sec-litreleases litigation_release 64 KB 2,226 chars

SEC v. Leonard L. Zanello, Sr.; Ihor A. "Gary" Humesky; Steven B. Rodd; and Robert F. Broege, Jr., No. LR-17886, Northern District of Georgia — Press Release

raw: Leonard L. Zanello, Sr., Ihor A."Gary" Humesky, Steven B. Rodd, and Robert F. Broege, Jr.

Leonard L. Zanello, Sr., Ihor A."Gary" Humesky, Steven B. Rodd, and Robert F. Broege, Jr., No. 1:02-CV-3308

Caption: SEC v. Leonard L. Zanello, Sr, et al.

summary

The SEC charged Florida insurance salesmen Leonard L. Zanello, Sr., Ihor A. 'Gary' Humesky, Steven B. Rodd, and Robert F. Broege, Jr. with defrauding investors of several million dollars between 1999 and 2000 by selling unregistered securities in the Ponzi scheme LinkTel Communications, falsely claiming it was profitable and insured while hiding their 20–22% commissions and lack of due diligence, leading to charges under the Securities Act and Exchange Act and demands for injunctions, disgorgement, and penalties.

paragraph

Between 1999 and 2000, Leonard L. Zanello, Sr., Ihor A. 'Gary' Humesky, Steven B. Rodd, and Robert F. Broege, Jr. defrauded investors of several million dollars by selling unregistered securities tied to LinkTel Communications, a Ponzi scheme disguised as a profitable pay telephone business. They misrepresented LinkTel as solvent and fully insured, concealed that their actual commissions were 20–22% (not the advertised 15%), and failed to conduct reasonable due diligence despite claiming otherwise, while misleading investors that they would recover up to 100% of their investment—when in reality, recovery was capped at 15% if LinkTel collapsed. The SEC charged them with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b), 15(a) of the Exchange Act of 1934 and Rule 10b-5, seeking permanent injunctions, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.

narrative

Between 1999 and 2000, Florida-based insurance salesmen Leonard L. Zanello, Sr., Ihor A. 'Gary' Humesky, Steven B. Rodd, and Robert F. Broege, Jr. defrauded investors of several million dollars by selling unregistered securities tied to LinkTel Communications, an Atlanta-based company operating pay telephones that was later revealed to be a Ponzi scheme. The defendants falsely represented to potential investors that LinkTel was a profitable, solvent business with fully insured investments, when in fact it was insolvent and investors stood to recover no more than 15% of their funds if the company failed. They also misrepresented their commission rates as 15%, when in reality they received between 20% and 22%, and claimed to have conducted due diligence on LinkTel’s financial health, despite failing to do so. The SEC’s complaint, filed in the Northern District of Georgia, alleges 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, along with Rule 10b-5. The Commission seeks permanent injunctions to halt further misconduct, court-ordered accountings, disgorgement of all ill-gotten gains, prejudgment interest, and civil penalties against all four defendants. This case followed a prior SEC action against LinkTel and its owner, underscoring the systemic nature of the fraud. The defendants’ conduct exploited investor trust through material misrepresentations and omissions, making this a classic case of securities fraud involving mischaracterized risk and hidden compensation.

Enriched metadata

Scheme: unregistered-securities (100%)
Court: Northern District of Georgia
Case No.: 1:02-CV-3308
Entity: Leonard L. Zanello, Sr.

Classified unregistered-securities(confidence 100%). EDGAR detection: forms Form D/S-1· recall 41% / precision 30%. detection rule →

Extracted insights

Entities 2

agency Securities and Exchange Commission
agency the sec's complaint

Triples 11

Securities and Exchange Commission 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.
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 Distributed sales materials that misrepresented that their commissions would be 15%.
The defendants Received commissions ranging between 20% and 22%.
The defendants Represented that LinkTel was a safe investment because the investment was fully insured.
The complaint Alleges that 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.

View original SEC litigation releasesec.gov

Extracted body text (2,226c)

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. SEC Complaint in this matter

OCR text (2,226c · plain-text · 99% conf)