South Florida man claims he was duped by home-flipping 'scammer' Armando Montelongo

Texas Attorney General's Office confirms 'ongoing investigation' into business

By Christina Vazquez - Reporter

SUNRISE, Fla. - A house-flipping dream turned out to be a flop for one South Florida retiree.

Local 10 News viewer Rafael Mendoza called the "Call Christina" hotline, saying he couldn't get Armando Montelongo's company to respond to his repeated requests for a nearly $1,500 refund.

Mendoza said he wanted to get his money back after he claimed the three-day seminar he attended in 2014 didn't deliver on a promise to reveal the secrets of making a fortune flipping real estate. Instead, he said he was just badgered to spend even more money.

Television personality and self-professed real estate guru Armando Montelongo claims to be America's No. 1 home flipper, calling the people who buy into his products "students."

Montelongo claims to flip 400 homes a year and says he can help you "grow rich," too.

Mendoza is a retiree who was looking to supplement his Social Security income and found Montelongo's infomercial on real estate training sales pitch exciting.

He signed up for the free seminar, "But it turned out that it was really an advertisement for the three-day seminar, which was $1,500."

Mendoza paid the money, $1,496, and thought he was going to learn the ropes on how to flip homes.

Instead, he said he was pitched a more than $30,000 bus tour promoting the sale of a separate program.

Mendoza told Local 10 News he felt like he got "taken" and went as far as to say, "I think he's a scammer."

Mendoza's complaint is echoed by people all across the country, spanning several years.

Local 10 News investigative reporter Christina Vazquez uncovered that the Federal Trade Commission has 147 responsive complaints on file for the San Antonio-based business since 2009.

In 2013, a Forbes headline described him as a "huckster." Two years prior to that, the Better Business Bureau issued an alert.

[WEB EXTRAS: 2013 FORBES: Meet Armando Montelongo: The Home-Flipping Huckster Who'll Make $50M This Year | 2011 BBB Alert: "Free" Real Estate Investment Seminar Could Cost Tens of Thousands]

Vazquez checked in with Erin Dufner, the chief marketing officer with the Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin.

Dufner said that while the company currently holds a B+ rating and complaint volume is going down, "complainants continue to complain their dissatisfaction with the fee-based seminars after they attend the free seminar hosted by the business. Generally, consumers are asking for a refund."

Is there anything our community should know about Armando Montelongo seminars from the BBB when it comes to consumer protection information?

According to Dufner:

  1. Make sure to read all of the fine print when signing up for additional training.
  2. Be sure to understand any guarantees promised during the presentation.
  3. If you decide to sign up for additional seminars, make sure you have the time and tools to be successful using the training program.
  4. Don't be pressured to sign up for anything on the spot. Take time to review all documentation, research the business opportunity and decide if it's something in which you want to invest.

"I really don't understand, with so many regulatory agencies, why he hasn't been put out of business," Mendoza said.

In 2011, the Texas Attorney General's Office looked into the company's business practices and accepted what is called an "Assurance of Voluntary Compliance."

While no misconduct was cited, Montelongo's companies paid the state $100,000, while the state outlined a laundry list of things the company can and cannot do in order to comply with Texas law.

[WEB EXTRA: What is an "Assurance of Voluntary Compliance?"]

AVC's are provided for in the Deceptive Trade Practices Act under Texas law, Business and Commerce Code, Chapter 17.

Sec. 17.58. VOLUNTARY COMPLIANCE.

(a) In the administration of this subchapter the consumer protection division may accept assurance of voluntary compliance with respect to any act or practice which violates this subchapter from any person who is engaging in, has engaged in, or is about to engage in the act or practice. The assurance shall be in writing and shall be filed with and subject to the approval of the district court in the county in which the alleged violator resides or does business or in the district court of Travis County.

(b) The acceptance of an assurance of voluntary compliance may be conditioned on the stipulation that the person in violation of this subchapter restore to any person in interest any money or property, real or personal, which may have been acquired by means of acts or practices which violate this subchapter.

(c) An assurance of voluntary compliance shall not be considered an admission of prior violation of this subchapter. However, unless an assurance has been rescinded by agreement of the parties or voided by a court for good cause, subsequent failure to comply with the terms of an assurance is prima facie evidence of a violation of this subchapter.

(d) Matters closed by the filing of an assurance of voluntary compliance may be reopened at any time. Assurances of voluntary compliance shall in no way affect individual rights of action under this subchapter, except that the rights of individuals with regard to money or property received pursuant to a stipulation in the voluntary compliance under Subsection (b) of this section are governed by the terms of the voluntary compliance.

Local 10 News asked the Texas Attorney General's Office if Montelongo was ever found in violation of the AVC or if any follow-up investigation ever found Montelongo's companies to be in compliance.

In an email, Katie Avinger of the Texas Office of the Attorney General stated, "Regarding any follow up investigation, we do not confirm nor deny the existence of an investigation. We do not provide comments regarding investigations."

Two days after the Call Christina report aired, the Texas Attorney General's Office confirmed that it had an "ongoing investigation" into the business.

Since 2009, the office confirms it has received 78 complaints from people all across the country, some saying the Montelongo seminars are "bait and switch scam and fraud," complaining of "deceptive trade," looking to be refunded, in some cases, by tens of thousands of dollars. It would appear they have received as many complaints so far this year as they did all of last year.

After an initial attempt to reach the company through Montelongo's website went unreturned, Local 10 News asked a news crew to visit one of Montelongo's free seminars in Orlando.

A staff member winked at the camera, but did not talk. Instead, they held up a piece of paper to the lens reading, "Greg Salsburg--STiR Communications," a company Florida state records show is based in South Florida.

Monday morning, Salsburg sent an email that did not address the pattern of complaints spanning several years, but did state, "Our documented company phone calls have recorded Mr. Mendoza stating his pleasure with the workshop he attended and that he was able to purchase a property with a cash flow of $850 per month from the teachings."

It is a claim Local 10 viewer Mendoza denies.

"That is a big lie," Mendoza said. "The seminar that I participated in was at the end of January 2014 and it ended three days later. So the house that I purchased, I bought in the fall of the year before, in 2013. So therefore, what they're saying is a lame excuse to try to justify that I used their information to obtain property."

On Wednesday, Salsburg told Vazquez that he is no longer "working or associated with Armando Montelongo Companies."

Local 10 News asked Mendoza to provide paperwork to support his statement. According to the purchase agreement for a home in Indianapolis, Indiana, dated Oct. 26, 2013, he signed on Nov. 3, 2013.

Local 10 News then checked with Indiana Property Records, which documents a transfer of ownership date of Dec. 19, 2013. Records there show it was sold in January of 2015 for $900 less than his purchase price.

Mendoza signed a "student agreement" with Montelongo and purchased a three-day workshop package for $1,496 on Dec. 12, 2013.

Mendoza said he attended the three-day seminar on Jan. 31, 2014, Feb. 1, 2014, and Feb. 2, 2014. That is why Mendoza claims there is no connection between the Montelongo three-day seminar and the property in Indiana.

Outside of his current Sunrise home, which is owned by Mendoza Legacy Inc., Mendoza stated he does not own any other property.

Local 10 News has asked Salsburg for a copy of the audio recording. If we ever receive a statement regarding the years-long pattern of nationwide complaints we will also add that to the website.

The BBB says in general to be wary of get-rich-quick enterprises and never be pressured to sign up for something on the spot.

Follow Christina Vazquez on Twitter @CallChristinaTV

Follow Local 10 News on Twitter @WPLGLocal10

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