Marshall Reddick Real Estate Network Sued for Fraudulent Home Sale Investment Enterprise

Well known amongst real estate investors, Marshall Reddick and the Marshall Reddick Real Estate Network is under a bit of scrutiny today after being sued for fraud. According to a press release today from the Wyatt Law Firm (courtesy of Business Wire):

Marshall Reddick Real Estate Network, Inc. (MRREN), a prominent California-based real-estate-investment club, and 11 other individuals and businesses in the real-estate and lending industries based in Florida and Ohio were named as defendants in a lawsuit filed today in Los Angeles Superior Court relating to an alleged fraudulent real-estate-investment program involving the sales of homes in Florida.

In the lawsuit, filed by the Law Offices of Andrew M. Wyatt, a Los Angeles-based law firm, the Irvine, CA-based MRREN and its founder, Marshall Reddick, along with the other defendants were charged with 11 counts of illegal actions, including: Fraud; Racketeer Influenced and Corrupt Organizations (RICO) Act; Untrue or Misleading Advertising; Negligent and Intentional Misrepresentation; and Unlawful, Unfair and Fraudulent Business Acts and Practices.

According to the lawsuit, Reddick, a retired economics professor, has built his reputation through seminars held at community colleges and universities. MRREN has 80,000 members, of which half have purchased property through its system of “armchair investing.” MRREN purports to have a network of high quality developers, builders and lenders who are professional and reliable, assuring investors of “worry free investing.”

In 2005 and 2006, Mosner and Hidalgo invested in the development of three single-family homes in Port Charlotte and Englewood, FL. The lawsuit alleges that the bulk of the loan money went to the defendants for commissions and “overhead” costs. Little of the money was used for construction of the homes.

As a result of the builder’s failure to start construction, the plaintiffs were declared in default by the lenders. Besides adverse credit reports, Mosner and Hidalgo are potentially liable for hundreds of thousands of dollars.

Article Author: Joshua Dorkin

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