Uresti settles with SEC over violations
Securities agency sued former state senator over his work with failed FourWinds Logistics
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.