Florida’s real estate sector is currently grappling with a series of investment fraud and deceptive practices, leading to multiple investigations and arrests. Several individuals and firms are accused of misleading investors with promises of high returns, only to misappropriate funds for personal use or engage in elaborate Ponzi schemes. The Attorney General’s office and law enforcement agencies are actively pursuing these cases to protect Floridians from financial exploitation.
Key Takeaways
- Multiple real estate investment schemes in Florida are under investigation for fraud and deceptive practices.
- Accused individuals and firms allegedly promised high returns but failed to deliver, often misusing investor funds.
- Law enforcement agencies, including the FDLE and Attorney General’s office, are actively pursuing these cases.
- Past fraudulent activities and lack of proper licensing are common factors in these schemes.
Ongoing Investigations and Arrests
A Tampa-based real estate investment firm, RAD Diversified REIT Inc., along with its owners Brandon "Dutch" Mendenhall and Amy Vaughn, are under investigation by the Attorney General’s Office. Subpoenas have been issued as the office investigates 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 purchases, with allegations pointing towards a Ponzi scheme. Investors have reported being unable to collect returns or retrieve their initial investments.
In a separate case, 74-year-old Jerald Benjamin Clawson was arrested for organized scheme to defraud and unlawful use of unregistered securities in a Ponzi-style scheme. The Florida Department of Law Enforcement (FDLE) began its investigation in October 2023 after receiving complaints that Clawson was soliciting real estate investments with promised guaranteed returns. However, the funds were allegedly used for personal expenses, and "several million dollars" were obtained through this scheme. Clawson has a history of similar offenses, having been involved in a $74 million fraud scheme in 2001.
High-Yield Promises and Misappropriated Funds
Felipe Souza, a 27-year-old from Boca Raton, faces charges for a "bait and switch" scheme that defrauded 16 investors out of over $410,000. He allegedly promised guaranteed returns between 200% and 338% on non-existent real estate deals. Investigations revealed that Souza collected $413,800 from investors between February 2021 and January 2022. Instead of investing the money as promised, a significant portion was transferred to Michael Campbell, who also lacked proper licensing. Funds were reportedly used for personal expenses by both individuals.
Tax Fraud in Real Estate Investments
Brian Davison, former CEO of Tampa-based Equialt LLC, was sentenced to three years in federal prison for tax fraud. He underreported his income by at least $29.7 million between October 2018 and December 2020, resulting in a tax loss of $6.29 million to the federal government. Equialt LLC itself was placed into receivership following an SEC complaint related to an alleged fraudulent unregistered securities offering that raised over $170 million from more than 1,100 investors.
Florida Faces Investment Fraud and Deceptive Practices in Real Estate Sector.
- Tampa real estate investment firm under investigation for potential deceptive practices, Florida Politics.
- 74-Year-Old Florida Man Arrested in Real Estate Investment Fraud Scheme, Weekly Real Estate News.
- Florida Real Estate Investor Sentenced for $6.29 Million Tax Fraud, Weekly Real Estate News.
- Boca Raton man nabbed for $410K real estate scam, duping 16 investors, WPEC.