Types of Fraud Charges Under Texas Law

By Peek & Toland on January 28, 2019

Title 7, Chapter 32 of the Texas Penal Code covers criminal fraud offenses. While there are many varieties of fraud, a fraud offense always involves some sort of deceit or dishonesty with intent of personal or financial gain. Fraud is not all that different than theft, except that it usually concerns money and often does not have any element of force, violence, or physical taking or properly that may be present in a theft offense. For this reason, fraud is often referred to as a white collar crime.

One common type of fraud under Texas law is healthcare fraud. In many cases, healthcare fraud involves the Medicaid or Medicare programs, but also may involve private insurance companies in some cases. Healthcare fraud might occur when medical practitioners overbill these programs to gain excess funds for their own gain, or when practitioners create patient identities to allow them to submit false claims for services.

Types of Fraud Charges Under Texas Law

Identity theft is another common type of fraud that can occur in many different ways. As technology has advanced, so has the ability of individuals to commit identity theft by electronic means. Identity theft occurs when individuals steal others personally identifying information, such as name, address, date of birth, and Social Security number, in order to apply for loans, credit cards, and other fraudulent financial documents that give them access to money. Unlawfully assuming another’s identity also may allow them to run up existing credit cards and obtain money from the person’s bank accounts without their permission. Identity theft often overlaps with credit card and bank fraud.

Embezzlement and misappropriation of assets are other types of fraud that primarily involve an individual who abuses the trust placed in his by an employer or client by taking funds for their own personal gain. These offenses encompass situations in which a cashier skims money from the cash register, when a clerk forges business records in order to pocket utility payments from customers, or a financial advisor wrongfully uses a client’s assets for his or her own financial benefit.

The criminal defense lawyers of Peek & Toland have handled the legal defense of countless individuals who are facing criminal charges, including fraud offenses. We are here to protect your rights and advocate on your behalf in order to get the best outcome possible in your case. Call our office today at (512) 474-4445 to set up an appointment with our criminal defense attorneys today.

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How Texas Businesses Can Unknowingly Break the Law

By Peek & Toland on February 24, 2017

Businesses can easily break the law without realizing it. A failure to follow the rules can leave them facing criminal sanctions and crippling fines. Here are five ways Texas businesses can unknowingly break the law.

1 Improperly Using Investor Funds

If you are a struggling start-up business and you suddenly receive a sizeable sum of money from an investor, there may be a temptation to spend it on yourself. Even if you only use a small amount you may land up in trouble.

Investment funds are held in trust. As a business owner, you have a fiduciary duty to investors to be ethical and report how the money is being used. You may think buying a new car helps your image as a business. It could leave you facing fraud charges.

How Texas businesses can fall foul of the law

Texas businesses can easily break the law

2 Misclassifying Employees as Contractors

You can fall foul of a wide range of employment laws as a small business owner. It may be tempting for Texas businesses to designate workers as independent contractors. You can cut costs by not paying them overtime or other benefits and increase your profit margins.

In reality, small business owners do not always have the freedom to choose whether a worker is an employee or a contractor. There are certain tests set out by the federal government. This IRS sets out the characteristics of a worker and an employee here.

If you misclassify a worker you can face penalties, back wages and back taxes that can hit your bottom line.

If you are unsure about the status of worker, Texas businesses can request an IRS determination by filling out Form SS-8.

3 Accidentally Hiring Undocumented Immigrants

It’s very easy to fall foul of immigration laws, which is why we recommend you hire an experienced Travis County, Texas immigration lawyer.

When you hire a worker you have to fill in form I-9 by law. This documents the eligibility of the worker for employment in the United States. Although it’s a single piece of paper there are many common mistakes that can be made while completing and maintaining I-9 records. Failure to do the paperwork correctly can lead you to employ an undocumented immigrant and to face heavy fines from U.S. Citizenship and Immigration Services (USCIS).

Texas Businesses Can Improperly Bill for Services

4 Improperly Billing for Services Like Medicare

Healthcare related businesses face very strict regulations about how they can charge for expenses related to Medicare. It can be easy to break the rules without realizing it. Health care fraud has been the subject of crackdowns by the federal authorities in recent years. We have noted some major health care fraud prosecutions in Texas.

In 2016, federal investigation uncovered a $900 million health care fraud in Texas and other U.S. states.

5 Making False Claims when Bidding for Government Contracts

It’s not a crime to promote your business, but you should not make false claims. This is particularly the case if you are submitting an RFP (request for proposal) for a government contact. False claims can include your experience, previous projects and the time you will take to do the work,

You should be as honest as possible when dealing with the government to avoid potential sanctions.

At Peek & Toland we work with many business owners to make sure they are complying with the complex legal requirements of running a company. Call us for a consultation at (512) 474-4445.

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Texas Attorney General’s Criminal Fraud Trial Moves Closer

By Peek & Toland on February 21, 2017

Texas Attorney General Ken Paxton has been dismissive of his looming criminal fraud trial but attempts to get the charges dismissed have been unsuccessful to date.

The Texas Tribune reported in November that attorneys acting for Paxton are no longer seeking to have the state securities fraud charge against him dismissed.

A deadline passed for attorneys to seek to persuade the state’s highest court to look into the case.

Texas has a long history of public officials being charged with white collar crimes and Paxton is just the latest.

Attorney General Ken Paxton faces a criminal fraud trial

Paxton’s attorneys say they are confident in the strength of the attorney general’s case.

Paxton is accused of convincing investors to purchase stock in a North Texas technology firm without disclosing that he was being paid by the firm. He faces criminal charges in Texas based on the allegations. The charges stem from a time before he was the state’s attorney general.

The felony charges date back to Paxton’s private business deals in 2011 and 2012.

Although the federal case was dismissed last September, the U.S. Securities and Exchange Commission rebooted the case by filing amended allegations.

Attorney General Faces Criminal Fraud Trial in the Spring

Texas Court of Criminal Appeals upheld Paxton’s criminal indictments. A trial is likely in Collin County in the spring. The burden of proof in the criminal proceeding is far greater than that of the SEC case, according to Paxton’s lawyers.

White collar charges such as fraud are notoriously complicated. We have seen a raft of cases like this in which public officials have faced expensive and lengthy court proceedings, only for the cases against them to collapse.

Former Texas governor Rick Perry was accused of abuse of power charges. The charges against him were dismissed by Texas’ highest court in 2016, reported the New York Times.

However, Dan Morales, a former Texas attorney general, was jailed for four years for mail fraud. He was accused in 2003 of mailing money in unearned legal fees to a friend. He subsequently admitted charges of lying on his tax return and mail fraud.

If you have been charged with a white collar crime in Texas, you may be facing a very onerous sentence. Call us at (512) 474-4445.

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Texas Lawyer Acquitted on Fraud Indictments Over BP Damage Claims

By Peek & Toland on September 15, 2016

A high profile white collar crime trial of a Texas lawyer and six co-defendants who faced fraud indictments over the BP Oil spill six years ago ended in an acquittal.

In August, a jury acquitted Mikal Watts, a San Antonio lawyer, two associates in his law firm and two BP claims workers. They faced 66 charges of conspiring to commit fraud, identity theft, mail fraud, and aggravated identity theft.

They were accused of making false compensation claims in the wake of the BP oil spill six years ago.

An earlier report in Insurance Journal said federal prosecutors reduced the number of indictments against Mikal Watts, a lawyer from San Antonio, and six co-defendants from 95 to 73.

Lawyer faces fraud indictments over BP scandal

A BP gas station

They allegedly faked 40,000 damage claims in the wake of the BP oil spill in 2010.

The report stated Jury selection for the case began on July 18 in Gulfport, Miss. The Insurance Journal report said U.S. District Judge Louis Guirola Jr. stated the charges dropped from the docket seemed to be the same alleged offenses as the 22 counts of aggravated identity theft on the indictment.

The seven defendants in the case faced 73 charges claiming they conspired to file false claims over the 2010 BP spill and stole the identities of victims who did not agree to be represented by the law firm. Federal prosecutors accused Watts and his associates of fraudulently submitting to the petroleum company the names of 40,000 people with claims that totaled more than $2 billion.

However, Watts and his associates denied the charges. The attorney opted to represent himself at trial over fraud indictments. Watts forged a reputation for earning millions of dollars in suing big corporations over injuries to his clients.

Additionally, Watts, two non-attorney members of his law firm and four contract field workers were accused of inventing the names of the victims or using the names of real people without their permission. Prosecutors claimed the move would allow Watts to gain a place on the BP litigation steering committee and to increase the legal fees he might collect from the case.

What Was The BP Disaster?

The BP oil spill of April 20, 2010, has been described as the worst environmental disaster in U.S. history. It also led to a loss of life.

The disaster followed the failure of a final cement seal on an oil well in the Gulf of Mexico. The explosion claimed the lives of 11 oil rig workers.

The federal government estimates as many as 4.2 million barrels of oil gushed into the Gulf, reported CNN. For 87 days, oil and methane leaked from the wellhead below the surface of the ocean. The consequences for wildlife and the beaches were devastating.

The subsequent litigation after the Deepwater Horizon spill was extensive and ranged from wrongful death lawsuits to property damage and compensation for health issues. BP set up a $20 billion fund for losses. Some of the lawsuit claims are explained here by Nolo.

White collar crimes by their very nature are complicated and involve large amounts of evidence gathering. See our white collar resources here.

If you are facing fraud indictments, identity theft or another white collar charges, you could end up in jail for a long period. Call Peek & Toland for expert legal representation at (512) 474-4445.

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Five of the Biggest White Collar Frauds in History

By Peek & Toland on June 13, 2016

White collar crimes may not involve violence, but that doesn’t mean the investigators don’t take them seriously or hit the offenders with heavy sentences. Some of the biggest white collar frauds in U.S. history have involved millions and even billions of dollars and cost people their livelihoods and their financial futures. In this blog, we look at five of the largest scale fraud crimes in U.S. history.

If you are accused of a white collar crime, you may have been motivated by financial hardship or family issues. You may have been wrongly drawn into a federal investigation and should contact our experienced Texas criminal defense attorneys as soon as possible. These are some of the biggest white collar crimes in U.S. history.

top white collar criminals

The biggest white collar crimes (clockwise) Enron, Bernard Ebbers, Bernie Madoff, Allen Stanford and Jack Abramoff

1 Bernie Madoff

Bernie Madoff is a fixture in any list of the most audacious scams in U.S. history. Madoff was a Wall Street stockbroker who was accused of perpetrating the most extensive financial fraud in American history. His so-called “Ponzi Scheme” was set up to pay investors with other investors’ money. Those investors later lost billions of dollars.

Madoff made the word “Ponzi” a household name when he was arrested and charged with securities fraud. Although he had been suspected of fraud for 10 years before he came to the attention of the authorities, he wasn’t arrested until 2008 when his conduct was reported by one of his sons. In 2009, he pled guilty to 11 federal crimes including money laundering, securities fraud and theft from an employee benefit plan. He was sentenced to 150 years in prison and ordered to pay $170 billion in restitution.

2 Jack Abramoff

Jack Abramoff was a notorious lobbyist who illustrated the seedier side of Washington D.C. politics. A report on CBS revealed how he manipulated politicians and their staffers by giving them generous gifts as well as job offers that bought influence. His scandals implicated politicians and even the mob. They also landed him in prison for 70 months for using a fake wire transfer to qualify for a $60 million loan to buy a casino.

3 Enron

The scandal at the Texas-based energy giant became a byword for corporate white collar crime in the early 2000s. Enron grew rapidly to become America’s seventh largest company, employing more than 21,000 staff.

The firm’s rapid success was later revealed to be based on an elaborate scam. Enron set up about a dozen “partnerships” with companies it created, and then used its partnerships to conceal huge debts and heavy losses on its trading businesses.

The firm’s numerous crimes included manipulating Texas’s power market, bribing foreign governments to win contracts overseas and manipulating the energy market in California. Thousands of employees lost their pensions and livelihoods when the company collapsed.

Former chief executive Jeffrey Skilling was sentenced to 24 years in prison for his part in the fraud, but his sentence was later cut to 14 years. Former chairman Kenneth Lay was convicted of conspiracy and fraud and was sentenced to six years in jail. He died before he finished his sentence. Other executives were convicted of white collar crimes.

4 Allen Stanford

Texas-based businessman Allen Stanford was once hailed as a billionaire success story. In 2012, he was convicted by a Houston federal jury on conspiracy, fraud, and obstruction charges.

For more than 20 years he ran a $7.2 billion Ponzi scheme around the sale of high-yielding certificates of deposit through his Antigua-based Stanford International Bank, according to prosecutors. He was accused of using investor funds to make risky investments and finance his lavish lifestyle. He recently lost an appeal to overturn his conviction and 110-year prison sentence.

5 Bernard Ebbers

Known as the “telecom cowboy,” Bernard Ebbers embarked on an aggressive spate of takeovers at the helm of WorldCom, until he failed to take over Sprint.  As the tech bubble burst, WorldCom was revealed to be a sham that was falsely inflating revenues and fraudulently claiming normal expenses as capital expenditures. WorldCom artificially inflated assets to the tune of $11 billion. In 2005, the “telecom cowboy” was convicted of fraud and sentenced to 25 years in jail.

If you have been convicted of a white collar crime, we cannot guarantee we’ll win your case. However, we will bring our experience of these serious crimes to bear in your defense and work hard to ensure that your rights are protected, and that all evidence is correctly presented to the court. Call our office at (512) 474-4445.

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