Florida is grappling with an escalating wave of real estate investment fraud, with authorities investigating several firms and individuals accused of defrauding investors. Losses are mounting as schemes promising high returns unravel, leaving victims with significant financial setbacks. The Attorney General’s office and law enforcement agencies are actively pursuing these cases.
Key Takeaways
- Multiple real estate investment firms and individuals in Florida are under investigation for alleged fraud.
- Schemes often involve deceptive promises of high returns and misuse of investor funds.
- Authorities are actively pursuing legal action, including subpoenas and arrests.
- Past fraudulent activities by some individuals highlight a pattern of misconduct.
Tampa Firm Under Investigation
A Tampa-based real estate investment firm, RAD Diversified REIT Inc., and its owners, Brandon "Dutch" Mendenhall and Amy Vaughn, are facing scrutiny from the Attorney General’s Office. Subpoenas have been issued as part of an investigation into potential violations of the state’s Deceptive and Unfair Trade Practices Act. The investigation stems from numerous investor complaints alleging that funds were pocketed instead of being used for property investments, with some characterizing the operation as a Ponzi scheme. The firm and its owners are accused of promoting seminars and using social media to attract investors, particularly targeting Floridians with limited capital for direct real estate purchases.
Arrests and Schemes Uncovered
In a separate case, 74-year-old Jerald Benjamin Clawson was arrested on charges including organized scheme to defraud and unlawful use of unregistered securities. The Florida Department of Law Enforcement (FDLE) initiated an investigation after receiving complaints that Clawson was soliciting real estate investments with promises of guaranteed returns, only to use the money for personal expenses. This scheme allegedly involved "several million dollars." Clawson has a history of legal trouble, having been previously implicated in a large-scale fraud involving unregistered securities in 2001.
Another investigation led to the arrest of 27-year-old Felipe Souza of Boca Raton. Souza is accused of a "bait and switch" scheme that defrauded 16 investors out of over $410,000 by promising exorbitant returns on non-existent real estate deals. The Florida Office of Financial Regulation (OFR) found that Souza collected funds by falsely claiming to secure collateral for property flipping ventures. Instead of investing the money, a significant portion was transferred to an associate, Michael Campbell, with both individuals reportedly using the funds for personal expenses. Neither Souza nor Campbell were licensed to sell securities or real estate in Florida.
Financial Fraud and Sentencing
In a related development, Brian Davison, a former CEO of the Tampa-based real estate investment firm Equialt LLC, was sentenced to three years in federal prison for tax fraud. Davison pleaded guilty to making false statements on tax returns, underreporting his income by at least $29.7 million between 2018 and 2020. This resulted in a tax loss of $6.29 million to the federal government. Equialt LLC itself faced a Securities and Exchange Commission complaint in 2020 concerning an alleged fraudulent unregistered securities offering that raised over $170 million from more than 1,100 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.
- Florida Real Estate Investor Sentenced for $6.29 Million Tax Fraud, Weekly Real Estate News.