MIAMI--The U.S. Securities and Exchange Commission has charged five men with defrauding shareholders of a now-defunct employee leasing company that provided workers compensation insurance and other services to employers in 32 states.

The SEC civil fraud complaint, filed in U.S. District Court in Miami, stems from the 2006 collapse of Certified Services Inc., a publicly traded Fort Lauderdale, Fla.-based company that provided workers comp, payroll and tax withholding services to 1,900 small and midsize companies with a combined 53,000 workers. Certified was consolidated in May 2006 into the existing Chapter 11 reorganization of a subsidiary, Certified HR Services Co.

Named in the lawsuit are W. Anthony Huff, a convicted felon who allegedly controlled Certified, though he was not an officer of the company; Danny L. Pixler, the company's former president; Anthony R. Russo, a former chief executive officer and chief financial officer; Otha Ray McCartha, Certified's former chief risk officer; and Charles J. Spinelli, a Certified consultant.

The SEC charges that the defendants falsified Certified's financial statements by reporting as assets 16 bogus letters of credit purportedly worth $47 million, and by failing to report liabilities for workers comp claims that at their peak reached $65 million.

At the same time, Messrs. Huff and Pixler siphoned about $30 million from Certified through a sham "risk allocation agreement" under which an affiliate company, Midwest Merger Management L.L.C. of Louisville, Ky., was to assume Certified workers comp exposure, the SEC charges. Midwest was created by Messrs. Huff and Pixler, according to the complaint.

Messrs. McCartha and Spinelli were convicted last year of criminal fraud charges related to the bogus letters of credit and were sentenced to 24 months and 21 months in prison, respectively. Both have settled the SEC charges, agreeing to permanent injunctions barring them from violating securities laws.

The suit seeks similar injunctions against the other three defendants, along with disgorgement of allegedly stolen funds.

Mr. Russo called the SEC charges "completely baseless" and said, "this suit will be vigorously defended."

Donald L. Cox, a Louisville lawyer representing Mr. Huff, denied the SEC's charges, saying that Mr. Huff did not know the letters of credit were fraudulent, had no part in Certified's accounting decisions and did not divert Certified funds through Midwest.

Messrs. Huff and Cox also noted that Certified's court-appointed bankruptcy trustee agreed to sell some assets of Certified's business to O2HR L.L.C., a Fort Lauderdale-based professional employer organization for which Mr. Huff said he raised capital.

According to bankruptcy court filings, Certified made a deal to sell virtually all of its business to O2HR in September 2005, after its subsidiary, Certified HR Services, had already filed for Chapter 11 protection. The bankruptcy trustee then sued O2HR, charging that the deal represented a fraudulent transfer of estate property and seeking to consolidate O2HR into the reorganization, court records show.

After months of negotiations among the trustee, O2HR, Mr. Huff and others, the court approved a settlement in May 2006 under which Certified itself was consolidated into its subsidiary's bankruptcy proceeding; O2HR agreed to pay the estate $10.3 million in installments; and O2HR acquired portions of Certified's business, the filings show.

In 2004, Mr. Huff was convicted on federal mail fraud charges in an unrelated scheme and sentenced to 12 months' probation. The Kentucky Insurance Department had previously revoked his insurance agent's license as a result of an alleged $113,000 premium theft, according to the SEC's complaint.