Federal Grand Jury Indicts Five in Connection with a Factoring Scheme that Defrauded Banks in San Antonio of Millions of Dollars
Today, federal authorities arrested three individuals charged in connection with a scheme to defraud several San Antonio financial institutions of more than $13 million, announced U.S. Attorney Gregg N. Sofer and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
Agents arrested the three San Antonio residents without incident—48-year-old Ronald Wayne Schroeder, 58-year-old Jill Martin Alvarado, and 78-year-old Phyllis Jo Martinez. Authorities in Del Rio, TX, arrested Alvarado’s 55-year-old husband, Rigo Alvarado, over the weekend. Martinez’s 56-year-old son, Ryan Martinez, is currently in state prison on unrelated charges.
A six-count federal indictment unsealed today charges all five named above with one count of conspiracy to commit bank fraud. In addition, Schroeder, Jill Alvarado, Ryan Martinez and Phyllis Martinez are charged with one count of conspiracy to commit money laundering. The indictment also charges Schroeder, Ryan Martinez and Phyllis Martinez with one count of conspiracy to launder monetary instruments. Schroeder is also charged with three counts of bank fraud.
Factoring—when a company sells specific accounts receivable to a third party at a discounted price in order to accelerate its cash flow—is the focus of the defendants’ fraudulent scheme. The indictment alleges that the defendants conspired to defraud various financial institutions of money through the factoring of false and fraudulent invoices. Beginning with Southwest Bank, then Bank of San Antonio (BOSA), and finally, TransPecos Bank, Schroeder sent false and fraudulent invoices of companies owned or controlled by the other defendants to be factored by the financial institutions. Schroeder and other co-conspirators would then use that money for their own personal enrichment or to pay off old invoices owed to the financial institutions much like a Ponzi scheme where money from new investors is used to pay old investors. The indictment identifies three companies that are involved in the scheme including: Nerd Factory, which was owned by Ryan Martinez and later, Phyllis Martinez; Alvy’s Logistics, which is owned by Jill and Rigo Alvarado; and, Republic Logistics, a fake company created and used by Schroeder to steal money for himself. According to the indictment, false and fraudulent invoices from Nerd Factory were factored by Southwest Bank and then BOSA. That money would then be used by the owners of Nerd Factory, Ryan Martinez and later, Phyllis Martinez, for legal fees in a pending criminal federal case or as unearned profit. Alvy’s Logistics and Nerd Factory also kicked back some of the money obtained to Schroeder.
In addition to using false and fraudulent invoices for actual companies, the indictment alleges that Schroeder submitted false and fraudulent invoices on behalf of Republic Logistics to BOSA which were then paid by BOSA. Schroeder used this money to, among other things, purchase high dollar goods such as cars, RVs, an airplane, boat, and beach house.
The indictment further alleges that Schroeder initially began this practice while being funded by Southwest Bank (FDIC insured). Schroeder fraudulently grew that portfolio until he was able to sell it all to BOSA (FDIC insured). The scheme continued and expanded while BOSA funded Schroeder. Schroeder also attempted to broker a subsequent deal whereby Trans Pecos Bank (FDIC insured) would purchase the fraudulent factored invoices.
Upon conviction, each bank fraud related charge is punishable for up to 30 years in federal prison; conspiracy to commit money laundering, up to 20 years in federal prison; and, conspiracy to launder monetary instruments, up to ten years in federal prison.
The FBI is conducting this ongoing investigation. Assistant U.S. Attorney Joseph Blackwell is prosecuting this case on behalf of the government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.