“The Nudge Defendants’ promised funding is only available if the consumer finds a buyer who is willing to first place the funds needed to buy the property in trust with the title company. This limitation, which is not prominently disclosed, if disclosed at all, during the Preview Events, renders the promise of funding without money down largely illusory.”

💡 The core promise of no-money-down investing was false because consumers needed to find a buyer with cash before getting any funding.

“The vast majority of consumers who purchase the Nudge Defendants’ products and services do not become successful real estate investors and do not make any money from the Nudge Defendants’ system, or even recover the cost of the Workshop or Advanced Training. Many consumers end up heavily in debt and, in numerous instances, consumers have lost their life savings.”

💡 Despite promises of wealth, most consumers lost money and some lost everything they had saved.

“The Nudge Defendants’ own records show that for every year from at least 2013 to 2017, only 1% (or fewer) of the consumers who had enrolled in a Workshop had received the tuition reimbursement.”

💡 The defendants’ offer to reimburse workshop costs after completing a profitable deal was essentially meaningless because 99% of consumers never made enough to qualify.

“20% of the 510 loans BuyPD made to consumers from March 2015 through December 2015 defaulted. (The Nudge Defendants’ loan default rate is almost double the highest residential loan delinquency rate of 11.36% reported by the Federal Reserve during the Great Recession in early 2010.)”

💡 Properties sold at Buying Summits were so overpriced that one in five buyers defaulted on loans, a rate worse than the 2008 housing crisis.

“In text messages with Lewis, Graziosi explained that he understood his role for at least some of the Nudge Defendants’ events was to put the [consumers] in the mindset to buy and [t]hen the sales guys come in to slay it.”

💡 Celebrity endorser Dean Graziosi explicitly acknowledged his job was to soften up consumers for high-pressure sales tactics.

“For example, in September 2015, Graziosi received an email from a trainer and friend he worked with who described situations that made her physically sick and disgusted concerning two consumers… One consumer was called by marketing to join the Inner Circle. They asked her how much money she has available, including on her credit cards and sold her a package for the amount she had which was $6500. This wom[a]n, also elderly, has 3 credit cards maxed out already and is saying this will empty her bank account.”

💡 The defendants deliberately targeted elderly consumers with limited means, selling them packages that would drain their last remaining funds.

“For example, in September 2019, Graziosi and Finnegan discussed in text messages negative posts about the Nudge Defendants’ events appearing under Graziosi’s name on the Trustpilot website. Graziosi asked Finnegan to make it an absolute priority that it stays clean. Finnegan replied: We know how to do that. Within the past 4 hours I sent Dean four 5-star reviews.”

💡 When negative reviews appeared online, defendants coordinated to flood review sites with fake positive reviews to bury consumer complaints.

“The Nudge Defendants primarily use the Workshops not to educate, but to sell consumers additional, more expensive products and services (referred to as Advanced Training), typically for tens of thousands of dollars.”

💡 Consumers who paid over $1,000 for workshops expecting education got sales pitches instead.

“The Nudge Defendants’ telemarketers were instructed to maximize the sale amount they could get from each consumer. The Nudge Defendants kept track of how much their telemarketers sold to each consumer by tracking each telemarketer’s dollar per lead (DPL) amount.”

💡 Telemarketer performance was measured by how much money they could extract from each consumer, not by customer satisfaction or outcomes.

“In numerous instances, the Nudge Defendants’ telemarketers tell consumers that they will use this personal financial information to assess whether the consumer would be an appropriate candidate for the program. The Nudge Defendants’ representations about how they use consumers’ financial information are false. The Nudge Defendants’ telemarketers do not use this information to assess a consumer’s qualifications for the program. Instead, the Nudge Defendants use this information to decide how much to charge consumers for the one-on-one coaching program.”

💡 When telemarketers asked for financial information claiming they needed to see if consumers qualified, they actually used it to determine the highest price each person could afford.

“For example, the Nevada Company representatives tell consumers during the credit card application process that the consumers could expect to earn thousands of dollars per deal or per month from the Nudge Defendants’ system and even as much as one hundred thousand dollars for the following year. In numerous instances, the Nevada Company representatives advised consumers to state on credit card applications that their projected income from their real estate investments would be $100,000 or more.”

💡 The credit card application company helped consumers lie about expected income to get approved for more credit cards to pay for training.

“The Nudge Defendants’ executives, including Sanderson, had knowledge that the Nevada Company was inflating consumers’ income when applying for credit cards. For example, in January 2017, one of the Nudge Defendants’ executives emailed Sanderson: We’ve heard from students that [Nevada Company] is telling them to state larger incomes than the student really makes. Just curious if that is their practice? This practice continued for another year after this exchange and stopped only after the Nudge Defendants learned that they were the subjects of an FTC investigation.”

💡 Company executives knew consumers were being coached to lie on credit applications but did nothing until regulators started investigating.

“Unbeknownst to consumers, the Nudge Defendants often marketed and sold properties to consumers at prices marked up as much as 20% more than what the Nudge Defendants would pay for them. In many instances, the Nudge Defendants sold the properties to consumers at significant markups within days after they had executed agreements to buy the properties themselves, and did so, before their own purchases had closed.”

💡 The defendants secretly added 20% or more to property prices for their own profit while claiming consumers were getting exclusive deals.

“The comparables that BuyPD provided consumers were cherry-picked to justify BuyPD’s price. They omitted property sales that were closer and in the same neighborhoods as the subject properties. The property sales that BuyPD omitted had substantially lower sales prices than the purported comparable sales that BuyPD included in the reports to support BuyPD’s higher offer price to the consumer.”

💡 The defendants fabricated market analysis reports by cherry-picking sales data to make inflated prices look legitimate.

“The Nudge Defendants have taken in over $400 million from consumers across the country and overseas through their deceptive scheme. Since January 2015, over 750,000 individuals have attended one of the Nudge Defendants’ Preview Events. Since 2015, the Nudge Defendants have sold Advanced Training packages to over 30,000 consumers.”

💡 The scale of the operation was enormous, with over $400 million extracted from consumers through a systematic nationwide scheme.