Prosecutors for the Office of the Kansas Securities Commissioner announced that on Tuesday, an administrative action was filed against: Sutton MN, LLC; Real Development Corp.; Michael Elzufon and David Lundberg.
This was filed as a result of an investigation stemming from the November 7, 2012 Cease and Desist Order filed against the same entities and individuals.
The new action alleges that those entities and individuals violated the Kansas Uniform Securities Act by selling promissory notes to raise capital for various downtown Wichita real estate projects without properly registering the securities.
The action also includes allegations that the funds received from investors were to be used to repay the City of Wichita, when in fact those funds were instead diverted to pay back prior investors and for unrelated business expenses.