State Sen. Carlos Uresti Found Guilty on All Counts in Federal Fraud Trial

A federal jury on Thursday found State Sen. Carlos Uresti guilty on 11 felony fraud and money laundering charges related to his work with FourWinds Logistics, a defunct fracking sand company that prosecutors portrayed as a Ponzi scheme.

His co-defendant, former FourWinds consultant Gary Cain, also was found guilty on all counts against him. They will be sentenced on June 25. Uresti faces up to 20 years in prison on each fraud-related charge and up to 10 years on a money-laundering charge.

Uresti said after the verdict that he will “absolutely” appeal the convictions and has no plans to step down from his senate seat. He could remain in office throughout the appeals process. His term is set to expire in 2021.

Surrounded by almost a dozen friends and family members outside the federal courthouse, Uresti said he struggled to “find the right words, obviously, but I do want to thank my wife, Lleanna, and apologize to her for everything that I’ve put her through, and my family as well.

“We’re a strong family, we’re going to continue to move forward and continue to do what we need to do,” he said. “This is a shock to all of us. This is not the verdict we were expecting.”

The verdict by the jury of eight women and four men was read before a packed courtroom after a month-long trial featuring dozens of witnesses and volumes of documents entered as evidence.

Members of the jury, who deliberated for 11 hours this week, declined to comment as they left the courthouse.

Uresti was 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.

“What the trial evidence showed in this case was that FourWinds Logistics was essentially set up as a fraudulent scheme to lure investors to [invest] money with the co-conspirators via false pretenses, false promises, [and] misrepresentations including altered financial documents,” U.S. Attorney for the Western District of Texas John Bash told reporters. Bash was in the courtroom as the verdict was read.

“That money was supposed to go to buying fracking sand for oil production, but in actuality a lot of that money went to pay prior investors, a lot of that money went to personal expenses by the co-conspirators – everything from gifts and travel and luxury vehicles to controlled substances, even prostitutes.”

While former FourWinds CEO Stan Bates pleaded guilty to criminal fraud charges in January, defense attorneys argued that Uresti did not know about the scam until it was too late.

“I hope this verdict sends a message to everyone else out there that it doesn’t matter your status in government or in the community – if you commit fraud you’re going to be held accountable,” Bash said.

The government’s key witness against Uresti was Denise Cantu, whom the senator 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 in 2012. At Uresti’s urging, Cantu invested $900,000 in FourWinds, losing $800,000 of it when the company went bankrupt in 2015.

Assistant U.S. Attorney Joe Blackwell, who led the prosecution, credited law enforcement teams and the victims for their help in the case.

“I’m especially gratified for this verdict for them,” Blackwell said. “They truly were victimized in this case.”

Financial restitution for the victims and prison time for Uresti are likely, he said, but that will be up to the judge. Sentencing at federal court is complicated and based on a number of factors including level of involvement in the crimes, amount of losses, and victim statements.

“There’s going to be a lot of calculations that [go] into it,” later adding that the goal is to “make the victims as whole as we possibly can.”

Also at issue in the trial was a 2013 loan Cantu made to Uresti, which prosecutors said constituted wire fraud because he led her to believe the money was to go to clients, not himself.

The District 19 lawmaker, who has served in the Texas Legislature for two decades and in the State Senate since 2006, did not testify in his own defense.

The defendants will remain free on bond pending sentencing, Senior U.S. District Judge David Ezra said after the verdict was read. “Mr. Uresti still faces a second criminal trial in this court and it would be difficult for him to prepare for that case were he incarcerated at this time.”

Uresti faces a separate indictment on bribery and money-laundering charges in connection with his role as a consultant for a company providing healthcare services to prison inmates in Reeves County in West Texas, part of Uresti’s district. The senator was allegedly paid $10,000 a month to serve as a marketing consultant, with half the money allegedly going to a county official in exchange for his vote on the contract. The government alleges the payments to former Reeves County Judge Jimmy Galindo occurred from 2006 to 2016.

That indictment was issued at the same time as the FourWinds indictment, and a trial is tentatively set for May.

Shortly after 10 a.m. Thursday morning, the courtroom had begun to fill with reporters, lawyers, friends and family members of Uresti, and critics. When Uresti entered, he remained standing with hands folded on the back of his chair until the judge entered the room and instructed all to be seated – at least those who had seats in the packed courtroom.

Before bringing in the jury, Ezra laid out “ground rules” for the room.

“This is a United States courtroom, and I insist that we maintain the dignity of these proceeding and this courtroom regardless of what the verdict is,” Ezra said. “Which means that there’ll be no outbursts, no yelling, no jumping around, no doing any of those kinds of things here, alright?”

The room acknowledged the judge’s instruction with silence.

He instructed the audience, especially the media, not to leave until proceedings were complete. After the verdict is announced, there are other details that the court needs to settle, he said, and it’s distracting to have people dash out of the room.

“Many [reporters] have been here every day for the entire term of this very lengthy trial and you’re very anxious – and I would be, too, if I were in your position – to get to the telephone or get to the typewriter or get to the iPad and start putting your story out there,” he said.

Most jury members looked down while they walked in. Once seated, Ezra asked to review the verdict – which was made more suspenseful by difficulties opening the envelope in which it was written.

“I need a letter opener here,” he said in jest.

When Courtroom Deputy Priscilla Springs read aloud guilty verdicts for all 20 counts – 11 for Uresti, 9 for Cain – neither defendant showed visible reactions, keeping their eyes fixed straight ahead. As Springs announced the final counts, Uresti turned to face the jury.

When the jury was dismissed, he embraced attorneys and supporters who sat behind him. His wife missed the verdict reading, but met the senator outside the courtroom for a long hug, remaining by his side when he exited the building to answer reporters’ questions.

Wendy Lane Cook contributed to this report.