FourWinds Consultant Gary Cain Sentenced to 68 Months in Federal Prison
In San Antonio today, a federal judge sentenced FourWinds Logistics, Inc. (FourWinds) consultant Gary Cain to 68 months 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 Cain pay, jointly and severally, $6,345,441 restitution and be placed on supervised release for a period of three years after completing his prison term. Judge Ezra also ordered Cain to surrender by September 25, 2018, or upon notification by U.S. Bureau of Prisons officials, to begin serving his federal prison term.
Yesterday, Judge Ezra sentenced Cain’s co-defendant, San Antonio attorney and former District 19 Texas State Senator Carlos I. Uresti to 12 years in federal prison and the same amount of restitution.
In February, a jury found Cain and Uresti guilty on all charges for their roles in a Ponzi scheme that defrauded investors out of millions of dollars. 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. 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. 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 and testimony also revealed that Uresti, Cain and Bates engaged in money laundering with the proceeds of wire fraud.
Bates is scheduled to be sentenced at 1:30pm on August 6, 2018, in front of Judge Ezra. For each fraud related charge, Bates faces up to 20 years in federal prison upon conviction. For each money laundering charge, Bates faces up to ten years in federal prison upon conviction.
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.