Florida Attorney General James Uthmeier’s office is investigating Tampa-based RAD Diversified REIT Inc. and its owners, Brandon “Dutch” Mendenhall and Amy Vaughn, for alleged deceptive practices. The investigation stems from multiple investor complaints claiming they are unable to recover funds or receive promised returns, raising concerns of a potential Ponzi scheme.
Key Takeaways
- Florida Attorney General James Uthmeier is investigating RAD Diversified REIT Inc. for alleged deceptive practices.
- Owners Brandon “Dutch” Mendenhall and Amy Vaughn are also under scrutiny.
- The investigation is prompted by multiple investor complaints regarding unrecoverable funds and promised returns.
- Concerns have been raised about the possibility of a Ponzi scheme.
- Subpoenas have been issued, requiring the company and its owners to provide documents by July 18.
Investigation Details
Attorney General Uthmeier’s office has issued subpoenas for RAD Diversified REIT Inc., its subsidiaries, and owners Brandon “Dutch” Mendenhall and Amy Vaughn. The investigation focuses on allegations that the company, promoted by Mendenhall and Vaughn through social media and seminars, may be pocketing investor funds instead of acquiring real estate as advertised. Uthmeier stated, “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.”
Investor Complaints and Subpoenas
Multiple complaints have been filed by investors in RAD Diversified who report being unable to collect returns or retrieve their invested capital. The investigation aims to gather evidence, including communications between the company and customers, marketing materials, financial documents, and records of customer complaints, to determine if the company’s real estate holdings match the value of investments made by its customers.
Mendenhall and Vaughn, who have gained a following as internet and social media influencers, promote their fund as a means to pool investor funds for real estate investments, particularly targeting Floridians with limited capital for outright property purchases. The company and its owners have until July 18 to respond to the subpoenas and provide the requested documentation.
Broader Real Estate Market Concerns
While this investigation focuses on RAD Diversified, other major real estate investment firms are also facing scrutiny. A separate lawsuit filed in Miami alleges conspiracy, predatory lending, and deceptive trade practices against Silverstein Capital Partners and Monarch Alternative Capital. This case involves a dispute over a construction loan for a Miami skyscraper, with accusations of an attempt to illegally charge usurious interest rates exceeding 45 percent, a felony under Florida law. These developments highlight a growing concern over potential misconduct within the real estate investment sector.
Sources
- Tampa real estate investment firm under investigation for potential deceptive practices, Florida Politics.
- Florida AG probes Tampa real estate firm RAD over Ponzi scheme claims, The Business Journals.
- Major Real Estate Investment Firms Face Accusations with Criminal Implications, Yahoo Finance.