Florida is grappling with a significant rise in investment fraud losses, with multiple real estate investment firms and individuals under investigation for deceptive practices. The Attorney General’s office is actively pursuing cases involving alleged Ponzi schemes and fraudulent promises, impacting numerous investors across the state.
Key Takeaways
- A Tampa-based real estate firm, RAD Diversified REIT Inc., and its owners are under investigation for potential violations of the Deceptive and Unfair Trade Practices Act.
- Investigations reveal allegations of firms pocketing investor funds instead of purchasing properties as advertised, with some schemes resembling Ponzi operations.
- Elderly investors and those with limited capital are often targeted in these fraudulent schemes.
- Past fraudulent activities by individuals involved in current investigations highlight a pattern of deceptive behavior.
RAD Diversified REIT Inc. Under Investigation
Attorney General James Uthmeier’s Office has issued subpoenas for RAD Diversified REIT Inc., along with its owners Brandon “Dutch” Mendenhall and Amy Vaughn. The investigation stems from numerous complaints alleging that the company, which promotes real estate investments through social media and seminars, is not using investor funds as promised. Investors report being unable to collect returns or retrieve their money. The investigation aims to determine if the company’s real estate holdings match the value of customer investments.
Arrest in Ponzi-Style Real Estate Scheme
In a separate case, 74-year-old Jerald Benjamin Clawson was arrested by the Florida Department of Law Enforcement (FDLE) on charges including organized scheme to defraud and unlawful use of unregistered securities. Clawson allegedly solicited real estate investments with promises of guaranteed returns, but instead used the "several million dollars" obtained from investors for personal use. This is not Clawson’s first encounter with the law; he was previously involved in a $74 million fraud scheme involving pay telephone leasebacks in 2001.
Boca Raton Man Charged in $410K Real Estate Scam
Felipe Souza, 27, of Boca Raton, faces charges for a "bait and switch" scheme that defrauded 16 investors of over $410,000. The Florida Office of Financial Regulation (OFR) investigated Souza’s business, FAS Creative Concepts LLC, after receiving complaints from the U.S. Securities and Exchange Commission (SEC). Souza allegedly promised exorbitant returns of 200% to 338% on real estate deals that did not exist. Instead of investing the funds, Souza and an associate, Michael Campbell, reportedly used the money for personal expenses. Neither Souza nor Campbell were licensed to sell securities or real estate in Florida.
These ongoing investigations underscore a growing concern over investment fraud within Florida’s real estate sector, with authorities urging vigilance among potential investors.
Sources
- 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.
- Boca Raton man nabbed for $410K real estate scam, duping 16 investors, WPEC.