day conference entitled “Breathing Room: Making Space for the Divine in Family Life” at Eagle Harbor Congregational Church, 105 Winslow Way West.

The whirlwind of activity that makes up modern life leaves little time for contemplation and reflection. This gathering is an attempt to “catch a breath” and examine the spiritual needs of young people from a variety of perspectives.

The keynote speaker is David Marshak, Ph.D., education professor at Seattle University and author of “The Common Vision: Parenting and educating for Wholeness.”

He will be followed by a panel of Bainbridge Island parents and residents – among them, Rev. Dee Eisenhauer, Althea Paulson, Art Mann and Kerry Grant – who will speak about their experience in nurturing children’s spirits, both inside and outside faith communities. Time will be provided after presentations for participants to talk with each other in small groups.

Registration and coffee begin at 9 a.m., followed by presentations 9:30 a.m. to noon. A $5 donation is requested. Pre-registration is encouraged at 842-4657 or

Hyla cookoff spices it up>/b>

The hottest culinary event of the year is here: the Hyla Chili Cookoff will be held 11 a.m. to 3 p.m. Saturday at Hyla Middle School, 7861 Bucklin Hill Road.

Sample and vote for your favorite chili from local restaurants. You’ll also enjoy live music, games, prizes, an auction, raffles, fun inflatable games, and of course, great food. Proceeds benefit the school. Information: 842-5988.

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