SAN ANTONIO (KXAN) — Texas State Senator Carlos Uresti, D-San Antonio, is facing multiple indictments for allegedly developing an investment Ponzi scheme and making false statements to investors.
The 53-year-old state senator is accused of developing the scheme to market fracking sand for oil production under the Four Winds company. The chief executive officer, Stanley Bates, and Four Winds consultant Gary Cain, have also been indicted on charges of committing wire fraud and conspiracy to commit money laundering.
As part of the Ponzi scheme, Uresti and the other defendants are accused of using funds from recent investors to pay earlier investors for personal expenses.
“I am hard at work representing District 19 in the 85th Legislative Session,” Uresti said in response. “The charges against me are groundless and I look forward to proving my innocence in a court of law at the appropriate time. I will enter a plea of Not Guilty and immediately return to work representing District 19.”
Uresti also faces five counts of wire fraud, two counts of securities fraud, one count of engaging in monetary transactions with property derived from unlawful activity and one count of being an unregistered securities broker.
The men, all from San Antonio, face up to 20 years in federal prison for each fraud-related charge if they are convicted. They face up to 10 years in prison for each money laundering charge and Uresti faces up to 20 years in prison for the charge of being an unregistered securities broker.
In addition to the Four Winds indictment, Uresti and 44-year-old Vernon Farthing III, of Lubbock, are accused of conspiracy to commit bribery and money laundering. From January 2006 to September 2016, they are accused of paying and accepting bribes in order to secure a Reeves County Correctional Center medical services contract for Farthing’s company.
Farthing allegedly paid Uresti $10,000 a month as a marketing consultant. The Department of Justice says half of that was then given to a Reeves County official for his vote to award Farthing the contract.
For these charges, Uresti and Farthing face up to 5 years in prison for the bribery indictment and up to 20 years in prison for the money laundering indictment.
Uresti, Bates and Cain are expected to appear before a U.S. magistrate judge in San Antonio at 11 a.m. Wednesday.
The FBI’s Public Corruption Task Force, made up of the FBI, IRS, DPS and the Peace Corps-Office of Inspector General, is investigating.
FBI agents were seen raiding the state senator’s San Antonio offices in February. Uresti served as a member of the Texas House from 1997 to 2006, when he was elected to the Texas Senate.
His District 19 is one of the largest legislative districts by area in the United States, stretching from San Antonio west to the border of Mexico up to the border with New Mexico.