A Nevada motivational speaker-cum-investment guru who is also a major GOP donor is being accused in court documents of operating a Ponzi scheme in which investors were promised big returns for buying real estate in the Dominican Republic.
While the FBI is reportedly investigating the businessman, James Catledge, he has not been charged with a crime by the government. The accusations against Catledge are leveled in the lengthy report of a special master who was appointed by a federal judge in Florida as part of a civil suit brought by aggrieved investors.
The special master, Thomas Scott, who is the former U.S. Attorney for the Southern District of Florida and a former federal judge, conducted a forensic analysis in the case. The accusations against Catledge were first reported by the investigative news Web site Broward Bulldog.
The special master report alleges that Catledge along with Canadian resort developers Frederick and Derek Elliott engaged in a “Ponzi scheme or Ponzi-like scheme” causing thousands of investors to be “financially destroyed.”
They allegedly sold fractional and timeshare units at two sites in the Dominican Republic, Juan Dolio and Cofresi, which were foreclosed on and sold last year. The special master accuses Catledge of marketing and selling the real estate products to investors, who were “guaranteed” annual returns of 7 to10 percent.
But, the special master alleges, only the initial investors ever saw any returns. In the case of the Juan Dolio property, where a resort was planned but never completed, the money used to pay out these returns “largely came from monies received from new investors,” the special master report alleges. It alleges that Catledge “preyed upon unqualified investors and sold ‘securities’ without a proper license.”
Over $170 million of investor money was “almost completely lost,” according to the special master. The report says Catledge was paid over $42 million in commissions.
Lawyers for Catledge and the Elliotts categorically denied wrongdoing in interviews with Broward Bulldog.
Catledge, who is based outside Las Vegas, is a somewhat mysterious figure who has operated under a variety of company names, including Impact, Inc., and Net Worth Solutions.
His YouTube channel features clips with titles like “Will to win,” “Dare to dream,” and “Price of success.” He evangelizes to rooms full of rapt investors, who take notes on Catledge’s “net worth” strategies.
In this clip, he tells an audience of associates: “I have this fear that sits deep inside me that you as associates in the net worth building business may not be learning the principles of building net worth yourself.” He adds: “Maybe you’re off on a tangent that’s tied to fear and you brought your old tool box from wherever you came from with you here.”
His Web site, “Success! In Motivational Speaking by James Catledge,” touts a rags-to-riches story.
Raised by a single mother, Catledge says he worked odd jobs to afford clothes as a child and later paid his way through college and his two-year Mormon mission.
“He was now sharing his passion and mastery of financial services with other leaders as well as his unique talent for business building,” the site says. His company aims “to teach people about money and to be more responsible for their own net worth. Now thousands of associates and tens of thousands of clients have been taught these principles.”
Besides his business pursuits, Catledge also has an apparent interest in Republican politics. He gave over $100,000 to various GOP causes in the ‘08 cycle, including $50,000 to the McCain Victory 2008 fund.
He donated $28,500 to the RNC and $2,300 to Mitt Romney during the GOP primary in 2007.
In May 2008, Catledge dined with President George W. Bush and McCain at Romney’s Utah home, according to a press release Catledge put out publicizing the event.