A key investor in Fourwinds Logistics told a federal court jury on Tuesday that he invested largely due to the presence of State Senator and U.S. Marine Carlos Uresti as a minority owner of the fracking sand firm, News Radio 1200 WOAI reports.
"You can trust a Marine," Mexico City millionaire Hector Navarette recalled being told by Uresti.
Uresti is on trial on eleven counts, including wire fraud, for allegedly knowingly luring Navarette and other investors into placing large sums of money into a company which they say was a 'Ponzi scheme,' and which collapsed less than a year after Navarette invested.
But under cross examination by defense attorney Michael McCrum, Navarette said even when the company's fortunes turned south, he presented Uresti and Fourwinds CEO Stan Bates with a reorganization plan which would increase his investment in the company. Navarette said his proposal for expansion included purchasing storage silos for the fracking sand which was sold by Fourwinds.
Navarette said, while his reorganization plan would have reduced the commissions Uresti received on the investments he lured to Fourwinds, his plan would have included Uresti and Bates continuing on with the company, indicating Navarette, who is an experienced investor, did not feel that Fourwinds was a fraudulent company.
A key prosecution point is that Uresti lured investors to Fourwinds, knowing full well that the firm was not what he told investors it was. Previous witnesses have testified that Fourwinds went so far as to 'photoshop' photos of sand trucks lined up to deliver sand to oilwells to try to give potential investors a false image of the company's finances.
Fourwinds filed for bankruptcy after oil prices collapsed in early 2015, but so did as many as one third of companies which were active in the Eagle Ford Shale, where drilling essentially stopped in the face of sharply lower world oil prices.
"There was a problem," Navarette told the jury.