State opens investigation into Sunrise - lllinois secretary of state files temporary order stopping investment firm

By LORRAINE SWANSON - Wednesday, October 22, 2008

The Illinois Secretary of State's office filed a temporary order of prohibition against the missing CEO and president of a shariah-compliant investment firm. A spokesman for Jesse White's office said state investigators have gathered sufficient evidence to believe there was a violation of securities law.

No one has seen or heard from Salman Ibrahim, the president and CEO of Sunrise Equities since August. Salman, whose last known address is the 5600 block of W. Eddy, has been accused of allegedly bilking hundreds of investors from West Ridge's Indian-Pakistani community and from around the world. Investors' losses are estimated between $50 million and $80 million.

"The order stops Sunrise's activities," Secretary of State spokesman Henry Haupt said. "[Sunrise] cannot solicit any more investments.

Investors noticed something awry when they stopped receiving monthly disbursement checks from the investment firm in August. The firm's corporate officers and employees also stopped returning investors' calls, which investors said was highly unusual.

The temporary order names Sunrise Equities Inc. and Sunrise Management II. The firm also did business as the Sunrise Development Group and Sunrise Development Inc., with addresses at 6355 N. Claremont, 1000 W. Monroe and 1023 W. Madison.

In addition to Ibrahim, the order lists company founders Amjed Mahmood, of Des Plaines, and physician Mohammed Akbar Zahid, of Chicago. Both appear on the company's Web site as the senior vice presidents of construction and community relations, respectively.

Saquib Anwar, also named as a "respondent," is listed as an employee and sales agent of Sunrise.

The temporary order alleges that Ibrahim and others failed to register securities and committed fraud in the sale of securities.

"In general, for any securities to be sold in the state of Illinois, firms have to go through a registration process," said Jim Nix, a senior attorney with the Secretary of State's office. "This discloses where the money goes to and who is in charge of the company. Sunrise did not go through this step."

Sunrise registered as a corporation in 2001, according to state records, and kept its registration current. Nix said he could not say exactly when investors first contacted the Secretary of State's office because of the ongoing investigation. "But they contacted us shortly before the temporary order was issued," Nix said. "We try to issue them as quickly as possible when we have enough information."

Between December 2007 and June 2008, the firm's agents and operators offered at least one Illinois resident the opportunity to purchase promissory notes. According to the temporary order, Sunrise's agents allegedly told the investor that she would receive monthly disbursements between 17 and 20 percent of her initial $126,000 investment.

Nix said the investor named in the temporary order is "representative" of hundreds of others.

Although Islamic law prohibits interest-bearing loans, state laws define the transfers of sale between investors and Sunrise as securities.

Cole Taylor Bank has filed a $15.5 million foreclosure lawsuit on an Uptown development site marketed as Pure 2.0 and located at 4700 N. Clarendon. Ibrahim is named as a defendant in the foreclosure case because he personally guaranteed a $7.2 million sales agreement, according to Chicago Real Estate Daily, published by Crain's Chicago Business.

Plans for Pure 2.0 were presented to Uptown residents in March. Investors were sold shares in the upscale, 18-story condominium development. Another Pure development at 24 S. Morgan is almost completed. Sales of condominium units are said to be moving forward, according to Sunrise Development's former sales and marketing director, Suzy Grossman.

Many investors told News-Star that Ibrahim gained their trust because they were struck by his deep Muslim faith. Ibrahim also served as treasurer on the Shariah Board of America, until leaders removed him from the post shortly after he disappeared in late August.

Dozens of investors have since banded together to file a lawsuit forcing Sunrise into involuntary bankruptcy in an effort to recoup some of their losses. Attorneys representing the investors have stated that several of them have been interviewed by the FBI.

Haupt said that typically in such cases as Sunrise, when there is apparent "fraud of this magnitude, criminal authorities are notified."

Those named in the temporary order of prohibition have 30 days to request a court hearing. Any time after 30 days shall constitute an admission of guilt, making the temporary order of prohibition final.

CONTACT: lswanson@chicagojournal.com

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