Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—M.D. Fla.: SEC charges Florida-based REIT, founders with fraud in $152M scheme, (Jul 30, 2026)
Organizations Mentioned:RAD Diversified Reit, Inc.
By Suzanne Cosgrove
The founders allegedly claimed the REIT was profitable while it was suffering millions of dollars in annual losses.
The SEC has filed charges against RAD Diversified REIT, Inc. (RADD), a real estate investment trust (REIT), and its founders, Brandon “Dutch” Mendenhall and Amy Vaughn, for raising at least $152 million from 5,500 U.S. retail investors through an unregistered fraudulent securities offering (SEC v. RAD Diversified REIT, Inc., No. 8:26 cv 02186 ((M.D. Fla. filed July 29, 2026)).
According to the court filing, from November 2019 through March 2024, Tampa, Florida-based RADD raised investor funds through both its stock offerings and investments offered through its “Inner Circle” program while systematically deceiving investors about RADD’s profitability, the valuation of its stock, and its liquidity.
The defendants led investors to believe that RADD was a profitable REIT that generated revenue from rental income and sales of refurbished properties, and that it paid cash dividends from those profits.
Claims are touted on social media. According to the SEC’s complaint, the defendants invoked Christian values and patriotism in social media posts and sales scripts to gain investor trust and repeatedly claimed that “zero investors have ever lost money on their investment” and “none of our Inner Circle partners have ever lost money.”
At the same time, the SEC said, the defendants knew that millions of dollars in annual losses were reflected in internal profit-and-loss statements.
Property values are not verified. The complaint also alleges that the defendants claimed RADD’s stock price was based on independent appraisals or valuations of the REIT’s properties and would be regularly updated. However, the properties were not independently valued, and defendants never updated RADD’s stock after July 2023, despite widespread property foreclosures and internal findings showing that the stock price was significantly overstated.
The defendants allegedly assured investors of liquidity while routinely denying or ignoring redemption requests, which RADD ultimately froze in February 2024. It filed for bankruptcy on March 1, 2026.
At the time that Mendenhall painted a glowing picture of RADD to investors, he knew that RADD’s rental income and real estate sales did not cover RADD’s operating expenses from 2022 through 2024. He also knew that RADD relied on financing and new investor funds to operate, and he knew that RADD had net operating losses from 2021 through 2024. But he did not disclose these facts to investors.
Funds diverted. Further, the complaint alleges that the defendants diverted approximately $54 million of investor funds to relief defendant The Seminar Solution, LLC (TSS), an entity owned by Mendenhall and Vaughn, which then misappropriated millions for personal expenses, including IRS taxes, private jet charters, luxury goods and recreational activities.
Through this scheme, Mendenhall misappropriated approximately $2.3 million, and Vaughn misappropriated approximately $2.5 million in investor funds.
Charges. 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. Relief defendant TSS is 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. The SEC also seeks disgorgement with prejudgment interest against relief defendant TSS.
The case is No. 8:26 cv 02186
Attorneys: Russell Koonin for the SEC.
Companies: RAD Diversified Reit, Inc.
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