Scam Cardone and his fellow scammer Dean Graziosi

With the end of cheap money and soaring interest rates, the scammers who sell “get rich quick in real estate” courses and investments in real estate are finding it harder to find victims.

The lawsuits against these scammers are also increasing.

As we reported on, Grant Cardone is facing severe legal peril in the case of Pino v. Cardone and Cardone Capital. This danger to Cardone followed his recent loss of a crucial appeal in the US Ninth Circuit. In this appeal, the Court reversed the lower court and ruled that Cardone’s social media solicitations for investors made him a statutory seller of securities under US law.

Grant Cardone’s fellow “get rich in real estate” scammer Dean Graziosi and his partners were  sued by the US Federal Trade Commission and the State of Utah.

The FTC and State of Utah stated that the scam perpetrated by Nudge LLC, Graziosi, and Yancey scam cost consumers more than $400 million. The defendants agreed to pay $16.7 million in fines.  This lawsuit reveals a literal scammers playbook that has been used by “get rich quick in real estate” scammers in the era of cheap money.

From the FTC press release:

In their lawsuit, the FTC and State of Utah describe certain practices engaged in by the defendants which resemble those used by the Church of Scientology and Grant Cardone. These practices include:

• Creating a vast amount of social media PR which focuses on getting rich by investing in “a proven method of wealth creation” used by those who have made fortunes in real estate. Scientology sells “the world’s only workable technology.” The marketing parallel here is obvious. Scientology appeals to the lure of gnosis, of secret knowledge. Scammers like Cardone and Graziosi appeal to both greed and secret knowledge possessed by wealthy insiders.
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• Access to this proven wealth creation formula is available only at a low cost introductory seminar priced. Nudge LLC used social media celebrities Graziosi and Yancey to promote its $1147 introductory seminar.
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• At the low cost introductory seminar, participants are informed that the real secrets and big results come only on the “Advanced Training” courses. These advanced courses are sold for $30,000 or more. In Scientology, the tremendous results come only on the “advanced levels” which are the OT Levels.
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• The defendants made representations that “Advanced Training” is only available to a select number of specially chosen people. Applicants were to they had apply to, and qualify for, acceptance into the Advanced Training. In Scientology, a person must qualify for, and be invited onto, the OT levels.
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• Promising clients access to “third-party funds” to finance real estate deals. What actually happens is that Graziosi and Yancey’s staff signed up clients multiple credit cards. Clients were also coached to obtain credit line increases on their existing credit cards. This tactic resembles the Chase Wave Credit Card Fraud in which Scientology salespeople did the same thing and then had their victims immediately charge the total available balance of all of the cards to Scientology for prepaid courses.
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• In a parallel to what Grant Cardone does to his investors, Graziosi, Yancey, and their partners purchased homes and then, without disclosing their ownership, sold these homes to their clients as “deals” after marking them up to make a profit from their clients.

The FTC and the State of Utah emphasized that Graziosi and Yancey were selling “get rich quick” real estate courses that did not make anyone rich except themselves.

Graziosi and Yancey’s “sales funnel” consisted of funneling in gullible people through making promises of wealth that could be obtained by secret knowledge; selling them useless courses; and then selling some of these people “deals” on homes at inflated prices.

From the FTC’s lawsuit:

“We believe these two TV personalities (Graziosi and Yancey) each made millions of dollars by assisting and facilitating this real estate investment rip-off,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “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.”

The big lie in the ad is that Dean Graziosi would sell real secrets which, if he kept for himself, would make him far wealthier than selling courses. This is the lie of all “get rich quick” real estate courses. The scammers are selling their marks empty promises and hope; literally a piece of blue sky.

A screenshot of an ad featuring Dean Graziosi was included in the lawsuit. The language of this piece is intended to flatter the ego of the victim. It is meant to convey the impression that the recipient has been found worthy. In his munificence, Dean Graziosi has therefore granted the recipient special VIP access to the inner sanctum wherein the secrets to wealth reside: 

The FTC Press Release: