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As state Sen. Carlos Uresti's fraud trial drags on, one defrauded investor's testimony could be key

State Sen. Carlos Uresti's criminal fraud trial has entered its third week. The case could hinge on the testimony of one of Uresti's former legal clients.

State Sen. Carlos Uresti, D-San Antonio, arrives at the federal courthouse in San Antonio on Wednesday, Jan. 17, 2017.

SAN ANTONIO — It was a young, grieving mother, prosecutors hoped, who would make the difference in the federal government’s case against state Sen. Carlos Uresti, sending the longtime Democratic legislator to serve prison time instead of continuing to serve the people of Senate District 19.

And as the third week of the criminal trial against the San Antonio lawmaker started Monday, the testimony of that key witness, 38-year-old Denise Cantu, slogged on. She first took the stand Thursday and continued testifying until the end of the day Monday, describing how she invested $900,000 in a now-defunct frac-sand company called FourWinds Logistics at Uresti's suggestion — and then lost nearly all of it.

Uresti, who represented Cantu in a wrongful death suit after a 2010 car accident killed her son and daughter, has been accused of defrauding investors — including Cantu — in a Ponzi scheme perpetrated by the company. He faces 11 felony charges and has claimed that he wasn't aware of FourWinds' illegal dealings. Cantu said she only invested because she trusted his guidance and because she believed he was personally invested as well.

Jurors have already heard from FBI personnel, who investigated FourWinds; former company officials, several of whom entered into plea deals with the government; and other company investors, who have painted a picture of a chaotic organization run by an erratic and irresponsible CEO, Stan Bates. Prosecutors have also pointed to how Uresti was struggling financially at the time of the company’s fraud scheme. And investors themselves have emphasized that without Uresti, they would not have trusted the unknown company with their money.

Meanwhile, defense attorneys have attempted to distance Uresti from the company, arguing that Uresti was unaware and uninvolved with the fraud that occurred at FourWinds. In cross examination of various witnesses for the prosecution, for example, defense attorney Michael McCrum has tried to show that Uresti did not know about the company’s forged financial statements. The burden of proof falls on the government to demonstrate Uresti was complicit in criminal dealings.

At stake for the legislator are millions of dollars in fines, years in federal prison and a two-decade career in the Texas Legislature. If convicted, Uresti would lose his long-held seat in the Texas Legislature, though he could continue to serve during the appeals process.

Prosecutors spent much of Thursday afternoon airing explicit text messages between Cantu and Uresti, arguing that their intimate relationship led her to invest in the company that would ultimately defraud her. The defense on Friday made much the same argument — but with their focus on a different relationship. It was Bates, the defense argued, who leveraged his intimate relationship with Cantu to convince her to invest more money in the scheme.

Throughout the proceedings, Uresti listened attentively and without much expression, his gaze steadily directed toward Cantu and his hands clasped beneath the table or taking notes on a legal pad. That quiet was punctuated by occasional gasps and giggles from the courtroom as attorneys displayed sexually explicit texts between Cantu and Bates or Cantu and Uresti on large screens throughout the courtroom.

Cantu testified Thursday that her relationship with Uresti, begun as early as 2010, turned intimate. That romantic relationship made her trust him years later, when he suggested she invest in the frac-sand company, allegedly asking “Are you ready to make some money?”

“I knew he was married, but we would still be intimate at times,” Cantu told the jury Thursday. “He was a good friend. We could talk about anything.”

Uresti — whom Cantu called “Carlos” throughout her testimony — has denied that they had an affair.

Cantu said Uresti convinced her that the investment was “guaranteed” and “good as gold.” She said she was under the impression that he had invested his own money in FourWinds as well, though he had not.

On cross-examination, Uresti’s defense tried to highlight Cantu’s affair with another FourWinds affiliate: Bates, the former CEO, who pleaded guilty last month to eight felony charges related to his work at the company.

And McCrum attempted to downplay Cantu’s relationship with Uresti, which she initially denied in an interview with FBI agents investigating FourWinds.

McCrum also made much of the fact that she could not recall many details or dates.

He asked Cantu, did you have sex with Uresti in 2012?

“Could be… I didn’t write down the days we had sex,” Cantu said softly from the stand. She was asked to speak up three times Friday morning alone.

“How about for 2013? Was it more than one time?”

“Could have been.”

“‘Maybe more than once…’” McCrum scribbled on an easel facing the jury.  “What about in 2014?”

That line of questioning continued until they got to the year 2017, as McCrum looked to downplay Cantu’s relationship with Uresti while emphasizing her ties to Bates.

McCrum also played for the jury a voicemail Uresti left for Cantu in August 2014, advising her not to agree to a FourWinds investment deal before discussing the terms with him. That message was left on the same day that Cantu signed an agreement and exchanged sexual messages with Bates, McCrum noted.

To testify in the trial, Cantu had to be released from police custody, where she has been held since November on charges of aggravated assault and aggravated robbery because she was unable to post bail. U.S. District Judge David Ezra ruled that attorneys could not mention those unrelated charges in court.

After the prosecution wraps up its case — likely early this week — the defense will have its chance to call witnesses. Uresti’s attorneys told the San Antonio Express-News they have not yet decided whether they’ll call the senator to testify. Even if he doesn’t take the witness stand, jurors may hear audio recordings of interviews Uresti gave the Express-News in 2016, when the newspaper published a lengthy investigation of FourWinds.

Defense attorneys are expected to call more than a dozen witnesses from lists of more than 200, among which are several high-profile names, including state Sen. José Menéndez, D-San Antonio, Republican Lt. Gov. Dan Patrick and Republican Comptroller Glenn Hegar.

Monday marked the 11th day of a trial attorneys originally expected to last three weeks but which has dragged slightly. The judge has already instructed lawyers to pick up the pace.

Uresti is also scheduled to go to trial in early May on separate bribery allegations. He was indicted on those counts, as well as the charges he’s fighting this week, in May 2017 after a February FBI raid of his law offices.

The lawmaker has also been accused of sexual harassment at the Texas Capitol, charges he has denied. The judge ruled that those allegations will not be allowed in court.

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Courts Politics State government Carlos "Charlie" Uresti