In March 2022, businessman Grant Cardone stood onstage at his annual conference at the Diplomat Beach Resort in South Florida, preparing to introduce a special guest.
“The gentleman I’m about to bring to the circle right here is massively, massively successful,” he said, his voice reverberating through a room filled with thousands of his adoring fans.
“He’s the strongest marketer on planet Earth with the best brand in the world,” he continued. “Some of you will know this guy because he’s a real estate mogul. But most of you motherfuckers will know him because he is the 45th president of the United States of America.”
As the crowd roared and Lee Greenwood’s song “God Bless the USA” blared across the sound system, former President Donald Trump emerged from a corner of the room and strode to center stage, spotlights and smoke machines erupting around him.
Trump, smiling, fist-bumped Cardone, who seemed uncharacteristically starstruck as the former president told him, “You have a great reputation.” He added that if Cardone ever went into politics, “You would automatically have my vote. I don’t care whether you’re a Democrat or a Republican, you have my complete and total endorsement.”
That endorsement has been shared by millions of fans who eagerly follow Cardone’s advice; A-list celebrities like John Travolta, Tom Brady and Kevin Hart who routinely appear at his events; and finance websites like CNBC’s Make It and Forbes that tout him as an expert.
And the key to his empire has been his social media prowess.
Cardone is one of the world’s leading “finfluencers,” or financial influencers, and leverages social media to sell his training programs and real estate investments to his millions of followers.
Financial influencers have proliferated across social media in recent years, especially as get-rich-quick culture boomed in the pandemic with promises of “passive income” or “wealth creation” while jobs disappeared and people were trapped at home glued to their computers.
Some finfluencers are homegrown Suze Ormans, dispensing handy savings hacks or folksy wisdom on how to find the best credit card deals. But like all things on the internet, there’s also a supercharged version of this social media niche, populated by sports-car-driving and yacht-partying influencers hawking high-risk investment schemes and strategies. And their messaging is so effective that their followers have come to believe that with the right opportunities and entrepreneurial spirit, they can become billionaires, too.
Cardone was seemingly always perfectly suited to become a social media phenomenon. As a modern-day P.T. Barnum, he’s posted bombastic videos pretending he’s gone bankrupt to capture the attention of his followers. He’s woven together a potent origin story of overcoming family tragedy and addiction to build a career as a social media influencer, life coach and reality TV star. In a near-constant flow, Cardone shares tips on how to build wealth to his 2.4 million Youtube subscribers, 4.4 million Instagram followers and 6.8 million Facebook followers while flaunting his own: a waterside mansion in Florida, a private jet emblazoned with his corporate logo, and nonstop hobnobbing with celebrities.
Cardone’s promise is simple: His fans, too, can have a slice of the high life, provided they attend his seminars to learn his sales techniques or invest money in his real estate company.
But lawsuits examined by HuffPost show that he’s been involved in a series of business disputes over the years and that people around him have been accused of fraud by federal authorities. His twin brother, Gary, who put up the seed money for Cardone’s booming real estate business, has been the target of Federal Trade Commission civil action, which alleges his company helped scammers evade credit card fraud alerts. The FTC is petitioning the court to close Gary Cardone’s business and order him to pay money to consumers impacted by his activities. (Gary Cardone did not respond to requests for comment.)
Court records from lawsuits involving Grant Cardone’s training programs include claims from former clients who say they were trapped into lengthy, inflexible contracts that they were unable to pay for or get out of.
The owner of an Ohio power-washing business claims he tried to cancel the firm’s $497-a-month contract after eight weeks but said he was unable to do so. An employee from Cardone’s training company stated they could only cancel after their contract was completely fulfilled, and the firm later sued for the remaining $16,401 of the contract. The case was settled.
Lisa Williams, the owner of Jubilee Family Chiropractic, a struggling family business in Virginia, signed up for a six-year training contract at $795 a month. A fan of Cardone, she claims she maxed out her credit cards to attend training sessions with him.
Williams wrote to the company in 2020, at the height of the pandemic, to explain that her business was struggling with “astronomical business debt and tight cash flow,” and asked for some understanding about her late payments. However, she was sued in 2022 for the remaining $52,000 on her training contract. The case was also settled.
“He's been on news broadcasts, being interviewed by reputable people. I'm thinking OK, this guy must be the real deal.”
- Marcus Askins
Cardone increasingly has been under fire for his business practices — but so far has escaped any major consequences. He is currently at the center of an ongoing class action lawsuit filed in 2020 that alleges that he misled investors on social media with overblown promises of high returns. Cardone has denied the allegations, saying it is a “tragedy our system is so litigious & people are encouraged to sue others in order to hold a company doing great things hostage.”
As a prominent member of the Church of Scientology, Cardone is also accused of infusing the controversial organization’s teachings into his business methods, which led to a now-settled lawsuit by former employees. The terms of the settlements have not been made public. (None of the lawsuits, settled or ongoing, have named Scientology as a co-defendant.) In response to a request for comment, a representative for the Church of Scientology wrote, “The slanted and offensive allegations you have sent us, while mostly unsourced, from their tenor, appear to be lifted from a handful of anti-Scientology bigots who shriek at any successful Scientologist. The fact is there are many Scientologists and they are everywhere around the world. You can find them in their homes, at work and helping others in the community.”
HuffPost interviewed four former employees and reached out to current employees about the inner workings of Cardone Capital. In one interview, a former senior executive at Cardone Capital alleged they watched as staffers tried to destroy what they say was evidence of wrongdoing. They also provided documentation to support their allegations. And an internal financial document reviewed by HuffPost indicates Cardone has made $54 million by marking up properties sold to his investors through his real estate fund. (Grant Cardone and Cardone Capital did not respond to multiple requests for comment.)
If you have a tip about Cardone Capital email tom.warren@buzzfeed.com.
Now, social media sleuths and some of Cardone’s investors are looking into the legitimacy of his real estate funds and various business partnerships, and are trying to hold him accountable. They allege that Cardone has pulled the wool over clients’ eyes and trapped them into deals that only serve his interests.
Paul Pelletier, who was the Department of Justice’s most senior fraud prosecutor during a 25-year career at the agency, reviewed the documents in the class action case against Cardone. “It looks like his business is built on lies and deception that will likely collapse leaving investors holding an empty bag,” he said.
Before Grant Cardone became a social media sensation, the financial influencer had a seemingly idyllic childhood growing up in Lake Charles, Louisiana. Perched a few miles north of the Gulf of Mexico, it’s a town where traditional Southern architecture sits alongside petrochemical plants.
His father, Curtis Louis, was the first in his family to attend college. He opened a grocery store and subsequently trained as a stockbroker. The family had five children and enjoyed all the trappings of American middle-class success.
“With a strong work ethic, he was able to make a little bit of money and buy us a home on the lake. We went fishing on a boat, water-skied, had a riding lawn mower and lived among doctors in a nice neighborhood,” Cardone wrote of his father in a Linkedin post in 2016.
But it was not to last.
Louis died early from a heart attack when Cardone was just 10. “We went from a house on the lake to a tiny brick house on a tiny lot, surrounded by houses that all looked exactly the same,” Cardone wrote. “My mom’s scarcity mindset became a part of everything we did. Little did I know that this time seeded what would later drive me in life.”
Ten years later, tragedy would strike once more as Cardone’s brother Curtis Louis Jr. died at the age of 25.
By his own admission, Cardone then lost his way. He wrote on his website that by the age of 23, the only things he had were “drugs, a few bucks, and a dog that I could barely take care of.”
Eventually, he went to a treatment center and got clean. He had his first brush with Scientology when he read “Dianetics,” the foundational text of the controversial church, he told YouTube creator DJ Vlad in an interview.
“That book helped me understand why I was using drugs and actually helped me in my recovery process,” Cardone said, adding that he did not become a Scientologist immediately.
After rehab, Cardone’s uncle suggested he get a job as a car salesman. “I thought I was gonna puke,” Cardone later told a Florida radio station. “I’m like, are you kidding me? I got an accounting degree.” Still, Cardone claimed that within two years he was in the top 1% of car salespeople in the country. Despite his success, he was soon let go, he said.
“I said you know what, I’ll never be dependent on someone else ever again,” he told the radio show. “I’ll go out on my own.”
He left Lake Charles for Houston and then San Diego. And in 1984, he founded Cardone Training and Technologies. Initially, it was focused on teaching car salesmen how to aggressively close deals. He fashioned himself as a sales trainer of the macho school, who believes salespeople fail from “being reasonable” and “believe pressure is a bad thing.” He applies this approach to his own students, frequently warning them: “Don’t be a little bitch.”
The business grew to include consulting and software tools that salespeople could use for managing customer relationships. Then he began dabbling in real estate.
He also became a life coach, penning New York Times bestsellers including 2010’s “If You’re Not First, You’re Last: Sales Strategies to Dominate Your Market and Beat Your Competition,” referencing a phrase popularized in the Will Ferrell film “Talladega Nights.” From there, he branched out from the automotive industry to offer training services to “anyone who wants to get more out of life and business.”
While Cardone’s training business empire was on the ascent, he was still intent on building something much bigger — and when he joined the Church of Scientology in the early 2000s, his path to wealth accelerated. When asked if he is still a Scientologist, Cardone did not respond. In its written response, the Church of Scientology stated: “While Mr. Cardone is undeniably a prominent parishioner, he holds no official nor unofficial position in the Church hierarchy and has no special ‘status.’”
Cardone was 45 when a friend suggested he look into Scientology again, he said in the interview with DJ Vlad. So he made an appointment to meet a representative of the church at its San Diego branch.
“I went in there, asked them, what do you do here exactly? Forget the media, the CNN, the tabloids, it didn’t matter to me that John Travolta or Tom Cruise were Scientologists,” he said in the interview. “All I wanted to know was what can you guys do for me.”
Cardone said that at the time, he was single and desperate to start a family. He threw himself into the church and, according to Scientology publications, donated hundreds of thousands of dollars to the organization.
Soon, he met his second wife, Elena. She had grown up near him in Louisiana before heading to Los Angeles to become an actress, studying at the prestigious Beverly Hills Playhouse under Milton Katselas, a popular Scientologist who was friends with L. Ron Hubbard, Scientology’s founder, and was purportedly responsible for leading many aspiring actors into the organization.
However, Katselas, who died in 2008, had fallen afoul of the church’s leadership ― and in particular its leader David Miscavige ― just as Cardone’s stature was rising. One former Scientologist who knew Katselas told HuffPost that when church leadership had likely soured on Katselas, Cardone seemed to leap into action to impress them.
In a series of letters, first reported by the Village Voice and later obtained by HuffPost, Cardone wrote to Katselas over the years accusing him of “perversions” and neglecting Scientology. In one letter written on Cardone Industries letterhead, Cardone also admitted to stirring up students at the Beverly Hills Playhouse to encourage them to desert the acting school.
When asked about these events, a spokesperson for the Church of Scientology said our questions were “absurd.” They added, “The Church had nothing to do with Mr. Cardone’s relationship with Mr. Katselas, who passed away 15 years ago.”
It would not be the only time that Cardone allegedly used his membership and position in the church to pressure people. At the same time that he was writing the letters to Katselas, he was making a business connection through the church that would end in a ferocious lawsuit.
According to court records reviewed by HuffPost, in the mid-2000s, property developer Ralph Giannella was experimenting with Scientology and was the “selectee” of Grant Cardone, meaning the businessman was his formal introducer to the church.
Giannella alleged in court documents that Cardone proposed they go into business together, offering to pay him $30 million for a slice of Giannella’s company, Premier Coastal Development. Scientology was part of the business proposal, according to a letter from Giannella’s lawyers, who wrote that Cardone promised that “wealthy and well-connected Scientologists would want to do business with Giannella” if he joined forces with him. Giannella agreed.
According to Giannella’s testimony, Cardone paid an initial down payment of $3 million to become a partner in the business, with the agreement that he would then pay the rest of the $30 million for his full stake. Cardone soon got to work and brought in a Scientology business consultant to make sure that the company was run in accordance with the church’s principles, and installed his brother Gary as CEO.
However, there was a wrinkle — Giannella claimed Cardone told him that because “Scientologists can be trusted and are so honest and so forth,” he refused to formalize their partnership with a contract.
Giannella further testified that he drafted documents and sent them to Cardone, who always made excuses that he was out of town or claimed he was busy doing high-level courses on Freewinds, a ship owned by the Church of Scientology where elite Scientologists receive their religious instruction.
“I went along with the delays because of him being, you know, such a — you know, such a high-up Scientologist and my belief that I could trust him and everything I had learned about Scientology,” Giannella later testified. “When I went down to the Scientology church here in San Diego, you know, Mr. Cardone was like a Scientology god down there.”
One day in the summer of 2007, Giannella said he went to pick up Cardone at the airport. “He informed me that he was welching on the deal,” Giannella testified. “He said, ‘Well, this is kind of hard for me to tell you, but I don’t want to buy half of your company.’”
Giannella argued that he could have accepted other offers for his business, but instead wasted his time with Cardone. Giannella sued him, alleging that Cardone’s abrupt departure from the business led to him laying off staff among other sizable losses. Cardone countersued, accusing Giannella of accounting irregularities. (The status of this case is unclear.)
However, one document came out in court that may shed light on the alleged behavior of the Cardone twins. A memo written by an “enforcement officer” at the World Institute of Scientology Enterprises, titled “Major PR flap caused by Grant Cardone and Gary Cardone,” alleged that “a majority of Ralph’s employees were laid-off, right when Grant and Gary disappeared. The employees and other people Ralph deals with are upset about the Scientologists that came in and destroyed Ralph’s company.” (Gary Cardone did not appear to give evidence in the litigation, and Grant Cardone’s lawyers advised him not to answer questions relating to Scientology in his depositions.)
But the failed business deal did not slow Cardone’s rise in the church. In future years he was allowed to tout his business at Scientology events, such as a prosperity seminar that he ran at the San Diego church. He was also feted by Miscavige, who gave him and Elena an award for their donations, crediting them with “elegance, panache, and a touch of exciting danger,” according to Impact Magazine, the journal of the International Association of Scientologists.
His devotion to Scientology was seemingly so strong that in 2017 he was sued by staff at his training firm who said attending Scientology events was a condition of employment and that they were told Cardone “wants all employees in the Church.” Lawyers for Cardone Training Technologies denied the allegations, and in their defense wrote that “the company has made good-faith efforts to prevent discrimination and retaliation in the workplace.” The case was later settled, and the terms remain confidential.
As Cardone rose within the church, he was also experimenting with a new type of power. He adopted social media slowly in the late 2000s, at first posting grainy pictures of him going about his life. There’s a blurry picture of him and Elena at the Celebrity Centre, the elite Scientology building in LA, or dressed to the nines with his brother Gary.
In 2011, Grant Cardone landed a high-profile spot on reality TV as the star of National Geographic’s “Turnaround King,” a kind of “Hell’s Kitchen” for car dealers in which he went into failing businesses to turn them around. While the show only lasted two episodes, Cardone began referring to himself as the “Turnaround King” in his own videos and posts from then on.
Following his reality TV appearance, he developed more sophisticated social media strategies, harnessing branded images and inspirational quotes that drove ever-increasing engagement. “Turn up, even if your eyes are bleeding,” read one of the posts from 2013.
By 2015, he had effectively honed his online persona. Gone were the cinéma vérité shots of him with family and the blurry snaps of him teaching small rooms of tired-looking car salespeople. In their place were glossy professional photos of him on jets or at expensive restaurants with a cigar hanging out of his mouth. He hired a professional videographer and posted slickly produced films of himself across Twitter, YouTube and Instagram.
It worked. He went from creating videos that had just a few hundred views to hundreds of thousands. Now his videos garner millions of views.
In an interview with Entrepreneur magazine, Cardone explained his approach to social media. “I post content frequently. Every day I deliver something,” he said. “I show my millions of followers the ‘behind-the-scenes’ of my life. This can include my marriage, life as a father, my spirituality, or going to monster events like the World Series or a Conor McGregor fight.”
As Cardone became more and more popular online, he set up an annual conference called 10X Growth, referring to his “10X Rule” around which all of his content is branded. He initially started using the phrase when he released a book on the subject in 2011. Its blurb states: “The 10X Rule unveils the principle of ‘Massive Action,’ allowing you to blast through business cliches and risk-aversion while taking concrete steps to reach your dreams.” In essence, he was suggesting his followers set their sights 10 times higher than their expectations to achieve the kind of success Cardone himself had found.
The first 10X Growth Conference took place in April 2017 in Las Vegas with 2,000 attendees. Daymond John, founder of fashion brand FUBU and star of “Shark Tank,” was a speaker for the launch. Soon after, Cardone opened a new business: selling real estate investments directly to his followers, through his property firm, Cardone Capital.
“Cardone Capital is officially open to investors. I’m so excited to make this announcement,” he wrote on Facebook at the time. “To all the investors who trust me with your money I will never let you down.”
The pitch was simple. Amateur investors would send him their money, and he would invest in multi-apartment properties that Cardone Capital would oversee, paying the investors a monthly return from the rents. And then, after the market had risen, he would sell off the properties, giving his investors their money back along with a healthy profit.
It’s known as syndication and is a popular way for amateur and lower-income investors to put their money into real estate. In 2012, Congress loosened the regulations in this industry, making it easier for businesses like Cardone Capital to market themselves online. The industry rode the wave of the pandemic-era real estate boom. However, with interest rates rising, real estate syndicators are now struggling — and small-time investors are paying the price, as the Wall Street Journal recently reported.
Cardone’s social media presence was a key part of the venture, according to documents filed with the Securities and Exchange Commission in 2018. “We expect that our investor base will be largely drawn from Mr. Cardone’s exposure on social media and on media content delivered over the Company’s website,” an offering document for the fund read. “It would be difficult to replace Grant Cardone.”
He sold it to his fans in the enthusiastic style that they celebrated.
“You’re gonna walk away with a 15% annualized return. If I’m in that deal for 10 years, you’re gonna earn 150%. You can tell the SEC that’s what I said it would be. They call me Uncle G and some people call me Nostradamus, because I’m predicting the future,” Cardone said in a 2019 YouTube show he produced called “Real Estate Investing Made Simple.”
It proved popular with his followers. “This is why Im invested in Cardone Capital because of his success and experience in Real Estate. Also, Uncle G’s struggle in life is what make him a great example,” one wrote.
In a YouTube video posted about a year after he opened Cardone Capital to his fans, he claimed to have raised $180 million from his investors. “I have raised more money in 18 months using crowdfunding than any other real estate company on planet Earth,” he claimed.
According to its website, Cardone Capital has since grown to hold $4 billion of assets under its management, with apartment complexes all over the country. While Cardone runs the commercial operations, private jet pilot Ryan Tseko, who also flies Cardone’s personal jet, is listed as executive vice president of the company. (Tseko did not respond to requests for comment.) It also seems the company is still aligned with Scientology and its literature continues to appear at Cardone Capital corporate events. (None of the lawsuits, settled or ongoing, have named Scientology as a co-defendant. A spokesperson for Scientology said “the Church is not involved in the business of any parishioner and has no information about Mr. Cardone’s projects. The Church has no investment in his projects.”)
One former Cardone Capital staffer told HuffPost that the staff was under a lot of pressure to perform, and that much of it came from Scientology. “My biggest issue was mainly how they ran the organization through Scientology. This led to a massive turnover rate and crazy anxiety amongst employees,” the former staffer said.
Another former employee told HuffPost that after complaints surfaced about employees being made to join the church, the techniques to influence became more subtle. “Any event that you go to, in the corner, there’s going to be a bookshelf that has all these pamphlets about Scientology. In the events that we were required to go to, they’ll briefly talk about it. And it is a recruiting thing,” they said.
In 2018, the SEC wrote to Cardone about the claim of 15% returns for investors. “You have commenced only limited operations, have not paid any distributions to date and do not appear to have a basis for such a return,” it stated in a publicly released letter. It also warned that “the company and its management are responsible for the accuracy and adequacy of their disclosures.”
As a result, Cardone amended his sales pitches and later hired a law firm to make sure that his social media posts were compliant with SEC regulations. When contacted for comment, a spokesperson for the SEC said, “The SEC does not comment on the existence or nonexistence of a possible investigation.”
“My money is being held hostage, and they’re making a real return. And at this point, I literally have no idea whether I will ever see a penny of that ever again.”
- Askins
Even with these controversies, Cardone’s star continued to rise. In 2021, he appeared on another reality TV show, “Undercover Billionaire” on Discovery+, where he was dispatched to Pueblo, Colorado, and challenged to make a million dollars in three months. He achieved the challenge, founding a social media agency that exists to this day.
And his conferences continued to attract bigger and bigger star power. In March 2020, John Travolta, who is also a member of the Church of Scientology, was the keynote speaker at Cardone’s annual 10X Growth Conference. Walking onstage to pyrotechnics and the “Pulp Fiction” theme song, he regaled the audience with stories of how he landed big roles and convinced airlines to sponsor him — and shared his thoughts on money. “In some ways in this world, you can’t be rich enough,” the star said. “Because it protects you.”
But by late 2020, Cardone was facing more legal trouble for his allegedly questionable business practices. The class action suit filed against him states that Cardone’s online promotions “contained untrue statements of material fact, and concealed or failed to disclose material facts,” and that despite his claims of 15% returns each year, “investors have received only a 4.5% rate of return on their investments.”
The lawsuit also alleged that Cardone owned one of the properties that he was trying to sell to investors as a new investment opportunity. The complaint states that 10X Living at Delray, a Florida development that has a movie theater, tennis courts and a billiards room, was purchased by Cardone in September 2018. However, the lawyers for the complainants argued it was not sold to investors for two months, yet Cardone Capital still charged a 1% finders fee, worth a little under $10 million.
As to whether Cardone buying the properties before selling them to investors was illegal, Pelletier, the former Justice Department prosecutor, suggested Cardone may be misleading investors. “It is not typical front-running, but nevertheless, as pointed out in the complaint, he is at least misleading investors as to the method of acquisition and finance of the properties,” he said. “I am not an expert in ethics, but I can say that making false representations in the purchase and sale of a security can constitute securities fraud.”
“As the Complaint points out, when you look at the fee he is charging and analyze it on the basis of undisclosed self-dealing, it could be evidence to establish fraudulent intent,” Pelletier added.
A HuffPost analysis of SEC documents also indicates that while Cardone purchased the development for $92,200,000, when he sold it to investors weeks later, it was valued at $97,714,286.
According to court documents, investors asked that they be returned the money they had invested in two of his funds, including the one that held the 10X Delray investment and damages. Their case was denied in May 2021 in the California courts, which ruled the investors’ case was not actionable under the Securities Act.
However, in December 2022, that decision was overturned in the U.S. Court of Appeals for the 9th Circuit, which ruled that the investors’ suit “fairly alleges that the nature of social media presents dangers that investors will be persuaded to purchase securities without full and fair information.” The lead plaintiff in the class action, Luis Pino, a retiree from Inglewood, California, claimed he invested $20,000 in Cardone’s real estate funds. He died earlier this year and his daughter, who inherited Pino’s estate, took over as the lead plaintiff in the ongoing case. (Grant Cardone did not respond to multiple requests for comment about these allegations.)
HuffPost also spoke to an investor, Marcus Askins of Georgia, who launched his own lawsuit against Cardone Capital in September 2022. He claims that he invested $1,000 with the fund. He’d been living overseas and had just returned to the U.S., and wanted to put some money into an investment for the future.
“I saw Grant Cardone on YouTube. He’s very, very well known in the real estate community,” Askins told HuffPost. “So in my head, I’m thinking, OK, well, he must be legit, right? Because I mean, he’s been on news broadcasts, being interviewed by reputable people. I’m thinking OK, this guy must be the real deal.”
But since putting the money in, he claims he hasn’t received any return at all.
“It’s eating away at me, hurting,” he said. “That is money that I could have invested either in my own business or in reputable ventures. My money is being held hostage, and they’re making a real return. And at this point, I literally have no idea whether I will ever see a penny of that ever again.”
In response to the lawsuit, the company said that Askins did not provide the correct address to send his checks. Askins, meanwhile, contends that they continued to send him promotional material, so they knew where he lived. The case is ongoing.
Another former staffer of Cardone Capital, speaking on the condition of anonymity, said they dreaded the 15th of the month when the disbursements were paid to investors, as they received complaints that people were getting less than Cardone had led them to believe.
“We had to go in and kind of like, damage control. ‘Well, you’re not making cash flow, you’re making an appreciation, and when Grant sells in 10 years, you know, the property is going to appreciate,’” the former staffer alleged. However, they added that even if the property did go up in value, it was unclear how much Cardone would actually return to investors after the properties were sold off or refinanced. The former staffer said that Cardone wouldn’t tell investors what kind of fees he would take out once a sale was made. (Cardone did not respond to requests for comment about the fee structure of Cardone Capital.)
Financial documents filed with the SEC show that in addition to the 1% finders fee charged to clients, Cardone Capital charged an annual 1% fee on investments it was holding. Cardone Capital’s website also warns that it can also collect up to 20% of profits as a performance payment.
The former senior executive who spoke to HuffPost claimed working for Cardone Capital was like “‘Wolf of Wall Street’ or a really bad movie.”
In an exclusive interview, the executive alleged that around three years ago, an external auditor found a discrepancy worth millions of dollars in one of the real estate funds, leading Cardone Capital to bring in temp staff to destroy documents. HuffPost reviewed material supporting the allegations. HuffPost also reached out to two other former Cardone Capital executives who allegedly have knowledge of these claims, but they did not respond to multiple requests for comment.
“They were tasked over a period of days with just shredding boxes and boxes of documents, many of which were tax records and plane logs, with maintenance and jet fuel, which I’m assuming was paid for with investor funds,” the former Cardone Capital executive claimed.
According to the executive, at one point an employee went into the office of a member of Grant Cardone’s leadership team. “He screamed, ‘Burn the place down,’ inferring, you know, destroy everything,” the executive said, alleging that another company executive was “frantic” about the document shredding because the company was supposed to retain copies of the documents. HuffPost spoke to another employee at Cardone Capital who was present when the shredding of the documents took place and overheard the “burn the place down” comment. (Cardone did not respond to multiple requests for comment about these allegations.)
At the same time, the controversies swirling around Cardone began spilling over onto the very platform that he had been so effectively leveraging for his own gain.
In March 2018, a boyish finfluencer from California named Kevin Paffrath first took aim at Grant Cardone on YouTube. In a video called “Grant Cardone & Cardone Capital Exposed,” the then 26-year-old licensed real estate broker filmed himself driving around looking at properties to purchase in his Tesla, sharing his opinions on Cardone Capital, and warning his viewers about the fees Cardone Capital charged and how it locked investors in.
Over the next several years, Paffrath and Cardone would be caught in a running battle, social media style. The younger finfluencer was arrested after turning up at Cardone’s office unannounced. Cardone sued Paffrath for harassment and authored Tweets and blog posts about him. “You simply can’t build your brand up by trying to tear someone else’s down. Being great doesn’t require you to be stupid,” Cardone wrote. In the end, the lawsuit was dismissed and Paffrath was not found guilty of harassment.
Paffrath then went on to film one more video that would lead to greater scrutiny of Cardone online.
In March 2020, Paffrath started digging into the filings of Cardone’s funds, and in particular looked at a deal that Cardone was offering investors on a property in Maryland, which he told investors was worth $157.6 million. However, when Paffrath looked at the deed of the property, he claimed that Cardone had already purchased it for $133.7 million in December 2019.
“Are they trying to deceive new investors?” Paffrath asked in a YouTube video. “What’s up with this?”
The video caught the attention of YouTuber Aaron Smith-Levin, an investment researcher known for investigating companies for hedge funds. He’d previously worked for Bill Ackman researching multilevel marketing firm Herbalife, which became one of Wall Street’s best-known bets that a stock would crash. Smith-Levin had grown up as a child in Scientology, spending approximately 29 years in the organization before leaving at the age of 33. During his time he worked for the Sea Organization ― or “Sea Org” ― a religious order comprised of committed Scientologists who sign a billion-year commitment contract with the church.
Smith-Levin started probing Cardone’s businesses, and to date has published more than 60 YouTube posts sharing his opinions of Cardone, including a series of in-depth videos about his findings.
According to a YouTube video Smith-Levin posted in September 2022, he went through property records and calculated how much Cardone bought properties for and how much he sold them to investors for. “Grant made over $110 million dollars of profit directly into his own pocket just by front-running his investors on the deals that his investors believe he’s out there finding for them,” Smith-Levin claimed. Cardone did not respond to multiple requests for comment about Smith-Levin’s allegations.
HuffPost obtained an internal Cardone Capital property valuation document showing the value of properties that it held before selling them to investors at a markup. An analysis of the document and SEC records by HuffPost suggests that Cardone has made around $54 million selling nine of his properties to investors.
In the video, Smith-Levin also addressed Cardone directly and claimed that authorities were probing his deals.
“Grant, I’m talking to you directly because I know that you watch my videos,” he said. “You can be sure that as your employees are looking for other employment they are enthusiastically collecting up every single bit of evidence that they can to share with the authorities and to bring your operation down. You must be the only person at Cardone Capital who is unaware that you’ve been under federal investigation for well over a year now.”
HuffPost was unable to substantiate Smith-Levin’s claims that authorities were investigating Cardone. In response to a request for comment about these allegations, a spokesperson for the FBI said, “The FBI neither confirms nor denies an investigation and declines to comment further.”
Cardone has also continued to align himself with business partners dogged with allegations of fraud. One of his more recent partners is Jared Yellin, who runs a tech incubator. In lawsuits, Yellin is accused of defrauding prospective entrepreneurs by clients, allegedly charging them to have their pitches heard and then billing them for software development projects that were never completed. (Yellin did not respond to multiple requests for comment sent by HuffPost.)
“Cardone continues to use social media to draw new investors into his businesses and flout his wealth, and is busy promoting his newest venture, 10X Health.”
He partnered with Grant Cardone to found 10X Incubator in early 2022. It promised “the ultimate synergy and a company that will forever change tech by giving the everyday person a fighting chance to become a tech entrepreneur.” (In court documents, Grant Cardone disputed he was still involved with the incubator.)
The incubator is now facing at least four lawsuits, which allege it defrauded prospective entrepreneurs by charging them for software development it never delivered. In one case, Yellin argued that startup businesses “carry with them substantial inherent risks, as a substantial percentage of them fail before ever becoming profitable.”
Sean Callagy is one of the entrepreneurs who is suing 10X Incubator. An award-winning lawyer who is legally blind, he set up a training company with Yellin in 2019. However, he later sued, alleging that Yellin had “willfully and blatantly violated” a settlement agreement to leave the company after Callagy fired him.
Callagy alleges Yellin took client lists without authorization and reached out to market Grant Cardone’s projects from the 10X brand, which Callagy claims breaches a non-compete. (Yellin did not respond to requests for comment about these specific allegations.)
Callagy’s law firm is now representing entrepreneurs who also used the incubator. One, Joshua Osteen, described as a “hardworking ‘blue collar’ professional” in his legal documents, claims he lost $100,000. He also alleges that Yellin asked prospective investors to “pay a toll” of $5,000 to entities owned by Yellin and Grant Cardone, which Osteen claims deterred investors from working with his company.
Following the lawsuits, the incubator was renamed Project 10K. Two entrepreneurs, Chase Cline and Gallant Dill, wrote to one of Cardone’s top company executives to inform him of the allegations against Yellin in September 2022.
“I don’t know if you know this yet, but basically Jarred Yellin is a complete con-artist,” Dill wrote, in a text later shared in court, alleging Yellin took $150,000 from Cline and Dill to develop their software product but never delivered it. A month later, in October 2022, Yellin sued Cline and Dill for defamation, writing that they were attempting to “harm or destroy the business relationship” he has with Cardone, who Yellin’s complaint says remains a business partner of Project 10K. (The defamation case is ongoing.)
Still, Cardone continues to use social media to draw new investors into his businesses and flout his wealth, and is busy promoting his newest venture, 10X Health. His partner in the business, Gary Brecka, is a “biohacker” who was previously in the life insurance business, where he was accused by a former employer of running a kickback scheme according to a lawsuit it filed against him in August 2022. (The case was dismissed after the former employer failed to serve Brecka.)
“Do you think I’m legit or do you think I’m a scam?”
- Grant Cardone
According to its website, 10X Health sells a package of biohacking machines that promises to give “healing power back to the human body using magnetism, oxygen, and light.” It costs $132,936. Ultimate Fighting Championship president Dana White promoted Brecka’s methods on the “Balancing Chaos” podcast last year. “They do these tests on you and they know when you’re gonna die,” he said. “I became obsessed. He gave me 10.4 years. Completely changed my life.” White credited 10X Health with a newly chiseled physique and improved health. However, mixed martial arts fans were unimpressed, denouncing it as a “complete BS grift” online. (In response to questions about the efficacy of the technology sold by 10X Health, Brecka initially offered to send details about red light and oxygen therapy, and then declined to respond further.)
White responded directly to the social media criticism he was getting. “I get it. People are skeptical and people are talking about that I’m getting scammed. You think I would get scammed? You think I would allow myself to get scammed?” he told his followers in a video posted directly to UFC’s YouTube channel.
In recent social media posts, Cardone can be seen on a 206-foot superyacht touring the Mediterranean. True to form, he’s been posting a nonstop stream of content, carving up the waves on a personal watercraft or working out with dumbbells on deck.
He also recently posted, and then deleted, a video to YouTube titled “Monaco Scam Alert.” At the quayside of the famous city-state, surrounded by the yachts of the rich and glamorous, he complained to his viewers about his social media detractors.
“Dude, you would not believe how many of these people on Reddit have things to say about me,” he said. “I’m trying to give you guys a billion dollars worth of advice and I don’t charge anything. And the response is, ‘Oh man look at him showing his cars off, look at him showing his plane off, people who show stuff off are scammers.’”
“Comment man, do you think I’m legit or do you think I’m a scam?” he asked his followers. And reply they did. “Keep showing off! It inspires me!” wrote one.
Levin soon posted a response video. “He’s a fraud,” said the ex-Scientologist. “He’s a fake billionaire.”
It is not yet known when Cardone will have to appear in court for the ongoing class action suit his investors have brought against him. Until then, it seems he’ll keep ignoring the haters — and mounting legal troubles — from aboard the superyacht.
If you have a tip about Cardone Capital email tom.warren@buzzfeed.com.
Tom Warren is an investigative reporter based in the UK. A two-time Pulitzer finalist and former New Journalist of the Year, he can be contacted on tom.warren@buzzfeed.com.