Florida is grappling with a surge of sophisticated real estate investment fraud schemes that are targeting unsuspecting investors, leading to significant financial losses. Authorities are actively investigating multiple cases involving deceptive practices, Ponzi schemes, and outright theft, highlighting a growing concern for the state’s real estate market.
Key Takeaways
- Multiple real estate investment firms and individuals in Florida are under investigation for alleged fraud.
- Schemes often promise high, guaranteed returns, luring investors with fake opportunities.
- Victims have reported losing substantial sums, ranging from thousands to millions of dollars.
- Elderly individuals appear to be particularly vulnerable targets for these scams.
Investigations into Deceptive Practices
The Florida Attorney General’s Office is investigating Tampa-based RAD Diversified REIT Inc. and its owners, Brandon "Dutch" Mendenhall and Amy Vaughn. Subpoenas have been issued as the office probes potential violations of the state’s Deceptive and Unfair Trade Practices Act. Complaints suggest that investor funds are being pocketed instead of being used for property acquisition, with allegations pointing towards a Ponzi scheme. Investors have reported being unable to retrieve their returns or principal investments.
High-Yield Promises Turn Sour
In Boca Raton, a man has been arrested for a "bait and switch" scheme that defrauded 16 investors of over $410,000. The suspect, Felipe Souza, allegedly promised guaranteed returns between 200% and 338% on non-existent real estate deals. Investigations revealed that funds were not used for legitimate business purposes, with a significant portion transferred to an associate and the remainder used for personal expenses. Neither Souza nor his associate were licensed to sell securities or real estate in Florida.
Repeat Offenders and Elaborate Schemes
A 74-year-old Florida man, Jerald Benjamin Clawson, was arrested for a Ponzi-style scheme involving real estate investments. He is accused of soliciting cash and bridge loans with promises of guaranteed returns, but instead used victims’ money for personal use. This is not Clawson’s first encounter with the law; he was previously implicated in a $74 million fraud scheme involving unregistered securities in 2001.
Another case involves a 60-year-old Florida man who reportedly lost $1.6 million in an elaborate scheme orchestrated by a woman he had known for over a decade. The suspect allegedly provided fake documentation for foreclosure property investments, never actually purchasing the properties and making excuses when the victim requested his money back. Authorities are concerned she may have defrauded other investors as well.
Vulnerability of Seniors and Prevention
Data indicates that older individuals are disproportionately targeted by real estate fraud. In 2024, those aged 60 and over reported significant financial losses due to these scams. Florida ranks among the top states for real estate fraud complaints and financial losses. Scammers often exploit the trust and financial assets of seniors. To combat these schemes, experts advise vigilance, including being wary of deals that seem too good to be true, verifying the credentials of real estate agents, thoroughly reviewing all paperwork, and considering hiring a real estate attorney for due diligence.
Sources
- Tampa real estate investment firm under investigation for potential deceptive practices, Florida Politics.
- Boca Raton man nabbed for $410K real estate scam, duping 16 investors, WPEC.
- 74-Year-Old Florida Man Arrested in Real Estate Investment Fraud Scheme, Weekly Real Estate News.
- This Florida man, 60, says
he lost $1.6 million in an elaborate real estate investment scheme — fronted by a woman
he’d known for over a decade. How to avoid falling for fake investments, Moneywise. - Florida AG probes Tampa real estate firm RAD over Ponzi scheme claims, The Business Journals.