Two well-known real estate investors could soon be named as defendants in a case against a real estate training company accused of scamming consumers out of more than $400 million.
On Monday, the Federal Trade Commission announced it had named investor promoters Dean Graziosi and Scott Yancey as potential defendants in a lawsuit it filed against Nudge, a Utah-based company that advertised various coaching, training and wealth-building seminars for real estate agents.
FTC
Graziosi is a self-described multi-millionaire known for selling real estate guides, CDs and infomercials for the past two decades. He has over 1 million subscribers on Instagram and regularly publishes posts about “hustling” and “passion.” Yancey, who starred on the A&E show “Flipping Vegas” between 2011 and 2014, also published a book about making money by flipping homes for profit. Neither could be immediately reached by Inman for comment.
“We believe these two TV personalities each made millions of dollars by assisting and facilitating this real estate investment rip-off,” Andrew Smith, Director of the FTCs Bureau of Consumer Protection, said in a press statement. “They were instrumental to the scheme and took a cut of the profits, and that’s why we’re seeking to add them to our case against the program’s operators.”
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The FTC and the Utah Division of Consumer Protection first filed a complaint against Nudge in November, claiming the company “used false money-making promises to convince consumers to buy real estate training packages that often cost tens of thousands of dollars.” An amended complaint claims Graziosi and Yancy were the main celebrities that Nudge used to bring in consumers by offering “free” sessions as a way of getting them to buy costly packages later on.
“Graziosi and Yancey each received over $10 million from the Nudge Defendants since 2012,” reads the amended complaint. “Graziosi and Yancey received a percentage of most or all of the Nudge Defendants’ sales to consumers who attended the Preview Events they sponsored, including sales of additional training or coaching services that the Nudge Defendants sold to consumers through telemarketing.”
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The two agencies further allege Graziosi and Yancey were aware of complaints from buyers who claimed they were misled into spending money on training programs promising a winning money-making formula and received a percentage of what they paid for seminars and training programs. Graziosi and Yancey also allegedly helped Nudge develop a good reputation by discussing ways to get positive reviews about the company on sites such as Yelp and Consumer Affairs as early as last year.
If the court approves the amended complaint, the case will proceed with Nudge, Graziosi and Yancey as the defendants.
Over the years, numerous scams and schemes have surfaced in the real estate industry using everything from training programs to lead-generation services as a way to deceive agents into spending money.
