Charles McAllister, the majority owner of an Austin, Texas vault was recently charged with fraud and misuse of money that customers appropriated to him to buy gold, silver, and platinum on their behalf.
In July 2015, hundreds of the investors learned that the bullion they thought they’d purchased had disappeared from two vaults in Austin. It is alleged that McAllister used the money for himself and his business — a type of fraud known as Misapplication of Fiduciary Property.
Fraud is a very serious offense in Texas, and is often prosecuted at the felony level. What exactly is it, though? What other acts are considered fraud under Texas law?
The Many Different Types of Fraud in Texas
Texas law is very specific about fraud, naming 22 separate ways that someone can commit the act. These are typically misdemeanors, state jail felonies, or third-degree felonies.
Texas law specifically covers the following types of fraud:
- Forgery: The alteration, manufacture, execution, or authentication of any writing such that it purports to be the act of another who did not authorize that act, to have been executed at a time or place or in a numbered sequence other than was in fact the case, or to be a copy of an original when there was no such original.
- Criminal simulation: Simulation is the act of simulating or assuming an appearance that is feigned or otherwise not true. Criminal simulation is a feigned or fictitious transaction to commit fraud.
- Trademark Counterfeiting: Deliberate or unauthorized use of a counterfeit trademark. It is often used to create false merchandise. For example, false designer purses.
- Stealing or Receiving Stolen Check or Similar Sight Order: Theft of another’s unsigned check, or the reception of a stolen check with the intention to use it, sell it, or transfer it to a person other than its owner.
- Credit Card or Debit Card Abuse: Knowing use of a false, expired, or cancelled credit card, or the use of a credit card other than one’s own. This also covers the purchase and sale of stolen or fictitious credit cards.
- False Statement to Obtain Property or Credit: Intentionally or knowingly making false or misleading written statements to obtain property or credit for oneself or another, such as lying on a credit card application.
- Hindering Secured Creditors: If you have a signed security agreement creating a security interest in collateral, for example a house, you can be charged with hindering a secured creditor if you destroy, remove, conceal, or otherwise harm or reduce the value of the property for the purpose of hindering enforcement of the security interest.
- Fraudulent Transfer of a Motor Vehicle: Transferring a motor vehicle to another knowing that the vehicle is subject to a security interest, with the intent to defraud the vehicle’s owner, or disposing of a motor vehicle with the intent to defraud its owner.
- Credit Card Transaction Record Laundering: This typically occurs when an authorized vendor presents a creditor with a credit card transaction that does not occur, or if a person causes an authorized vendor to present a creditor with a sale that was not actually made by the vendor.
- Issuance of Bad Check: Deliberate issuance of a check knowing that the issuer does not have sufficient funds in the bank for the payment of the check as well as other checks outstanding at the time of issuance. This could also lead to theft by check charges.
- Deceptive Business Practices: Engaging in business practices that are deliberately deceptive or falsified, for example misrepresenting a contestant’s chance of winning a contest, or selling an adulterated or mislabeled item. This is distinct from theft crimes that consist of taking money for services never performed.
- Commercial Bribery: A form of bribery that involves corrupt dealing with potential buyers to secure an advantage over competitors. For example, bribing a committee in charge of contractor selection.
- Rigging Publicly Exhibited Contest: Interfering with a public contest (e.g. a horse race or football game) in a way that could affect its outcome. This could include bribing officials, making threats, or tampering with something that could affect the contest’s outcome. It is generally done for the purpose of winning a bet.
- Illegal Recruitment of an Athlete: Offering an athlete prohibited incentives to attend a particular school.
- Misapplication of Fiduciary Property or Property of Financial Institution: Misappropriating funds or property entrusted to oneself. This typically involves using trust property for one’s own benefits or treating an estate or other property as one’s own.
- Securing Execution of Document by Deception: Deceiving a person into signing a document that the person would otherwise not have signed if they had not been deceived.
- Fraudulent Destruction, Removal, or Concealment of Writing: Destruction, concealment, or other impairment of certain documents such as product codes, labels, price tags, symbols of value, or trademarks for the purpose of deception.
- Simulating Legal Process: Issuing or delivering a document that in form and substance falsely simulates civil or criminal legal processes with the purpose to induce payment of a claim or cause another to submit to the putative authority of the document.
- Refusal to Execute Release of Fraudulent Lien or Claim: Asserting a fraudulent lien or claim on property and refusing to release the claim to a debtor or property owner is considered fraud.
- Deceptive Preparation and Marketing of Academic Product: The sale, advertisement, or offering of an academic product to someone who will use it to satisfy an academic requirement.
- Fraudulent Use or Possession of Identifying Information: The theft, possession or use of a false or stolen identity, otherwise known as identity theft.
- Fraudulent, Substandard, or Fictitious Degree: Issuing or claiming to have an academic degree that is fictitious or does not adhere to academic standards.
Battling Texas Fraud Charges
As you can see, there are all kinds of ways that you can technically commit fraud – many of which you may not have even realized were illegal. If you are surprised to find yourself facing fraud charges, reach out to an experienced Texas fraud defense attorney to protect your rights and maximize your chance of a favorable outcome.
About the Author:
Brandon Fulgham has an in-depth understanding of both Texas law and Texans themselves. Before practicing law here, he received his undergraduate degree from TCU, and his law degree from South Texas College of Law in Houston. After graduation, he worked in District Attorneys’ offices as a prosecutor, building cases designed to put people behind bars. Now, he uses that knowledge to protect the rights of people in and around Fort Worth, making sure they receive the strongest possible defense when they find themselves on the wrong side of the law. He has been recognized for his work by The National Trial Lawyers, Fort Worth Magazine, and others.