A Chicago corporation has filed suit against the company behind "Help Me Flip It," claiming the purportedly investment-based program cost it $60,000 for nothing.
"Help Me Flip It" (HMFI) was a promotion frequently touted on “Real Estate on Radio” (REOR), a program aired on Chicago radio station WLS-AM. According to plaintiff Protocol Holdings, LLC, HMFI “promised investors that in return for their provision of monies to REOR and its subsidiaries ... REOR would assist in the purchase of certain residential real estate properties, arrange for their renovation through licensed contractors and then help the investors to find purchasers for the properties.”
$30,000 per property for “renovation”
In November 2009, Scott Salgan, who the complaint describes as “an agent of Protocol Holdings,” heard a solicitation for HMFI on the radio and thought it sounded like a good deal. According to the suit, several of the defendants “represented to ... Salgan that if he provided $30,000 to them in connection with the purchase of certain properties ... that money would be used for their renovation by licensed contractors and that, in fact, the work could not begin until those monies were paid."
That sounded reasonable to Salgan, according to the suit, so he transferred $30,000 to the defendants in April 2010. The following month, Salgan transferred another $30,000 to improve a second property. According to the complaint, “[d]espite repeated promises over the course of months, none of the defendants ever used any of these monies to purchase goods and services for the improvement of either [property].”
Making matters worse, “[a]lthough some work was done on [one of the properties] ... this work did not improve the property and in fact resulted in a net loss of approximately $4,836 because plaintiff had to clean up the mess left by the crew provided by defendants.”
“Despite repeated requests,” the complaint says, “none of plaintiff's money has ever been returned by any of the defendants.”
Nothing new under the sun
Protocol's situation is unfortunate, but it's hardly unique. In September 2009, a nationwide group of students filed suit against “Millionaire University,” which they said enticed them into buying “real estate courses ... generally cost[ing] in excess of $20,000,” and then buying and re-selling property. According to that complaint, the university promised the investment would “pay back every dollar spent by the student for the intensified real estate training at MU and give them capital to jumpstart their real estate investing careers.”
And in May 2010, similar allegations were levied against Trump University, which a group of dissatisfied plaintiffs said scammed them out of thousands of dollars in courses that promised to help them“become the next real estate mogul,” “become your own success story,” or “learn wealth strategies.” In the end, though, the plaintiffs said “[t]he primary lesson Trump University teaches its students is how to spend more money buying more Trump seminars.”
The HMFI suit names as defendants REOR, LLC; Envision Group, LLC; and several individuals. It alleges unjust enrichment, breach of contract, breach of fiduciary duty, and violation of an Illinois consumer protection statute; and seeks recission of the contract and consequential damages.
