Texas State Senator’s Bid for New Trial Denied

SAN ANTONIO (CN) – A federal judge ruled Thursday that Texas State Senator Carlos Uresti does not deserve a new trial after a jury convicted him in February on all 11 felony charges he faced for running a multimillion-dollar Ponzi scheme.

Texas State Senator Carlos Uresti leaves the courthouse Thursday, Feb. 22, 2018, after being found guilty of 11 felony charges. (Photo by Erik De La Garza/CNS).

Senior U.S. District Judge David Alan Ezra rejected the San Antonio Democrat’s claims that the court made “heavily biased” comments against him, and improperly disqualified attorney Mikal Watts as his chosen counsel.

“It is clear, based on the context of trial as a whole, that the court did not wade beyond its bounds of judicial neutrality in ruling on the matters before it,” Ezra concluded in the ruling. “A careful review of the record will reveal that the court’s rulings were measured, tailored to the issues, and not in any manner inflammatory.”

A jury convicted Uresti and his co-defendant Gary L. Cain on a total of 20 felony charges related to the now-bankrupt fracking enterprise FourWinds Logistics. FourWinds CEO Stanley P. Bates pleaded guilty in January to eight felonies, including securities fraud, wire fraud and money laundering.

Bates, who faces decades in prison when he is sentenced April 17, did not testify at Uresti’s month-long trial. Uresti and Cain are scheduled for sentencing June 28.

Prosecutors depicted Uresti at trial 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.

The government built their case through testimony of almost two dozen witnesses, including FBI and IRS agents and defrauded investors such as star witness Denise Cantu. Prosecutors said Uresti sexually groomed and exploited Cantu, and kept nearly $900,000 in the Ponzi scheme that took millions of dollars from other unsuspecting investors.

Uresti, 54, made $115,000 in seven and a half months of work as the company’s general counsel and investment recruiter, prosecutors said at trial. Cain, 61, a consultant, made $210,000.

Defense attorneys argued Uresti was an unknowing participant in Bates’ start-up company who didn’t know the inner workings of FourWinds.

In his 28-page ruling, Judge Ezra wrote that it was unlikely Uresti remained unaware of the “high probability of the existence of illegal conduct.”

Uresti’s attorney Tab Turner said in an interview Thursday that he had not yet reviewed the ruling, but noted it was not surprising to see a motion for new trial denied at the district court level.

“Although we have great respect for the judge, we respectfully disagree with his view of the evidence,” Turner said. “The government failed to present any evidence that Mr. Uresti had any knowledge that Mr. Bates was stealing money from the investors. Once he did gain suspicion, he immediately advised the FBI, which every citizen has an obligation to do. We will continue in the process by way of an appeal.”

Uresti can appeal Ezra’s ruling to the Fifth Circuit.

The lawmaker faces up to 20 years in prison for each of the fraud-related charges, and up to 10 years for each money-laundering charge. A personal injury attorney, Uresti is in jeopardy of losing his law license as a convicted felon, and will have to forfeit his Texas Senate seat if he is unsuccessful on appeal.

He has so far refused calls to resign his District 19 seat, including from his own party, but at least two Democrats have publicly announced plans to run for the position.

Eight days after Uresti’s Feb. 22 conviction, his wife of six years filed for divorce in Bexar County. Uresti’s trial featured allegations that he engaged in an extramarital affair with Cantu, a key prosecution witness.

Cantu, 38, testified that in the months before Uresti began pitching FourWinds to her, he routinely sent her sexually explicit text messages, had sex with her in a back restroom and shower at his law office, and guaranteed that FourWinds “was as good as gold.”

She sued Uresti in state court. That case is pending.

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