U.S. Attorney’s Office Secures Asset for Victims of Four Winds Fraud
SAN ANTONIO – Yesterday U.S. District Judge David A. Ezra granted a motion by the U.S. Attorney’s Office for the Western District of Texas (USAO) to disburse $171,448.24 plus all accrued interest to the victims of the Four Winds fraud scheme. The proceeds will be applied to defendant Gary Cain’s restitution judgment, concluding three years of litigation over Cain’s only significant asset that was at one time valued at over $1.2 million.
In 2018, the USAO obtained a restraining order to prevent the sale of Cain’s house in Bentley Manor based on its belief that Cain used a sham company to hold title and avoid paying restitution. The USAO alleged that for over a decade Cain had resided in and made all payments for the house while utilizing a series of nominees, trusts
, and companies to conceal his ownership interest. Just three weeks prior to Cain’s sentencing in 2018, which would include $6.3 million in restitution owed to eight victims, the home was transferred to a newly created company purportedly managed by Cain’s brother with his two youngest daughters as the beneficial owners. Although several parties contested the order, the Court found that the company was the nominee of Gary Cain earlier this year.
“Our congressional mandate is to pursue restitution orders aggressively, recognizing the impact of crime on victims,” said U.S. Attorney Ashley C. Hoff. “The tenacity in this case demonstrates our commitment to recovering victim losses and should signal to defendants that cooperation, not concealment, is the preferred approach.”
During the enforcement action, the USAO joined nine other parties, five of which asserted some type of interest in the Bentley Manor house. The parties reached a settlement earlier this month, recognizing only two interests in the property in addition to the U.S.
In February 2018, a jury found Cain and former state senator Carlos Uresti guilty on all charges for their roles in a Ponzi scheme that defrauded investors out of millions of dollars after they made false representations in soliciting and later misleading investors concerning their investment into a company called Four Winds Logistics. Prior to trial, co-conspirator and former Four Winds Logistics Chief Executive Officer Stanley P. Bates pleaded guilty to eight separate federal charges including securities fraud and money laundering. The defendants accepted investor funds but used them to pay earlier investors and personal expenses including gifts, travel, luxury automobiles, controlled substances, and to hire prostitutes.
Through its Financial Litigation Unit (FLU), the USAO exercises several remedies to ensure that criminal defendants prioritize compensating their victims. The FLU also litigates against those defendants who hide their assets or refuse to pay.
The USAO and the Department of Justice Tax Division worked together to reach this resolution, culminating with the Court agreeing with the government's motion for summary judgment establishing that the company selling the home was Cain's nominee.
Assistant U.S. Attorneys Steven Seward, Todd Keagle and Mark Tindall along with DOJ Tax Attorney Herb Linder handled the post-judgment enforcement proceedings.