"That little junk dealer from Jenkintown has built a multibillion-dollar entity in New York," says Furlong-based broker and investment advisor Austin Dutton, of real estate mogul Nicholas Schorsch. "He went from Old York Rd. to Park Ave."

Schorsch is chairman of giant corporate landlord American Realty Capital Corp., and also of investment bank and brokerage RCS Capital Corp., two publicly-traded companies now at odds with one another over the planned $700 milllion sale of an American Capital brokerage business to RCS. RCS wants to cancel the deal in the wake of last week's departure by two American Realty Capital Corp. financial executives for posting false financial reports. American Capital, whose largest investor is Malvern-based Vanguard Group, and whose board includes ex-Pa. Gov. Ed Rendell, insists the deal go through.

Shares of both American Realty and RCS fell sharply following last week's revelation. Both RCS and American Capital stopped falling today and recovered slightly after RCS issued a statement underlining its legal, board and strategic distance from American Capital, despite the fact that Schorsch is chairman of both.

Dutton's firm, Bridge Valley Financial Services, a Newbridge Financial Securities Group (corrected) affiliate in Furlong, Pa., has sold American Capital shares, and investments in Schorsch-backed non-traded real estate funds like shopping-centers owner Phillips Edison Corp., to clients including hundreds of Philadelphia police officers, firefighters, teachers and retirees.

Speaking for himself, and not for his firm, Dutton says clients have told him Schorsch-backed funds have posted positive returns in recent years while preserving investors' principal, which makes them happy.

Dutton markets to Philadelphia city employees who collect deferred compensation and other money. He sends email "blasts" to city employees, and addresses Police Academy cadets, getting his brand out.

"I made a big mistake: I gave every client my cell number," Dutton told me. "Every client knows my daughter is a soccer player at Penn Charter. As a hundred retired policemen have said to me, 'You must be the smartest guy in the world. Or the dumbest guy in the world. Because you have all our money, and we know where you live, and we all carry guns.' There's an accountability here."

Despite their common connection to Scorsch, American Capital and RCS "are separate companies, with separate board of directors," Dutton says, adding again that he's just giving his opinion, not his employer's.

Several U.S. brokerages have suspended sales of Phillips Edison and other Schorsch-related funds. But Dutton says those funds aren't connected to American Realty's reporting problem. He adds that it's wrong for "inflammatory, scandalous" Internet posters to be "almost accusing (Schorsch) of being a member of Al Qaeda."

Dutton says the reported values of the non-publicly-traded funds haven't changed as a result of the issues at American Realty. The non-traded REITs are popular among his clients -- people such as "a policeman, a schoolteacher, a pharmaceutical exectuive who do not want (their) money tied to the S&P" index.

Dutton says he welcomes investigation of the former American Realty officials: "When someone misstates earnings, I want the SEC to come in."

On Nov. 26, as American Realty shares plunged on the bad news, Dutton held a dinner "for 50 firemen and policemen at the Kansas City Prime in Warrington. I told them, 'Here's what happened. Here's what I know today. As I find out, more will be made available." He's also referred investors to a YouTube video by a broker-funded group called Factright reviewing the American Realty financial reporting scandal.

Is he afraid ousted American Realty CFO Brian Block might implicate other officials in Schorsch-related companies? "I don't know what he's going to say. I do know Brian Block was part of an entity that made a lot of money" for investors, Dutton said, again emphasizing he's just giving his own opinion. "They created a lot of good will and protected people's assets. No company has done a better job."