A Hawaii district court has brought judgment against Ronald Zaucha, the chief executive officer of Left Behind Games and developer of the Christian-themed real-time strategy titles by the same name, the United States Securities and Exchange Commision said in a litigation release yesterday. Zaucha is liable for $2.6 million dollars in "disgorgement, interest and penalties," and has been permanently banned from trading penny stocks.
The judgment follows an August 2014 ruling where Left Behind's founder, Troy Lyndon, was found liable for over $3.6 million under similar circumstances.
The SEC claimed that Lyndon issued nearly 2 billion shares of stock to Zaucha in exchange for consulting work for Left Behind Games. In issuing its judgment, the court found that Zaucha did not, in fact, perform any such work. Instead, Lyndon and Zaucha conspired to use sale of the stock to generate revenue, in the form of kick backs, for the company itself.
The SEC says that the company's stock was suspended by the SEC in September of 2013, and revoked on Feb. 24, 2014.
When the charges were brought against him, Reuters quoted Zaucha as stating that he was ignorant of entire affair.
"I'm just a video game guy. If any violation occurred, it would never have been intentional — and certainly, never fraudulent. My attorney told me that any person that earned shares could use them for any purpose," he said.
"For more than two years, I've asked SEC to explain how and if I have violated any rule, so that I could self-report it. As I see it, the government has systematically and intentionally conspired to dismantle Left Behind Games and the facts are both true and hard to believe — worthy of a Ron Howard film or John Grisham novel."