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Sen. Carlos Uresti indicted on federal fraud charges

Very bad.

Sen. Carlos Uresti

State Sen. Carlos Uresti, accused of misleading a former client who invested in a company in which Uresti has a financial stake, was indicted by a federal grand jury on 11 charges over his involvement in the alleged investment Ponzi scheme — in addition to a separate indictment alleging bribery.

In the first indictment, the federal grand jury charged Uresti, a San Antonio Democrat, with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. The indictment also charges Uresti with five substantive 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.

A separate indictment centered on a contract to provide medical services to a correctional facility in West Texas. That indictment alleges that a colleague of Uresti’s, Vernon C. Farthing III, paid Uresti $10,000 per month as a marketing consultant and that half of the money was given to a Reeves County official to win over his vote to award the contract to Farthing’s company — the culmination of a 10-year scheme involving bribery and money laundering.

[…]

A lengthy investigation published by the Express-News in August first detailed Uresti’s involvement in the company and fraud allegations it faces.

Three months later, Uresti coasted to re-election, winning his San Antonio seat with 56 percent of the vote against Republican and Libertarian challengers. Uresti is among the Legislature’s most powerful Democrats. He is vice chair of the Health and Human Services committee and sits on three other high-profile committees: Finance, Education and Veteran Affairs & Border Security.

In February, the FBI and IRS raided Uresti’s law office. In a statement at the time, the senator said he was cooperating with federal agents as they were “reviewing our documents as part of their broad investigation of the FourWinds matter.”

FourWinds’ purported intent was to buy sand and sell it at a markup to oil and gas companies, but some investors have accused the company’s leadership of misrepresenting its financial health and spending their money on frivolous, personal expenses. It now faces millions of dollars in claims from investors and other companies.

Denise Cantu, whom Uresti represented in a wrongful-death case, said she lost most of the $900,000 she invested in the now-bankrupt company in 2014 at the suggestion of Uresti, according to the Express-News. She has said she was not initially aware that Uresti would get a piece of her investment, though Uresti has suggested otherwise.

With allegations of serious financial mismanagement detailed in bankruptcy court, the FBI last year opened an investigation into FourWinds, the Express-News reported. In August, Uresti told the paper that he was a “witness” in that investigation but not its target.

See here for some background, and read the rest fore more. As with Ken Paxton, I will not call for Sen. Uresti to resign at this time, as they are both still innocent in the eyes of the law. Unlike Paxton, Uresti is not on the ballot again until 2020, so he (in theory, at least) has the time to dispose of this before he has to face the voters again. That’s assuming he gets acquitted or the charges get dropped. As with other legislators who face legal troubles, I’d encourage Sen. Uresti to prioritize getting his personal affairs in order by stepping down from his office, after the session is over. Whether he does or he doesn’t, there are several State Reps in Bexar County who I think would do a fine job in that office. I wish him luck, but I also wish he’ll listen to what I’m saying. The Current has more.

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3 Comments

  1. Joshua ben bullard says:

    He’s not going to resign the office kuffner,the office is leverage, or at least it used to be .Years ago these politicians could do anything illegal under the sun and know that if caught all they would have to do is resign and the federal case would drop.They stopped that practice in the early 2000’s.No,he’ll keep his office untill conviction ,in assure you of this.

  2. PDiddie says:

    “The first victim listed is Diane Cantu, who, according to the San Antonio Express-News, lost her 13-year-old son, four-year-old daughter and their two friends in a car wreck after a tire blew out on her SUV, causing the car to flip. Cantu received a $900,000 settlement in the wrongful death lawsuit in which Uresti was her lawyer — but she lost most of that money to Uresti after he allegedly cajoled her into investing the money in Four Winds.

    Cantu first invested $25,000 into Four Winds, but that money was actually used to pay Uresti’s personal and business expenses, according to the indictment. To convince her to invest, Uresti allegedly made it sound like he, too, was considering investing, and he gave her “legal advice” about the investment without disclosing that actually he benefited from her investment. He was allegedly not registered with the Securities and Exchange Commission to act as a securities broker anyway.”

    Sorry, Charlie and joshuabenbullardpleaselearntousepunctuationcorrectly, Uresti needs to go. Yesterday.

    Just like Paxton.

  3. Bill Daniels says:

    Maybe Paxton and Uresti can be “cellies.”

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