Former State Senator Carlos Uresti Sentenced To 12 Years in Federal Prison
In San Antonio today, a federal judge sentenced San Antonio attorney and former District 19 Texas State Senator Carlos I. Uresti to 12 years in federal prison, announced U.S. Attorney John F. Bash, Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division, and Internal Revenue Service-Criminal Investigation Special Agent in Charge D. Richard Goss, San Antonio Field Office.
In addition to the prison term, Senior U.S. District Judge David A. Ezra ordered that Uresti pay $6,345,441 restitution and be placed on supervised release for a period of three years after completing his prison term.
“As Judge Ezra said, this is a sad day for the community. The judge imposed a just sentence of 12 years in prison that accounts for the fact that former Senator Uresti used his position of trust in the community to lure his victims to the fraudulent scheme at the heart of the case. I hope that this sentence sends the message to others that this office will not tolerate such outrageous abuses of power,” stated U.S. Attorney Bash.
“Today's sentence sends a strong message to those who would defraud and harm others for their own personal gain,” said FBI Special Agent in Charge Combs. “As an elected official, this individual took advantage of his position and power to personally enrich himself at the expense of those who trusted him. It is imperative that all individuals, but especially those who hold elected office, do so with honesty and integrity. The public can have confidence that the defendant is being held accountable for the crimes of which he has been convicted.”
“Today's sentencing of former Texas Senator Carlos Uresti exemplifies IRS Criminal Investigation’s intense focus on rooting out corruption.” said IRS-CI Acting Special Agent in Charge Goss. “No matter what your profession, it is unacceptable to help yourself to other people’s money and violate their trust. Honest taxpayers have been reassured today that no one is above the law.”
In February, a jury found Uresti and FourWinds Logistics, Inc., (FourWinds) consultant Gary L. Cain, guilty on all charges for their roles in a Ponzi scheme that defrauded investors out of millions of dollars. Charges against Uresti included one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, 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. Charges against Cain included one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and seven counts of engaging in monetary transactions with property derived from specified unlawful activity. Prior to jury selection, former FourWinds Chief Executive Officer Stanley P. Bates pleaded guilty to eight separate federal charges including securities fraud and money laundering.
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, Cain and Bates engaged in money laundering with the proceeds of wire fraud.
Cain and Bates remain on bond pending sentencing. Cain is scheduled to be sentenced tomorrow at 1:30pm in front of Judge Ezra. Bates is scheduled to be sentenced at 1:30pm on August 6, 2018, in front of Judge Ezra. 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 remains on bond awaiting a second federal trial on unrelated charges. Uresti and Vernon C. Farthing, III, of Lubbock, TX, are charged by a federal grand jury indictment with one count of conspiracy to commit bribery and one count of conspiracy to commit money laundering. The indictment alleges that from January 2006 to September 2016, the defendants conspired with others to pay and accept bribes in order to secure a Reeves County Correctional Center medical services contract for Farthing’s company. The indictment specifically alleges that Farthing paid Uresti $10,000 a month as a marketing consultant and that approximately half of that sum was then given to a Reeves County official for his support and vote to award the contract to Farthing’s company. Upon conviction of the charges contained in this indictment, Uresti and Farthing face up to five years in federal prison for conspiracy to commit bribery and up to 20 years in federal prison for conspiracy to commit money laundering. Jury selection is scheduled for October 22, 2018, in San Antonio before Judge Ezra.
The FBI’s Public Corruption Task Force is conducting this investigation. The Task Force is comprised of investigators from the FBI, IRS-CI, Texas Department of Public Safety (DPS) and the Peace Corps-Office of Inspector General. Assistant U.S. Joseph E. Blackwell, William R. Harris, Mark Roomberg, Erica Giese and Sean O’Connell are prosecuting this case on behalf of the Government.