RAD Diversified SCAM ALERT!!!

General Real Estate Investing
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RAD Diversified SCAM ALERT!!!

Arthur Crum
Member since 2019 · 7 posts · 33 votes

Hello,

I Just wanted to give everyone a quick update on the RAD Diversified scandal that is currently unfolding. As of April 1, 2024, RAD Diversified (a REIT), has officially put a freeze on withdrawing any and all funds from the REIT. If I had to speculate, I would say they are facing some serious liquidity issues. Interestingly enough, I came across an article in the Philidelphia Inquirer that raised concerns about the REIT two years ago. It's pretty much spot on. Looks like your classic Ponzi scheme. It would appear good ole Dutch has been using new investor funds to pay liquidations i.e. robbing Peter to pay Paul. I guess the well has run dry.

I myself was duped into investing $5000 (unaccredited) into the fund and will now no longer be able to liquidate any portion of my shares. The URL provided above will take you to official statement that RAD has provided to the SEC. Personally, I doubt its authenticity, but that's the direct information I was provided with from Alexander Prock, as of one hour ago. I also know that RAD's accreditation with the BBB has been revoked due to the massive influx of similar complaints that have been pouring in since the official statement was released on April 1st, 2024.

I would strongly advise ALL BP members to stay far away from this scam. I highly doubt I will ever see my money again. I would sincerely hope that the SEC has begun looking into this and/or the FBI. And, by the way, Dutch Mendenhall the CEO of RAD, has been a member of the BP community now for several years so feel free to chime in bud. Below is a copy of the SEC statement. It really makes me sick that these scam artists run rampant while the SEC does absolutely nothing to combat the issues. Anyway, please feel free to do your own due diligence but it looks like we all got got.



"On April 1, 2024, the board of directors (the “Board") of RAD Diversified REIT, Inc. (the "Company”) decided, in accordance with the terms of its Share Redemption Program, to continue the temporary freeze of the Company’s redemption program. The Company will not process any pending requests that have not been redeemed as of February 1, 2024 nor will it accept any redemption requests after April 1, 2024. Pending redemption requests will remain in queue until the Company recommences the redemption program. The Board intends to reassess this decision to determine whether to recommence the redemption program or to continue to pause the redemption program no later than July 1, 2024."

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Scott Trench:

I have no idea what is happening at this particular fund, and can’t chime in on any specifics.

I will say that I, along with many investors in the community, have likely lost a lot of money. Syndicators who bragged about how smart they were, showed off fancy lives, cars, private jets, and mansions, second homes, and wrote books and sold expensive courses about how smart they are at investing are being exposed all over the place. Sometimes, these syndicators who are actively in process of wiping out investor’s life savings, even brag about how automated their businesses are and how they don’t have to work!

I’m not making the same mistakes with my money again, nor will I allow investors who made their name in part on BiggerPockets to go unexposed if they treat investors poorly, lose huge amounts of investor money, or clearly mismanage funds.

We are starting PassivePockets.com and launch it in June. We will learn how to find and vet “good” and expose “bad” for ALL to see. In the meantime, we will watch the forums for more posts about the syndicators who handle situations to the chagrin of their investors. 


 Morning Scott,  I missed this post and posted above but its worth repeating. What I see irrespective of how the deals are going is the lack of communications from these syndicators
with respect to how their deals are actually doing. Communication good or bad goes along way to keeping investors from being upset to going ballistic on the internet and creating irreparable harm to the syndicators reputations.

It seems that most of the BP influencers I have seen over the years have stepped into MF syndication with varying results. So to that end they are new to the game never went through a deep downturn cycle. And for them rasing capital on SM BP facebook whatever has been fairly easy compared to others who dont have a big SM or BP presence.  This is where the crowdfunding sites helped a lot fo those types scale.

The play book as you described is an old one when it comes to marketing themselves nothing different than what the how to trainer do. The difference is they are stuck with a certain asset as we are seeing. The trainers just pivot to what is working today and set up training in that niche. But its all the same big budget for marketing and go hammer the airwaves/internet. Sell the sizzle etc etc.

Having been front and center in the late 80s of a billion dollar syndication company ( was an independent contractor in charge of finding and entitling their land projects in northern CA.) I saw what happens when these things start to go south and from my mind most of these companies that could be struggling now simply do not have enough staff to handle all their investors needs in a timely fashion and when things go bad like we see posted on BP right now lack of up front communications leads to Investors going out of their minds with worry and the blame game starts. Then of course google searches bring all these things to the front page and next thing you know reputations get hammered..

As one who personally had a medium sized HML company going into 2007 2008 with 600 loans on my books and by 2010 went through a massive re value melt down all of us in that business got hammered for us we started in 2001 and by 2010 had to basically shut down let go 90% of staff and spent 3 to 4 years hemorrhaging our net worth's to make sure our banks got paid ( which to my personal financial situation was devastating) Most of my peers went out of business completely ( BK) I did not but by 2011 I was basically starting over. But with my head held high gone was all the normal trappings of RE success being served as a big slice of humble pie :(.

And as my core commercial banks understood that I doing everything i could to protect them. The one bank left kept a 1 mil line of credit for me ( down from 15 mil) had me  on a 90 day extensions for 4 years and allowed to to earn back in. Its taken basically 12 years to get back to maybe half of what I had at the time.

Bottom line RE cycles and I suspect most of the folks that are having issues did what they thought was correct or right and the market has gone against them.. If they are not changing their personal lifestyles to adjust to this, not communicating, doing new deals leaving old ones to wither then you know what your dealing with the goal ( human nature i guess) is to keep lifestyle intact at all costs.

To that end I just paid off yesterday my last legacy bank debt took me 12 years but its done an gone now. But those same banks stuck with me and allowed me to pivot and build up my new construction side using bank debt intead of HML.. etc etc.

So If i was guessing most of the folks having issues in the space have very little assets aimed toward client relations and communications but still do big spends on advertising for new blood.

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  • Dyanne Christensen
    Member since 2024 · 12 posts · 6 votes
    1y
    0Reply
  • Dyanne Christensen
    Member since 2024 · 12 posts · 6 votes
    1y

    They are still at it. Trying to rope people in as they steal from us.

    3Reply
  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    1y
    Quote from @Dyanne Christensen:

     PLEASE take a minute to call the SEC at (800) SEC-0330. Tell them what you were pitched with and what you wound up in. If you gave them any information about needing access to the funds (i.e. I'm retired and can't lose this money) be sure to fill that in. Show them that they are continuing these capital raises, but not paying out old investors. That company insiders have looted millions of dollars in bogus loans written as "promissory notes" from the investor money they did raise and that according to employee reviews on Glassdoor they are paying their salespeople 1099, which would make each of them an unregistered broker/dealer/investment advisor.

    Every complaint, each new piece of data brings them one step closer to justice. I would be on those calls speaking up and asking questions. Maybe I can save the next guy.

    1Reply
  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    1y
    Quote from @Arthur Crum:

    Hello,

    I Just wanted to give everyone a quick update on the RAD Diversified scandal that is currently unfolding. As of April 1, 2024, RAD Diversified (a REIT), has officially put a freeze on withdrawing any and all funds from the REIT. If I had to speculate, I would say they are facing some serious liquidity issues. Interestingly enough, I came across an article in the Philidelphia Inquirer that raised concerns about the REIT two years ago. It's pretty much spot on. Looks like your classic Ponzi scheme. It would appear good ole Dutch has been using new investor funds to pay liquidations i.e. robbing Peter to pay Paul. I guess the well has run dry.

    I myself was duped into investing $5000 (unaccredited) into the fund and will now no longer be able to liquidate any portion of my shares. The URL provided above will take you to official statement that RAD has provided to the SEC. Personally, I doubt its authenticity, but that's the direct information I was provided with from Alexander Prock, as of one hour ago. I also know that RAD's accreditation with the BBB has been revoked due to the massive influx of similar complaints that have been pouring in since the official statement was released on April 1st, 2024.

    I would strongly advise ALL BP members to stay far away from this scam. I highly doubt I will ever see my money again. I would sincerely hope that the SEC has begun looking into this and/or the FBI. And, by the way, Dutch Mendenhall the CEO of RAD, has been a member of the BP community now for several years so feel free to chime in bud. Below is a copy of the SEC statement. It really makes me sick that these scam artists run rampant while the SEC does absolutely nothing to combat the issues. Anyway, please feel free to do your own due diligence but it looks like we all got got.



    "On April 1, 2024, the board of directors (the “Board") of RAD Diversified REIT, Inc. (the "Company”) decided, in accordance with the terms of its Share Redemption Program, to continue the temporary freeze of the Company’s redemption program. The Company will not process any pending requests that have not been redeemed as of February 1, 2024 nor will it accept any redemption requests after April 1, 2024. Pending redemption requests will remain in queue until the Company recommences the redemption program. The Board intends to reassess this decision to determine whether to recommence the redemption program or to continue to pause the redemption program no later than July 1, 2024."


     Arthur - As I mentioned to another poster above, please call the SEC and give them all the details about your interactions with RADD, about company insiders looting their investment capital in the bright light of day through the use of multi million dollar promissory notes between the Mendenhall family and the company, that they've been paying their sales force in Ontario and Pennsylvania via 1099 and that a review of the real estate assets in Philadelphia newspaper and Texas that is subject to foreclosure litigation does not match up to what they should have been purchasing based upon what is described in their sales presentations. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1y
    Quote from @Melanie P.:
    Quote from @Arthur Crum:

    Hello,

    I Just wanted to give everyone a quick update on the RAD Diversified scandal that is currently unfolding. As of April 1, 2024, RAD Diversified (a REIT), has officially put a freeze on withdrawing any and all funds from the REIT. If I had to speculate, I would say they are facing some serious liquidity issues. Interestingly enough, I came across an article in the Philidelphia Inquirer that raised concerns about the REIT two years ago. It's pretty much spot on. Looks like your classic Ponzi scheme. It would appear good ole Dutch has been using new investor funds to pay liquidations i.e. robbing Peter to pay Paul. I guess the well has run dry.

    I myself was duped into investing $5000 (unaccredited) into the fund and will now no longer be able to liquidate any portion of my shares. The URL provided above will take you to official statement that RAD has provided to the SEC. Personally, I doubt its authenticity, but that's the direct information I was provided with from Alexander Prock, as of one hour ago. I also know that RAD's accreditation with the BBB has been revoked due to the massive influx of similar complaints that have been pouring in since the official statement was released on April 1st, 2024.

    I would strongly advise ALL BP members to stay far away from this scam. I highly doubt I will ever see my money again. I would sincerely hope that the SEC has begun looking into this and/or the FBI. And, by the way, Dutch Mendenhall the CEO of RAD, has been a member of the BP community now for several years so feel free to chime in bud. Below is a copy of the SEC statement. It really makes me sick that these scam artists run rampant while the SEC does absolutely nothing to combat the issues. Anyway, please feel free to do your own due diligence but it looks like we all got got.



    "On April 1, 2024, the board of directors (the “Board") of RAD Diversified REIT, Inc. (the "Company”) decided, in accordance with the terms of its Share Redemption Program, to continue the temporary freeze of the Company’s redemption program. The Company will not process any pending requests that have not been redeemed as of February 1, 2024 nor will it accept any redemption requests after April 1, 2024. Pending redemption requests will remain in queue until the Company recommences the redemption program. The Board intends to reassess this decision to determine whether to recommence the redemption program or to continue to pause the redemption program no later than July 1, 2024."


     Arthur - As I mentioned to another poster above, please call the SEC and give them all the details about your interactions with RADD, about company insiders looting their investment capital in the bright light of day through the use of multi million dollar promissory notes between the Mendenhall family and the company, that they've been paying their sales force in Ontario and Pennsylvania via 1099 and that a review of the real estate assets in Philadelphia newspaper and Texas that is subject to foreclosure litigation does not match up to what they should have been purchasing based upon what is described in their sales presentations. 


    Melanie,  How do you know that this company is paying by 1099 ?  just curious thats some pretty detailed infomation.. Maybe refer this over to Barry Minkow ??
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  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    1y

    Former employees have reviewed their time working at RAD on Reddit and Glassdoor - several of the reviews mentioned it. I've also been directly in touch with a "fronter" in their Ontario, CA office who described the pressure-cooker type of environment, revolving door and nonstop lying. Management treats line employees quite poorly and lying is just part of the job. The company is in a huge crisis - he said the entire accounting department walked out while he worked there. Can you imagine calling hundreds of leads a day for "investments" and seeing all those who keep track of the dollars you're raising exit in tandem? Even the CEO's younger brother decided not to hang around - whatever his reasons are - it's too late for him unless he returned all the money he took out and fully disclosed  every illegal act he has personal knowledge of BEFORE the SEC/FBI show up at his door.

    I referred the "fronter" to a whistleblower law firm, but who knows if he followed up. I feel it's important to get that information into the investor complaint to give whoever reviews the allegations a 30,000 foot view of the variety of warning signals on full display by this outfit. 

    A simple source document review correlating the company's bank records of money in, investor principal owed out and total out for real estate currently owned would likely reveal a lot. The assets I see them actually acquire do not correlate to the money they've raised.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1y
    Quote from @Melanie P.:

    Former employees have reviewed their time working at RAD on Reddit and Glassdoor - several of the reviews mentioned it. I've also been directly in touch with a "fronter" in their Ontario, CA office who described the pressure-cooker type of environment, revolving door and nonstop lying. Management treats line employees quite poorly and lying is just part of the job. The company is in a huge crisis - he said the entire accounting department walked out while he worked there. Can you imagine calling hundreds of leads a day for "investments" and seeing all those who keep track of the dollars you're raising exit in tandem? Even the CEO's younger brother decided not to hang around - whatever his reasons are - it's too late for him unless he returned all the money he took out and fully disclosed  every illegal act he has personal knowledge of BEFORE the SEC/FBI show up at his door.

    I referred the "fronter" to a whistleblower law firm, but who knows if he followed up. I feel it's important to get that information into the investor complaint to give whoever reviews the allegations a 30,000 foot view of the variety of warning signals on full display by this outfit. 

    A simple source document review correlating the company's bank records of money in, investor principal owed out and total out for real estate currently owned would likely reveal a lot. The assets I see them actually acquire do not correlate to the money they've raised.


    Boiler room  operation ?  most of those are in Utah. Working for training guru's selling education.
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    0Reply
  • Melanie P.Pro Member
    Rental Property Investor · Member since 2023 · 1k+ posts · 922 votes
    1y

    A "fronter" is like a "junior broker" in the movie, "Boiler Room." Someone who gets prospects on the phone all day, tries to get them interested, qualifies them and then connects to them to a "consultant" who pitches the various investments they are touting that week. 

    The other odd thing is the lack of focus. They're all over the place. They have ghetto Class Ds in Texas and Philly, a REIT, working farms, an operating golf club, apartment complexes, cryptocurrency... it's almost like whenever a very hot prospect gets through all their different asset classes, they simply invent another one. These businesses do not have great overlapping synergies and RAD does not have a reputation for being good at any of them.

    0Reply
  • James D. KelloggPro Member
    Gypsum, CO · Member since 2021 · 7 posts · 4 votes
    1y

    A large group of RAD investors is beginning to form with the intent of pursuing legal remedies. Post on this thread if you know anyone who who has invested.

    1Reply
  • Zac Gaetano
    Member since 2025 · 2 posts · 1 vote
    1y

    Would love to know the legal routes available, I only put in 2,000 but they are simply ignoring my emails at this point.

    1Reply
  • Timothy Sharrock
    Member since 2025 · 1 post · 0 votes
    1y

    I sent in money for investment in June of 2023, during a point in time when un accredited investing was allowed, I didn't find out until June 2024 that I they didn't invest the money, I had no stock in the company because I didn't make the cut. They have yet to send the money back, and all attempts to do so from me have been met with: largely getting ignored, or when I can reach them: they tell me there is a freeze on withdraws, and attempts to get me to sign a "promissory note" instead.

    any advice would be helpful

    0Reply
  • Hongjie Xie
    Member since 2024 · 4 posts · 0 votes
    1y

    I started in Feb 2021, the last update of the shares and amount was on July 11, 2023, with 500 shares and final net value of $12,520. 

    0Reply
  • Barbara RadkePro Member
    Westlake Village, CA · Member since 2021 · 16 posts · 15 votes
    1y

    I invested as well. 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Zac Gaetano:

    Would love to know the legal routes available, I only put in 2,000 but they are simply ignoring my emails at this point.


     I would not take legal action on a $2k investment on my own if it was my investment as you will be spending a lot more than that to chase what could be a ghost. If there is a group like that mentioned above I would see how to get in with them and if there are costs try and see if they are absorbed within a group so its less on the individual.

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  • Alan David
    Member since 2024 · 95 posts · 35 votes
    1y

    this is for interested members here;

    https://www.sec.gov/Archives/edgar/data/1721469/000110465924...

    Raad just will not let go.I cannot understand why they dont make at least a small effort to make us 

    whole.They must have some funds.

    0Reply
  • Jonathan Karas
    Member since 2024 · 25 posts · 4 votes
    1y

    I invested $125,000 with them ($75,000 in the REIT and $50,000 in a hard money loan). I am by no means wealthy.

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Alan David:

    this is for interested members here;

    https://www.sec.gov/Archives/edgar/data/1721469/000110465924...

    Raad just will not let go.I cannot understand why they dont make at least a small effort to make us 

    whole.They must have some funds.


     If they are under investigation by the SEC (I believe their Reg D PPM noted this), then their counsel is probably telling them not to do anything with the capital they have until that has gone through. 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Jonathan Karas:

    I invested $125,000 with them ($75,000 in the REIT and $50,000 in a hard money loan). I am by no means wealthy.


     For a Regulation A+ offering, you are not supposed to invest more than 10% of your net worth outside your primary residence if you are not accredited. 

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  • James D. KelloggPro Member
    Gypsum, CO · Member since 2021 · 7 posts · 4 votes
    1y
    Quote from @Chris Seveney:
    Quote from @Zac Gaetano:

    Would love to know the legal routes available, I only put in 2,000 but they are simply ignoring my emails at this point.


     I would not take legal action on a $2k investment on my own if it was my investment as you will be spending a lot more than that to chase what could be a ghost. If there is a group like that mentioned above I would see how to get in with them and if there are costs try and see if they are absorbed within a group so its less on the individual.


     There is a group of over 100 investors that has formed to evaluate potential options. Many people invested hundreds of thousands in a variety of funds (in addition to the REITS). It seems the money went into a black hole with absolutely no documentation or reporting provided. 

    1Reply
  • Zac Gaetano
    Member since 2025 · 2 posts · 1 vote
    1y

    Where is this group.

    0Reply
  • James D. KelloggPro Member
    Gypsum, CO · Member since 2021 · 7 posts · 4 votes
    1y
    Quote from @Zac Gaetano:

    Where is this group.


     Zac, please check you notifications at the top right of your screen when logged into BiggerPockets 

    0Reply
  • Barbara RadkePro Member
    Westlake Village, CA · Member since 2021 · 16 posts · 15 votes
    1y
    Quote from @Alan David:

    this is for interested members here;

    https://www.sec.gov/Archives/edgar/data/1721469/000110465924...

    Raad just will not let go.I cannot understand why they dont make at least a small effort to make us 

    whole.They must have some funds.

    The document you shared said The Board intends to reassess this decision to determine whether to recommence the redemption program no later than January 1, 2025. Do you know if this has happened? 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Barbara Radke:
    Quote from @Alan David:

    this is for interested members here;

    https://www.sec.gov/Archives/edgar/data/1721469/000110465924...

    Raad just will not let go.I cannot understand why they dont make at least a small effort to make us 

    whole.They must have some funds.

    The document you shared said The Board intends to reassess this decision to determine whether to recommence the redemption program no later than January 1, 2025. Do you know if this has happened? 


     They are a regulation a+ offering so they must provide thse reports to the SEC which are public. Here is a link to their filings:



    SEC.gov | EDGAR Full Text Search

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  • Hongjie Xie
    Member since 2024 · 4 posts · 0 votes
    1y
    Quote from @James D. Kellogg:
    Quote from @Zac Gaetano:

    Where is this group.

    in my notifications there, i do not see any link to any group. 

     Zac, please check you notifications at the top right of your screen when logged into BiggerPockets 


    0Reply
  • James D. KelloggPro Member
    Gypsum, CO · Member since 2021 · 7 posts · 4 votes
    1y
    Quote from @Chris Seveney:
    Quote from @Barbara Radke:
    Quote from @Alan David:

    this is for interested members here;

    https://www.sec.gov/Archives/edgar/data/1721469/000110465924...

    Raad just will not let go.I cannot understand why they dont make at least a small effort to make us 

    whole.They must have some funds.

    The document you shared said The Board intends to reassess this decision to determine whether to recommence the redemption program no later than January 1, 2025. Do you know if this has happened? 


     They are a regulation a+ offering so they must provide thse reports to the SEC which are public. Here is a link to their filings:



    SEC.gov | EDGAR Full Text Search


    0Reply
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