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The fraud trial of San Antonio entrepreneur Brian Alfaro ended Tuesday after his lawyers chose not to mount a defense against investors’ claims that they were defrauded.

Alfaro attorney Patrick Schurr said after court Tuesday that it was a “tactical decision” not to call any witnesses to testify on behalf of Alfaro, his companies and other defendants. Schurr declined to elaborate on the strategy.

A group of 28 investors sued Alfaro for $44 million in damages, saying he operated a Ponzi scheme and used their money to fund a lavish lifestyle that included expensive homes and pricey automobiles. Alfaro has disputed the allegations. The damages are triple the amount the group collectively invested and lost in Alfaro’s Primera Energy, an oil and gas company.

The case will be decided by U.S. Bankruptcy Judge Craig Gargotta instead of a jury, and it may take weeks before he issues a verdict. The judge has given both sides the opportunity to present written closing arguments, which probably won’t be submitted until late May or June.

The investors originally sued Alfaro and his companies in Bexar County district court, but the case was transferred to bankruptcy court in San Antonio after Primera filed for Chapter 11 in June 2015.

After the investors’ lawyers rested their case Tuesday, the civil trial’s sixth day, Alfaro lawyer James Pikl asked the judge to issue a judgment for Alfaro, Primera’s founder and former president, and the other defendants.

Pikl said the investors’ lawsuit “has been frivolous from the beginning.”

The lawsuit was “brought in bad faith to harass Mr. Alfaro and for no other reason,” Pikl said. “It’s time to end this travesty before more time and resources are wasted.”

Among other arguments, he said the evidence presented during the trial shows the money paid by the investors to Primera became Primera’s money.

“All of the arguments about the investor money being used by people to buy cars and things like that is false,” Pikl said. “In fact, Mr. Alfaro himself testified, without contradiction, that he never received a dime from any of the investors. Mr. Alfaro, instead, was paid by Primera with Primera’s money.”

The investors got what they paid Primera for — working interests in oil and gas wells, Pikl said.

Pikl said if there were any overpayments to Alfaro — emphasizing that he wasn’t saying there were — those legal claims would be held by Primera and not the investors.

Lawrence Morales II, a lawyer for the investors, disputed the notion that Alfaro — the individual — can be separated from Alfaro as president of Primera.

“Every day nearly, he’s draining money out of this company knowing that it’s incurring millions and millions of dollars of obligations,” Morales said. “Yet he seems not to take any responsibility for it whatsoever.”

Alfaro took $5.5 million in compensation from 2013 to through 2014 and at least 90 percent of it came from investors, Morales said. He added that many of the plaintiffs suing Alfaro are 75 or older.

“Older people, unfortunately … are preyed on by people who want to take advantage of them,” Morales said. “I don’t think it’s any coincidence that Mr. Alfaro’s client base is largely elderly.”

Gargotta denied Pikl’s motion. He then asked Alfaro’s lawyers if they were ready to put on their case.

“The defendants rest, your honor,” Schurr replied.

pdanner@express-news.net

Twitter: @AlamoPD

 

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