Florida is currently grappling with a surge in alleged real estate investment scams and deceptive practices. Recent investigations by the Attorney General’s office and local law enforcement have uncovered schemes ranging from individual fraud cases involving significant financial losses to broader, suspected Ponzi schemes targeting multiple investors through online platforms.
Florida’s Real Estate Investment Scams Unveiled
Florida has become a hotspot for real estate fraud, ranking third nationally in both fraud complaints and total financial losses in 2024. This trend is particularly concerning for older individuals, who are frequently targeted due to their accumulated assets and trusting nature. Scammers exploit this by creating seemingly legitimate documents and leveraging online platforms to ensnare victims.
Key Takeaways
- Florida is a prime target for real estate fraud, especially for older adults.
- Scammers often use sophisticated methods, including forged documents and online influence.
- Two major cases highlight the diverse nature of these alleged scams.
Individual Fraud Case: The $1.6 Million Loss
Jose Luis Fernandez, a 60-year-old Florida resident, reportedly lost over $1.6 million in an elaborate real estate fraud scheme orchestrated by Ybis Del Carmen of Realty Golden Group, an individual he had known for years. Del Carmen allegedly provided fake documentation for six foreclosure properties, never actually purchasing them. Fernandez became suspicious when he couldn’t retrieve his funds. Del Carmen has since been arrested and faces charges of organized fraud and grand theft, with authorities suspecting other potential victims.
Alleged Ponzi Scheme: RAD Diversified REIT Under Scrutiny
Florida Attorney General James Uthmeier has launched a sweeping investigation into RAD Diversified REIT, Inc., its subsidiaries, and its owners, Brandon “Dutch” Mendenhall and Amy Vaughn. These internet personalities are known for promoting real estate investment seminars, encouraging Floridians to invest in their REIT. However, numerous investors have reported difficulties in receiving promised returns or retrieving their initial investments, leading to suspicions of a Ponzi scheme. The Attorney General’s office has issued subpoenas demanding extensive documentation, including:
- Communications between RAD Diversified REIT and investors.
- All documents provided to customers.
- Records of customer complaints.
- Operational and training manuals.
- Offering statements, prospectuses, and other investment opportunity documents.
- Marketing materials.
- Comprehensive banking and financial documents.
- Miscellaneous documents detailing the REIT’s stockholders and holdings.
Protecting Yourself from Real Estate Scams
To avoid falling victim to real estate fraud, experts advise vigilance and due diligence:
- Be wary of deals that seem too good to be true: Unusually low prices for properties should raise a red flag.
- Exercise caution with off-market properties: Properties not listed on the Multiple Listing Service (MLS) may carry higher risks.
- Verify credentials: Always check the license and references of any real estate agent involved.
- Thoroughly review all paperwork: Inspect deeds, titles, and contracts carefully.
- Consider legal counsel: Hiring a real estate attorney can provide an extra layer of protection and expertise.
Sources
- Florida man, 60, says he lost $1.6M in an elaborate investment scam — fronted by a woman he’d known for years, Yahoo Finance.
- Florida AG Unearths Alleged "Ponzi Scheme" In Popular Real Estate REIT, Tampa Free Press.
- Tampa real estate investment firm under investigation for potential deceptive practices, Florida Politics.