SALT LAKE CITY — Federal and state regulators have moved to shut down a Utah-based real estate investment training program touted by celebrity pitchmen that they say makes empty promises on how to earn money flipping houses.

The Federal Trade Commission and the Utah Division of Consumer Protection filed a civil complaint against Nudge LLC, its affiliates and company executives in U.S. District Court in Salt Lake City, claiming they have taken more than $400 million from consumers across the country and overseas in a “deceptive scheme.”

“These defendants presided over a sales process that started with empty promises of future wealth and ended with many consumers left in financial ruin,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection.

Jeffrey Knowles, an attorney for Nudge and the other defendants named in the lawsuit, said his clients provide valuable real estate education, training and experience to their customers. 

“The FTC’s groundless lawsuit and overreaching rush to shut down a legitimate company operating lawfully for many years are grossly unfair and do not reflect reality,” he said. “They will fight these allegations and look forward to telling their side of the story and setting the record straight.”

The complaint alleges that starting in 2012, Nudge enticed people to enroll in a series of increasingly expensive training packages costing thousands of dollars that don’t help them make money.

Nudge markets its training through real estate celebrities who promise to reveal strategies for making “amazing profits” at seminars included in the packages, according to the FTC. One celebrity endorser quoted in the complaint says he will share his “formula for success” that is “proven” to get results.

Advertisements feature Scott Yancey from A&E’s “Flipping Vegas,” Doug Clark from Spike TV’s “Flip Men,” Drew Levin and Danny Perkins from HGTV’s “Renovate to Rent,” and Josh Altman from Bravo’s “Million Dollar Listing Los Angeles,” according to the FTC. They are not named as defendants in the complaint.

The free seminars, however, are mostly a sales pitch to spend more than $1,100 to attend a three-day workshop, where consumers will supposedly get access to a “system” for finding “lucrative” deals, the complaint says.

View Comments

Those promises also prove empty, as the workshops largely cover general information about real estate investing, misrepresent services offered by Nudge, and a pitch for advanced training that costs as much as $20,000, according to the complaint.

More than 95% of those who attended the seminars paid Nudge more than they made in real estate transactions, the FTC said.

In addition to Nudge, Response Marketing Group LLC, and BuyPD LLC, executives Brandon B. Lewis, Ryan C. Poelman, Phillip W. Smith, Shawn L. Finnegan and Clint R. Sanderson are listed as defendants in the complaint.

The FTC wants a judge to issue an injunction preventing Nudge from doing business, freeze the company’s assets, impose fines and order restitution for consumers.

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.