Grand jury indicts man in 'Net fraud
May 10 - A man who allegedly lured investors into a company that he claimed would allow doctors and pharmacies to communicate over the Internet about prescriptions has been indicted on 21 counts of securities fraud.
The Denver grand jury indictment alleges that Randy Prefer, 46, grossly misrepresented the progress being made on the system known as PharmNetRX.
The indictment alleges that in late 1996 and early 1997, Prefer told investors that a demonstration test program for PharmNetRx was almost ready for testing. He persuaded 21 investors to put $321,250 in the project.
In reality, the grand jury said, the demonstration test program was far from operational.
The grand jury said Prefer failed to tell investors that:
In the summer of 1995, he and others were sued by the Federal Trade Commission for engaging in fraudulent activity in connection with the sale of business opportunities. In December 1995, Prefer entered a consent judgment with the FTC in which he agreed to pay the federal agency $20,000. Prefer was permanently prohibited from engaging, directly or indirectly, in the sale of a franchise or business venture.
In August 1994, the state of Minnesota entered a cease-and-desist order against several people, including Prefer, ordering him to stop offering or selling business opportunities in the state until complying with Minnesota registration requirements.
In July 1995, the state of Iowa issued a similar order against Prefer and others, ordering them to stop selling unregistered business opportunities in the state and stop omitting material facts.
Grand jury indicts man in 'Net fraud
May 10 - A man who allegedly lured investors into a company that he claimed would allow doctors and pharmacies to communicate over the Internet about prescriptions has been indicted on 21 counts of securities fraud.
The Denver grand jury indictment alleges that Randy Prefer, 46, grossly misrepresented the progress being made on the system known as PharmNetRX.
The indictment alleges that in late 1996 and early 1997, Prefer told investors that a demonstration test program for PharmNetRx was almost ready for testing. He persuaded 21 investors to put $321,250 in the project.
In reality, the grand jury said, the demonstration test program was far from operational.
The grand jury said Prefer failed to tell investors that:
In the summer of 1995, he and others were sue
d by the Federal Trade Commission for engaging in fraudulent activity in connection with the sale of business opportunities. In December 1995, Prefer entered a consent judgment with the FTC in which he agreed to pay the federal agency $20,000. Prefer was permanently prohibited from engaging, directly or indirectly, in the sale of a franchise or business venture.
In August 1994, the state of Minnesota entered a cease-and-desist order against several people, including Prefer, ordering him to stop offering or selling business opportunities in the state until complying with Minnesota registration requirements.
In July 1995, the state of Iowa issued a similar order against Prefer and others, ordering them to stop selling unregistered business opportunities in the state and stop omitting material facts.