Dean Graziosi Scam Allegations: FTC Settlement and Refunds

Dean Graziosi settled a Federal Trade Commission lawsuit in 2023 by agreeing to pay $1.25 million and accepting a permanent injunction restricting his conduct in consumer transactions. The FTC and the Utah Division of Consumer Protection had added him as a defendant to a case against Response Marketing Group (also known as Nudge, LLC), alleging he provided substantial assistance to a real estate investment training operation that used deceptive promises to sell consumers workshops and coaching packages costing thousands of dollars. The FTC described the resolution as one of its first monetary settlements with a celebrity endorser.¹

The Underlying Real Estate Training Operation

Response Marketing Group, based in Lindon, Utah, and its affiliates Nudge, LLC and BuyPD, LLC sold real estate investment training under a rotating set of brand names, among them Flip for Life, Renovate to Rent, Smart Flip, OnWealth, and Affluence Edu. Infomercials and social media ads featuring celebrity endorsers drew consumers to free 90-minute seminars. Those seminars pitched a $1,000, three-day workshop, which then served as a venue to upsell coaching programs, including an “Inner Circle” tier priced upwards of $30,000. The FTC alleged the operation took in more than $400 million, and that more than 750,000 people had attended the events since January 2015.²¹

In a June 2022 summary judgment ruling, a federal judge found that several of the operation’s core representations were false or misleading. Those included claims that consumers would gain access to a special “funding network” letting them do deals without their own money, that they would receive letters helping them make discounted cash offers on properties, that the company had buyers waiting to purchase homes students planned to flip, and that coaching spots were limited to a “select group.” The Utah Division of Consumer Protection said most customers “did not become successful real estate investors and did not recoup the money they spent.”¹³

What the FTC Alleged Graziosi Did

The FTC and Utah DCP filed their original complaint in November 2019 in the U.S. District Court for the District of Utah. In August 2020, the agencies moved to amend the complaint to add Graziosi and Scott Yancey, the star of A&E’s Flipping Vegas, as defendants. The theory was that both men had violated the Telemarketing Sales Rule by providing “substantial assistance or support” to Response Marketing while knowing, or consciously avoiding knowing, that its practices were deceptive.²⁴

According to the amended complaint, Graziosi and Yancey were typically paid a percentage of all revenue generated from program sales after the seminars they promoted, a structure the FTC said resulted in each receiving roughly $10 million. The FTC also alleged both endorsers knew of consumer complaints describing how the company had “swindled people” and collaborated with the Nudge defendants to suppress negative feedback online, including by discussing posting fake positive reviews on Trustpilot and Yelp to push down negative results. Yancey was alleged to have suggested directing seminar attendees to post positive reviews during lunch breaks.⁴⁵

The Settlement Graziosi Signed

Judge David Barlow of the U.S. District Court for the District of Utah approved the celebrity settlements on April 24, 2023, and the corporate and owner settlements on May 18, 2023. Graziosi agreed to pay $1.25 million. Yancey’s payment, initially set at $4.577 million, was reduced to $450,000 after he made financial disclosures to the court. The company’s owners and their entities separately agreed to $15 million in consumer redress, with an additional $15 million in civil penalties owed to the Utah DCP if the redress went unpaid, and were permanently banned from selling “wealth creation” products anywhere in the United States. The Deseret News described the combined $16.7 million judgment as the largest consumer protection settlement in Utah history.¹⁶

What the Injunction Prohibits

Graziosi’s stipulated order does more than impose a payment. It permanently bars him from making or helping others make misrepresentations in any consumer transaction, and it lists specific categories: claims about likely income, program exclusivity, the need for consumers’ financial information, material connections between him and product sellers, and the authenticity of consumer reviews or endorsements. He is also permanently barred from providing substantial assistance or support to any person or entity he knows or should know is engaged in practices prohibited by the FTC Act or the Telemarketing Sales Rule. The order required him to destroy customer data obtained through the Nudge programs and imposed compliance monitoring for up to ten years, with detailed reporting on his business activities, cooperation with FTC investigations, and recordkeeping covering accounting records, consumer complaints, and refund requests.⁷

Refunds to Affected Consumers

In March 2024, the FTC announced it was distributing more than $10 million in refunds to 4,670 consumers harmed by the scheme. The agency also sent claim notices to nearly 400 additional consumers who had previously filed complaints.⁸

Why the Case Was a First

The FTC publicly characterized the Graziosi and Yancey settlements as its first monetary settlements with celebrity endorsers. Andrew Smith, then Director of the FTC’s Bureau of Consumer Protection, said the FTC and Utah DCP believed “these two TV personalities each made millions of dollars by assisting and facilitating this real estate investment rip-off.” Samuel Levine, who succeeded Smith, said the agency “will continue cracking down on deceptive moneymaking opportunities and unlawful endorsement practices.” The theory of liability was that endorsers who lend their names and faces to a marketing operation can be personally on the hook under federal consumer protection law when they provide substantial assistance to a company engaged in deception, even if they do not operate the underlying business.⁹¹

What Graziosi Is Doing Now

Graziosi’s current primary venture is Mastermind.com, a platform he co-founded with Tony Robbins that sells courses and coaching programs aimed at helping people turn expertise into income. The platform is separate from the Response Marketing programs at the center of the FTC case. The stipulated order does not bar him from selling educational products; it prohibits misrepresentations in consumer transactions and assistance to entities engaged in deceptive practices, and it subjects him to years of compliance reporting.¹⁰⁷

1
Federal Trade Commission. FTC Suit Leads to $16.7 Million Judgment Against Principals, Celebrity Endorsers of Real Estate Investment Training Scheme
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Federal Trade Commission. FTC Seeks to Add Real Estate Investment Celebrities Dean Graziosi, Scott Yancey as Defendants
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Utah News Dispatch. Settlement Payments in Response Marketing Real Estate Fraud
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Federal Trade Commission. FTC Moves to Name TV Real Estate Celebs Dean Graziosi, Scott Yancey in Nudge Lawsuit
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Federal Trade Commission. FTC Moves to Add Real Estate Celebrities Dean Graziosi, Scott Yancey to Nudge Case
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Deseret News. Utah Real Estate Investment Workshops Settlement
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Federal Trade Commission. Stipulated Order for Permanent Injunction as to Defendant Dean Graziosi
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Federal Trade Commission. FTC Sends More Than $10 Million in Refunds to Consumers Harmed by Real Estate Investment Training Scheme
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Hunton Andrews Kurth LLP. Keeping It Real Estate: FTC Secures First Monetary Settlement Against Celebrity Endorsers
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Mastermind.com. Mastermind.com