Securities and Exchange Commission
Litigation Release No. 17886 / December 10, 2002
SEC Charges Florida Salesmen With Fraud
Securities and Exchange Commission v. Leonard L. Zanello, Sr., Ihor A."Gary" Humesky, Steven B. Rodd, and Robert F. Broege, Jr., , Civil Action Number 1:02-CV-3308 (N.D. Ga.)
The Securities and Exchange Commission announced today that it has filed a complaint in the United States District Court for the Northern District of Georgia against Florida insurance salesmen Leonard L. Zanello, Sr., Ihor A."Gary" Humesky, Steven B. Rodd, and Robert F. Broege, Jr. The complaint alleges that between 1999 and 2000, Zanello, Humesky, Rodd, and Broege defrauded investors of several million dollars in connection with selling investments on behalf of LinkTel Communications, Inc., an Atlanta, Georgia company that sold and operated pay telephones. In a prior proceeding, the SEC sued LinkTel and its owner. SEC v. LinkTel Communications, Inc., Case No. 1:00-CV-3169 (N.D. Ga.).
The complaint in this matter alleges that Zanello, Humesky, Rodd, and Broege made material misrepresentations and omissions while selling investments in pay telephones. Zanello, Humesky, Rodd, and Broege represented to potential investors that they had investigated LinkTel and that it was a profitable company. The complaint alleges that LinkTel was, in fact, an insolvent ponzi scheme and that defendants did not reasonably investigate LinkTel's financial status. The defendants also distributed sales materials that misrepresented that their commissions would be 15%. In fact, defendants received commissions ranging between 20% and 22%. Defendants further represented that LinkTel was a safe investment because the investment was fully insured. To the contrary, investors' money was not fully insured because investors stood to receive no more than 15% of their investments if LinkTel collapsed.
The SEC's complaint charges Zanello, Humesky, Rodd, and Broege with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions against all defendants, as well as an order compelling accountings, disgorgement of ill-gotten gains, along with prejudgment interest and civil penalties.