Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, September 9, 2009

SEC Charges Former CEO of Globe Tel with Accounting Fraud

The SEC filed a civil action against Timothy J. Huff ("Huff"), the former chief executive officer ("CEO") of GlobeTel Communications Corp. ("GlobeTel" or the "company"), a publicly-traded company headquartered in Fort Lauderdale, Florida, now known as Sanswire Corp. According to the complaint, Huff participated in a scheme to fraudulently inflate GlobeTel's revenue from approximately May 2002 through October 2004. The complaint alleges that Huff's scheme involved the creation of millions of dollars in fake invoices and call detail records that appeared to reflect transactions between GlobeTel and telecommunications companies in Mexico, Brazil and the Philippines. The complaint further alleges that, as a result of Huff's scheme, GlobeTel issued materially false and misleading periodic reports, registration statements and press releases. Huff allegedly received compensation from the company of about $4.9 million and exercised stock options with a value of more than $1.5 million. The SEC charges Huff with violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13a-14 and 13b2-2 thereunder and seeks as relief permanent injunctions, civil penalties, disgorgement with prejudgment interest and an officer and director bar.

The SEC previously charged GlobeTel and a number of other former officers in connection with these and other securities law violations. The SEC also charged Huff for violations of Section 5(a) and 5(c) of the Securities Act of 1933. Without admitting or denying the allegations, Huff settled those charges by consenting to an injunction and $30,000 civil penalty.

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Finally Tim Huff gets his share of the joy. And maybe he will be stripped of the money he has redirected in his pockets.
Still missing in the overall picture is the former COB Kostro, the Polish Headhoncho, who was and still is connected to the Globetel Sanswire mess. Kostro and Huff started this con biz, together; grouped other con artists and created rip-off companies.
Finally they could grap Globetel. And from pickpocket business they grow to fraud.
The collection of people working until today for Globetel Sanswire is st ill a con class of its own. The spin offs from Larry Lynch (former CFO) and Uli Altvater (former CTO and German con artist)are still working.

Thnaks to the Internet and the available sources everybody should get the needed informations to be aware of these guys.

Posted by: Axel Larator | Sep 10, 2009 12:01:12 AM

Its a good thing for the investors that at least their we're honest people to take over the company instead of letting it die. It seems to be turning around big time and with the new CEO who is tight with the military a Big contract shouldn't be far away.

Posted by: LINEBACKER | Sep 18, 2009 10:56:17 PM

the crooks are still running Sanswire networks

Posted by: john smith | Nov 11, 2009 7:26:21 PM

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