The Arizona Corporation Commission sanctioned insurance producer James David Gray of Peoria and his affiliated companies, Seek Insurance Services, LLC and Elite Business Group, LLC, for defrauding investors with a real estate Ponzi scheme.
The Commission ordered Gray and Seek Insurance Services, LLC pay $309,428 in restitution and an administrative penalty of $35,000 while Mr. Gray and Elite Business Group, LLC are required to pay $28,985 in restitution and a $35,000 administrative penalty.
The Commission found the respondents offered and sold unregistered securities and notes issued by companies controlled by EquiAlt, LLC to at least 17 investors, most of whom were not accredited investors. None of the respondents were registered to offer or sell securities in Arizona.
The Commission found the respondents, during the offer or sale of EquiAlt securities, made material misrepresentations and omissions to the investors regarding the securities’ risk and liquidity.
The Commission found Gray and his affiliated companies represented to investors that EquiAlt, LLC was raising capital to purchase, improve, lease, and dispose of distressed real property. In actuality, EquiAlt, LLC was operating as a nationwide Ponzi scheme.
In settling this matter, the respondents admit to the Commission’s findings and the entry of the consent order.