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Comptroller who stole more than $800,000 from San Antonio company pleads guilty to federal charges

October 3, 2018

A former comptroller of Southern Folger Detention Equipment LLC, a local company that makes locks and equipment for jails and prisons, pleaded guilty Wednesday to federal charges of wire fraud and filing a false tax return.

Ryan Glenn Martinez, 54, was sentenced last week in state court to six years in prison for embezzling more than $800,000 from Southern Folger and spending some of that money on trips to Las Vegas, gambling and male prostitutes, according to state prosecutors.

A federal indictment in May, stemming from an IRS criminal investigation, accused Martinez of similar conduct and also alleged he set up shell entities to hold money intended to pay Southern Folger for equipment between January 2012 and May 2014.

He faced 10 federal counts of wire fraud, three counts of money laundering and four counts of filing false tax returns, but he took a plea deal Wednesday and pleaded guilty to one count of wire fraud and one count of filing a false tax return.

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U.S. District Judge Fred Biery scheduled sentencing for January. Martinez faces up to 20 years in prison on the federal charges.

Mike McCrum, Martinez’s lawyer in the federal case, said he didn’t see any evidence in the federal case that Martinez used any of the embezzled money on prostitutes.

“There’s a disagreement how much the company lost, but it will be several hundred thousand dollars,” McCrum said, adding that that differences will be hashed out at sentencing. “Yes he did wrong, and yes he pleaded guilty, but he shouldn’t get a more severe sentence than is justified.”

Southern Folger President Donald Halloran told KSAT-TV last week that Martinez’s work phone showed evidence of him soliciting, then using male prostitutes. Halloran also said Martinez’s criminal activity forced the small company to eliminate more than 10 positions through two rounds of layoffs and to temporarily suspend the company’s profit-sharing program.

Martinez was terminated in May 2014 after a two-week internal investigation, Halloran told the TV station.

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The federal indictment says Martinez set up shell company M.C. Media LLC and aliases that included MCM LLC to use them in various ways in his scheme. The indictment said he stole checks or money orders issued by customers as payment to Southern Folger, stole checks issued by health insurers to Southern Folger and used MCM LLC as a fake vendor to bill Southern Folger and its then-parent company Phelps-Tointon Inc.

The indictment said he deceived co-workers with false emails that caused Southern Folger and Phelps-Tointon, to wire money to a bank account he owned and controlled, and covered up his fraud with false entries in the company’s books.

Southern Folger, formerly Southern Steel, has been in operation for 121 years. It is a leading global provider of detention locks and hardware, detention equipment contracting, security electronics systems, and a leader in facility service and maintenance, according to a May 2017 news release announcing that Coastal Detention Holdings LLC of Georgia had bought 100 percent equity in Southern Folger from Phelps-Tointon.

Guillermo Contreras covers federal court and immigration news in the San Antonio and Bexar County area. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | gcontreras@express-news.net | Twitter: @gmaninfedland

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