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FourWinds

Sen. Uresti convicted on fraud charges

Time to resign.

Sen. Carlos Uresti

The courtroom was silent and thick with anxiety Thursday morning as the judge’s deputy read the verdicts: “Guilty,” “guilty,” “guilty” — 11 times over, and on all felony counts.

State Sen. Carlos Uresti sat stone-faced, his gaze directed at the deputy, as he heard the ruling that throws into question his two-decade career in the Texas Legislature and opens up the possibility more than a century in federal prison and millions of dollars in fines.

If upheld on appeal, the 11 felony charges — including multiple counts of fraud and money laundering — would render the San Antonio Democrat ineligible to continue serving as a state legislator. Uresti, an attorney by trade, would also be disbarred.

Uresti has no immediate plans to step down from his seat in the state Senate, he said minutes after the verdict. And he will “absolutely” appeal the jury’s decision.

[…]

There were no calls for resignation among state lawmakers immediately after the verdict, but Texas Democrats issued an immediate rebuke of the senator Thursday morning, saying “no one is ever above the law.”

“After being found guilty of such serious crimes, Senator Uresti must seriously consider whether he can serve his constituents,” Texas Democratic Party Communications Director Tariq Thowfeek said.

And state Rep. Roland Gutierrez, another San Antonio Democrat, said that elected officials are “held to a higher standard.”

“Over the next few weeks we need to have a serious discussion as constituents and taxpayers about how we move forward and turn the page,” he said. Gutierrez, whose district overlaps with Uresti’s, could be eyeing the senator’s seat.

See here and here for some background. You can have that “serious discussion” about moving forward and turning the page if you want, but it should happen in conjunction with Sen. Uresti resigning, which frankly he should have done months ago, for other reasons. As such, I’m glad to see this.

“In light of today’s jury conviction of Sen. Carlos Uresti, the Texas Senate Democratic Caucus is calling upon Sen. Uresti to resign his position,” caucus chair Sen. José Rodriguez said in a statement.

[…]

“Voters in this time and age want people who have at least so far [demonstrated] good judgements,” said Leticia Van De Putte, former Democratic senator for Texas’ District 26. “All I know is that if the defense is ‘Well I didn’t know this was wrong,’ it’s very difficult to go back and ask people to vote for you.”

[SMU political science professor Cal] Jillson agreed: “He might find that his political career is ended because of this, and it will provide political opportunities for others.”

Van de Putte served in the Texas Senate from 1999 to 2015, overlapping nine years with Uresti, who won his senate seat in 2006.

“I’m heartbroken at the situation,” said Van de Putte, who later co-founded a consulting firm. “I know Sen. Uresti … has been an amazing champion for abused children. I worked with him on a number of efforts, he’s done great work in the Legislature.

“No one will remember all the great work he did. They’ll remember this case.”

[…]

State Rep. Roland Gutierrez (D-San Antonio) released a statement Thursday, saying elected officials are “held to a higher trust” and that constituents and taxpayers would have to “move forward and turn the page.”

Political analyst Harold Cook, who has worked in the Texas House of Representatives and as an advisor to Democrats in the Texas Senate, said Gutierrez’s tone implies he’s vying for Uresti’s seat.

“This is what I would have written for somebody [who is] already going to be a candidate,” Cook told the Rivard Report. “Senate districts don’t come up often and they’re not open often.”

District 19 is one of the biggest senate districts in the country, Cook said. “There are a lot of Democrats holding office in those counties [who] would love to be state senator.”

There are others mentioned the story, and I’m sure the list will be long when and if it comes to it. But first, we need Uresti to resign. Step down now, so we can get someone else in place as soon as possible and so we don’t face the prospect of not just one but TWO incumbent legislators going to jail, perhaps during the next session. Among the many things that I hope we’ve learned from the #MeToo movement is the concept that no one is so important or accomplished that they must be shielded from being held accountable from their actions. Please do the right thing here, Senator. The Current and the Rivard Report have more.

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.

FBI and IRS raid Sen. Carlos Uresti’s office

That’s never a good thing.

Sen. Carlos Uresti

FBI and IRS agents raided the San Antonio law offices of state Sen. Carlos Uresti on Thursday morning — confiscating documents and other items.

A law enforcement source told the the San Antonio Express-News, which first reported the raid Thursday, that it was connected to Uresti’s involvement with a now-bankrupt fracking sand company that he held a financial stake in.

“Law enforcement agents with IRS and FBI are lawfully present conducting a law enforcement operation,” FBI spokeswoman Michelle Lee told the Texas Tribune. “No further details have been released at this time.”

Lee confirmed that no arrests had been made.

Uresti, a San Antonio Democrat and personal injury attorney, has been entwined in a complicated saga involving FourWinds Logistics, which sold sand used in hydraulic fracturing, a process that extracts oil and gas from shale rock.

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

[…]

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.

On Nov. 4, four days before Election Day, Eric Nelson, the former marketing director for FourWinds, was indicted for his role in an alleged scheme to defraud investors. He later pleaded guilty to one felony charge of conspiracy to commit wire fraud. Federal attorneys accused Nelson of altering company bank statements to “grossly” inflate its account balance. At least two more former FourWinds employees have been indicted since the election: Shannon Smith, who held a 48 percent stake in the company, and Laura Jacobs, who worked as its comptroller. They face similar charges to Nelson’s.

FourWinds had paid Uresti to attract investors before it filed for Chapter 11 reorganization in August 2015 — beset by allegations of fraud and misused funds.

It could be that this action by the FBI and IRS was to collect evidence for the case against FourWinds and its executives. If that’s all it is, and Uresti himself is not implicated in anything criminal, then this will be as bad as it gets for him, and the news will fade in time. If not, well, he’ll probably wind up having something in common with Ken Paxton. I hope for his sake it doesn’t come to that, but we’ll see. A statement from Sen. Uresti can be found here, and the Current has more.