Investment fund frauds have long been a staple of the SEC enforcement division. Many of those have involved various types of real estate transactions. It is doubtful however that any involved mobile homes and the queen of mobile homes. – two key elements in the most recent real estate offering fraud action of the agency. SEC v. Gundy, Civil Action No. 5:”23-cv-00700 (W.D. Tx. Filed May 31, 2023).
Named as defendants in the action are: Chimene Van Gundy, the Queen of Mobile Homes; Outstanding Real Estate Solutions, Inc., a real estate firm that specialized in mobile homes which is now in receivership; Michael Trofimoff, the founder of a firm doing business as Georgia Mobile Home Investing; Santos Kidd, the CEO of Kinda’ole Financial Services, LLC, a firm that claimed to help home owners achieve their financial goals; and Maria Tosta, the firmer VP of Outstanding Real Estate responsible for bringing in clients.
Beginning in 2018, and continuing for the next three years, the Queen of Mobile Homes and her firm, Outstanding Real Estate, solicited investors to acquire interests in the company. Defendants Trofimoff, Kidd and Tosta participated in the solicitations as commissioned salespeople. Investors were not told that the salespeople participating in the solicitations were paid.
Potential investors were told that their funds would be used to purchase, refurbish and sell mobile homes. They were also told that returns of 15% to 20% would be paid on the investments. The investors were also told that there was a key-man insurance policy on Ms. Van Gundy’s life in recognition of here critical role to the investors. About $18.5 million was raised from 600 investors.
The securities sold were not registered with the Commission. The salespeople were not registered as brokers despite their role in the sales process. The complaint alleges violations of Securities Act Sections 5(a) and (c), and 17(a) of the Securities Act and Exchange Act Section 10(b), Defendant Tosta has agreed to settle the charges, consenting to the entry of permanent injunctions and agreeing to pay disgorgement and pre-judgment interest of $117,917.57 and a civil penalty of $60,000. See Lit. Rel. No. 25739 (May 31, 2023).