On July 2, 2007, the Securities and Exchange Commission filed an emergency action in Dallas federal court to halt what the Commission contends is a fraudulent offering of securities, known as Secured Debt Obligations (“SDOs”), by Amerifirst Funding, Inc. and Amerifirst Acceptance Corporation (together, “Amerifirst”). The SDOs are notes purportedly secured by automobile financing receivables created or purchased by the defendants. The district court entered, under seal, a temporary restraining order suspending the offering, as well as orders freezing the defendants’ assets and requiring an accounting and repatriation of assets. The court also appointed a receiver to secure assets for investors, and ordered defendants to preserve documents and submit to expedited discovery. On July 3, 2007, the court unsealed all of the orders.
The defendants named in the Commission’s Complaint are:
Jeffrey C. Bruteyn, age 37, of Dallas, Texas, Managing Director of Amerifirst Funding, Inc. and Amerifirst Acceptance Corporation and the Director and sole owner of Hess Financial Corporation;
Dennis W. Bowden, age 55, of Dallas, Texas, the president of Amerifirst Funding, Inc., a director and chief operating officer of Amerifirst Acceptance Corporation and president and COO of American Eagle Acceptance Corporation;
Amerifirst Funding, Inc., a Texas corporation operated and controlled by Bruteyn and Bowden; and
Amerifirst Acceptance Corporation, a Texas corporation operated and controlled by Bruteyn and Bowden.
The Commission’s Complaint also names two relief defendants, seeking return of investor funds they unjustly received:
American Eagle Acceptance Corporation, a Texas corporation controlled by Bowden and held out to be a subsidiary of Amerifirst Funding; and
Hess Financial Corporation, a Texas corporation controlled by Bruteyn.