Man pleads guilty to defrauding seniors

It was a $9-million scam, and many of his victims were on fixed incomes.

By THOMAS LAKE, Times Staff Writer
Published September 20, 2007

ADVERTISEMENT R. John Zavodny, 65, faces up to 10 years in prison.

A former Holiday resident pleaded guilty Monday to running a $9-million pyramid scheme that ensnared nearly 50 seniors, authorities said.

R. John Zavodny, 65, was the owner and operator of Mortgage Income Trust. According to a statement released Wednesday by Florida Attorney General Bill McCollum's office, Zavodny's company sold customers about 170 promissory notes, passing them off as secure real-estate investments when they were actually unsecured loans.

"This operation was a shameful effort to exploit our senior citizens out of their hard-earned money," McCollum said in the statement.

The scheme began in 1995. Many of the victims were retired and living on fixed incomes. Much of their money went to commissions, marketing fees and other businesses associated with Zavodny and his co-conspirators, McCollum said. Some of the victims got payouts from their investments, but the majority of that money came from new victims. That's why authorities called it a pyramid scheme.

Zavodny's company was dissolved in January 2001. He and three co-defendants were arrested in 2003. He pleaded guilty Monday in Hillsborough County Circuit Court to charges of securities fraud and selling unregistered securities.

His sentencing is set for Dec. 7. He faces up to 10 years in prison.

The Attorney General's Office said he will have to pay the money back, although it was unclear Wednesday whether or not he was capable of doing so or even how much he owed.

[Last modified September 19, 2007, 21:47:35]