ATLANTA, GA – Richard J. Randolph, III, the former CEO of Randolph Acquisitions, Inc., is headed to federal prison after being convicted of a calculated securities fraud scheme that bilked investors out of over $1 million. The sentencing marks the culmination of a lengthy investigation by the U.S. Secret Service and the U.S. Attorney’s Office.
Acting U.S. Attorney Kurt R. Erskine didn’t mince words, stating, “Corporate executives, like Randolph, are expected to defend investors’ money, not take advantage of their position in a company to defraud them.” Randolph, who also served as Chairman of the Board and majority shareholder, systematically lied to investors to prop up the value of Randolph Acquisitions, Inc., a publicly traded company based in Atlanta, Georgia. The fraud unfolded between 2017 and 2018.
The scheme centered around Randolph’s control of both Randolph Acquisitions and Gallagher Management Group, a related entity. As Randolph prepared to merge the two, he began a campaign of deception, flooding auditors with falsified financial statements. The U.S. Secret Service’s Steven R. Baisel, Special Agent in Charge of the Atlanta Field Office, noted the complexity of the scheme. “Fraud is fraud, no matter how complicated,” Baisel said. “The defendant in this case employed multiple machinations in an effort to hide his criminal acts. Ultimately, his efforts failed under the scrutiny of the law enforcement professionals tasked with unraveling his schemes.”
The lies were staggering in scope. Randolph falsely valued a property at $10.5 million, despite purchasing it for just $1.1 million and later selling it for $1.2 million. He claimed Gallagher Management Group owned buildings it never touched, inflating their worth to a combined $10 million. Another property, acquired for $425,000, was falsely valued at $4.5 million before being sold at auction for a paltry $687,500 after the company defaulted on a $500,000 loan. Randolph even submitted a fraudulent bank statement showing a balance of over $2.5 million, when the actual balance was a mere $58,198.78.
The deceit didn’t stop there. The audited financials falsely stated that Gallagher Management Group “has consistently maintained over $50 million dollars in assets, under management, annually,” and that it “provides a broad range of investment banking services” and “investment management services” to a diverse client base – all demonstrably false. A consultant hired to prepare a business valuation for the merger relied on these fabricated financials and projections, further cementing the fraud. The investigation revealed a pattern of calculated misrepresentation designed to lure investors and inflate the company’s worth.
While the exact sentence length was not immediately released, authorities confirmed that Richard J. Randolph, III, will serve significant federal prison time for his crimes. The case serves as a stark reminder that even sophisticated financial schemes will be exposed, and those who prioritize greed over integrity will face the full weight of the law. This investigation underscores the Secret Service’s continued commitment to combating financial crimes and protecting the integrity of the U.S. financial system.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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