Alaska Financial Company III Promoters Allegedly Misappropriated Funds and Violated SEC “Regulation D”

The Securities and Exchange Commission (SEC) reportedly has settled charges against the operators of a real estate investment business that caused millions in loses to investors.  Up to 300 investors may have lost money on interests in a fund known as Alaska Financial Company III, LLC (“AFC III”), which two individuals named Tobias Preston and Charles Preston sold to investors via their company McKinley Mortgage Co. LLC (“McKinley”). The SEC accused defendants of falsely portraying AFC III as a safe investment and reporting that it had profitable operations.  However, according to the SEC, in reality AFC III was insolvent and unable to make interest payments as they came due.  According to the SEC, although a portion of the raised funds were invested as promised to investors, Messrs. Preston and McKinley diverted millions of dollars in proceeds of outside investments to fund business and personal expenses as well as McKinley’s…

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