Texas State Senator’s Fraud Trial Begins

SAN ANTONIO (CN) — Jury trial begins Monday for Texas state Senator Carlos Uresti, who faces 11 felony counts, including fraud and money laundering, that could send him to federal prison for 200 years.

Prosecutors say Uresti, 54, a three-term Democrat from San Antonio, ran a Ponzi scheme known as FourWinds Logistics, a now-bankrupt fracking enterprise, with his co-defendant Gary L. Cain.

Allegations that Uresti engaged in an extramarital affair with a key prosecution witness, Denis Cantu, are expected at trial. The Harlingen woman claims in court documents that Uresti, a personal injury attorney, tricked her into investing $900,000 in settlement proceeds with FourWinds in 2014.

Uresti and Cain are accused of making false statements to solicit investors in the fracking scheme, skimming money they received and doling some out as Ponzi payments. FourWinds CEO Stanley P. Bates pleaded guilty this month to eight felony charges in the case.

A jury of 12 and four alternates was selected Thursday for the trial expected to last three weeks. If convicted of any of the felonies, Uresti, a former Marine and one of 11 Democrats in the 31-member Texas Senate, could be disbarred and would have to resign his senate seat.

Uresti represents almost 800,000 Texans in one of the largest geographical districts in the United States, Senate District 19. He was easily re-elected to a third term in November 2016 with 56 percent of the vote and is not up for election until 2020.

Two months after the election, in January 2017, Cantu named Uresti as a defendant in a $900,000 civil lawsuit. She sued in Hidalgo County but the case has been transferred to Bexar County Court.

FBI agents raided Uresti’s San Antonio law office in February 2017 in the FourWinds investigation. A grand jury indictment followed in May. Uresti was charged with conspiracy to commit wire fraud, conspiracy to commit money laundering, 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.

A list of potential witnesses Uresti submitted in October reads like a who’s who of Texas politics, with U.S. District Judge Orlando Garcia and state Sen. Jose Menendez included in the 38 witnesses expected to testify at trial. A separate list of those who “may be called to testify” for Uresti includes former San Antonio mayors Julian Castro and Henry Cisneros, Republican Lt. Gov. Dan Patrick, and other state and local leaders.

Opening statements were set for 9 a.m. Monday before Senior U.S. District Judge David Alan Ezra at the John H. Wood Jr. Federal Courthouse.

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