May 19, 2017

Fraudster of the Week — Texas State Senator Carlos Uresti

By the C|C Whistleblower Lawyer Team

On Tuesday, a federal grand jury in San Antonio returned two indictments against state senator Carlos Uresti in connection with two schemes—one involving alleged kickbacks for a medical services contract at a county jail, and a second dealing with an alleged Ponzi scheme that marketed sand used for hydraulic fracking.  He now faces more than a dozen criminal charges and, if convicted, could be imprisoned for decades.  Senator Uresti has served in the Texas state legislature for over twenty years, while also maintaining a solo law practice.

According to the indictments, the first alleged scheme involved Four Winds Logistics LLC, a now-bankrupt company formed at the height of the recent oil boom to buy and sell sand used in fracking.  Uresti, a personal injury lawyer, allegedly caused one of his clients to invest a $900,000 settlement in Four Winds, which paid commissions to Uresti for drawing investors.  Prosecutors, however, assert that Four Winds turned out to be a Ponzi scheme.  In Four Winds’ ongoing bankruptcy proceedings, investors claim that the CEO grossly misrepresented the state of the company’s finances and used the company as a personal bank account.

The second scheme involves a contract for medical services at Reeves County Correctional Center, which sits within Uresti’s senate district.  The indictment alleges that Uresti conspired with Vernon C. Farthing, a Lubbock doctor, to bribe a Reeves County judge to help secure a medical contract for Farthing’s company with the county jail.  According to the indictment, Farthing paid Uresti a $10,000 monthly retainer for his “marketing” services, and Uresti then funneled half of his retainer to Reeves County officials.

In a statement issued Tuesday, Uresti said that he is “hard at work representing District 19 in the 85th Legislative Session.”  He denied all charges as “groundless,” and promised to “enter a plea of not guilty and immediately return to work representing District 19.”

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