The Florida Attorney General’s Office is investigating Tampa-based RAD Diversified REIT Inc. and its owners, Brandon “Dutch” Mendenhall and Amy Vaughn, for potential violations of the state’s Deceptive and Unfair Trade Practices Act. The probe, which has led to subpoenas for the company and its principals, centers on allegations that investor funds are being misused instead of being allocated to real estate as advertised, with some investors reporting an inability to retrieve their returns or initial investments.
Key Takeaways
- Florida Attorney General James Uthmeier’s office is investigating RAD Diversified REIT Inc. for alleged deceptive practices.
- Owners Brandon “Dutch” Mendenhall and Amy Vaughn are specifically named in the investigation and have been subpoenaed.
- The investigation is exploring potential violations of Florida’s Deceptive and Unfair Trade Practices Act.
- Multiple investor complaints allege difficulties in retrieving funds or returns.
- The Attorney General’s office is examining whether the company’s real estate holdings match the value of invested funds.
Investigation Details
Attorney General James Uthmeier announced the investigation, stating that his office has received multiple complaints from investors in RAD Diversified. These complaints suggest that the company, promoted by Mendenhall and Vaughn through social media and seminars targeting Floridians with limited capital for direct real estate purchases, may be operating as a Ponzi scheme. The investigation aims to determine if the company’s real estate assets are equivalent in value to the funds invested by its customers.
Subpoenas Issued
Subpoenas have been issued to RAD Diversified REIT Inc., its subsidiaries, and owners Brandon “Dutch” Mendenhall and Amy Vaughn. They are required to provide requested documents to the Attorney General’s office by July 18. The investigation is being handled by Special Counsel Ellen Lyons and Senior Assistant Attorney General Miles Vaughn. The office is seeking evidence including communications with customers, marketing materials, financial records, and internal procedures to assess the validity of the complaints.
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 Dade County accuses Silverstein Capital Partners and Monarch Alternative Capital of conspiracy, civil misconduct, and predatory lending related to a $32 million construction loan for the Legacy Miami Worldcenter skyscraper. The lawsuit alleges an attempt to sabotage the project by selling the loan to a shell corporation to impose illegally high interest rates, exceeding 45 percent, which is a felony under Florida law. This case highlights broader concerns about potentially predatory practices 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.