The Securities and Exchange Commission has charged RAD Diversified REIT, Inc., a Tampa, Florida-based non-traded real estate investment trust, along with its two founders, with running a real estate investment scheme that the agency alleges raised at least $152 million from more than 5,500 retail investors nationwide through false claims about profitability, stock valuation and liquidity. The case, filed July 29, 2026 in the U.S. District Court for the Middle District of Florida, is a civil enforcement action; none of the allegations have been proven in court.
According to the SEC’s litigation release, the agency’s complaint names RAD Diversified REIT (RADD), founder Brandon “Dutch” Mendenhall and co-founder Amy Vaughn as defendants, along with The Seminar Solution, LLC, an entity the SEC has named as a relief defendant. The case is docketed as No. 8:26-cv-02186 in the Middle District of Florida.
RADD is a non-traded REIT that told investors it acquired and repositioned single-family, multi-family and mixed-use residential properties, along with farmland, often purchased below market at foreclosure auctions and tax-deed sales. The SEC alleges that from November 2019 through March 2024, Mendenhall and Vaughn raised the $152 million through two channels: roughly $104 million from RADD stock offerings and additional funds through an “Inner Circle” program that sold hard-money loan notes and joint venture agreements. Unregistered sales agents allegedly used high-pressure tactics and invoked Christian values and patriotism to build trust with investors, the complaint states.
The SEC alleges the defendants told investors that “zero investors have ever lost money” on RADD, while the company was in fact posting millions of dollars in annual losses. The complaint further alleges that RADD’s steadily rising share price was represented as being based on independent appraisals of its properties, when in fact the properties were never independently valued β and that the company never updated its share price after July 2023, even as it faced widespread property foreclosures and internal data allegedly showing the stock was significantly overvalued.
The SEC also alleges that Mendenhall and Vaughn personally misappropriated close to $5 million of investor funds, and that roughly $54 million was diverted to The Seminar Solution, an entity they own, which allegedly used the money for personal expenses including IRS tax payments, private jet charters, luxury goods and recreational activities. The complaint alleges that redemption requests from investors were routinely denied or ignored, and that RADD froze all redemptions in February 2024. RADD and several affiliated entities filed for Chapter 11 bankruptcy protection in March 2026, placing more than 300 properties under court supervision, according to the release.
The SEC’s complaint charges the defendants with violating the registration and antifraud provisions of the Securities Act of 1933 and the antifraud provisions of the Securities Exchange Act of 1934. The agency is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, civil penalties against RADD, Mendenhall and Vaughn, and officer-and-director bars against the two founders. Against The Seminar Solution, the SEC is pursuing an unjust-enrichment claim to recover diverted funds. As of publication, the defendants had not filed a public response to the SEC’s complaint.
What it means
Everything above describing the alleged conduct β the misrepresented valuations, the diverted funds, the frozen redemptions β reflects the SEC’s civil allegations, not a judicial finding of wrongdoing. RADD and its founders have not been found liable, and the case will proceed through the normal litigation process in Florida federal court.
For RealtyWire’s audience, the case is a reminder of a structural risk specific to non-traded REITs: because their shares don’t trade on a public exchange, valuations can rest heavily on a sponsor’s own say-so rather than a market price, and redemption rights can be curtailed or suspended at the sponsor’s discretion, as the SEC alleges happened here. Retail investors in illiquid, sponsor-valued vehicles have historically had limited ability to verify pricing claims or exit quickly when problems emerge β a dynamic regulators have flagged in other non-traded REIT and alternative-investment enforcement actions. For related coverage of real estate fraud risk, see RealtyWire’s wire fraud checklist for buyers and sellers and its report on an appraiser sentenced in a $65 million mortgage fraud case.
More broadly, the case lands amid continued SEC scrutiny of non-traded and Regulation A-style real estate offerings marketed directly to retail investors. Readers can track additional coverage on RealtyWire’s housing market section.
