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Investigation: Russ Whitney Should Resign as CEO and Chairman

This article was written by in Investing. 16 comments.


For those who follow real estate investing gurus, it might be interesting to note that Russ Whitney’s company, through an internal investigation, is calling for the founder’s resignation. Russ Whitney, the founder, chief executive officer, and chairman of the Whitney Information Network has in the past aligned himself with Robert Kiyosaki (of Rich Dad, Poor Dad infamy).

The report said the committee “found that, among other things, before the start of the government investigations, the company’s marketing function — including advertising for company products, solicitation of customers, presentation of live seminars, telemarketing, coaching and mentoring — was characterized by inadequate controls, inadequate training and a failure to devote adequate resources to compliance.

I don’t expect any remuneration for customers who were swayed by the marketing cited in the report, unfortunately.

Here are the basics about Russ Whitney. He is a high school drop-out who built a money-making business. What was that initial business? Well, Whitney doesn’t really explain:

“I ordered a book that had a couple of ideas that made sense. I finally found something that I could do that didn’t require a lot of money to start, and in 3 weeks, I made $11,000…” He and his family celebrated his initial financial success with a commitment to use that money to make more money. He quickly invested it in another money-making vehicle. A little over a year later, at the age of 22, he had racked up $117,000 in profits.

Why no details other than to say his plan “involved real estate?” Well, he wants you to attend his seminars, buy his books, and become part of the program if you want to find out. As any guru, his primary income doesn’t come from these investment opportunities — it comes from the massive “education” program built around his investing ideas. That’s the truer way to wealth, at least for Whitney — become a cult-like motivational leader.

For some interesting reading on Russ Whitney, consider some of these articles. There is enough content here and elsewhere on the Internet to keep you busy for days.

News-Press: Top Whitney Execs Targeted
Rip Off Report: Russ Whitney
Russ Whitney’s Building Wealth and Russ Whitney’s Blog
John T. Reed on Russ Whitney
New York Times: Russ Whitney Wants You to Be Rich
Teach Me To Trade and Rich Dad Academy: both assisted by or partnered with Russ Whitney

Below is a video (part one of two, Adobe Flash required) about suspected rip-offs by Russ Whitney. The source is not identified.

If you’re interested, here is the second part of the video.

Updated August 9, 2011 and originally published November 17, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 16 comments… read them below or add one }

avatar Mrs. Micah

I want a cult-like following that will pay me thousands of dollars for my nuggets of wisdom so that I don’t actually have to succeed at what I’m telling them to do.

Oh, wait. I don’t. I want to be able to sleep at night.

But there are day…………

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avatar Brandie

I’m not sure what you guys are upset about. My husband and I took his course about 5.5 years ago and we now own 14 houses. Yes, the information came at a high price, but so does college and there is no guarantee that you will find a job in the field that you trained for. Guess what you still have to pay off all those student loans. We had zero training in any kind of real estate, but in 2 years we had 14 houses. Its all in what you put into it. That goes for anything in life.

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avatar Sarah

Brandie, I completely agree. I have spent about $80k on my engineering education and about $30 on my real estate education (which began with Russ Whitney). I now have two 3-family houses paying rent, and I have been unemployed from my engineering job for almost 12 months, with no prospects in sight. My cashflow from rents is almost enough to live off of. One more 3-family and it will be. I bought one in 2006 so I am severely underwater, but because of the education I received through RW, I understood I am not interested in what the market does. As long as it cashflows, what does it matter? RW made it easy to figure out what cashflows and what makes sense.

I would never have understood the basic principles of real estate if I had not taken the classes offered by RW. If this lady in the article bought something because someone else encouraged her to instead of looking at sound financials, then she did not understand the material presented.

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avatar Dean

Ditto! I didn’t even take a Russ Whitney course, I just read his book and went from renting a room in Harlem,NY to owning 8 rental properties(2 multi family buildings) in Brooklyn over the course of 4 years. I stupidly did it in my spare time while working a full time job. Had I put in more effort I’d have a lot more Real Estate. But there’s still time!

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avatar plonkee

I’m also wondering how I can get into that racket whilst still maintaining a semblance of ethics. Are we really sure it’s not possible?

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avatar Mrs. Micah

We must brainstorm this, plonkee. Anyone else interested? ;)

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avatar Sherry Fearrand

You got that right! Russ Whitney & his “buddy” companies are bad news. Just look at the facts of recent litigation:
1. His customers are suing him CSK Tel 813-282-6000
2. His stock holders are suing him for defrauding customers, and inflating his stock value.
3. His employees are suing him
4. Several states atty generals have moved against him, like TN, MI, FL etc. FL just settled a multi million dollar suit against Whitney etc. AND are filing another suit. For one proof

Florida Attorney General is filing suit against: Russ Whitney – Gulfstream Developement – United Mortgage Corporation – Douglas Realty
For their fraudulent and illegal practices regarding housing Investor training & Turn-Key new construction houses.
Anyone who has been hurt by these poeple needs to file their complaint with the FL Atty General’s Office (here are step by step instructions)
Go to http://www.myfloridalegal.com
Click on to Consumer Protection-(Left Side Column)
Click on Economic Crimes
Click on Contact Economic Crimes

The Complaint Form will appear. Fill in all sections.

Under Section 2, for Name/Subject list: Russ Whitney/Gulfstream Development/United Mortgage etc.

For Subject/Category dropdown list click on: False or Deceptive Trade Practices

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avatar Wm. Taylor

Hi Sherry Fearrand,
I’m not sure if you went throught the course to make a personal observation but my wife and I did. We got just what we paid for. Info and confidence to start. Many of the people that didn’t like the course mentioned to us thier issues and to be honest, we have yet to hear an issue that isn’t self induced. Winners win, everyone is jelous, lossers lose, and complain. Also, any education in human history will explain what is happening to Mr. Whitney. As you stated, #1 His customers are suing him. If one sues, others follow, not lead, which brings me back to my “winners win staement. #2, 3, and 4 on your list, see My original comment. They can’t win by themselves so they hire an attorney. I however applaud your efforts to help people who feel they have been wronged by your links and instructions. It’s good to have someone looking out for the helpless.

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avatar whitney developments

Robert Kiyosoki BUSTED!!!!
http://www.cbc.ca/marketplace/2010/road_to_rich_dad/main.html
His association with Whitney brought him down.

Watch for major developments in these two class action suits this and next week
1. http://www.archive.org/details/3-07Musuit
2. http://www.archive.org/details/NorthPortSuit

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avatar Kevin

I happen to agree with Brandie also. You get from it what you put in. However, having said that, I immediately suspected Russ Whitney and his learning academy of being a scam after I spent a whopping $9k on his seminars and 2 courses, and found that when I requested assistance on a deal, the help was much lacking, and instead, I was advised to join their coaching program, for another $2500.

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avatar Carol Luken

Russ Whitney is bad news.Don’t believe anything you hear from him. My friend lost lost her ass following his doctrine. Her credit is ruined. the property she paid 200k for sold at sheriff sale for 64,000 .He SHOULD be held accountable!

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avatar Do'n fine!

Wow! That is terrible and I wish your friend luck getting back on her feet. However, I am concerned about her buying a property for 200K. In the R.W. course I took, it was never taught, not once, to pay THAT much for a single property without doing the Due diligence. Maybe she got a lttle excited and went overboard. The course taught you how not to let that happen. So far for us, following his instruction,….. Do’n fine!

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avatar Speedy

Okay folks, I too am a Russ Whitney student and I paid lots of money for his courses and programs. I had several and even the mentor program where a Millionaire coach came out to my home and mentor me for a week, at the end I had under contract two properties ( I got one and missed the other) ,I then later had gotten 2 more and should of and could of gotten more but it wasn’t due to Russ’s courses or teaching it was due to me! You see you get out of it what you put into it! I just lost it somehow and got sidetracked or something! But I am sure if I go back over everything again that I can and it is no ones fault but mine! So people, quit your complaining and stop expecting to get rich just by buying the stuff and not following it thru! It does truely work, but again that is the key word “WORK”. Ofcourse you may have to make adjustments to certain things due to the way the econonmy is today! Sure a property worth 200k or so back a few years ago isn’t worth as much in some places , but it isn’t Russ’s fault , blame it on our politicians for the state of our country and the economy!

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avatar Metoo

I agree with Speedy and Brandie. I too am a Russ Whitney student, paid the money for the education, traveled to Florida for Millionaire Training, had a coach come to our town and worked it. Initially purchased three income properties. When it came time for refinancing, the economy dropped and the properties were not worth what I bought it for. Economy dropping is not Russ’s fault. I believe Russ started very honestly and found a way to share with others. I have met numerous people working for Russ. They were not as honest as Russ was. My guess is that these people were making promises to “students” that may have been out of reach. I went through a divorce and lost my shirt, so I don’t own anything anymore, but I will always value what I learned and use it as my basis for real estate investing in the future.

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avatar Henry Aguirre

Follow the mentors instructions and do not reinvent the formula (i.e, fixer upper/retailing) plus dedication, passion and hard-work. I learned a lot after just a year of following my mentors education and hands-on training I made it to the real estate investment. I acquired 12 properties in under two years. Four flips, and three rentals, one lease option and 4 whole sale. That is just being a part-time.

I move to Florida, the formula stayed the same, now I am a full time and I can see a great potential in this new market. Thanks Wealth Intelligence, I got what I paid for in a year, because of hard work and passionate about the people I am helping with their issues.

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avatar rollsmith01

I spent a little over $16k with the WIA and paid for it with my 1st deal! People often ask me how I buy so many houses and I tell them that I invested in the right knowledge. It paid off for me, I just had to do it!

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