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State Sen. Uresti On Trial: Attorneys Say He Was Not Involved In Fraud

State Sen. Carlos Uresti, on right, and his wife Lleanna Uresti leave arm in arm from the downtown federal courthouse on Monday. (Photo courtesy of JOEY PALACIOS / TEXAS PUBLIC RADIO)

Attorneys for State Senator Carlos Uresti say he had nothing to do with the fraud involved at Four Winds that caused investors to lose hundreds of thousands of dollars, while government attorneys argue he conspired to defraud investors during opening statements Monday of a trial expected to last three weeks.

by Joey Palacios, Texas Public Radio.

Uresti; Gary Cain, a former consultant for Four Winds; and former Four Winds CEO Stan Bates face, collectively, 22 counts  — 11, of which, belong to Uresti.

Assistant U.S. Attorney Joe Blackwell told jurors the circumstances of the case were “born in tragedy.”

In August 2010, Denise Cantu – the prosecution’s main witness – was in a car accident, which killed two of her four children. Cantu hired Uresti as her lawyer and In October 2012, she received over $1 million in the settlement.

By 2013, Uresti began asking Cantu to invest some the settlement money, including two loans of $25,000 and $75,000.

Also in 2013, Stan Bates begins forming Four Winds, a company to provide hydraulic fracturing sand. Blackwell told jurors, “You’re going to hear a lot about Stan Bates, he’s moved from scheme to scheme.”

In January 2014, Blackwell said Uresti is introduced to Bates and agreed to be an investment broker to bring people into Four Winds.

Several investors are convinced to invest in Four Winds by Uresti, including Cantu, who provided $800,000 of her settlement money.

The government went on to say a relationship between Uresti and Cantu began as a friendship but would turn sexual. Blackwell said Cantu would trust Uresti as a confidant.

A group of Mexican investors also bought in and as well as Richard Thum, the owner the San Antonio-based Five Star Cleaners.

Blackwell said Bates misused money and little went to buying and selling fracturing sand. Bates, along with other Four Winds employees, pleaded guilty to fraud earlier this month.

Uresti’s attorney Michael McCrum told jurors there was fraud but Uresti was not involved.

“You’re going to hear how Stan Bates and a few employees … in the secrecy of those private computers misused those people’s money. People pled guilty to fraud. Fraud did happen. People on the outside didn’t know about it,” he said, adding Uresti did not have access to Four Winds books or accounting software.

McCrum said much of the corresponded after providing the $800,000 was between Cantu and Bates in text messages and not Uresti. He said Bates and Cantu also had a sexual relationship.

According to prosecutors, Uresti received $115,000 from Four Winds over seven and a half months through multiple means, including legal fees and monthly retainer fees. Stan Bates received $633,000 over 13 months, and Cain received $210,000 over seven months.

Sixteen jurors were selected — six men and ten women — and four will serve as alternates.

No witnesses testified Monday due to technical issues with the court room’s audio and video system. Judge David Ezra dismissed the jury and court will reconvene Tuesday.

Carlos Morales is Marfa Public Radio's News Director.