CAMDEN, NJ—A Gloucester County, New Jersey man is charged with scamming distressed homeowners into giving him their houses and then soliciting fake real estate investments from private investors—secured by those same properties—that netted him more than $3 million in illicit profits, U.S. Attorney Paul J. Fishman announced.

Randy Poulson, 42, of Woolwich Township, New Jersey—the owner and operator of Equity Capital Investments LLC—was arrested this morning by special agents of the Philadelphia FBI. Poulson was arrested on a complaint charging him with mail fraud, which alleges the business he operated was actually a multi-million-dollar Ponzi scheme. Poulson is scheduled for an initial appearance and bail hearing this afternoon before U.S. Magistrate Judge Anne Marie Donio in Camden federal court.

According to the complaint unsealed today:

Poulson engaged in a two-pronged scheme. First, he promised to pay the mortgages of distressed homeowners facing foreclosure if they sold their homes to him—for no other compensation. Using this method, Poulson obtained the deeds to more than 25 distressed homeowners’ residences, causing them to vacate the homes so renters could move in. Poulson then stopped making the monthly mortgage payments, causing those mortgages to go into foreclosure without the distressed homeowners’ knowledge.

In the second prong of the scheme, Poulson successfully solicited more than 50 private investors into his companies—including Equity Capital Investments, which 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, New Jersey.

The investigation to date has uncovered more than $3 million in investor losses as a result of Poulson’s schemes.

The mail fraud count which with Poulson is charged carries a maximum potential penalty of 20 years in prison and a $250,000 fine or twice the gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Edward J. Hanko in Philadelphia, for the investigation leading to today’s complaint.

The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.

The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.