A Tampa-based real estate investment company, RAD Diversified, is at the center of state and federal investigations following accusations that it may be a Ponzi scheme. Investors report that payments have ceased, redemptions are frozen, and an estimated $100 million in assets are now unaccounted for.
The Florida Attorney General’s office and the U.S. Securities and Exchange Commission (SEC) are examining the firm's operations after numerous complaints from investors who were promised substantial returns on real estate ventures.
Key Takeaways
- RAD Diversified, a Tampa real estate firm, is under investigation by the SEC and the Florida Attorney General.
- An estimated $100 million in investor assets are reportedly missing from the company's portfolio.
- Florida's Attorney General has publicly stated the situation "appears to be a Ponzi scheme."
- The company froze investor redemptions in February 2024, and many investors say payments stopped around the same time.
- Lawsuits are mounting, with courts issuing $9.5 million in default judgments against RAD entities.
A Sudden Halt to Promised Returns
RAD Diversified, founded by Brandon “Dutch” Mendenhall and Amy Vaughn, built its business by offering access to real estate investments through various programs. These included a non-traded real estate investment trust (REIT), tax-advantaged Opportunity Zone funds, and an exclusive $50,000-per-person “Inner Circle” for joint ventures.
The company aggressively marketed high returns, claiming a 150% gain over four years—a figure that starkly contrasts with the 18% return of a major market index fund over the same period. For a time, the model appeared to work, attracting hundreds of investors from across the country.
However, the flow of money began to dry up in late 2023. Investors reported that income distributions from the REIT and interest payments on loans they had provided to the company slowed and then stopped entirely. The company initially cited the downturn in the housing market and rising mortgage rates as the cause for the cash crunch.
Internal Red Flags and an Ominous Request
Concerns were not limited to outside investors. Brad Carr, a retired U.S. Army veteran hired as the company's director of strategic initiatives in January 2023, noticed issues early on. He described how financial data provided to him for analysis seemed inconsistent and changed between versions.
Just two weeks into his new role, Carr received a strange assignment from CEO Brandon Mendenhall: research how convicted Ponzi schemer Bernard Madoff was caught. After reviewing the case, Carr concluded Madoff's scheme survived because he controlled the information and investors were hesitant to question the impressive returns.
"Madoff stayed undetected because he kept the details out of view and no one wanted to spoil the magical returns by asking questions."
Unable to verify the company's performance claims, Carr resigned in June 2023, just six months after he started. A few months later, investor payments began to fail.
By the Numbers
- $100 Million: Estimated value of missing assets, according to an investor with board access.
- 150%: The four-year return RAD Diversified claimed to investors.
- $9.5 Million: Total value of 18 default judgments issued against RAD entities this year.
- 1 Million+: Number of documents RAD claims to have provided to the SEC.
Investors Detail Financial Losses
The fallout has left many individual investors facing significant financial hardship. They describe a pattern of broken promises, poor communication, and properties being sold without their knowledge.
The Case of Tom Nagy
Tom Nagy, a retired business owner from Pennsylvania, invested approximately $330,000 across four housing joint ventures, a loan to RAD, and a stake in a golf course owned by a related business. He said communication became difficult after he noticed a property he already owned was being presented to other investors as available for purchase.
Soon after, his expected rental income and loan interest payments never arrived. By late 2023, he was informed that all four of his joint-venture properties had been sold. He says he never received a small profit from one sale and was told he owed the company $40,000 for renovations on another. To date, he has recovered only $1,900 of his $330,000 investment.
Misleading Partnerships
Lonnie Phillips, a former paramedic from Virginia, invested around $300,000 after being assured that joint ventures were true 50/50 partnerships. He believed RAD would have significant “skin in the game” alongside him. He later discovered that RAD had sold most of its stake in one of his properties to another investor without his knowledge, undermining the partnership structure he was sold on. That property was eventually sold, and Phillips says neither he nor the other investor received any of the proceeds.
Investigations and Legal Battles Escalate
The situation came to a head in February 2024 when the SEC declared RAD Diversified REIT’s offering statement abandoned, halting its ability to raise new money. On the same day, the company officially froze all investor redemptions.
Leveraging the JOBS Act
RAD Diversified utilized provisions from the 2012 JOBS Act, specifically Regulation A+ and Regulation D. These rules were designed to help smaller companies raise capital with fewer public disclosure requirements than a traditional IPO. While intended to spur growth, critics argue these looser regulations can be exploited by firms with less transparent operations, leaving investors with greater risk.
In July 2025, Florida Attorney General James Uthmeier announced his office had issued subpoenas to the company. In a public statement, Uthmeier said, “this appears to be a Ponzi scheme.” RAD has disputed the claim and argued that the Attorney General's office lacks jurisdiction.
The company also confirmed it is under investigation by the SEC. Meanwhile, lawsuits have been piling up. Jeff Thomas, the REIT's largest outside shareholder with a $1.5 million investment, was briefly appointed to the board in the summer of 2025 to investigate the financial turmoil.
After gaining access to bank accounts, Thomas reported to other investors that the REIT was “broke,” with a balance of just $2.36 million. He found that properties were in foreclosure, taxes and insurance were unpaid, and rent collections had plummeted. Days after confronting management, he was removed from the board. With legal pressure mounting and assets seemingly gone, hundreds of investors are now left wondering if they will ever see their money again.
