Royce Newcomb of Fresno has pleaded guilty to running a $4.2 million fraud scheme through his business. ABC 30 screen grab.

A Fresno businessman was arrested Monday on charges of running a $4.2M Ponzi scheme as well as receiving a fraudulent pandemic loan.

The indictment against Royce Newcomb, 60, charges him with five counts of wire fraud and one count of money laundering for running Ponzi, COVID-19 benefits, and other fraud schemes through his company, Strategic Innovations LLC.

According to court records, beginning in 2017, Newcomb owned and operated Strategic Innovations that purported to make smart home and business products meant to stop package theft, prevent weather damage to packages and make it easier for delivery services and emergency responders to find homes and businesses. He created prototypes for his products, applied for and was issued patents and trademarks, and received local and national media attention that he used to secure millions of dollars from investors.

ABC 30 ran one such story on the eDOR — a secured box for packages that expands from a special door. The story listed Newcomb as Strategic Innovation’s chief designer.

Newcomb told his investors that he had been awarded a grant by the National Science Foundation and that he would use their money to further develop and bring his products to market, according to court documents, in addition to promises of significant returns in as little as three months. But none of these representations were true, according to a news release.

Instead, Newcomb used the investors’ money to pay for his personal expenses such as gambling, luxury vehicles and a mansion, to pay for refunds to other investors, and to pay for new, unrelated projects without the investors’ authorization, according to the U.S. Attorney’s office.

In the midst of Newcomb’s Ponzi scheme, the U.S. Attorney said he also received a fraudulent COVID-19 loan for over $70,000 from the Small Business Administration and fraudulent loans for over $190,000 from private lenders. He allegedly lied about his company having hundreds of thousands and even millions in revenues to get these loans.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Joseph Barton and Jeffrey Spivak are prosecuting the case.

If convicted, Newcomb faces maximum statutory penalties of 20 years in prison and a $250,000 fine for each of the wire fraud counts, and 10 years in prison and a $250,000 fine for the money laundering count.