The Florida Attorney General’s Office is investigating Tampa-based real estate investment firm RAD Diversified REIT Inc. and its owners, Brandon “Dutch” Mendenhall and Amy Vaughn, for alleged deceptive practices and a potential Ponzi scheme. The investigation stems from multiple investor complaints regarding an inability to retrieve returns or principal investments.
Key Takeaways
- Florida Attorney General James Uthmeier is investigating RAD Diversified REIT Inc. for potential violations of the state’s Deceptive and Unfair Trade Practices Act.
- Owners Brandon “Dutch” Mendenhall and Amy Vaughn, who promote investments through social media and seminars, are specifically named in the investigation.
- The investigation is exploring allegations that investor funds are being misappropriated instead of being used for advertised real estate purchases, with concerns of a Ponzi scheme.
- Subpoenas have been issued, demanding documents from the company and its owners by July 18.
Investigation Details
Attorney General James Uthmeier’s office has issued subpoenas to RAD Diversified REIT Inc., its subsidiaries, and owners Brandon “Dutch” Mendenhall and Amy Vaughn. The investigation is focusing on allegations that the company may be violating Florida’s Deceptive and Unfair Trade Practices Act and other relevant laws. Mendenhall and Vaughn are known for their online presence, where they promote seminars encouraging investments in Florida real estate through their company and associated entities.
Investor Complaints and Allegations
According to a news release from the Attorney General’s office, multiple complaints have been received from individuals who invested with RAD Diversified. These investors claim they are unable to collect promised returns or recover their initial investments. Attorney General 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 the office is working to protect Floridians from potential fraud.
Scope of the Investigation
The investigation aims to gather information to determine if the company’s real estate holdings are equivalent in value to the total amount invested by its customers. The subpoenas seek a wide range of documents, including communications between the company and its clients, marketing materials, financial records, and internal company procedures. Special Counsel Ellen Lyons and Senior Assistant Attorney General Miles Vaughn are leading the case. Mendenhall and Vaughn, along with the company, have until July 18 to comply with the subpoenas and provide the requested documentation.
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.