Judge: Uresti, Cain should have known 'no clean funds' from fracking business

Requst for new trial denied

SAN ANTONIO – A federal judge rejected a request for acquittal by state Sen. Carlos Uresti and his co-defendant, Gary Cain, at one point saying Uresti took the trial court rulings "conveniently cherry-picked and out of context."

Uresti and Cain were convicted on federal fraud charges in February. The pair and a third man, Stanley Bates, were part of a now-bankrupt oil field sand fracking company. Bates pleaded guilty before the case went to trial. Prosecutors have said Uresti may owe the victims $3 million in restitution.

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While Uresti and Cain filed separate motions for a new trial, their legal claims were identical.

Uresti cited "heavily biased" statements made against his presumed innocence during the trial. Judge David Ezra said the court's rulings, "conveniently cherry-picked and out of context," were not "a comment on the guilt or innocence of Defendant." 

"In addition to the regular admonishments throughout the trial, the Court instructed the jury not to make assumptions on the guilt or innocence of Defendant based on anything the Court did or said during the trial and not to investigate the case on the internet or in the news while deliberating," Ezra wrote.

Both Uresti and Cain raised concerns about whether they should have been convicted if they did not know that the company, Four Winds, was a financial scheme that lured investors by inflating profits on records without the funds to back them up and paying investors -- as well as Uresti, Cain and Bates -- with money from investors, not from profits.

The judge cited testimony from several witnesses that there "were no clean funds" and that "Uresti also lied to investors about how he had personally invested his own money, even going so far as touting his bank account statement to others, when in fact he invested nothing in the venture."

"The evidence compels a finding that Uresti was subjectively aware of the illegal conduct surrounding Four Winds," Ezra wrote. "It was reasonable for the jury to conclude Cain knew about the illicit source of his paychecks, but deposited them regardless."

Cain also filed a motion for acquittal. It was also denied.

The men are due in court for sentencing this summer.

Uresti is also facing federal bribery charges. He has not resigned from office and maintains his license to practice law, but his wife filed for divorce within a week of his conviction on fraud charges.