‘Minnesota guy’ Michael Elzufon makes first court appearance on fraud charges

Former downtown Wichita developers David Lundberg and Michael Elzufon – known as “the Minnesota guys” – are facing May 7 preliminary hearings in Sedgwick County District Court, each on 61 felony counts of securities fraud and selling unregistered securities.

The duo, operating as Real Development, pulled in a large group of local and out-of-town investors in buying and managing at least 14 aging downtown office buildings that they eventually lost in foreclosures and lawsuits.

Last month, Kansas Securities Commissioner Josh Ney announced filing of criminal charges against the pair under the Kansas Uniform Securities Act.

The complaint accuses Elzufon and Lundberg of defrauding at least one Kansan and 59 residents of other states by offering and selling unregistered securities in their businesses. The alleged losses are in excess of $3.5 million.

Elzufon made his first appearance in court on the charges Thursday morning; Lundberg first appeared Feb. 26, according to district court records unsealed Thursday. Both men are free on bond.

In response to an e-mailed request for comment, Elzufon’s attorney, Kurt Kerns wrote: “The assertions being made are grossly untrue. Mike has faithfully, tirelessly and passionately fought to make downtown Wichita a success for more than a decade.

“Make no mistake: Had the city, and the federal government through HUD; followed through as promised, investors would have seen their expected returns and Mike would be a Wichita success story.”

Criminal defense attorney Richard Ney, who a court document said on March 5 delivered Lundberg’s passport to district court in response to bond conditions set by a judge, said he “would not make any comments on Mr. Lundberg’s behalf.” Court records on Thursday showed no attorney listed for Lundberg.

Elzufon also was ordered to surrender his passport as a condition of his bond.

At a preliminary hearing, a judge hears witness testimony then determines whether a defendant should be bound over for trial on the crimes charged.

This story was originally published March 13, 2015 at 6:46 AM with the headline "‘Minnesota guy’ Michael Elzufon makes first court appearance on fraud charges."