Richard J. Randolph, III of Atlanta, Georgia, was recently sentenced to six years and six months in prison relating to securities fraud charges. Randolph was also ordered to pay restitution to his victims totaling over $1.6 million.
According to a news release from the Department of Justice:
“Richard Randolph was the CEO, Chairman of the Board of Directors, and majority shareholder of Randolph Acquisitions, Inc., a company headquartered in Atlanta, Georgia, that publicly filed its financials with the Securities and Exchange Commission. He also controlled Gallagher Management Group and other related entities. In 2017 and 2018, Randolph sold over $1 million in Randolph Acquisition stock to various investors.
In 2017, Randolph began preparing to merge Gallagher Management Group into Randolph Acquisitions and sold Randolph Acquisitions shares to multiple investors. Gallagher Management also engaged an accounting firm to audit its 2016 financial statements. In connection with this audit, Randolph provided false and fraudulent information regarding Gallagher Management Group’s assets which were then reflected on the balance sheet of the 2016 financial statements:
- Randolph falsely valued property at $10.5 million with no associated liability. In reality, Gallagher Management Group purchased the property in September 2016 for $1.1 million with a $1.1 million mortgage loan secured by the property. It was sold in August 2017 for $1.2 million.
- Randolph falsely claimed that Gallagher Management Group owned two buildings valued at a claimed $10 million combined. In reality, neither Gallagher Management Group nor Randolph ever owned these properties.
- Randolph falsely valued yet another property at $4.5 million that was acquired in January 2016 for $425,000 by an entity controlled by Randolph and was transferred to Gallagher Management Group in March 2017. In April 2018, the property was sold at auction for $687,500 after Gallagher Management Group defaulted on a $500,000 loan.
- Randolph provided a false bank statement showing a balance of over $2.5 million. The actual balance in this account was $58,198.78.”
The DOJ press release also noted that the audited financials of Richard J. Randolph’s companies also contained many misrepresentations, including the value of assets and the services it was providing to other entities.
Fishman Haygood’s Investment Fraud Division has experience bringing claims on behalf of investors who were duped in fraudulent schemes. Please contact us to discuss your possible claim.
