Uresti set­tles with SEC over vi­o­la­tions

Se­cu­ri­ties agency sued for­mer state se­na­tor over his work with failed FourWinds Lo­gis­tics

San Antonio Express-News - - BUSINESS - By Pa­trick Dan­ner

Con­victed felon Car­los Uresti reached a set­tle­ment with the Se­cu­ri­ties and Ex­change Com­mis­sion this week over al­le­ga­tions that he vi­o­lated se­cu­ri­ties laws while in­volved with a now-de­funct San An­to­nio com­pany.

Uresti, the for­mer state se­na­tor who this year was sen­tenced to 12 years in fed­eral prison for de­fraud­ing in­vestors in oil field ser­vices com­pany FourWinds Lo­gis­tics, con­sented to the en­try of a fi­nal judg­ment against him in a civil law­suit brought by the SEC.

Un­der the fi­nal judg­ment, Uresti agreed to not vi­o­late se­cu­ri­ties laws, and he is barred from par­tic­i­pat­ing in the pur­chase, of­fer­ing or sale of oil- and gas-re­lated se­cu­ri­ties. He can trade such se­cu­ri­ties in his own per­sonal ac­count, how­ever.

He also agreed not to make any pub­lic state­ment deny­ing the al­le­ga­tions in the SEC’s suit or cre­ate “the im­pres­sion that the com­plaint is with­out fac­tual ba­sis.”

In ad­di­tion, Uresti, 55, must turn over $115,099, plus $16,664 in in­ter­est. How­ever, the dis­gorge­ment will be deemed sat­is­fied by the $6.3 mil­lion in resti­tu­tion he was or­dered to pay as part of his sen­tence.

Uresti, FourWinds’ lawyer, escrow agent and a 1 per­cent owner who re­cruited in­vestors, was found guilty of 11 felonies — in­clud­ing se­cu­ri­ties fraud and money laun­der­ing — by a fed­eral jury in Fe­bru­ary.

The long­time San An­to­nio Demo­crat sub­se­quently re­signed from the Se­nate and sur­ren­dered his law li­cense.

Uresti has been free on bail pend­ing his Jan. 14 sen­tenc­ing on an un­re­lated bribery con­spir­acy charge that he pleaded guilty to

in Oc­to­ber rather than stand trial. As part of his plea, Uresti agreed to drop the ap­peal of his con­vic­tion and sen­tence in the FourWinds case.

Prose­cu­tors have said they will rec­om­mend that Uresti serve what­ever sen­tence he gets in the bribery case con­cur­rently with his 12-year sen­tence in the FourWinds case. The bribery con­spir­acy charge car­ries a max­i­mum of five years in prison.

U.S. District Judge Xavier Ro­dridguez still must

sign off on the fi­nal judg­ment against Uresti in the SEC’s law­suit.

Uresti “wants to look for­ward, not back­ward,” said his San An­to­nio at­tor­ney, Mikal Watts. “He will not be in­volved in the sell­ing of se­cu­ri­ties in the fu­ture.”

Shamoil T. Shipchan­dler, di­rec­tor of the SEC’s Fort Worth re­gional of­fice, de­clined to com­ment.

“Lawyers and pub­lic ser­vants have height­ened re­spon­si­bil­i­ties when it comes to han­dling other peo­ple’s money,” Shipchan­dler said in a Sept. 28 email after the SEC filed its suit. “We take ac­tion to­day

to im­pose an in­dus­try bar to pro­tect in­vestors from fu­ture fraud­u­lent con­tent.”

The SEC opened an in­ves­ti­ga­tion into FourWinds in Au­gust 2016, two days after the San An­to­nio Ex­press-News first re­ported on Uresti’s in­volve­ment in the com­pany and al­le­ga­tions by some in­vestors that they had been de­frauded.

The SEC also named in its law­suit FourWinds CEO Stan Bates, who pleaded guilty to eight felonies rather than stand trial with Uresti. Bates was sen­tenced to 15 years in prison and was or­dered to pay $6.3 mil­lion in resti­tu­tion.

He is in­car­cer­ated at the Karnes Cor­rec­tional Cen­ter in Karnes City.

Bates, 46, set­tled the SEC’s suit si­mul­ta­ne­ously with the fil­ing of the com­plaint. As part of the set­tle­ment, he is barred from serv­ing as an of­fi­cer or di­rec­tor of any com­pany that is­sues se­cu­ri­ties.

Bates also was or­dered to turn over $663,256 in ill­got­ten gains and pay $110,066 in in­ter­est. How­ever, the resti­tu­tion he owes in the crim­i­nal case will sat­isfy the re­quire­ment that he pay back il­licit pro­ceeds.

The SEC al­leged that Uresti and Bates raised $11.2

mil­lion pur­port­edly to buy and sell sand used in frack­ing for oil pro­duc­tion. The pair mis­rep­re­sented the prof­itabil­ity and safety of the in­vest­ments, the SEC added.

“Uresti was fac­ing fi­nan­cial dif­fi­cul­ties and be­lieved he stood to make mil­lions through his in­volve­ment with (FourWinds),” the SEC al­leged in its com­plaint. Uresti falsely told some in­vestors that he had in­vested his own money in the ven­ture and that Bates was a suc­cess­ful busi­ness­man, the doc­u­ment added.

Jerry Lara / Staff file photo

For­mer state Sen. Car­los Uresti, shown in Au­gust, was found guilty this year of 11 felonies — in­clud­ing se­cu­ri­ties fraud and money laun­der­ing — and sen­tenced to 12 years in prison.

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