Two insurance agents in Virginia are accused of illegally selling promissory notes in violation of securities laws through 12 companies operating in the state.

Julius Everett Johnson and Walter Ray Reinhardt, who authorities say were last known to be living in Richmond, Va., had a temporary injunction issued against them and their business entities.

The Virginia State Corporation Commission Division of Securities and Retail Franchising, which regulates securities transactions in the state, accused both men, along with companies they operated, of making material misrepresentations and material omissions, including failing to provide financial disclosures, failing to provide investment-risk disclosures, failing to provide a litigation or compliance disciplinary disclosure, failing to disclose that the securities being offered were not registered and falsely stating that they were exempt from registration, and making misrepresentations about his personal net worth pertaining to personal guarantees of the issued promissory notes, according to SCC records.

Johnson and his companies also are accused of operating as a fraud or deceit upon purchasers by issuing corporate promissory notes for one issuer, then transferring the money to another entity and using new investors’ money to pay interest to previous investors, records show.

The companies Johnson operates, each included as defendants in the case, are Benefit Contract Administrators Inc., MHC Linen Service LLC, River City Cleaners LLC, Roberts Awning Restoration and Renewal LLC formerly known as Roberts Awning LLC.

Other defendants include Julius Everett Johnson doing business as Benefit Contract Administrators LLC, Mid Atlantic Insurance Agencies Inc., LivingWell Healthcare of Virginia LLC, Everett Awnings Inc. doing business as Roberts Awnings, and FIC Financial Group Inc., records show. Regulators say all of the businesses under Johnson’s control were located in the 2600 block of North Parham Road.

Reinhardt operates three businesses: First Fidelity Financial of Richmond LLC and Commonwealth Assurity LLC, both located at the same address as Johnson’s businesses on North Parham Road, and Capital Investor Group Inc. located on Consultant Place in Durham, N.C., records show.

Reinhardt is accused of selling illegal securities between 2005 and now. He also is accused of operating as the broker-dealers in offerings and selling the illegal promissory notes of Benefit Contract Administrators, MHC Linen Service, River City Cleaners, Mid Atlantic Insurance Agencies, LivingWell Healthcare of Virginia, Roberts Awning Restoration and Renewal and FIC Financial Group, records show.

Neither Johnson nor Reinhard, according to case files, were registered to sell securities in or from Virginia.

Johnson has a life and annuities and health insurance license from Virginia, active since July 1, 1979, according to the SCC website. Reinhardt, who lists a Durham, N.C., address for his residence, has a life and annuities license, active since Oct. 14, 2008, according to the SCC website.

A securities hearing examiner must now investigate in preparation for a three-day hearing in the case, scheduled for July 22 to explain why they should not have to pay restitution or make rescission to investors and if they should be penalized for their alleged actions. The defendants are required to make an initial written response by March 26.