Florida’s Attorney General is investigating Tampa-based RAD Diversified REIT Inc. and its owners for alleged deceptive practices in real estate investments. The probe, initiated after multiple investor complaints, centers on claims that funds intended for property acquisition may have been misappropriated, potentially resembling a Ponzi scheme.
Key Takeaways
- Tampa real estate firm RAD Diversified REIT Inc. is under investigation.
- Owners Brandon “Dutch” Mendenhall and Amy Vaughn are named in subpoenas.
- Allegations include pocketing investor funds instead of buying properties.
- The Attorney General’s office suspects violations of deceptive trade practices.
- Investors report inability to collect returns or recover their principal.
Investigation Details
Attorney General James Uthmeier’s Office has issued subpoenas to RAD Diversified REIT Inc., along with its owners Brandon “Dutch” Mendenhall and Amy Vaughn. The investigation aims to determine if the company has violated Florida’s Deceptive and Unfair Trade Practices Act and other relevant laws. Mendenhall and Vaughn, who have gained a following as social media influencers promoting real estate investment seminars, are central to the inquiry.
"Our office has received complaints that a popular internet duo selling real estate investment services through their fund is pocketing cash instead of buying properties as advertised," Uthmeier stated in a news release. "This appears to be a Ponzi scheme, and with several individuals claiming they’ve been exploited, we are investigating to ensure Floridians are not being deceived by greedy fraudsters."
The company and its owners have until July 18 to respond to the subpoenas by providing requested documents. The investigation seeks to verify whether the company possesses real estate assets equivalent in value to the total amount invested by its customers. Evidence being sought includes communications with customers, marketing materials, banking records, and internal company procedures.
Broader Concerns in Florida Real Estate Investment
This investigation into RAD Diversified REIT Inc. is part of a larger pattern of alleged fraud within Florida’s real estate investment sector. Recent cases highlight similar schemes where investors have been promised high returns on property investments, only to have their funds allegedly misused for personal gain or disappear entirely.
For instance, a separate case involved Aventura brothers Hugo and Emmanuel Amaya, who were arrested on charges including grand theft and organized scheme to defraud. Authorities allege they took hundreds of thousands of dollars from investors, using the money for luxury items and travel instead of property investments. Victims reported being promised significant interest rates, but ultimately received little to no return on their investments.
Another incident involved Boca Raton resident Felipe Souza, accused of defrauding 16 investors out of over $410,000 through a "bait and switch" scheme. Investors were promised exorbitant returns on non-existent real estate deals. Investigations revealed that funds were not used for legitimate business purposes but were instead transferred to other individuals or used for personal expenses.
These cases underscore the importance of due diligence for individuals considering real estate investments, particularly those promoted through online channels or promising unusually high returns.
Sources
- Tampa real estate investment firm under investigation for potential deceptive practices, Florida Politics.
- Property Investor Says Florida Real Estate Broker Stole $121M, Law360.
- Aventura brothers used property investment fraud to fund lavish lifestyle: Police – NBC 6 South Florida, NBC 6 South Florida.
- Boca Raton man nabbed for $410K real estate scam, duping 16 investors, WPEC.