California Department of Corporations Halts Sales of Fraudulent Investment Contracts for the Development of Residential Real Estate.

SACRAMENTO, Calif. -- The U.S. Securities Exchange Commission Files Fraud Charges in a Related Action

The Department of Corporations today announced that it has ordered Sunshine Real Estate Development, Inc., Jules Bernard Fleder and Roger Sherman to immediately desist and refrain from offering and selling unqualified securities in California. The principal place of business of Sunshine Real Estate Development, Inc. is Los Angeles and the company is incorporated in the state of Nevada.

The unqualified securities offered for sale were for investment interests in a "Joint Venture Agreement." The securities were in the form of written agreements stating that, among other things, "Sunshine, which is currently in the business of real estate development, shall offer real estate purchased by Sunshine to the joint venture." Investors were told that at the time the real estate was sold, they would receive cash back plus an additional amount equal to 12 percent profit per annum on all monies contributed.

Sunshine Real Estate Development, Inc. did not acquire real estate or return principal to investors as described in the written agreements. California investors have invested at least $3 million in the bogus investment contracts. The orders issued by the Department of Corporations bar Sunshine Real Estate Development, Inc., Jules Bernard Fleder and Roger Sherman from further offering or selling investment contracts and joint venture interests in Sunshine Real Estate Development, Inc. Corporations Counsel Kirk Wallace handled the enforcement action.

In a related action, the Securities Exchange Commission (SEC) filed fraud charges on Friday against four men, two of which include Jules Bernard Fleder and Roger Sherman, that alleged the defendants deceived investors by promising to generate investment returns through the development of real estate in Texas, Virginia and South Carolina. The SEC's action also names other companies associated with and operated by Fleder and Sherman which include Kennsington Holding Corporation, U.S. Real Estate Partners, Preferred Assets, Inc. and Summit Financial Services, Inc. The U.S. District Court in Texas has appointed a receiver for these companies and has taken possession of the main offices of Sunshine Real Estate Development, Inc.

The Department of Corporations is California's Investment and Financing Authority, reporting to the Business, Transportation and Housing Agency and the Governor. The Department is responsible for the regulation, enforcement and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending and residential mortgage lending. For further information or to obtain a complaint form, see the Department's Web site at www.corp.ca.gov or call 1-866-ASK-CORP (1-866-275-2677).