State Senator Carlos Uresti is fighting back against charges he lied to investors about the health of a now-bankrupt fracking company, 1200 WOAI news reports.
"Yes, a fraud happened. And people plead guilty to it. And they should," defense attorney Michael McCrum told jurors in his opening statement. "But he’s not in that group. And the evidence is going to show that."
The federal fraud trail, which gets going this week in San Antonio's federal courthouse, has garnered so much attention, the courtroom reached capacity before it even got started Monday. At one point, even members of Sen. Uresti's family had to wait for someone to leave before they were let inside.
Sen. Uresti (D-SA) faces charges of wire fraud, money laundering and securities fraud, centered around a company called FourWinds Logistics, which opened in May of 2014 and closed about one year later. It's alleged that he lied to investors, who pumped millions in the company, thinking the funds would be spend on fracking sand, which would apparently be bought low and sold high to the energy companies working in the EagleFord shale formation, south of San Antonio.
McCrum is attempting to deflect blame to the company's former CEO, Stan Bates, who previously pled guilty, and will take the stand as a witness for the prosecution. He suggested to the jury that Bates was the one who fudged the numbers. Sen. Uresti was merely bringing investors to the table.
"Sen. Uresti did not know what was going on inside those walls. Inside those computers,” McCrum said.In their opening arguments, federal prosecutors compared FourWinds to a Ponzi scheme, where old investors were paid with new investor’s money. They plan to present Bates as a con-man, who spent cash on rented Ferraris and prostitutes, and told wild tales to investors about how he sold his own cars to invest in the business, and had high profile investors backing the project.
"Matthew McConaughey! Tim Duncan is an investor," Assistant US Attorney Joe Blackwell told the jury that Bates claimed. "Not true."
McCrum agreed that Bates put on a show, but went further, saying that a number of high-profile and well-heeled investors believed it, and put their money down. He says Sen. Uresti was fooled, too. That's why he pitched the investment to his friends, family and business associates who backed his run for the Texas Legislature.
"If he had criminal intent, would he be introducing people who were important in his life?" McCrum asked.
The first witness to take the stand today will be the book keeper at FourWinds.
If found guilty, Sen. Uresti faces years in prison, and would likely lose both his seat in the senate and his license to practice law.