A federal judge's ruling disqualifying a defense attorney from the fraud case against State Sen. Carlos Uresti was upheld by another judge Wednesday.
Mikal Watts was hired by Uresti to represent him on charges related to a Ponzi scheme. A federal indictment accuses Uresti and two others of taking money from people for their Four Winds Logistics company. It claimed to buy and sell sand used in hydraulic fracking, then use it make oil.
One of the alleged victims is Denise Cantu. It's her ties to both Uresti and Watts that lead to a judge upholding the ruling disqualifying Watts.
Uresti represented Cantu in a lawsuit that was filed after two of her children were killed in a car accident. Uresti had Watts's firm help with the lawsuit.
"It is undisputed that Uresti and Watts entered into a fee-sharing agreement for the matter," Judge David Alan Ezra wrote.
Once she received a settlement, the government alleges Uresti convinced Cantu to invest $925,000 -- most of her settlement -- in Four Winds.
"The court finds that reasonable persons would understand the similarity of the issues involved between Watts' legal assistance to Ms. Cantu in obtaining a settlement, and the alleged fraudulent use of that same settlement money by Uresti, Watts' current client in the present action and former co-counsel in the previous action, particularly where Ms. Cantu has not waived any conflict," Ezra wrote.