Remember Democratic State Senator, the man charged with Carlos Uresti, charged with 11 federal counts of “securities fraud, wire fraud and acting as an unregistered securities broker”? There’s been an odd turn to his case:
A federal judge disqualified San Antonio attorney Mikal Watts from defending state Sen. Carlos Uresti in a criminal fraud case, saying the lawyer was too conflicted to represent the Democratic lawmaker.
U.S. Magistrate Judge Henry Bemporad on Monday granted a request from federal prosecutors to remove Watts, saying the lawyer had a conflict of interest because he previously represented a Harlingen woman identified as a victim in the case against Uresti. Bemporad said the conflict outweighed the senator’s Sixth Amendment right to choose his own legal counsel.
Snip:
The lawmaker had various roles with FourWinds, including serving as its lawyer and outside general counsel for a short time in 2014. He also helped recruit investors, including Denise Cantu of Harlingen, a one-time client whom he represented in a lawsuit over the deaths of her two children. The children were killed in 2010 after a rear tire on her Ford Explorer blew out.
Uresti referred Cantu’s civil case to Watts’ law firm in return for a cut of the legal fees if they prevailed. Watts’ law firm handled numerous defective tire cases. Uresti obtained a $200,000 loan from Watts against fees Uresti expected to receive from Cantu’s settlement, Blackwell said.
Cantu ultimately received a substantial out-of-court settlement, the bulk of which she invested with FourWinds at Uresti’s suggestion. She lost all but $100,000 of her $900,000 investment. Uresti received a $27,000 commission on her investment. Cantu is identified as “Victim 1” in the indictment.
Prosecutors allege Uresti had financial difficulties that drove him to to exploit and defraud Cantu, whom they described in a court filing as a “mentally and emotionally vulnerable” client.
A “quick settlement” was “financially advantageous” for the senator, prosecutors have alleged. Uresti also borrowed $25,000 from Cantu, which he later paid back.
How many trial lawyers borrow money from their clients? I can’t imagine that this is a normal arrangement. Then again, very few of the transactions between Uresti and Cantu described here seem “normal.”
At a June 30 hearing, Bemporad ruled that Watts had a conflict of interest because of Watts’ prior representation of Cantu. The judge said the criminal case against Uresti is “substantially related” to Cantu’s wrongful-death case.
Also note this interesting tidbit: “Uresti already has been billed several hundred thousand dollars for his legal defense by Watts but has not paid for those bills, Watts said.”