The one-time president of a San Antonio finance company has pleaded guilty for his involvement in a scheme that allegedly defrauded investors of more than $800,000.
Larry Roberts faces up to 20 years in federal prison, as many as three years of supervised release and a fine of up to $250,000 fine after pleading guilty to one count of conspiracy to commit mail and wire fraud. His sentencing is scheduled for Jan. 20.
Roberts has agreed to pay restitution as part of his guilty plea. Federal prosecutors say the amount is about $853,000.
U.S. Magistrate Judge Richard Farrer accepted Roberts’ guilty plea earlier this month.
“Mr. Larry Roberts has taken full responsibility for his actions pertaining to these charges,” his attorney, Dante Dominguez, said in an email.
“We look forward to putting all the evidence in front of the court, having faith that a just sentence will be given that makes Mr. Larry Roberts accountable for his actions and considers all circumstances surrounding the situation along with the levels of culpability he should face in relation to other actors,” Dominguez added.
Roberts and his father, Earl Roberts Sr., each held the title of president of factoring firm Factac Inc. at various times, state corporate records show. A factoring company purchases invoices and accounts from other companies at a discount. It makes money on the difference between what it acquired the debts for and what the customers owe.
The pair were indicted on five charges of mail and wire fraud by a federal grand jury in November.
Chief U.S. District Judge Orlando Garcia this week set a plea deadline of Feb. 3 for Earl Roberts Sr. He’s scheduled to go to trial Feb.14 if he doesn’t enter a plea.
Factac solicited investors to raise money to purchase invoices and receivables, promising a minimum annual return of 10 percent.
Earl Roberts Sr., 77, launched Factac in 2000. Larry Roberts, 51, had joined the business by 2012.
Around late 2016, Factac ceased factoring invoices and receivables in the volume necessary to support the returns promised to investors, according to Larry Roberts’ plea agreement.
Nevertheless, the plea says, Larry Roberts assisted his father in continuing to market Factac to new investors.
They told investors that Factac was still operating profitably and that it would pay 10 percent annual returns.
Multiple people invested with Factac from December 2016 through February 2018. But instead of using that money to factor invoices and receivables, the father-and-son team used the money to pay back previous investors and for personal expenses.
Federal prosecutors referred to Factac as a Ponzi scheme because money from new investors was used to pay earlier investors. This was done “so as not to arouse suspicion amongst investors about the status of their monies,” the indictment stated.
Both men authorized the creation of fraudulent quarterly statements that allegedly showed the growth of investments under Factac’s management, the indictment said.
Both men were released on a $10,000 unsecured bond following their indictment.
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