Thursday, January 25, 2018

Lawyers Depict Sen. Uresti as Clueless Victim in Federal Fraud Trial

Posted By on Thu, Jan 25, 2018 at 1:01 PM

click to enlarge Uresti (right) leaves the federal courthouse with his legal team Wednesday. - ALEX ZIELINSKI
  • Alex Zielinski
  • Uresti (right) leaves the federal courthouse with his legal team Wednesday.
Prostitution, cocaine-fueled galas, political influence, oil money, expensive suits, Matthew McConaughey: We’re only a few days into the trial of San Antonio Senator Carlos Uresti and witness testimony has already set the stage for a sleazy, action-packed crime drama.

The plot revolves around FourWinds Logistics, a now-defunct San Antonio  company that sold sand used in hydraulic fracking to extract oil from shale rock. The company largely relied on fraudulent bank statements to lure in potential investors, investors that eventually lost thousands when the company went bankrupt in 2015. Many of those investors blamed that loss on the reckless personal spending (read: $20,000 diamond rings, Ferraris, prostitutes, and narcotics) by FourWinds’ owners. Uresti, who runs an injury law firm when the state legislature's out of session, owned 1 percent of the FourWinds — and sometimes provided legal services to the company. He also was financially rewarded by the company for bringing in new investors.

In May, FourWinds CEO Stan Bates, company consultant Gary Cain, and Uresti were all indicted on a combined 22 felony counts of fraud and money laundering. Bates unexpectedly plead guilty to his charges on Jan. 8, and now faces decades behind bars. The federal trial that kicked off Monday, Jan. 22 will decided if Uresti and Cain face a similar fate. Both men have claimed innocence in their charges. The trial, presided over by U.S. District Judge David Ezra, is expected to last at least three weeks.

With a 21-year career in state politics on the line, Uresti is easily the star of the trial. And despite the Democrat’s well-documented past of glitz, flirting (both wanted and unwanted), lavish parties, and a fondness for The Godfather, Uresti’s attorneys are working hard to paint him as an innocent bystander in the whirlwind of corruption.



“People didn’t know what Stan Bates and his inner circle knew,” Michael McCrum, Uresti’s attorney, told jurors during the trial's opening statements, according to the San Antonio Express-News. “Senator Uresti did not know what was going on in those walls, what was going on in those computers, what was going on in those bank accounts that those people controlled.”

The biggest question jurors will face after closing statements: Was Uresti that oblivious to the rampant fraud going on at the small company that promised to make him big bucks?

On Wednesday, friends of Uresti told the court they had believed FourWinds was a scam, and they had warned the senator to cut ties.

“I told him something to the equivalent of, ‘You don’t need to walk away from this deal, you need to run,’” said Alexander Begum, another local injury lawyer who had agreed to meet with Uresti and Bates to consider investing in FourWinds. After hearing Bates’ pitch over a steak dinner in 2014, Begum said he told Uresti: “You need to get away from this guy. He’s a complete con man.”

But Bates, like Uresti, is a former U.S. Marine. Which, according to Begum, was Uresti’s excuse for trusting Bates’ deals.

“He claimed there was a certain brotherhood between Marines. That I wouldn’t understand,” Begum recalled on the witness stand. “He said, 'A Marine would not take advantage of another Marine.'”

In an email presented as evidence by Assistant U.S. Attorney Joseph Blackwell Wednesday, Uresti tells Bates he’s excited to collaborate with FourWinds, and used military analogies to explain why.

“Just like you, I look at the whole battlefield not just the skirmish before me,” Uresti writes.

Local clothing designer Margarito Alonzo, a close friend of Uresti's, told the court that despite agreeing to recruit investors for FourWinds and split the commission with Uresti, he told the senator he didn’t trust Bates from the start.

“He was a shady individual,” Alonzo said.

At investor meetings, Alonzo said Bates would “embellish the pitch” to a cringe-inducing level.

“He would lie about his clothing, his shoes, his house, his trips,” Alonzo said. “He’d say that Matthew McConaughey, Tim Duncan, that they were [investors] in the works, so to speak.”

Alonzo said he didn’t worry too much about the often hazy financial promises, and relied on Uresti, the legal expert, to “get to the bottom of it.”

At best, his friends’ testimony Wednesday made Uresti look like an incredibly poor judge of character, if not a irresponsible businessman. But, is that criminal?

If there’s any witness that could derail Uresti's innocence, it’s Denise Cantu.

In 2010, Cantu was driving her Ford Explorer when the back tire exploded, sending the car spiraling into a grassy median. Cantu survived the crash, but her two children and their two friends sitting in the back did not. Uresti represented Cantu in a wrongful death suit against Michelin and Walmart, helping her win a substantial settlement.

By 2014, Uresti had convinced Cantu to invest the bulk of her settlement, around $900,000, into FourWinds. Unbeknownst to Cantu, Uresti got 10 percent of her profits — a hefty $27,000 commission.

She lost nearly all of the money by the time the company imploded a year later. In a bankruptcy court filing, federal prosecutors said, “It’s hard to imagine a more mentally and emotionally vulnerable client.” What’s more, her lawyer has said Cantu and Uresti had an "intimate" relationship during her legal settlement. Alonzo confirmed this rumor on Wednesday.

But Uresti, whose wife has accompanied him to most court hearings, has vehemently denied this relationship. (He’s also denied, for that matter, recent claims that he sexually harassed female staffers for decades while at the state capitol.)

Cantu is expected to testify at some point during the criminal trial.

Former FourWinds employees have described the workplace environment as anything but normal. On Tuesday, former FourWinds office manager Desirée Talley recalled that outside companies saw FourWinds as “a brothel” for only hiring “surgically enhanced women who didn’t have experience in anything,” the Express-News reported.

Former FourWinds comptroller Laura Jacobs also testified that Bates often spent his money on prostitutes or expensive gifts for “whatever girl he was dating at the time.” Alcohol flowed before noon. Jacobs was responsible for creating false spreadsheets to show Cantu that the company was doing far better off than it actually was. She plead guilty to one count of fraud in 2016 and testified Tuesday as part of a plea deal.

Talley, who faces no charges, said that she’d experienced sexual harassment while working at FourWinds, but stuck it out because she needed the health insurance and the income to help take care of her dying father.

During cross examination Wednesday, Talley told Gary Cain’s attorney John Muller that Bates called the financial spreadsheets she put together to show potential clients “fluff.”

“And what did he call you?” Muller asked.

“I was the fluffer, unfortunately,” Talley said.

“What did he mean by that?” the attorney pressed. Talley didn’t reply.

Muller cleared his throat. “I’ll retract the question,” he said.

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