The first person to plead guilty in the criminal scheme that led to the downfall of ex-San Antonio lawmaker Carlos Uresti is scheduled to be sentenced this afternoon.
Eric Nelson, the former FourWinds Logistics ecommerce and marketing director who admitted to doctoring a bank record to make it appear than it had more money than it did, faces up to five years in federal prison and a $250,000 fine.
Nelson, though, is not expected to receive any prison time for pleading guilty to 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.
FourWinds was an 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.
Related: Ex-FourWinds CEO Stan Bates taken into custody; sentencing postponed
FourWinds CEO Stan Bates wasted investor money on personal expenses, expensive gifts, exotic car rentals and a wild lifestyle.
When oil prices collapsed the bottom dropped out of the sand market, sending FourWinds into a tailspin. The company entered bankruptcy in 2015 amid allegations that investors had been defrauded. Federal prosecutors later charged that the company was a Ponzi scheme.
Bates pleaded guilty in January rather than stand trial with Uresti, the longtime San Antonio Democrat, and company consultant Gary Cain. Nelson and two other FourWinds officials entered into plea agreements.
Uresti, who was the company’s legal counsel, a 1 percent owner and who recruited investors, was 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 to resign from the state Senate in June.
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 the matter for Sept. 11.
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 he initially resisted but ultimately gave in to Bates’ demand.
“He threatened to shoot me in the back of the head,” Nelson said.
Related: Ex-CEO: Uresti advised altering FourWinds bank statements
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.
Asked why he didn’t just walk away from FourWinds, Nelson replied he “felt trapped.”
Nelson was charged and pleaded guilty in November 2016.
“I think it takes a lot of guts to do what’s he done,” Robbie Ward, Nelson’s lawyer, said at the time of his guilty plea. “Most people don’t want to take responsibility for things nowadays.”
This article will be updated after Nelson’s sentencing.
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