Closing Arguments End in State Sen. Uresti’s Fraud Trial; Case Goes to Jury

Print Share on LinkedIn Comments More
State Senator Carlos Uresti approaches the Federal Courthouse with his wife Lleanna on Tuesday morning.

Scott Ball / Rivard Report

State Sen. Carlos Uresti approaches the Federal Courthouse with his wife Lleanna on Tuesday morning.

A federal prosecutor argued Tuesday that State Sen. Carlos Uresti knew he was recruiting investors for a fraudulent enterprise when he sought investments in a now-bankrupt fracking sand company. But attorneys for the San Antonio Democrat maintained that prosecutors produced no evidence that he was aware of the inner workings of FourWinds Logistics, which they portrayed as a Ponzi scheme.

Closing arguments in the federal fraud trial of Uresti and co-defendant Gary Cain, a former FourWinds consultant, came before a packed courtroom in San Antonio's federal courthouse. 

Senior U.S. District Judge David Ezra sent the jury off to begin deliberations shortly before 3 p.m. In a trial with more than two dozen witnesses, reams of documents, and more than 30 separate jury instructions, deliberations are likely to last several days.

Noting to jurors that he is often asked how long a jury should take to consider a case – a question he said he cannot answer – Ezra also told the jury that "there's no room in the federal courtroom for prejudice or sympathy."

Uresti is charged with 11 felony counts of securities fraud, wire fraud, and money laundering in connection with his role as legal counsel for FourWinds. Uresti held a 1 percent stake in the company, which bought and sold sand used in oil and gas production, and recruited investors.

The District 19 lawmaker, who has served in the Texas Legislature for two decades and in the State Senate since 2006, has pleaded not guilty to the charges but did not testify in his own defense. If convicted, Uresti faces up to 20 years in prison on each fraud-related charge and up to 10 years on the money-laundering charge.

Closing arguments in the four-week trial attracted numerous friends and supporters of Uresti, including his wife, father, and two of his brothers. Also in court Tuesday were Richard and Sharlene Thum, two investors who lost money in the collapse of FourWinds.

Some observers who attended much of the trial likened it to a telenovela, the genre of Spanish-language television serial known for high drama. Money, sex, loss of loved ones, greed, and excessive spending all figured in the testimony, along with the more mundane – financial spreadsheets, bank statements, promissory notes, and joint venture agreements.

Assistant U.S. Attorney Joseph Blackwell told jurors Uresti received warnings about FourWinds CEO Stan Bates but chose to work with him because he needed money. “He made a choice,” Blackwell said. “He made a choice to go into business with a con man. He made a choice to bring people … not his own money, but other people, to Stan Bates, including a shattered, vulnerable young lady who trusted and believed in him.”

Blackwell was referring to Denise Cantu, whom Uresti represented in a wrongful death lawsuit stemming from the death of her son and daughter in an auto accident in 2010. Cantu won a $2.5 million settlement. Prosecutors alleged that Cantu’s $900,000 investment in FourWinds was made solely at Uresti’s recommendation. Cantu lost $800,000 when FourWinds fell into bankruptcy in 2015.

Much of the testimony in the four-week trial centered on the actions of Bates, who was scheduled to stand trial alongside Uresti and Cain. However, shortly before the trial began, Bates pleaded guilty to eight felony charges related to his leadership of the company. Bates falsified bank statements and balance sheets shown to investors, spent investor money on parties and prostitutes, and used money from investors to pay off other investors, according to trial testimony.

During the trial, prosecutors presented evidence that Uresti was financially strapped despite building a million-dollar home and purchasing a Porsche. In his closing, Blackwell said that Uresti ignored the warnings he was given about Bates because “there’s millions to be made.” He argued that Uresti did not disclose to investors that he would receive a share of their profits.

But Uresti’s attorneys countered that the government had not presented sufficient evidence to show that Uresti intended to defraud the FourWinds investors he brought in.

“Carlos Uresti knew everything investors knew and nothing more,” said defense attorney Michael McCrum, stressing that Uresti had only recently been introduced to Bates and could not have known that the company was engaged in fraudulent activity.

While the government argued that Uresti “exploited” Cantu by urging her to invest in FourWinds, McCrum maintained that Bates was more influential, pointing to sexually charged text messages exchanged between Bates and Cantu before she invested.

McCrum pointed out that Uresti tried to bring in several longtime friends as FourWinds investors, including Nico LaHood, now Bexar County’s district attorney. LaHood did not invest in the company, however.

“Would a knowing co-conspirator bring in his best friends …?” McCrum asked. “That just doesn’t make sense.”

McCrum said that Uresti had a “good-faith belief that this was going to work.”

During his summation, McCrum explained at length to jurors that the government must prove Uresti’s guilt beyond a reasonable doubt, displaying on courtroom monitors the definitions of some the legal terminology contained in the lengthy jury instructions such as “intent to defraud.”

Among those defrauded investors, the government used Cantu as a key witness, portraying her as an unsophisticated investor misled by Uresti and Bates. During the trial, Cantu testified that she invested in FourWinds because she trusted Uresti, with whom she said she had a sexual relationship. However, the defense said it was Cantu’s intimate relationship with Bates that led her to invest. Other witnesses said they made investments because Uresti vouched for the company and its leaders.

Bates pleaded guilty in January to eight felony charges relating to his activities at FourWinds. He did not appear as a witness in the trial.

In his closing argument, Cain's attorney, Charles J. Muller III, emphasized testimony that showed the Four Winds consultant worked to try and save the company as the bottom was falling out of the fracking sand market and Bates' behavior became more erratic. Cain also tried to help investors as they began questioning what was happening with their money, Muller said.

"Does that sound like criminal conduct?" he asked the jury.

Uresti was indicted on May 16, 2017, on one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, five counts of wire fraud, two counts of securities fraud, one count of engaging in monetary transactions with property derived from specified unlawful activity, and one count of being an unregistered securities broker.

Tab Turner, one of Uresti’s attorneys, reminded the jury that Uresti should not be judged based on “negligence” or “carelessness.”

“That’s what elections are for,” he said.

Leave a Reply

Your email address will not be published. Required fields are marked *