Federal Jury in San Antonio Convicts Senator Carlos Uresti and FourWinds Logistics Consultant Gary L. Cain on All Charges
In San Antonio today, a federal jury convicted San Antonio attorney and District 19 Texas State Senator Carlos I. Uresti and his business partner, Gary L. Cain, on all charges for their roles in a Ponzi scheme that defrauded investors out of millions of dollars, announced United States Attorney John F. Bash and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio.
Following a four-week-long trial, jurors convicted Uresti and Cain of one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Jurors also convicted Uresti of 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. Jurors also convicted Cain of seven counts of engaging in monetary transactions with property derived from specified unlawful activity. Prior to jury selection, former FourWinds Logistics, Inc. (FourWinds) Chief Executive Officer Stanley P. Bates pleaded guilty to eight separate federal charges including securities fraud and money laundering.
“Today’s verdict powerfully reaffirms the core American belief in equal justice under law—a belief so important to our system of government that it is engraved on the front of the U.S. Supreme Court. No matter who you are, no matter your title or status or position in the community, you will be held accountable for your actions, particularly when you inflict harm on your fellow citizens. I could not be prouder of this Office’s prosecution team and our law-enforcement partners in achieving justice for the victims of the fraudulent investment scheme at the heart of this case,” stated United States Attorney John F. Bash.
“At the same time, this is in many ways a somber day for our community. A man who long held a position of public trust was found to have deceived those who placed their trust in him—for mere personal enrichment. So while I am deeply gratified that justice has been done in this case, I am concerned that the criminality revealed by today’s verdict could further erode the public’s faith in our democracy. For that reason, the public should know that this Office will relentlessly fight fraud and corruption by public officials,” Bash added.
Evidence presented during trial revealed that from February 2014 to December 2015, the defendants developed an investment Ponzi scheme to buy and sell hydraulic fracturing (fracking) sand for oil production. Evidence showed that the defendants made false statements and representations while soliciting investors in FourWinds. Collected funds were then used to pay earlier investors and for personal expenses including gifts, travel, luxury automobiles, controlled substances, and to hire prostitutes.
Evidence also showed that Uresti recruited investors under false pretenses by lying about investing his own money in FourWinds as well as failing to disclose his receipt of a commission and a percentage of the profits resulting from investments in FourWinds. Evidence also revealed that Uresti was not registered as a broker with the Securities and Exchange Commission (SEC).
Evidence and testimony also revealed that Uresti and Cain engaged in money laundering with the proceeds of wire fraud.
For each fraud related charge, the defendants face up to 20 years in federal prison upon conviction. For each money laundering charge, the defendants face up to ten years in federal prison upon conviction. Uresti faces up to 20 years in federal prison upon conviction of being an unregistered securities broker. Uresti and Cain remain on bond pending sentencing scheduled for 1:00pm on June 25, 2018, before Senior U.S. District Judge David A. Ezra in San Antonio.
The FBI’s Public Corruption Task Force is conducting this investigation. The Task Force is comprised of investigators from the FBI, Internal Revenue Service-Criminal Investigation (IRS-CI), Texas Department of Public Safety (DPS) and the Peace Corps-Office of Inspector General. Assistant United States Attorneys Joseph E. Blackwell, William R. Harris and Mark Roomberg are prosecuting this case on behalf of the Government.