A former Fox News host has fled to Portugal after his investors filed 25 separate lawsuits accusing him of running a slumlord Ponzi scheme keyed off of blighted homes in Indianapolis.
The abrupt ocean hop comes more than two years after Clayton Morris left a gig co-hosting the weekend edition of Fox & Friends to pursue a new career peddling real estate investments and amateur financial literacy advice.
In addition to launching a podcast aimed at counseling listeners toward healthier and more lucrative money habits, Morris’ eponymous Delaware-based corporation began soliciting investor clients for an easy-money, get-rich-quick scheme involving decrepit housing units in the Indiana capital.
Morris Invest LLC was leaping into a relatively modern incarnation of a classic real estate investment vehicle known in the business as “turnkey properties.” Someone else fronts the cost of purchasing and refurbishing homes that are being sold short or at tax auctions, and then reaps a steady flow of rental income from tenants the middleman construction and landlord firm pledges to identify, vet, and faithfully serve.
The pitch was simple: Give Morris your cash, and he’d take care of the rest. In at least one case, when a Georgia-based man who had taken the former Fox host up on his offer began asking questions about the other firms involved in the Indianapolis projects, Morris asserted that he owned and controlled that third-party organization as well.
When Morris needed a boost for his new projects, his old Fox pals were happy to help. In a December 2018 segment that began with a montage of highlights from Morris’s time hosting the weekend version of the show, Fox & Friends invited him to describe the do-nothing profit potential people could expect if they invested with him.
Morris didn’t just describe the barebones version of the investment schemes he’d been touting in web videos and a book. He encouraged viewers to think of their 401(k) account as a kitty for seeding their bright future in passive-income investing.
Morris’s nascent empire was by then already falling apart. The summer before he pitched his passive-income rental speculation work on Fox News, specialty real estate websites and message boards had begun lighting up with worrying reports from people who’d invested in Indianapolis’ rental market.
But it would be another few months before an Indianapolis Star investigation blew the lid off the thing, and the New York Times published its own lengthy look at what Morris – and no-longer-licensed realtor Bert Whalen – had been up to.
Turnkey investing is a common enough thing on the whole, though it only relatively recently has made the kind of geographic jump on which Morris’s alleged scheme operated. Classic turnkey investing mostly involved keeping your money closer to home, as the ability to drive across town to check on a property you owned that was occupied by tenants who’d never heard of you provided turnkey investors a measure of security that they weren’t being had.
Modern long-distance turnkey investing is primarily the province of gigantic hedge funds, which took advantage of the Great Recession’s housing market collapse and foreclosure boom to scoop up hundreds of thousands of empty family homes as investment fodder.
Eerie though the prospect of a remote “Wall Street landlord” is, those firms place a premium on their reputation and on avoiding legal trouble. Accordingly, they have tended to seek out professional and reliable landlording firms and contractor conglomerates to do the fixer-upper work involved in this perversion of the traditional home-as-bootstrap-fuel model of American dreamer class-mobility.
But Morris’s Indianapolis version of a turnkey scheme veered in the opposite direction, according to documents filed in 25 separate lawsuits.
Those who invested with Morris gradually discovered they were being assessed with code violations and tax liens from the city of Indianapolis on properties they’d been assured would be refurbished and managed in perpetuity by someone else.
The Star’s investigation detailed the grim conditions in which tenants of Morris and Whalen’s mini-empire were made to live – including exposure to lead, dangerous mold, and rodents. Some of the homes Morris induced people to buy with the same slick, simple presentation he made on Fox & Friends in December discovered their investment properties had been condemned as unlivable.
The state attorney general is now reportedly investigating the scheme. But at least 25 investors haven’t waited for the public prosecutor. Morris has been sued by more than two dozen different investors since the start of 2019.
One Columbus, GA-based plaintiff accuses the Fox alum of running “what appears to be a Ponzi scheme…pushed…through podcasts, YouTube videos, a website, and individual phone calls and emails.” The same suit reproduces an email Morris sent to the investor assuring him that Morris Invest LLC owned and controlled the Whelan-founded corporations that Morris is now attempting to blame for the whole debacle.
Morris’s wife told the Star by email that her husband was innocent of any wrongdoing and pledged the pair would continue “to take responsibility for all of our legal challenges that came from our relationship with [Whelan’s firm].”
In a separate, public note about the family’s hop across the Atlantic, Morris described how hard the whole thing has been on the two of them.
“Watching him endure this has felt like what I would imagine it is like to watch him endure chemotherapy,” she wrote.
Morris has previously asserted that he is a victim of Whelan just like the people now suing both men. The lawsuits make clear Morris represented himself to at least some investors as holding effective control of the Whelan firms he now blames for the cock-ups in Indianapolis.
“We would never have worked with this company if we knew ourselves, our families, or any other investors would find themselves in this position,” a March statement on the firm’s website read.
The man Morris did business with – the man he now says tricked him, too – had lost his license to broker real estate transactions in Indiana “several years ago” and had his firm “shut down [in 2017] by the State Attorney General’s office after multiple complaints,” T&H Realty Services’ Jeremy Tallman wrote in June of 2018.
The suit on behalf of the Georgia man specifically claims that Morris “appear[s] to have targeted inexperienced investors, many of whom ultimately lost large proportions of their savings or retirement funds in the scheme.”
Grifting off a conservative audience with little financial sophistication or experience of investing is something of a time-honored tradition in the conservative media world. Notorious con-man Porter Stansberry is perhaps the ur-example of the phenomenon.
Stansberry spent the Obama years prodding conservative mailing list audiences to be ever more afraid of a looming apocalypse, then marketing survivalist-themed investment products to them. He got help along the way from various prominent conservative media figures on and off Fox News airwaves, from Dick Morris to Newt Gingrich to Mike Huckabee to Glenn Beck, as Media Matters has detailed.
Stansberry hasn’t gone away now that the White House has changed hands. More recently, he’s touted a stock connected to the financially hopeless, ecologically ruinous Pebble Mine project in Alaska as “Trump’s Gold.” Since the 2018 midterms, Stansberry has also begun using caricatures of Rep. Alexandria Ocasio-Cortez (D-NY) to hock his investments advice.