James Donahoo II, of St. George, Utah, faces a proposed 48 month prison term for luring investors into his business of making hard money loans. Through his company called Paradigm Investing, Inc., Donahoo allegedly promised investors a 1-3% yield paid monthly from hard money bridge loans made to small businesses. Instead of making loans to legitimate small businesses with his investor’s funds, Donahoo allegedly disbursed the funds to businesses being used as puppets by his close associates, relatives, and friends. The defendant even elaborated fake bank statements for his company Paradigm, claiming that, “for every dollar invested, he had a dollar in the bank.”
Other horrifying stories have come to the surface of Donahoo’s excess with investors funds, including a shopping spree in Park City, Utah with $10,000 being spent on fur coats.
If you are thinking of doing trust deed lending or other loans with an individual or company such as this, think again. Confirm that the businesses or real estate that is being loaned on has legitimacy by using third party methods to verify. Never rely on the word of a company “representatives” to tell it’s story and the story of it’s investments.
Posted by Corey Curwick Dutton
Do you watch American Greed? Wow, some of these scammers are able to raise more funds than the legitimate guys. Gives us hard money lenders a bad name!
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