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Saturday, December 9, 2023
Courthouse News Service
Saturday, December 9, 2023 | Back issues
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Ex-Texas Lawmaker Gets 12 Years for Ponzi Scheme

Former Texas State Senator Carlos Uresti was sentenced to 12 years in prison Tuesday for 11 felony charges of running a multimillion-dollar Ponzi scheme that brought down the once-prominent Democrat’s two decade-long political career, marriage and law practice.

SAN ANTONIO (CN) - Former Texas State Senator Carlos Uresti was sentenced to 12 years in prison Tuesday for 11 felony charges of running a multimillion-dollar Ponzi scheme that brought down the once-prominent Democrat’s two decade-long political career, marriage and law practice.

Uresti, 54, sat stone-faced as Senior U.S. District Judge David Alan Ezra read his sentence at the San Antonio federal courthouse Tuesday afternoon.

“This is a sad case for many reasons,” Ezra said just before reading the sentence. “Senator Uresti knowingly allowed and knowingly participated in allowing his high office to be used for the purpose of promoting this fraudulent scheme.”

The judge added, “I am sad to say that I have absolutely no doubt in my mind in hearing the evidence that the jury reached the absolute right decision in this case. The evidence was substantial and overwhelming.”

The disgraced former state lawmaker, who resigned last week after 21 years in the Legislature, apologized to his defrauded investors and told Judge Ezra that he realizes he betrayed their trust “and I regret that I didn’t act when I had a chance.”

“I truly feel remorseful, ashamed, disgraced, angry at myself and sad,” Uresti told the judge. “I should’ve asked questions, I should’ve learned more, I should’ve stepped up. I tried to get to the truth, but not really…if I had I wouldn’t be here today.”

Ezra also ordered Uresti to serve three years of supervised release after his prison term and pay restitution of over $6 million.

Uresti’s month-long trial featured lurid details about the sexual relationship he had with defrauded investor Denise Cantu.

A jury convicted Uresti and his co-defendant Gary L. Cain in February on a total of 20 felony charges related to the now-bankrupt fracking enterprise FourWinds Logistics.

Uresti was found guilty of two counts of conspiracy, five counts of wire fraud, two counts of securities fraud, engaging in monetary transactions with property derived from specified unlawful activity, and being an unregistered securities broker.

FourWinds CEO Stanley P. Bates pleaded guilty in January to eight felonies, including securities fraud, wire fraud and money laundering.

Cain is to be sentenced Wednesday afternoon. Bates will learn his punishment in August.

The verdict came after a four-week trial in which prosecutors depicted Uresti as a cash-strapped politician who used his “well-known name” to steer millions of dollars into the sham company, while hiding its true financial status from investors.

They built their case through testimony of almost two dozen witnesses, including FBI and IRS agents and defrauded investors, including Cantu, a primary victim seen as a star witness. Prosecutors said the married San Antonio senator sexually groomed and exploited Cantu, and took nearly $900,000 in the Ponzi scheme that took millions of dollars from other unsuspecting investors.

“He was a predator,” said prosecutor Joseph Blackwell. “And he used his position as [Cantu’s] confidant, her lover, and her lawyer to prey on her. He also used his position as a state senator…for his own gain.”

Defense attorneys continued to maintain that Uresti was an unknowing participant in Bates’ start-up company, who “didn’t know what the inner circle knew about FourWinds Logistics.”

Uresti’s attorney implored Ezra for leniency in court documents filed on Monday and in impassioned arguments on Tuesday. His legal team submitted a binder of letters written in support of Uresti by local elected officials, family and friends.

“Judge, I’ am going to ask you with everything that I have inside of me to consider the good works of Mr. Uresti. This man stands above other defendants in a qualitative and quantitative way, which is extraordinary,” attorney Michael McCrum said.

McCrum went on to describe in detail Uresti’s years of military service, decades as a public servant and contributions to the community.

“This man has lost everything because of his conduct, and he still faces another trial. It’s not just an issue of reputational harm; it is literally a situation of him losing everything,” he said.

One week after the trial, Uresti’s wife of six years, Lleanna, filed a divorce petition in Bexar County state court. In April, the former Marine and personal injury attorney surrender his law license in lieu of disciplinary action from the State Bar of Texas.

Uresti is set to be tried on a separate bribery case this fall in West Texas on allegations that he split $850,000 in payouts with a judge in Reeves County. He also faces a civil fraud lawsuit pending in Bexar County state court from Cantu.

Uresti spent a decade in the Texas House of Representatives before unseating a longtime incumbent in 2006 to win election to the District 19 Senate seat. The youngest of eight siblings, Uresti quickly gained a reputation as a staunch defender for abused and neglected children, a role he said in his resignation letter that he hoped to continue out of public life.

Governor Greg Abbott set a July 31 special election to fill Uresti’s now-vacated seat in the sprawling and heavily Democratic district anchored in San Antonio. The race has generated eight candidates including Uresti’s brother, departing State Representative Tomas Uresti, whose primary loss in March was largely blamed on the public backlash spurred by his brother’s multiple felony convictions.

Judge Ezra rejected Uresti’s request for a new trial in April, finding it was unlikely the San Antonio Democrat remained unaware of the “high probability of the existence of illegal conduct.”

“Absolutely, absolutely I knew when Stan Bates was embellishing, and I should’ve stopped him,” Uresti said just before learning his sentence. “I can see where my actions, my inactions, made this situation worse.”

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Categories / Criminal, Financial, Government, Politics

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