Two San Francisco antique dealers were charged with fraud in federal court in San Jose for allegedly working a "Ponzi" scheme that took $1.5 million from investors.

Anthony Barreiro, 64, and Ernest Ray Parker, also known as Ray Parker Gaylord, 50, ran an antique business together, Charles Gaylord & Co., and the San Francisco-based ARTLoan Financial Inc.

The pair, also based in Dallas, allegedly told investors that their money would be loaned to investors to buy artwork and the art would be held by ARTLoan as collateral. The indictment says that debt servicing and art purchases were not fulfilled, and that the duo pocketed $1.5 million of the $3.4 million invested.

They allegedly paid investors $1.8 million in "Ponzi" payments to keep the appearance of a return, spending the rest on themselves.

Charged with 12 counts of conspiracy, mail fraud and wire fraud allegedly committed between 2008 and 2010, the pair faces up to 20 years in prison for each count. The trial has not yet been scheduled.

In a Sept. 2009 profile of ARTLoan Financial that ran in Art & Antiques magazine, Barreiro is quoted as saying, “My bankers rub their hands like Shylock, hoping for default” in order to take possession of the art, “but I don’t want our customers to default.”

ARTLoan filed for bankruptchy in 2011. Among the creditors is Gaylord's father, Charles, who is owed $453,000. Charles started the antique business that the indicted duo also ran.