Florida’s real estate sector is facing a wave of scrutiny as authorities uncover a string of fraudulent investment schemes across the state. Prominent real estate firms, longtime investors, and new faces are all under fire for alleged Ponzi schemes, deceptive practices, and multimillion-dollar tax fraud, putting investors’ money and trust at risk.
Key Takeaways
- Several unrelated real estate fraud schemes revealed across Florida.
- State authorities and law enforcement agencies are actively investigating and arresting suspects.
- Over $6 million in tax fraud and millions more in investment losses identified.
- Victims include retirees, first-time investors, and Floridians seeking financial security.
Attorney General Targets Tampa Investment Firm
A Tampa-based real estate investment company, RAD Diversified REIT Inc., and its principals, Brandon “Dutch” Mendenhall and Amy Vaughn, are under investigation by the Florida Attorney General. Allegations include promoting seminars that encourage everyday Floridians to invest in real estate, but instead of buying properties as promised, the company is suspected of misusing investor funds in a potential Ponzi scheme. Authorities have subpoenaed financial and marketing records and requested evidence of property holdings matching customer investments. Complaints have been mounting as investors claim difficulty withdrawing their funds or receiving returns.
Arrests Expose Ponzi-Style and Bait-and-Switch Schemes
Two other high-profile cases have rocked the state:
- Orlando: Jerald Benjamin Clawson, a 74-year-old longtime investor, was arrested for orchestrating a Ponzi-style real estate scheme. He allegedly promised guaranteed returns through cash and bridge loans, yet diverted funds for personal use. Authorities say “several million dollars” were lost by investors, many of whom received nothing back.
- Boca Raton: Felipe Souza, 27, faces charges for defrauding 16 people out of $410,000 with promises of high-yield returns on fake real estate deals. Souza and an associate, Michael Campbell, allegedly spent the money on personal expenses. Only a fraction of the investors’ money was returned, and neither was licensed to sell real estate or securities.
Major Tax Fraud Tied to Real Estate Investments
In another twist, Brian Davison, a Tampa real estate investor and co-founder of Equialt LLC, was sentenced to three years in federal prison for willfully hiding $29.7 million in income, causing a $6.29 million loss in federal taxes. His company had drawn over $170 million from 1,100 investors before authorities intervened. Davison must now repay the IRS in addition to serving his sentence.
Implications for Florida Investors
These cases underline growing concerns over real estate investment fraud in Florida. Authorities urge prospective investors to:
- Check the licensing status of investment firms and individuals.
- Be wary of guaranteed high returns and pressure tactics.
- Demand clear documentation and evidence of where funds are being used.
The combined impact of these crimes serves as a stark warning: thorough due diligence is essential when considering any real estate investment in the current climate.
Sources
- Florida AG probes Tampa real estate firm RAD over Ponzi scheme claims, The Business Journals.
- 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.