The Securities and Exchange Commission (SEC) has filed charges against RAD Diversified REIT Inc. (RADD), a Tampa-based real estate investment trust, and its founders Brandon “Dutch” Mendenhall and Amy Vaughn, accusing them of raising at least $152 million from more than 5,500 retail investors nationwide through an alleged fraudulent real estate investment scheme, with Mendenhall and Vaughn collectively misappropriating nearly $5 million of investor funds.
According to the SEC’s complaint, the scheme occurred from November 2019 through March 2024, with the defendants using a marketing campaign with unregistered sales agents and high-pressure tactics to deceive investors about RADD’s profitability, stock valuation practices, and liquidity. Part of this campaign invoked Christian values and patriotism to gain investor trust.
The complaint alleges that the defendants falsely claimed that RADD was a profitable REIT and that “zero investors have ever lost money on their investment.” In fact, RADD generated millions of dollars in annual losses. The complaint also alleges that the defendants claimed RADD’s ever-increasing stock price was based on independent appraisals or valuations of the REIT’s properties and would be regularly updated. In reality, the properties were not independently valued, and defendants never updated RADD’s stock beyond July 2023, despite widespread property foreclosures and internal findings showing the stock price was significantly overstated.
Furthermore, the defendants allegedly assured investors of liquidity, while routinely denying or ignoring redemption requests, which RADD ultimately froze in February 2024. RADD filed for bankruptcy in March 2026.
Moreover, the complaint alleges that Mendenhall Vaughn diverted approximately $54 million of investor funds to relief defendant The Seminar Solution LLC, an entity they co-owned, which then redirected the investors’ funds for personal expenses, including IRS taxes, private jet charters, luxury goods, and recreational activities.
The SEC’s complaint charges RADD, Mendenhall, and Vaughn with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Seminar Solution was charged with unjust enrichment.
The SEC seeks permanent injunctions and disgorgement with prejudgment interest against all defendants, and civil penalties, conduct-based injunctions, and officer and director bars against Mendenhall and Vaughn.
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