The Florida Attorney General’s Office is investigating Tampa-based real estate investment firm RAD Diversified REIT Inc. and its owners for potential violations of the state’s Deceptive and Unfair Trade Practices Act. The probe, initiated due to multiple investor complaints, centers on allegations that the company may be operating a Ponzi scheme, failing to use investor funds for property acquisition as advertised and preventing investors from retrieving their returns or principal.
Key Takeaways
- Florida Attorney General James Uthmeier’s office is investigating RAD Diversified REIT Inc.
- The investigation focuses on owners Brandon “Dutch” Mendenhall and Amy Vaughn.
- Allegations include deceptive practices and potential operation of a Ponzi scheme.
- Subpoenas have been issued, demanding documents from the company and its owners.
- Investors report being unable to access their funds or receive promised returns.
Investigation Launched Amidst Investor Complaints
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 stems from numerous complaints filed by investors who claim they are unable to collect returns or recover their initial investments. The Attorney General’s office is examining whether the company’s real estate holdings are equivalent in value to the total amount invested by its customers.
Social Media Influence and Investment Promises
Mendenhall and Vaughn have gained prominence as internet and social media influencers, promoting seminars that encourage investments in Florida real estate through RAD Diversified and its associated entities. Their marketing efforts target individuals who may not have sufficient capital to purchase property outright, promising pooled investment opportunities for real estate acquisition. The Attorney General’s office is scrutinizing communications, marketing materials, and financial documents to ascertain the legitimacy of these investment practices.
Legal Action and Document Demands
The subpoenas require RAD Diversified REIT Inc. and its owners to provide specific documents by July 18. These include evidence of communication with customers, documents shared with investors, internal company procedures, marketing materials, and banking records. The investigation aims to gather comprehensive information to determine if the company has violated state laws regarding deceptive and unfair trade practices. Special Counsel Ellen Lyons and Senior Assistant Attorney General Miles Vaughn are leading the case.
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.