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The top executives of a Minnesota company involved in downtown revitalization projects in Wichita say they have not been involved in fraudulent activities. Real Development founders Michael Elzufon and Dave Lundberg issued a statement regarding a "cease and desist" order that was filed by the Kansas securities commissioner.
The case involves life insurance assets that were pledged to Kaw Valley Bank as collateral for a loan.
The securities commissioner issued the order against Real Development and three other companies, and individuals involved with those companies. An investigation is underway, but no charges have been filed.
In their statement, Elzufon and Lundberg say the companies they purchased the life insurance assets from are believed by the securities commissioner to be involved in fraudulent activities. They said they believed the life insurance policies were valid and in-force from Hybrid Asset Management. Elzufon and Lundberg said they are victims and not perpetrators of fraud.
The statement said inaccurate statements made by the securities commissioner's office are jeopardizing the success of the Exchange Place project and creating a hostile environment for their other redevelopment projects in downtown Wichita.
Elzufon and Lundberg said they are looking forward to working with the securities commissioner to resolve any misunderstandings and have the cease and desist order withdrawn as quickly as possible.