Randy Poulson, 42 of Woolwich Township, was charged with mail fraud, alleging that his business was actually a multimillion-dollar Ponzi scheme. The owner and operator of Equity Capital Investments LLC was arrested and charged Wednesday morning by special agents of the Philadelphia FBI.
Poulson allegedly promised to pay the mortgages of distressed homeowners facing foreclosure if they sold their homes to him for no other compensation, according to the complaint unsealed on Wednesday.
He obtained the deed to more than 25 properties, causing the distressed homeowner to vacate the premises and allow renters to move in. Poulson didn’t make the monthly mortgage payments, causing the homes to go into foreclosure without the distressed homeowners’ knowledge.
Poulson then successfully solicited more than 50 private investors into his companies, including Equity Capital Investments. The company purportedly bought and sold real estate.
Poulson explained to the investors that their money would be used to acquire and rehabilitate properties, which Poulson claimed he would rent out and then sell for a 10 to 20 percent return on the investment.
In order to give the impression that Equity Capital Investments was a legitimate business, Poulson provided investors with fake mortgages and promissory notes for residential properties he claimed to be purchasing, renting and reselling.
In support of the scheme, Poulson gave three weekend-long seminars, numerous speeches at monthly dinners and various, private tutorial sessions purporting to teach real estate investing tips to individuals who paid fees to attend. Poulson was the former president of the South Jersey Real Estate Investment Club.
The properties for which Poulson solicited private investments were the properties he acquired from the distressed homeowners.
In reality, Poulson spent the investments on personal expenses and to partially repay previous investors in Ponzi-scheme fashion.
Poulson spent some of the investors’ money on Ray’s Pizza, Acme, Exxon/Mobil, Jos. A. Bank, DirecTV, Hollywood Grooming, Kiddie Garden, Philadelphia Union tickets, American Express, Studio 122 (a hair salon), The Disney Store, Toys ‘R Us, Wawa, and rent-to-own payments on a personal beach house located in Ventnor.
The investigation to date has uncovered more than $3 million in investor losses as a result of Poulson’s schemes.
Poulson faces a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia, for the investigation.