Two Wichita men, targets of a state securities probe for more than year, have been arrested in connection with an investigation of state securities violations.
Gregory A. Buss and Mark K. Nordyke, employees of Benessere Holdings — formerly known as Lion Share Capital — were booked into the Sedgwick County Jail on Tuesday night, according to jail records.
Buss was arrested on two counts of general fraud, two counts of fraud in investment advice with a device and 12 counts of willfully violating the loan broker act, according to the jail's daily booking report.
He remains in the Sedgwick County Jail under $50,000 bond, according to jail records.
Nordyke was arrested on one charge of fraud in investment advice with a device, failure to register as a loan broker, failure to provide disclosure documents by a loan broker and willful violation of the loan broker act. He had been released by mid-morning, according to jail records.
Benessere is a tenant at Wichita Executive Centre, 125 N. Market.
There is no telephone listing for Benessere Holdings. The listing for Lion Share Capital has been disconnected.
Shannon Sims, a spokeswoman for new Securities Commissioner Aaron Jack, said the arrests are related to an investigation by the Kansas Securities Commissioner's Office. The investigation began in late 2009. Sims said the investigation continues and that other suspects are being sought.
In December 2009, state securities officials slapped Lion Share with a cease-and-desist order alleging regulatory infractions.
The order, which named the two arrested men, Lion Share general manager Jeffrey Williams and employee Sherrilynn Frierson, claimed that the company violated the state's Uniform Securities and Loan Brokers Acts by collecting more than $550,000 to find lenders for more than 20 companies in Kansas and across the United States.
The order alleged that Lion Share made "material misrepresentations and omissions as it charged clients an advance fee to obtain a lender, while obtaining an equity stake in several of the companies along with the advance fee."
Those misrepresentations, according to the order, included:
* Williams failed to disclose his 2005 conviction for fraud in Illinois and his subsequent time in a federal penitentiary.
According to a May 10, 2005, news release from Patrick Fitzgerald, U.S. Attorney for the Northern District of Illinois, Williams was found guilty of fraud charges "arising from a scheme to illegally take over businesses and then drain cash from those businesses."
* The advance fee was refundable when it was not.
* The fee would be used for due diligence and to procure funding when it was used for personal expenses and operating costs.
* That similar projects had been funded successfully by Lion Share when they had not.