Copyright 2000 The Denver Post Corporation
The
Denver Post
May 10, 2000 Wednesday 2D EDITION
SECTION: DENVER & THE WEST; Pg. B-09
LENGTH: 276 words
HEADLINE:
Grand jury indicts man in 'Net fraud PharmNetRX 'grossly misrepresented'
BYLINE: By Howard Pankratz, Denver Post Legal Affairs
Writer,
BODY:
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.
LOAD-DATE: May 10,
2000 
