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Guilty Plea in Securities Fraud Case - The Hayes Law Firm
By Merritt Melancon
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(October 26, 2009 - Monday) - Ulys Randall Riner, 61, of Watkinsville, pleaded guilty in Newton County Superior Court to charges that he sold investors promissory notes that were not registered with the Georgia Secretary of State.
A Newton County grand jury in 2006 indicted Riner on racketeering and theft and securities fraud charges after 30 friends and neighbors who had invested in his company, Express Factoring, claimed that he bilked them out of $4.5 million, according victims and a release from the Secretary of State's office. They agreed to invest under false pretenses, said Laney Crowder, who lost $50,000 to Riner, her parents' next-door neighbor.
"The money was huge, but that was seven years ago," said Crowder, whose relatives lost a total of $1.2 million. "We haven't thought we were going to see any of that again for awhile. This is more about healing from having someone you trusted, that you considered a friend do this to you." Newton County Superior Court Judge Horace Johnson sentenced Riner to two years in a work-release program and 17 years of probation, during which time he must pay $2,000 a month in restitution. He agreed to pay a lump sum of $125,000 in restitution immediately, said his attorney, Tony Cochran.
Riner will be able to keep his physician assistant license so that he can continue to work and pay restitution, Cochran said. He will work in Newton County during his two-year work-release program. "The whole idea here is that he can keep working and make restitution," Cochran said. "If we went to trial and he was acquitted, which there was a good chance of happening, nobody would get anything. If we went to trial and he gets convicted, he'd go straight to jail and nobody would get anything." Riner ran Express Factors from 1987 to 2002 when the company went bankrupt, Cochran said. The company turned a profit by providing upfront cash to businesses awaiting payment from customers, he said.
Express Factors would buy those companies' accounts receivable for slightly less than face value, then collect the full account in a few months. Riner was not authorized to accept investments. Investors received healthy returns until Riner agreed to make a large loan to a small cable contractor in North Carolina, Cochran said. That company couldn't pay back the loan and declared bankruptcy. The loss in June 2002 forced Express Factoring into bankruptcy, and investors lost $4.5 million, Crowder said. Investors alleged that Riner had defrauded them because they had not authorized him to issue a traditional loan, only to buy short-term accounts receivable. He pleaded guilty to selling unregistered securities.
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