U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 17963 / February 3, 2003 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.)
THREE FLORIDA SALESMEN CONSENT TO PERMANENT INJUNCTIONS
The Securities and Exchange Commission (Commission) announced that on January 28, 2003, the Honorable Willis B. Hunt, Jr., United States District Court for the Northern District of Georgia, entered orders of permanent injunctions (Orders) against three of the four defendants in the above referenced litigation, Ihor A."Gary" Humesky (Humesky), Steven B. Rodd (Rodd), and Robert F. Broege, Jr. (Broege). The Orders restrained and enjoined the defendants from violating 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 Court ordered each defendant to pay disgorgement, prejudgment interest and civil penalties, which amounts will be decided upon subsequent motion by the Commission. Litigation is still pending against defendant Leonard L. Zanello, Sr.
Humesky, Rodd and Broege consented to the entry of the Orders without admitting or denying the allegations set forth in the Commission's complaint, filed on December 10, 2002. The litigation relates to the investments that the defendants sold on behalf of LinkTel Communications, Inc. (LinkTel), an Atlanta, Georgia company that sold and operated pay telephones. The complaint alleged that Humesky, Rodd, and Broege made material misrepresentations and omissions while selling investments in pay telephones. Humesky, Rodd, and Broege represented to potential investors that they had investigated LinkTel and that it was a profitable company. The complaint further alleged 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.
See also: L.R. 17886 (December 10, 2002)