Feds raid senator’s San Antonio office in investigation of failed company
Federal investigators on Thursday raided the San Antonio law office of state Sen. Carlos Uresti, casting a cloud over the future of the longtime Democratic lawmaker.
Agents with the FBI and the Internal Revenue Service confiscated documents from the office of Uresti, D-Bexar, who is embroiled in an investigation into his role at an oil and gas company accused of defrauding investors.
Uresti, who had served as general counsel in 2014 for the now-defunct San Antonio company Four Winds Logistics, said he is cooperating with investigators.
“Today, FBI agents are in my office, reviewing our documents as part of their broad investigation of the Four Winds matter,” Uresti, 53, said in a statement. “I have instructed my staff to fully cooperate with the federal investigators. I will help them in what-
ever way I can.”
FBI spokeswoman Michelle Lee told the American-Statesman that no arrests were made Thursday.
“No further details can be released at this time,” Lee said of the law enforcement operation.
The raid is the latest turn in an expanding investigation that has led to at least three guilty pleas from officials at Four Winds. Investors claim company CEO Stan Bates wasted their money on personal expenses and vacations.
Bates founded the company to trade “frac sand,” which is used in hydraulic fracturing to extract oil and gas from shale rock.
Uresti told the San Antonio Express-News in August that he had been contacted by the FBI as a witness in the case.
The company’s comptroller; a co-owner and chief operating officer; and marketing director each pleaded guilty to a single charge of conspiracy to commit wire fraud. The company filed for bankruptcy in August 2015, listing more than $14 million in debt.
The object of the scheme, according to charging documents, “was to enrich the conspirators by inducing individuals into investing money” into Four Winds and “maintaining that investment into Four Winds by providing false and misleading information and omitting material facts regarding their investment.”
The charging documents, filed in federal court in San Antonio, claim company officials in 2014 wired money from the company to personal bank accounts controlled by conspirators or their spouses; sent altered bank statements for the Four Winds’ general operating account to potential investors; and emailed an investor a spreadsheet that falsely showed the investor’s investment was used to buy fracking sands.
At a bankruptcy court hearing, Bates, on the stand to answer questions about the movement of money in and out of the company, exercised his Fifth Amendment right against self-incrimination more than 70 times, the Express-News reported.
Uresti served as the company’s outside general counsel for four or five months in late 2014, according to the Express-News, which first reported news of the raid.
The newspaper has reported that Uresti is facing a grand jury investigation into possible public corruption charges related to his involvement with the company.
Uresti received Four Winds shares, as well as a $40,000 loan from the company that he failed to disclose initially, the Express-News reported. He also collected a $27,000 commission on a Harlingen woman’s $900,000 investment in a joint venture with Four Winds; the woman ended up losing about $800,000, according to the paper.
Uresti was elected to the Texas House in 1997, serving there nine years before being elected to the Texas Senate in 2006 to represent a vast district that covers about a third of the Texas-Mexico border.
He has made his mark on budget, foster children, veterans and border security issues. There already appears to have been some political fallout from the investigation: Lt. Gov. Dan Patrick stripped Uresti of his post on the Legislative Budget Board, which makes budget recommendations, last fall, after reports began circulating of Uresti’s involvement in the Four Winds inquiry.
This session, Uresti has proposed raising the smoking age from 18 to 21 to save lives and reduce health care costs; expanding health care services for kids in foster care; and making it easier for people to register to vote.
Uresti, a personal injury lawyer and Marine veteran, comes from a politically involved family. One brother, Albert Uresti, serves as tax assessor-collector in Bexar County; another brother, Tomas Uresti, serves as a Democratic state representative.
In a legislative session that has already seen the indictment of state Rep. Dawnna Dukes, D-Austin, on corruption charges, Republicans pounced on the Uresti development.
The raid “of crooked Texas Democrat Carlos Uresti’s law office proves once again that there is an unprecedented amount of corruption among Texas Democrats,” said state GOP Chairman Tom Mechler. “Texas Democrats continue to find themselves mired in corruption and scandal. The cascade of these issues prove that Texas Democrats only care about power, as opposed to the constituents they’re supposed to be representing.”