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Monday, January 8, 2018

Co-Defendant in Uresti "Ponzi Scheme" Trial Pleads Guilty

Posted By on Mon, Jan 8, 2018 at 1:50 PM

click to enlarge Stanley Bates, Senator Carlos Uresti - FACEBOOK/ TEXAS SENATE
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  • Stanley Bates, Senator Carlos Uresti

A co-defendant in the criminal trial regarding Senator Carlos Uresti’s alleged involvement in an “investment Ponzi scheme” unexpectedly pleaded guilty Monday morning.

The case involves a now-defunct fracking company, Four Winds, which allegedly accepted millions of dollars from investors who were told their money would go towards purchasing frack sand. According to the indictment, the investors never saw their money again, while Uresti and his co-defendants Stanley Bates and Gary Cain "misused investor's funds to enrich themselves and others." Uresti is accused of legally advising investors to invest in Four Winds, without disclosing he would obtain commission for it.

Bates, the former CEO and majority owner of Four Winds, pleaded guilty to nine felony charges Monday, including conspiracy to commit wire fraud. Bates, Uresti, and Cain, were indicted back in May 2017 with a combined 22 felony fraud charges for their involvement with Four Winds.

According to prosecutors, the men allegedly spent investor’s money on personal expenses, like Ferraris, “wild parties,” and $20,000 diamond rings.

Prosecutors accused Bates, who (like Uresti and Cain) never invested in Four Winds himself, of altering bank statements and spreadsheets to falsely show the company was financially sound and that investments had gone towards purchasing fracking sands.

Bates had previously filed a motion on December 28 to be tried separately from Uresti and Cain. His defense argued the two men would team up to paint Bates as having worked independently in an attempt to convince the jury they had been victims of Bates’ fraud “just like the investors.”

Bates is quoted in the motion saying he blames Cain and Uresti for “screwing me over and destroying my company and life,” and that he did “not want anything to do with Cain or Uresti.”

Although U.S. District Judge David A. Ezra approved the motion to grant him a separate trial, Bates withdrew the motion before ultimately deciding to plead guilty. The dramatic move comes just 10 days before jury selection is scheduled to kick off the trial.

Meanwhile, Uresti is facing an unrelated second indictment for allegedly conspiring to commit bribery and money laundering in order to help Lubbock resident Vernon C. Farthing III obtain a prison contract with a West Texas Detention Center. According to the indictment, Farthing allegedly paid Uresti $10,000 a month as a marketing consultant— half of which was used to pay off a county official to vote in favor of a prison contract with Farthing’s company.

Uresti has denied any wrongdoing in both cases.

Uresti has also been under fire after the Daily Beast published in December several accounts from women who worked at the Texas Capitol saying they had been sexually harassed by him.

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