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In the following press release To view links in this forum your post count must be 10 or greater. Your post count is 0 momentarily. announced that a Pasco man pleaded guilty to charges of security fraud and selling unregistered securities to several elderly victims, most of them Florida residents. R. John Zavodny owned and operated Mortgage Income Trust (MIT). The company sold approximately 170 promissory notes collectively worth nearly $9 million, but Zavodny and his associates misrepresented the true value of the notes to consumers. Zavodny and three co-defendants were prosecuted by the Attorney General’s Office of Statewide Prosecution.

“This operation was a shameful effort to exploit our senior Floridians out of their hard-earned money,” said Attorney General McCollum. “I am pleased that we are working towards returning the stolen funds to the rightful owners.”

Investigators with the Department of Financial Services and the Florida Department of Law Enforcement initiated the case and determined that through his salesmen, Zavodny promoted the promissory notes as being secure investments in real estate. Despite the fact that victims were told they were making investments with the appropriate protections from losing their funds, the notes were nothing better than unsecured loans. Much of the investors’ money actually went to pay commissions and marketing fees as well as direct funding to businesses closely affiliated with Zavodny and his co-conspirators.

Authorities believe as many as 55 elderly citizens were victimized by Zavodny’s scheme, many in the Tampa Bay and Southwest Florida area. Some victims did receive marginal payouts for their investments, but investigators determined that Zavodny’s operation was a pyramid scheme and the majority of the funds paid out to “investors” was money taken from new victims and redirected to continue the appearance of a legitimate business opportunity. One elderly victim, Kosty Costanzo of Port Charlotte, said he was tricked into buying the notes and needed the returns from the investment to continue long-term care for his wife, who later passed away. Costanzo was never paid.

MIT was dissolved by a Cease and Desist Order in January 2001. Zavodny was taken into custody by authorities with the Hillsborough County Sheriff’s Office in December 2003. Co-defendants Dean A. Sinibaldi, Peter G. Fager and Pamella Perkins Winslow were arrested days earlier and were similarly charged. Sinibaldi pleaded guilty to all charges against him and was sentenced to 21 months in prison. Fager pleaded guilty to multiple charges of the sale of unregistered securities and will be sentenced at a later date. Winslow pleaded guilty to one count of the sale of unregistered securities and will be sentenced with Zavodny in December. An additional co-conspirator, Gregory G. Shultz, was separately charged and convicted in Federal court for a related scheme and is currently serving a 17-year prison sentence.

Zavodny could be sentenced to up to 10 years in prison at his December sentencing hearing. He will also be required to make restitution to his victims. The plea agreement was entered into in Hillsborough County Circuit Court.
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