A Tampa-based real estate investment firm, RAD Diversified REIT Inc., is currently under investigation by Florida Attorney General James Uthmeier’s Office for alleged violations of the state’s Deceptive and Unfair Trade Practices Act. The investigation centers on owners Brandon "Dutch" Mendenhall and Amy Vaughn, who promote real estate investments through seminars and social media.
Key Takeaways
- Florida Attorney General’s Office is investigating RAD Diversified REIT Inc. for potential deceptive practices.
- Owners Brandon "Dutch" Mendenhall and Amy Vaughn are subjects of the investigation.
- Investors have reported being unable to collect returns or retrieve their invested funds.
- A separate lawsuit in Miami alleges conspiracy, predatory lending, and illegal interest rates against other real estate investment firms.
Investigation into RAD Diversified REIT Inc.
Attorney General Uthmeier’s office has issued subpoenas to RAD Diversified REIT Inc. and its subsidiaries, as well as to owners Mendenhall and Vaughn. The investigation was prompted by multiple complaints from investors who claim they cannot access their returns or recover their initial investments. Uthmeier stated that the office received complaints suggesting that funds intended for property purchases were being misappropriated, raising concerns of a potential Ponzi scheme.
The subpoena requires the company and its owners to provide documents by July 18th. The investigation aims to determine if the company’s real estate holdings are equivalent in value to the total amount invested by its customers. Evidence sought includes communications with customers, marketing materials, banking records, and internal company procedures.
Allegations Against Other Investment Firms
In a separate development, two prominent U.S. real estate investment firms, Silverstein Capital Partners and Monarch Alternative Capital, are facing accusations of conspiracy, civil misconduct, and predatory lending. These allegations are detailed in a $67 million lawsuit filed in Miami Dade County by affiliates of Royal Palm Companies. The lawsuit stems from a dispute over a $32 million construction loan for the Legacy Miami Worldcenter skyscraper.
Royal Palm Companies alleges that Silverstein Capital Partners secretly sold the loan to a "dummy corporation" created by Monarch, with the intent to foreclose on the project. The lawsuit also claims that the firms attempted to charge usurious interest rates exceeding 45 percent on the construction loan, which is a felony under Florida law for loans over $500,000.
Monarch Alternative Capital has a history of similar accusations, including a past incident in Minneapolis where they were accused of attempting a hostile takeover of a development project. Royal Palm Companies asserts that these actions are motivated by retaliation and greed, aiming to sabotage a significant Miami development project.