A former Covington man pled guilty this morning to selling unregistered promissory notes as securities, bringing to a close a case that has been going on for several years.
The charges against 61-year-old Ulys Randall “Randy” Riner stem from when he was owner and president of Express Factors, a factoring company that was originally based in Covington in the late 1990s.
The business involved the factoring of government contracts. Riner would purchase accounts receivables of businesses that were performing government contract work at a discounted price. He would then receive the full payment from the government agency once the contracts were fulfilled.
The investments in Express Factors – most of which came from family and close friends of Riner’s – were in the form of promissory notes that would mature at different times. The investments ranged from a few hundred dollars to hundreds of thousands of dollars. The promissory notes however, were not registered with the state and Riner reportedly lied to his investors about how their money would be repaid.
According to a statement made in 2004, Riner said that when one of his largest clients’s filed for bankruptcy his business began to fail as well. The investigation into Riner began in 2004 by the Secretary of State’s office after Express Factors filed for Chapter 7 bankruptcy in 2002 and at least two of his investors filed civil suits against him at that time seeking more than $1.5 million.
According to a press release by the Secretary of State’s office released after Riner's arrest in 2006, “Instead of ‘factoring’ government contracts, Riner allegedly used investors’ money to advance unsecured funds to a number of businesses without the investors’ consent. Once these businesses began to fail, Riner allegedly used funds from new investors – also known as a ‘Ponzi Scheme’ -- to conceal the losses. Several investors lost their life savings.”
In 2005 the case against Riner was turned over to the Newton County District Attorney’s Office.
Superior Court Judge Horace Johnson Jr., accepted the negotiated plea and sentenced Riner to 20 years on probation, the first three to be served in prison. According to District Attorney Ken Wynne, if Riner can pay $125,000 in the next 60 days he can avoid prison time, however. He is also required to spend the next two years on work release and to pay restitution in excess of $2 million at $2,000 a month. If Riner comes into money during that time (wins the lottery, receives an inheritance, etc), that money is required to go toward restitution.
Johnson agreed to allow Riner to use first offender status but if he were to get in any other trouble he could face up to 85 years in prison for this crime.
Riner made a short statement following his sentencing, telling the families in attendance and the court that he was grateful for the opportunity to speak and sorry for all that had transpired.
“Words cannot express how deeply sorry I am for the financial loss and the pain I’ve caused so many,” he said, breaking down. “For all that’s happened I want to apologize and I pray that someday they [the families affected] will find forgiveness in their hearts for my mistakes.”
Some members of the families who had been bilked of large amounts of money shed tears as well during his speech.
“I’m just happy,” said Laney Crowder, one of the many who had been swindled by Riner. “We’ve waited seven and a half years for this… We’re all relieved and happy to have some closure… He was a neighbor, a friend,” she continued. “He was very close to all of us and that makes it hurt 100 times more. It has been very difficult to get over.”
Wynne said “our intention all along was to recover as much [money] as we possibly could. I hope we’ve done that. I think the worst part of this case is the sense of betrayal because this was a man they [the victims] all trusted.”