UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 49031 / January 7, 2004

Admin. Proc. File No. 3-11370

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Leonard L. Zanello, Sr. ("Zanello" or "Respondent").

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III. 2 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions ("Order"), as set forth below.

III.

On the basis of this Order and Respondent's Offer, the Commission finds that:

1. Zanello is a resident of Coral Springs, Florida. During 1999, Zanello acted as an unregistered broker.

2. On February 26, 2003, an order of permanent injunction and other relief was entered by consent against Zanello, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 15(a) of the Exchange Act, in the civil action entitled Securities and Exchange Commission v. Leonard L. Zanello, Sr., Ihor A. "Gary" Humesky, Steven B. Rodd and Robert F. Broege, Jr., Civil Action File Number 1:02-CV-3308 in the United States District Court for the Northern District of Georgia. The order of permanent injunction against Zanello directed that Zanello shall pay disgorgement, prejudgment interest thereon, and a civil penalty in amounts to be resolved upon motion of the Commission at a later date. The order of permanent injunction provides that for purposes of disgorgement, prejudgment interest and the civil penalty, the allegations of the Commission's complaint shall be deemed to be true, and Zanello may not, by way of defense, contend that the disgorgement, prejudgment interest and the civil penalty should not be imposed.

3. The Commission's complaint alleged that, during 1999, Zanello and others, fraudulently offered and sold securities of LinkTel Communications, Inc. ("LinkTel") in unregistered transactions. The LinkTel investment program consisted of (a) the purchase of a pay phone, (b) leaseback agreement in which the investor leased the pay phone back to LinkTel and (c) LinkTel's offer to "buy back" the pay phones from the investor at the end of the lease. The agreements obligated LinkTel to manage the pay phones, pay annual returns of 12% to 14% and then repurchase the phones. The complaint further alleged that LinkTel and its promoters raised more than $6.4 million from over 270 investors and that the investment program was a Ponzi scheme. The complaint also alleged that in offering and selling LinkTel securities, Zanello and others misrepresented that LinkTel was a profitable company and that LinkTel investments were fully insured and safe. In fact, the company was losing money and insolvent and was not fully insured or safe. The complaint alleged that Zanello thereby violated Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)], Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], and Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]. Zanello consented to the entry of the order of permanent injunction without admitting or denying the allegations contained in the Commission's complaint, except as to jurisdiction and venue.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent Zanello's Offer.

Accordingly, it is hereby ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act, that Respondent Zanello be, and hereby is, barred from association with any broker or dealer.

Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

For the Commission, by its Secretary, pursuant to delegated authority.

By the Commission.

http://www.sec.gov/litigation/admin/34-49031.htm