Kings Real Estate Investment Trust, Reliance Enterprises, LLC, Monte R. Swanzy, Stephen P. Swanzy, David L. Knudson, and Van E. Brighton, individually and d/b/a Brighton Funding Group, Defendants, and Romerian Trust, Patricia Swanzy and Brighton Enterprises, Inc.: Lit. Rel. No. 18553 / January 23, 2004, 2004

On January 23, 2004, the SEC announced that the United States District Court for the District of Kansas granted the SEC's request, in its complaint filed the same day, for emergency relief, including a temporary restraining order, preliminary injunction, asset freeze, asset repatriation order and orders expediting discovery and prohibiting document destruction. As a result of the Court's ruling, $1 million in investor funds have been frozen. The Court ordered the relief against the defendants named in the Commission's complaint: Kings Real Estate Investment Trust ("Kings REIT"), Monte R. Swanzy, Stephen P. Swanzy, David L. Knudson, Reliance Enterprises, LLC ("Reliance") and Van E. Brighton, individually and d/b/a Brighton Funding Group. The Commission alleges in its complaint that the defendants committed securities fraud and offering registration violations in connection with a fraudulent scheme that has elicited $1.9 million from investors. The Commission also alleges in its complaint that defendants Knudson and Brighton violated the broker-dealer registration provisions of the federal securities laws.

In its complaint, the Commission alleges that the defendants defrauded investors by making the following false claims: 1) that Kings REIT has $100 million in assets; 2) that Kings REIT would pool the initial $1 million of investor funds raised, and maintain the funds for one year intact and free of risk in a Kings REIT account; 3) that the Kings REIT investment is "very safe"; and 4) that Kings REIT would pay to its investors returns of four to seven percent monthly (or 48 to 90 percent annually). The Commission further alleges that the defendants failed to disclose that, in reality, Kings REIT engages in no legitimate business or investment activities, and that the defendants were systematically misappropriating the investors' funds for their own benefit and to pay undisclosed sales commissions.

More particularly, the defendants are alleged to be participating in the scheme as follows:

Monte R. Swanzy, age 52, operates Kings REIT from his Dallas residence;

Stephen P. Swanzy, age 25, is believed to be Monte Swanzy's son and is a signatory on the Kings REIT bank accounts;

Van E. Brighton, age 55, of Manhattan, Kansas, is a promoter of Kings REIT;

David L. Knudson, age 45, of Lees Summit, Kansas, is a Kings REIT promoter.

The Commission named in its complaint, as relief defendants, Romerian Trust, Patricia Swanzy and Brighton Enterprises, Inc., based on their alleged illicit receipt of investor funds. The Commission seeks to freeze any investor funds in their control.

The Commission alleges in its complaint that the defendants Kings REIT, Reliance, Monte Swanzy, Stephen Swanzy, Knudson and Brighton, individually and d/b/a Brighton Funding Group, each violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that, additionally, defendants Knudson and Brighton violated Section 15(a) of the Exchange Act. In addition to the emergency relief that has been granted, the Commission seeks, against the defendants, permanent injunctions, disgorgement plus prejudgment interest and civil money penalties. The Commission also seeks disgorgement plus prejudgment interest from the relief defendants.

The Commission acknowledges the assistance and cooperation of the Kansas Office of the Securities Commissioner.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 18553 / January 23, 2004

SEC SUES TO HALT OFFERING FRAUD AND FREEZE ASSETS FOR INVESTORS

Modified: 01/26/2004