State business regulators are alleging that a local developer bilked investors in a planned downtown Kapolei retail and office building.

The state Department of Commerce and Consumer Affairs issued a preliminary order against Lawrence “Larry” Stogdell to cease and desist from offering or obtaining investment capital for his project known as Aloha Pacific Center and formerly Haumea Center.

DCCA said in its complaint that Stogdell received at least $2.3 million from 45 investors who were promised returns through interest and profit sharing without disclosing that assets supposedly securing their investments were unsound.

Additionally, the complaint said the developer gave investors excuses as recently as July as to why the more than $50 million project hasn’t been built, as part of what the agency called a scheme to defraud.

DCCA is seeking restitution from Stogdell on behalf of investors and a $500,000 administrative penalty.

Stogdell may request a hearing to dispute the allegations. He couldn’t be reached for comment Wednesday.

Catherine Awakuni Colon, DCCA director, filed the order last week, and the agency announced the filing Wednesday.

According to the order, Stogdell began soliciting investors around October 2007 for the project, a five-story office and retail complex.

Stogdell companies involved include L.A. Anuenue, APC Development Partners, Haumea Funding and Haumea Holdings.

Investors, who contributed $12,500 to $200,000 each, were to receive interest and profit sharing with a combined return between 25 percent and 63 percent, the complaint said.

The promise of profit sharing for passive investors made the offer a security that should have been, but wasn’t, registered with the state, DCCA said. The agency added that an agent who made commissions on the investments, David S.Y. Chang of Honolulu-based WealthBridge Real Estate LLC, also wasn’t registered to sell those securities.

Chang wasn’t immediately available for comment Wednesday.

Besides promising investors financial returns, Stogdell offered a guarantee and told investors their money was secured by the value of the project’s ground lease and other assets he had.

However, DCCA contends that Stogdell didn’t have the means for the guaranty.

“During the time the investments were being offered and sold to Hawaii investors, Stogdell and his companies had multiple lawsuits against them, including foreclosures, judgments totaling millions of dollars, and a complaint for breaching one of the ground leases on the development site of the Aloha Pacific Center,” the agency said.

The complaint alleges that before Stogdell began soliciting investors, he faced a foreclosure lawsuit on one of his prior real estate projects that was repossessed in November 2007 and left the developer owing $993,469. Yet Stogdell, in an Aloha Pacific Center investment brochure, listed the same property as having been sold, the complaint said.

Stogdell also defaulted on a $290,000 real estate promissory note in October 2007, and had a $1.9 million judgment against him in 2009 after he lost his home to foreclosure, DCCA said.

By 2011, Stogdell lost his main ground lease for Aloha Pacific Center after defaulting on rent in 2009, and he lost a smaller ground lease for the project in 2012 after not paying rent, the complaint said.

None of this negative information was shared with investors, DCCA alleges, based on investor complaints. Instead, investors were asked to keep their money with Stogdell for a longer period, DCCA said.

A few early investors got their money back, but most didn’t, DCCA said, adding that Stogdell continues to ask investors to extend their investments while sending them newsletter updates explaining project delays.

DCCA quoted from a June newsletter in which it said Stogdell claimed the project was recently approved for an investment from a group but that while the group was “clearing all the security checkpoints along the way to our account,” there was “confusion in the documents (that) instantly stopped the funds from arriving to us.”

Meanwhile, Stogdell and his companies continue to promote Aloha Pacific Center, including trying to get office and retail users to buy space in the project.

“To date, the Haumea project, now known as the Aloha Pacific Center, is still being advertised in sales materials, including internet listings to rent or purchase units in the project,” DCCA’s complaint said. “However, (Stogdell and his companies) no longer own any interest in the ground leases to build on the property identified as the project site.”