SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16816 \ December 4, 2000
SECURITIES AND EXCHANGE COMMISSION v. LINKTEL COMMUNICATIONS, INC., JEFFREY S. ALTMAN, and T.P.C. COMMUNICATIONS, INC., United States District Court for the Northern District of Georgia, Civil Action No. 1:00-CV-3169-WBH (N.D.Ga.)
COURT ENTERS PERMANENT INJUNCTION, FREEZES ASSETS, AND APPOINTS A RECEIVER IN PAY TELEPHONE PONZI SCHEME
The Securities and Exchange Commission ("Commission") announced today that on December 1, 2000, it filed a civil action against LinkTel Communications, Inc. ("LinkTel"), T.P.C. Communications, Inc., and Jeffrey S. Altman. The complaint alleges that LinkTel, TPC, and Altman engaged in fraud in the offer and sale of unregistered securities in the form of investment contracts. The defendants consented to an order, entered on December 1 by the Honorable Willis B. Hunt, United States District Judge for the Northern District of Georgia, permanently enjoining them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The order freezes the defendants' assets, orders an accounting, and appoints a Receiver for LinkTel and TPC.
The Commission's complaint alleges that the defendants promoted a fraudulent scheme through the use of insurance agents and newspaper advertisements in which LinkTel raised more than $6.4 million from more than 270 investors. The defendants offered and sold investment contracts in customer-owned, coin-operated telephones and, recently, investments in public access internet phones, in units involving a telephone, site lease, lease/back agreement, and buy/back agreement that constitute securities. No registration statement was filed with the Commission in connection with these securities. Although LinkTel is the source of lease payments on the telephones, investors were not told that LinkTel was losing money, had a negative net worth, and was dependent on revenue from new investors to sustain its operations. LinkTel failed to meet its monthly lease obligations to investors for the month of November 2000.