For the second time, a federal judge determined Senator Carlos Uresti’s lawyer, Mikal Watts, would be unable to represent him against federal fraud charges for his involvement in a Ponzi scheme, because Watts himself may have played a key role in Uresti’s alleged crime.
Senior U.S. District Judge David Alan Ezra upheld U.S. Magistrate Judge Henry Bemporad’s original ruling, which Watts unsuccessfully tried to appeal. With Watts out out of the picture, Uresti will be required to use a public defender.
In July, Bemporad ruled Watts was unfit to serve as Uresti’s lawyer because Watts had previously defended Denise Cantu (per Uresti’s referral at the time), who is one of the plaintiffs suing Uresti.
Cantu was involved in a deadly car wreck in 2010, when an exploding car tire caused an accident that killed her 13-year-old daughter, 4-year-old son and two friends. She won her criminal case against Michelin and Walmart, and Uresti convinced her to invest $900,000 of her settlement money into FourWinds, a San Antonio oil-field services company that eventually went bankrupt in 2015. Uresti received $27,000 in commission, and Cantu lost almost 90 percent of her investment.
“It is undisputed that Uresti and Watts entered into a fee-sharing agreement for the matter,” Ezra said in his decision, referring to Uresti and Watts' prior involvement with Cantu.
Bemporad had originally determined the “issue of divided loyalty is too great,” since Watts would likely find himself defending one client against a former client. He ultimately decided the conflict of interest overruled Uresti’s right to pick his own counsel. In his ruling, Bemporad called the decision “one of the hardest decisions a judge has ever had to make.”
Uresti is facing two separate indictments: One charges him with multiple counts of wire fraud, money laundering and securities fraud for his involvement in FourWinds, and the second accuses Uresti of helping rig a private prison contract at a West Texas detention center.
As for Watts, he is no stranger to fraud charges, having represented himself in a federal case charging him with fabricating a client list in order to win a $2 billion class-action lawsuit against BP. He was acquitted in 2016.