The Florida Attorney General’s Office is investigating Tampa-based RAD Diversified REIT Inc. and its owners, Brandon “Dutch” Mendenhall and Amy Vaughn, for potential violations of the state’s Deceptive and Unfair Trade Practices Act. The probe, which has led to subpoenas for the company and its principals, centers on allegations that investors’ funds are being misappropriated instead of being used for real estate purchases as advertised.
Key Takeaways
- Florida Attorney General James Uthmeier’s office is investigating RAD Diversified REIT Inc. for alleged deceptive practices.
- Owners Brandon “Dutch” Mendenhall and Amy Vaughn are specifically named in the investigation.
- The investigation is exploring whether the company is operating a Ponzi scheme.
- Investors have reported being unable to retrieve their returns or initial investments.
- Subpoenas have been issued, requiring the company and its owners to provide documents by July 18.
Investigation Details
Attorney General James Uthmeier announced that his office has received multiple complaints from individuals who invested in RAD Diversified. These investors claim they are unable to collect promised returns or recover their initial capital. Uthmeier stated, "Our office has received complaints that a popular internet duo selling real estate investment services through their fund is pocketing cash instead of buying properties as advertised." He further indicated that the situation "appears to be a Ponzi scheme" and that the investigation aims to protect Floridians from potential fraud.
Social Media Influence and Investment Model
Mendenhall and Vaughn are known for their presence on social media and the internet, where they promote seminars encouraging investments in Florida real estate through RAD Diversified and its associated entities. Their investment model is designed to pool funds from individuals who may not have sufficient capital to purchase property independently. The Attorney General’s office is seeking to verify if the company’s real estate holdings are equivalent in value to the total amount invested by its customers.
Subpoenas and Document Requests
Subpoenas have been issued to RAD Diversified REIT Inc., Mendenhall, and Vaughn, demanding the production of various documents by July 18. These include communications between the company and its customers, marketing materials, financial records, and any documentation related to customer complaints. Special Counsel Ellen Lyons and Senior Assistant Attorney General Miles Vaughn are overseeing the case. The investigation seeks to gather comprehensive evidence to determine the extent of any deceptive practices and potential violations of state law.
Sources
- Tampa real estate investment firm under investigation for potential deceptive practices, Florida Politics.
- Florida AG probes Tampa real estate firm RAD over Ponzi scheme claims, The Business Journals.