Five people allegedly involved in a scheme that defrauded a San Antonio bank of millions of dollars have been indicted by a federal grand jury, the U.S. attorney’s office said.
The indictment, filed last week, charged Ronald “Wayne” Schroeder, 48, the former president of a Bank of San Antonio subsidiary, with three counts of bank fraud, conspiracy to commit bank fraud and conspiracy to commit money laundering.
Schroeder is accused of using the proceeds to buy automobiles, recreational vehicles, an airplane, a boat and a beach house.
“Mr. Schroeder has been cooperative from the outset of this matter and will continue to work with the government to rectify the situation,” his lawyers, Chip Lewis and Erica Giese, said in an email.
Also named in the indictment are Jill Martin Alvarado, 58; her husband, Rigo Alvarado, 55; Phyllis Joe Martinez, 78, and her son Ryan Martinez, 56. All of them face a single count of conspiracy to commit bank fraud. Jill Alvarado and the Martinezes also were charged with one count of conspiracy to commit money laundering.
All but Ryan Martinez, who is in a state prison in Woodville on an unrelated 2012 theft offense, were arrested in recent days.
The indictment was unsealed Tuesday but was not publicly available as of Wednesday morning.
The indictment comes more than three months after the Bank of San Antonio revealed that it uncovered a $13.2 million “Ponzi-style fraud scheme” involving Schroeder. He’s accused of inducing the bank to purchase worthless receivables from various businesses.
The bank and its subsidiary, Texas Express Funding LLC, which Schroeder headed before he was terminated in April, sued him, the Alvarados, Phyllis Martinez and others for fraud, negligent misrepresentation and breach of contract.
Bank of San Antonio officials alerted the FBI in May to the alleged scheme.
“With the indictments and arrests of Wayne Schroeder and his accomplices, we believe that we are well on the way to full restitution” of the $13.2 million taken from the Bank of San Antonio and Texas Express Funding, bank Chairman J. Bruce Bugg Jr. said in a statement.
Texas Express Funding advances cash to companies in return for acquiring the debts owed to them at a discount — a financing method known as factoring. Companies get money quickly instead of waiting for customers to pay their bills.
The factoring firm makes money on the difference between what it acquired the debts for and what the customers owe on the invoices.
The indictment alleges the defendants conspired to defraud financial institutions through factoring of fraudulent invoices.
Beginning with Odessa-based SouthWest Bank, then the Bank of San Antonio and Pecos-based TransPecos Banks, Schroeder sent fraudulent invoices of companies owned or controlled by the other defendants to be factored by the financial institutions, according to the U.S. attorney’s office in San Antonio.
Schroeder and other co-conspirators would then pocket the money or pay off old invoices owed to the banks — much like a Ponzi scheme where money from new investors is used to pay earlier investors, the office added.
Three companies named in the indictment are: Alvy’s Logistics, owned by the Alvarados; Nerd Factory LLC, which was owned by Ryan Martinez and later Phyllis Martinez; and Republic Logistics, a “fake company” Schroeder created to “steal money for himself,” the U.S. attorney’s office statement said.
Alvy’s Logistics, which does business as Alvy’s Trucking, and Nerd Factory were also sued by the Bank of San Antonio.
The Bank of San Antonio also named SouthWest Bank in its lawsuit, filed in Comal County. Claims against the bank are for breach of contract, negligent misrepresentation and restitution.
“There’s no question the invoices we purchased from SouthWest Bank were fake, severely aged and uncollectable,” said Andy Taylor, a lawyer representing the Bank of San Antonio. “But whether SouthWest Bank knew that or not is still up in the air.”
Eric Taube, an attorney for SouthWest Bank, said neither he nor the bank had seen the indictment but it will continue to cooperate with law enforcement in the investigation.
While Schroeder was at the Bank of San Antonio subsidiary, the U.S. attorney’s office said in its statement, he attempted to broker a deal for TransPecos Banks to buy the fraudulent factored invoices.
Each bank fraud charge carries a maximum sentence of 30 years in federal prison. Conspiracy to commit money laundering is punishable by up to 20 years in prison.
Bobby Barrera, an attorney for Phyllis Martinez, did not respond to a request for comment. The Alvarados are not represented by an attorney yet and could not be located for comment.