Aug. 07–The first person to plead guilty in the criminal scheme that led to the downfall of former San Antonio lawmaker Carlos Uresti won’t have to serve any prison time.
Eric Nelson, the former FourWinds Logistics e-commerce and marketing director who admitted to doctoring a bank record to make it appear it had more money than it did, was sentenced to four years of probation Tuesday in San Antonio federal court.
“You got a pretty generous sentence, but I think you earned it,” Senior U.S. District Judge David Ezra told Nelson, 33.
Ezra credited Nelson’s “candid and honest testimony” during a 2016 bankruptcy court proceeding for providing a “blueprint” for the government in its investigation of the FourWinds scheme.
FourWinds was a San Antonio oil field services company that bought and sold sand used in fracking. Prospective investors were lured with promises of quick riches, but the venture was short-lived. Investor money was misspent to support the wild lifestyle of its CEO, Stan Bates, who pleaded guilty to securities fraud, money laundering and other charges, and is scheduled to be sentenced next month.
The company collapsed into bankruptcy in 2015 amid allegations that investors were defrauded. Prosecutors said FourWinds was a Ponzi scheme.
Nelson pleaded guilty to a single charge of conspiracy to commit wire fraud. He cooperated with federal investigators and testified during Uresti’s trial earlier this year in hopes of consideration at his sentencing.
Under sentencing guidelines, Nelson could have faced 46 to 57 months in prison. Both prosecutors and Robbie L. Ward, Nelson’s lawyer, asked the judge to sentence him to probation.
“While (Nelson) didn’t pay an unimportant role, (the scheme) would have occurred without his presence,” Ezra said. “So it does not seem to me in the short run or the long run that incarceration would serve any good purpose here.”
A relieved Nelson hugged his parents following the hearing. They were joined by members of St. Mark’s Episcopal Church, where Ward said Nelson now works as a facilities manager.
Like other defendants already sentenced in the case, Nelson will be responsible for paying $6.3 million in restitution to the FourWinds investors who were defrauded.
Nelson apologized to the FourWinds investors and the court.
“I never will be able to forgive myself for my time at FourWinds,” he told the judge.
Ezra wondered why Nelson just didn’t quit FourWinds.
“I was beyond scared,” Nelson answered. “It escalated and it kept getting worse and worse.”
Nelson is the fourth person to be sentenced in the FourWinds case.
Uresti, who was the company’s legal counsel and a 1 percent owner, and who recruited investors, was found guilty of 11 felonies in February and later sentenced to 12 years in prison. His conviction led him to give up his law license and resign from the Texas Senate in June.
Company consultant Gary Cain was sentenced to five years and eight months in prison. Both Uresti and Cain are appealing.
Bates was supposed to be sentenced Monday, but some late developments led the judge to reschedule for Sept. 11.
Bates pleaded guilty in January rather than stand trial with Uresti, the longtime San Antonio Democrat, and Cain. Nelson and two other FourWinds officials entered into plea agreements.
Laura Jacobs, FourWinds’ comptroller, was sentenced to a year and a day in a federal women’s prison camp last month. Shannon Smith, a FourWinds owner and the chief operating officer, is scheduled to be sentenced next Tuesday. .
Nelson testified during Uresti and Cain’s trial that Bates told him to add the numbers 187 in front of $98,896, the amount actually in FourWinds’ bank account, to make it appear that it had $18,798,896 in the bank. The statement was shown to investors and as “proof of funds” so FourWinds could buy sand.
Nelson said he initially resisted but ultimately gave in to Bates’ demand.
“He threatened to shoot me in the back of the head,” Nelson testified.
Nelson also admitted to doctoring documents that contained profit projections for FourWinds and its investors. One document showed a profit projection of $45,000, but in another document the next day, the profit projection was upped to $80,000. Nelson said he changed the documents on Bates’ orders.
Nelson was asked on the witness stand the reason for changing the numbers.
“To make it look like a better investment,” he said.
The documents containing the conflicting numbers were forwarded to Uresti, who never questioned them, according to Nelson.
Patrick Danner is a staff writer in the San Antonio and Bexar County area. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. — firstname.lastname@example.org — Twitter: @AlamoPD
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