The founders of a Florida real estate investment trust have been indicted on federal charges alleging they withheld employee contributions for retirement and health insurance plans without sending the money to providers. The case adds to mounting legal trouble surrounding the Port Richey-based company, which regulators separately accuse of defrauding thousands of investors.
Key takeaways
The indictment alleges that:
- Brandon Dutch Mendenhall and Amy Marie Smith Vaughn face 15 federal counts involving employee benefit and health care funds.
- Paycheck deductions allegedly were not transferred to 401(k) and health insurance providers.
- The alleged conduct occurred from May 2024 through February 2025.
- The founders also face separate allegations tied to a $152 million investor fraud scheme.
Alleged theft from employee plans
According to the indictment, Mendenhall and Vaughn founded and controlled RAD Diversified REIT, RADD Capital LLC, The Seminar Solution LLC and DHI Holdings. Prosecutors allege they were responsible for forwarding employee deductions to retirement and insurance providers but failed to do so.
Ten counts concern alleged 401(k) deductions withheld between May 2024 and February 2025. The individual amounts cited range from $60 to $3,317. Five additional counts allege that health insurance contributions withheld between September 2024 and January 2025 were not remitted, with amounts ranging from $302 to $8,395.
The indictment also seeks forfeiture of property allegedly connected to the proceeds of the offenses.
Defendants face potential prison time
Mendenhall and Vaughn each face up to 10 years in federal prison if convicted on the employee benefit-related charges. Mark Rankin, Mendenhall’s attorney, said his client is not guilty and intends to defend himself in court. An attorney representing Vaughn could not be reached for comment, according to the report.
The investigation involved the U.S. Department of Labor’s Employee Benefits Security Administration, the FBI, IRS Criminal Investigation and Florida’s Office of Financial Regulation.
Broader legal troubles for the REIT
The indictment follows a separate federal mail fraud case against Mendenhall. Prosecutors allege he submitted false information on a mortgage application to obtain financing for a $1.6 million home. His attorney has disputed that allegation, which could carry a maximum sentence of 20 years if he is convicted.
The founders are also defendants in a Securities and Exchange Commission case filed in July. The SEC alleges that they raised approximately $152 million from more than 5,500 small investors through unregistered offerings between 2019 and 2024.
SEC alleges investor money was misused
The SEC claims RAD Diversified promoted itself as a profitable investment opportunity with patriotic and Christian values while concealing financial problems. Regulators allege the company lost more than $20 million annually, presented fabricated share-price valuations and hid substantial mortgage debt. The complaint also references foreclosure actions involving more than 166 properties.
The agency further alleges that about $54 million in investor funds was transferred to The Seminar Solution, another entity controlled by the founders. It claims millions were then used for personal expenses, including travel, clothing, jewelry, golf and nightclub spending. Those allegations remain part of the civil case and have not been proven in court.
- Florida REIT Accused of Stealing From Employee Benefits, The Real Deal.