CAPE CORAL, Fla.-Why did so many credit union "members" and others invest and lose so much money here and in nearby Lehigh Acres? In part, because they found so much encouragement.
Among those making their home here is Russ Whitney, who during the real estate boom was at the front of a class of gurus who populate infomercials on late-night cable TV and lead those one- to three-day "seminars" on becoming wealthy in the stock or housing market. It is generally believed that Whitney helped fuel the rampant speculation in real estate in his home town that was in large part financed by Colorado's Norlarco Credit Union.
After time in jail in his youth and a stint working in a slaughterhouse in upstate New York, Whitney had purchased a rundown home, flipped it, bought more real estate and claimed to have become wealthy by repeating the process, according to his book, "Starting From Zero." At press time, a "box set" of that book, plus six audio CDs and a diskette that are part of Whitney's "Building Wealth System," were available on Amazon.com for $49.95.
But Whitney really hit the jackpot when he began offering to teach his "system" to others. Seminars that cost $199 to attend are introductions to other "courses" that can cost tens of thousands of dollars, according to media reports and those who have attended. Whitney offers "mentoring," for instance, for $15,000. The hotel seminars are now led by his son, Russ Whitney, Jr.
By 2005 the Whitney Information Network was a publicly traded company reporting it employed approximately 475 people and had $160-million in revenues. In his book and in interviews, Whitney said his success is due in large part to guidance from the Bible.
Not That Kind of 'Wealth'
Among Whitney's holdings is "Millionaire University," which, as the name makes clear, is promoted as a means to make its graduates wealthy. (In a Tennessee lawsuit Whitney said by "wealthy" he wasn't just referring to finances but to "spiritual" wealth, too.)
The Tennessee suit, brought by the state's attorney general, is one of many that have been filed against Whitney. There is even a website, "RussWhitneyLawsuit.com." Search Whitney's name on Google and the search engine will immediately default to "Russ Whitney scam." The topline results will show "Don't Trust Russ Whitney."
The Better Business Bureau says Whitney and his affiliates are "not BBB accredited."
In a 2006 online posting, a person identified as "Patricia" from Tampa, Fla., offers an explanation of how the real estate scheme was supposed to work.
"My daughter and I both purchased a home each while attending a weekend seminar at Russ Whitney's Millionare University. It was offered to us as an opportunity to be able to get into a real estate purchase with a hands-off approach. For an investment of approximately $14,000 we would purchase this $278,000 4BR 2Bath 3Car Garage home as a preconstruction property and by the time it was completed, we would have a contract for purchase through their real estate agency and reap the reward of between $16,000 and $22,000... We both bought these homes and at the present time the construction time has been over 18 months and we have a total of $22,000 each invested into these homes without a buyer in sight..."
Another posting by someone identifying herself as "Chonnie" from California offers a similar experience, saying "It was presented that there would be a 30% to 50% possible return on the investments...In short, we have invested a total of $38,000..."
