Investigation targets company involved in downtown Wichita projects
A Minnesota company involved in downtown revitalization projects in Wichita is the focus of a cease and desist order issued by Kansas Securities Commissioner Aaron Jack. Real Development and four other companies, and individuals associated with those companies, have been named in the order.
The securities commissioner is investigating life settlement policies that were presented to a Topeka bank and other investors in an effort to pay a loan. No charges have been filed, but the companies have been ordered to stop all securities transactions while the investigation is underway.
Real Development and its top executives, Michael Elzufon and Dave Lundberg, are named in the cease and desist order. The company purchased Exchange Place and several other downtown buildings. It had been in the process of refurbishing them into residential and office complexes.
The economic downturn has slowed progress on the revitalization project. The company has been working to pay off loans associated with the work.
Wichita Vice Mayor Janet Miller said she was surprised by the news of the investigation. She said the city is waiting to see if charges are filed in the case, and then city council members and legal staff will determine what the response should be.
City council members have also been unhappy with recent news that Real Development is working to launch a project for a destination resort in Georgia, at a time when its project in downtown Wichita is still incomplete.
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One of the companies involved in downtown development in Wichita has received an administrative cease and desist order from Kansas Securities Commissioner Aaron Jack.
Real Development LLC., along with Hybrid Asset Management, LLC; Sutton MN, LLC; and Churchill Capital Strategies, Inc; and Jeffrey Williams; Mark Nordyke; Sherrilynn L. Frierson; Gordon Schultz; Michael Elzufon and David Lundberg, are accused by the commissioner of violating the Kansas Uniform Securities Act by trying to deliver interests in fraudulent life settlement policies to a Topeka bank and other investors.
Life settlement policies or viatical settlements involve the sale of life insurance policies to third parties at lower than face value than the policy would pay out at time of death. This type of sale is often done in the case of diagnosis of a terminal illiness for the original policy owner.
Jack said anyone who may have been approached by these individuals or representatives from these companies about life settlement policies should contact the Office of the Kansas Securities Commissioner at 785-296-3307.
For more information about life settlement policies from the United States Securities and Exchange Commission, click here.
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