A significant collapse has struck Florida’s real estate sector, with RAD Diversified at the center of a burgeoning scandal. Investors are reporting tens of millions in missing assets, leading to multiple lawsuits and investigations by state and federal authorities. The situation raises serious questions about the company’s practices and the regulatory environment.
Key Takeaways
- Tens of millions in assets have reportedly vanished from RAD Diversified.
- The SEC and Florida’s Attorney General are investigating potential Ponzi scheme activities.
- Investors are reporting missed payments and frozen redemptions.
- The company’s use of JOBS Act provisions is under scrutiny.
The Rise and Fall of RAD Diversified
RAD Diversified, a Tampa-based real estate investment firm, promised investors a path to financial freedom through various offerings, including a non-traded real estate investment trust (REIT), Opportunity Zone funds, a crypto fund, and an exclusive investment club. The company claimed a real estate portfolio valued at $250 million.
However, cracks began to appear when former employees, like Brad Carr, a West Point graduate and former Army officer, raised concerns about financial discrepancies and unrealistic return claims. Carr resigned after six months, citing an inability to perform his duties due to these issues.
Investor Woes and Missing Millions
In the months following Carr’s departure, investors began experiencing a slowdown, then a complete halt, in income distributions and loan payments. RAD Diversified initially attributed the cash crunch to the broader real estate market downturn. However, by February 2024, the Securities and Exchange Commission (SEC) halted RAD’s ability to raise new funds, and the company froze investor redemptions.
Further compounding the crisis, in July 2025, Florida Attorney General James Uthmeier announced subpoenas, stating that the situation "appears to be a Ponzi scheme." Investors have reported significant losses, with some, like Tom Nagy, recovering only a fraction of their substantial investments. Another investor, Lonnie Phillips, detailed how properties were sold without his knowledge, and proceeds were never received.
Investigations and Regulatory Scrutiny
An internal review by Jeff Thomas, a former board member and significant shareholder, revealed alarming financial practices. He reported that the REIT was "broke," with declining rent collections, unpaid taxes and insurance, and properties facing foreclosure. Thomas estimated that approximately $100 million in assets were missing.
The company’s operations are also being examined in the context of the 2012 JOBS Act, which allowed companies to raise capital with less stringent disclosure requirements. Private REITs, in particular, have seen significant growth but also present risks due to limited redemptions and less ongoing disclosure compared to public REITs.
Adding to the concerns, accountant Charles Dombek, who promoted tax strategies at RAD events, has agreed to a permanent injunction with the U.S. Department of Justice barring him from promoting certain strategies. This news has further fueled investor fears about the return of their funds.
Legal Battles and Future Outlook
RAD Diversified faces numerous lawsuits, including 18 default judgments totaling $9.5 million against its entities in Hillsborough County. The company and its founders, Brandon "Dutch" Mendenhall and Amy Vaughn, have not responded to requests for comment. The ongoing investigations by the SEC and the Florida Attorney General’s office are expected to shed more light on the extent of the alleged misconduct and the fate of investors’ money.