SAN ANTONIO – A criminal defense attorney is appealing a federal judge’s ruling that disqualified him from representing State Sen. Carlos Uresti in a fraud case, calling the move “a giant waste of judicial resources.”
Federal prosecutors alleged Watts should not have been able to represent Uresti because his firm represented Denise Cantu in a tire rollover lawsuit. That case was settled in 2012. The woman ended up investing in the alleged Ponzi scheme that led to charges against Uresti and two others. The trio are accused of telling investors they were selling fracking sand for oil production, then used the money for their own personal gain.
A transcript of the hearing on the disqualification shows the magistrate said, “I have not been convinced that there is a significant possibility of the disclosure of confidential information having to do with Ms. Cantu.”
The judge also said it appeared unlikely Watts would be a witness at Uresti’s pending trial.
Watts filed an appeal to the ruling Monday based on a third argument for his dismissal that said the civil case and Uresti’s criminal case were “substantially related” matters.
“The Magistrate (made the conclusion) based solely on three facts he announced from the bench: first, ‘that the settlement proceeds from the prior case … are the monies that were supposedly allegedly defrauded in this case in one way or another’; second, ‘that Mr. Watts’s firm was involved in obtaining that settlement’; and third, ‘that the first transfer of proceeds from that settlement to the defendant , be it calling it a loan or calling it an investment, whatever you want to call it happened within months of the settlement itself and that that original transfer continue to being paid all the way through until 18 months later when the second transfer occurred which is a basis of the indictment in this case,” Watts wrote.
Watts alleges that decision is an error.
“After all, if the Magistrate is mistaken – and he is – the disqualification of Uresti’s counsel will make the entire trial of this case a giant waste of judicial resources, because the United States Supreme Court has held that reversal is mandatory when a criminal defendant’s counsel is erroneously disqualified,” Watts said.
Prosecutors have not filed a response to the appeal.
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