Investors in an Arkansas mortgage operation were promised returns as high as 20 percent. But now the state of Arkansas has shut it down, alleging the company had no possibility of earning anywhere near the promised amount.

A cease and desist order was issued against residential lender A Freedom Team Mortgage Company Inc. by the Arkansas Securities Department, according to a copy of the order. Orders were also issued against the Avedis Group as well as other affiliated entities and individuals, none of which or whom are registered with the department to deal or issue securities.

Allen, Texas-based Avedis purports to be a financial self-help group that produces literature and programs to help individuals handle and grow their assets, the order states. Members can sign up for several courses, including the first one that advises how to be debt free in several years and others that give real estate advice. They participate in conference calls and are paired with the others in the group known as mentors and financial advisors in the group.

Between September 2005 and May 2006, A Freedom sold 14 promissory notes to investors who, in the majority of cases, were urged by Avedis to refinance their homes through A Freedom and take out equity to invest in the notes. The notes were reportedly described as a suitable investment that would produce rates of return as high as 20 percent and matured in nine months. The total mount invested in the notes was nearly $745,000.

One of the targets invested over $150,000 to which he was given promissory notes promising a rate of return of 2 percent per month or no less than 24 percent annually, bought $50,000 worth of Avedis shares and for $150,000 was given an "investment contract" that would invest the funds at the discretion of the investee.

"Although the investigation into this matter is still ongoing, it is clear at this point that the money was not invested in any way or used any way that could generate there returns promised in the time period stated," the department said in the order.

Avedis was not immediately available for comment and the number listed for A Freedom was not in service.

Avedis reportedly submitted forms to the department in late 2003 requesting an exception from registration requirements and to sell Avedis stock without registering it.

Although most of the investors did not know exactly how the promised return would be made, they made an investment and expected a return.

The companies and agents violated laws by promising returns from 10 percent to 20 percent and by offering refinance loans in order to invest in the promissory notes "knowing they had no idea of how those rates of return would be made and no business plan or mechanism to achieve such high returns," the state said.

Others targeted in the order are Avedis' chief executive Jim Beach, aftmortgage.net; TT and T LLC; Thomas Financial LLC and its owner Mark Leamon Thomas, who also purported to be the founder of Avedis; GDC LLC and its owner Gary Duplantis; and Arkansas residents Trent Dodds; Betty Kitchen, the secretary of aftnetmortgage.com; and Tony Casteel who is affiliated with Avedis and some of the other companies.

The department issued an additional order to A Freedom, Kitchen, Thomas and Dodds for allegedly failing to comply with the Arkansas Fair Mortgage Lending Act, including operating without a license, accepting compensation as unlicensed loan officers, submitting false statements to the department, and continuing to conduct mortgage loan business even after the department ordered them to cease until a license was issued.

Failure to cease and desist from mortgage lending related activities may result in a civil penalty of up to $25,000 per violation.

Pending mortgage applications must be immediately transferred to a licensed loan officer, broker or banker.