WASHINGTON (CN) - A RICO class action claims the Enlightened Wealth Institute and the men who run it are charlatans who take thousands of dollars up front for worthless real-estate classes. The bogus "institute" works in league with an Escondido, Calif.-based collections company, Conrad Acceptance Co., which aggressively pursues victims for payments as soon as they sign up, according to the complaint.
"In fact, EWI is not an 'institute,' and it exists solely as a scheme by defendants to prey on individual by inducing them to pay thousands of dollars up front, using high-pressure sales tactics, for an 'education' in 'nothing down' real estate investing that fails to meet any of its promises," the complaint states. "Only after they have secured their victims' money do defendants reveal their 'enlightened' methods, which are nothing more than a variety of highly risky property flipping schemes that are themselves deceptive, likely illegal, and completely unfeasible," the complaint states.
Named plaintiff Yanqiu Ke claims Enlightened Wealth's founders, defendants Robert Allen and Tom Painter, prey on the unwitting by falsely claiming that their program "has produced one millionaire after another" for 25 years, and claiming to provide "world-class instructors" on real estate, stocks, Internet businesses and 'InfoPreneuring."
"Mr. Allen assures, 'It works whether the real estate market is going up, down, or sideways.' In its free 'seminars' in which it tries to entice people into signing up as paying participants, EWI claims that 91% of EWI 'students' are successful, and make their first deal within 90 says. On information and belief, and as set forth below, these representations are all false," according to the complaint.
It adds: "Defendants completely misrepresent the feasibility of the EWI nothing down strategies, and they omit key information that would allow consumers to meaningfully evaluate the services they sell. ... EWI offers model deals that by their very structure would require misleading lenders about one's ability to make a required down payment on an investment property."
The Enlightened Wealth Institute promotes itself as "a leader in investment education, providing enlightened wealth-building education to empower individuals to make a positive global impact."
Allen and Painter started the institute in 2004 as the latest incarnation of educational seminars they'd offered for years on how to become wealthy through real estate investment, according to the complaint. Previous incarnations of the defendants' "seminars" were called the "Enlightened Millionaire Institute," "Multiple Streams of Income," "The Robert Allen Institute" and "No Money Down," according to the complaint.
Painter, of Salt Lake City, claims to have been working with Allen for 25 years, according to the complaint. Defendant Lorenzo Spencer, also of Salt Lake City, is a "motivational speaker who promotes EWI programs at its free seminars and 'boot camp' trainings." He was the one who roped her in, Ke says.
EWI is based in Provo Utah, and Conrad Acceptance in Escondido, Calif. "It acts with full knowledge of the EWI program, and conspires with other defendants to collect full or substantial portions of tuition payments from participants before they become aware the EWI will not teach them successful real estate investment methods," according to the complaint.
Ke seeks class damages and punitive damages for RICO violations, breach of contract, unjust enrichment, negligent misrepresentation, and other charges.
Lead counsel is Craig L. Briskin with Mehri & Skalet, of Washington, D.C.
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