SA executive who spent stolen money on male prostitutes, gambling headed to prison

Ryan Martinez sentenced to six years in prison, ordered to pay restitution

SAN ANTONIO – A San Antonio business executive who embezzled hundreds of thousands of dollars from his employer was sentenced to six years in prison Wednesday as part of a plea deal with Bexar County prosecutors.

Ryan Martinez was ordered by Judge Frank Castro to begin serving his sentence immediately.

Victim impact letters entered as evidence in the case confirm that Martinez, who worked as the controller of the Southern Folger Detention Equipment Company from January 2012 to May 2014, used money acquired from stealing checks and creating fake invoices to pay for lavish trips to Las Vegas, gambling and to hire male prostitutes.

"When we seized his company phone, I came across that before I gave it to the police department. It was pretty devastating," said Southern Folger President Donald Halloran, moments after Martinez was taken into custody by bailiffs.

Halloran, who said Martinez's work phone showed evidence of him soliciting, then using male prostitutes, said Martinez's criminal activity paralyzed the small company.

Halloran said he was forced to eliminate more than 10 positions through two rounds of layoffs and had to temporarily suspend the company's profit-sharing program.

Martinez was terminated in May 2014 after a two-week internal investigation, Halloran said.

Around 30 Southern Folger employees took up several rows of seats during Martinez's sentencing.

Martinez's mother testified that sending her son to prison would cause her commercial cleaning company that he helps run to fold. She also said that Martinez is her and her husband's primary caretaker.

Castro listened to the testimony and then denied Martinez's request for probation.

"You were placed in a position of trust and you violated that trust," Castro said as Martinez stood in front of him.

Martinez must also pay back Southern Folger between $201,000 and $813,000 in restitution.

Castro said a hearing will be held at a later date, after Southern Folger officials hand over additional accounting documents, to determine exactly how much money Martinez must pay back.

Martinez faced up to eight years in prison as part of a plea agreement signed in June.

Prosecutors on Wednesday revealed that Martinez was hired by Southern Folger despite a 1991 conviction for federal mail fraud.

Halloran said a background check of Martinez prior to him being hired did not reveal the conviction and that Wednesday was the first time he had heard about it.

Court records also indicate that Martinez used a similar fake company scheme to embezzle upward of $400,000 from San Antonio engine component company Chromalloy, prior to being hired by Southern Folger. That criminal activity took place from July 2008 to January 2012, according to federal court filings.

Martinez does not face state theft charges in connection to his work for that company. However, his work for Chromalloy is part of a 17-count federal indictment on charges ranging from money laundering and wire fraud to making false tax returns.

Martinez's next appearance in federal court is scheduled for next week.

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