Daniel J. Flynn, III, 52, of Milton, who ran a real-estate firm at 161 Granite Ave. in Dorchester, was arrested on federal wire-fraud charges this week.
According to the US Attorney's office, Flynn got people to loan him money to buy property his company already owned, sometimes based on fraudulent promissory notes he showed to the investors to convince them he had lots of money coming in with which to repay them.
According to an affidavit by the FBI agent who investigated the case, Flynn used money from later investors to pay off earlier investors who had sued him after he didn't repay them.
The affidavit also says Flynn used nearly $100,000 from one investor to finish the basement of his Milton home, rather than to buy the condo building in Quincy that, in fact, he already owned.
Some of the evidence against Flynn came from a bookkeeper he hired - and who allegedly took some of Flynn's ill-gotten gains with him when he quit, for which he himself was arrested.