San Antonio business owner pleads guilty to fraud scheme

Earl Roberts Sr. faces a maximum of 20 years in prison when he is sentenced June 15 in San Antonio federal court.

Roberts followed in the footsteps of her son, Larry Roberts, by taking a plea deal and pleading guilty to one count of conspiracy to commit wire and mail fraud at a hearing Thursday before U.S. Magistrate Judge Elizabeth “Betsy” Chestney.

Larry Roberts pleaded guilty in 2021. His sentencing was scheduled for Thursday, but was postponed to June 29.

The father, 78, and son, 52, both of San Antonio, were indicted on five counts of wire and mail fraud by a federal grand jury in November 2020. Four of the charges will be dropped as part of their pleas.

On San Antonio-area father and son charged in alleged Ponzi scheme

Earl Roberts started a factoring business called Factac Inc. of Selma in 2000. The factor is a form of financing. A factoring company buys invoices and bills from other companies at a discount. It makes money from the difference between what it paid for the debts and what customers owe.

Larry Roberts joined the business no later than 2012 and serves as president.

Factac solicited funds from outside investors and promised them a minimum annual return of 10 percent, according to the pair’s plea agreements.

By the end of 2016, Factac had stopped factoring invoices and receivables in the volume necessary to maintain the returns promised to investors.

Regardless, the couple continued to advertise the investment opportunity, telling prospective investors they could make a 10 percent annual return. Multiple investors provided Factac with at least $800,000 from late 2016 through February 2018.

On Son pleads guilty in San Antonio financial scheme that allegedly cost investors more than $800,000

The men used that money to repay previous investors and their own personal expenses. Federal prosecutors named Factac as an alleged Ponzi scheme because money from new investors was used to pay previous investors. This was done “so as not to arouse suspicion among investors about the state of their money,” the indictment said.

Both authorized the creation of fraudulent quarterly reports purporting to show investment growth under Factac’s management, the indictment said.

Earl Roberts has agreed to make full restitution of about $784,000 to his victims, while his son has agreed to make about $853,000 in restitution. It is not clear why the amounts differ.

In addition to the maximum 20 years in prison, each faces up to three years of supervised release.

Some investors filed civil suits against Factac and/or the Robertses in 2017 and 2018, but it could not be determined if any of the plaintiffs ever collected their claims.

Two Bexar County brothers say they wired a total of more than $600,000 to Factac at different times starting in 2013. They said Factac stopped paying them interest in 2017, so they demanded the return of their money but claim that Factac refused.

The brothers filed a lawsuit alleging fraud and other claims in 2018 in state district court in San Antonio. Online court records show the case is pending, but nothing has been filed in the lawsuit for more than three years.

In another 2018 case, a Bexar County man sued Factac for breach of contract on behalf of himself and an investment trust of which he was a trustee in an attempt to get his money back. He had invested $50,000 and the trust gave $120,000. A judge granted their motion for summary judgment, which included a request for $150,000. An attorney for the plaintiffs did not respond to a request for comment, so it could not be determined whether they have collected.

Earl and Larry Roberts are free on $10,000 unsecured bail pending sentencing.

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