Misapplication of Fiduciary Property in Texas

One of the more common types of white collar crime prosecuted in Texas is “misapplication of fiduciary property.” In its simplest terms, if you agree to take someone else’s money and use it for a particular purpose, you can be charged with a crime if you act “contrary” to the agreement. For example, if you agree to serve as trustee of a trust, but you spend the trust’s funds on yourself instead of the beneficiaries named in the trust, that would be a misapplication of fiduciary property.

Court of Criminal Appeals Upholds $10,000 Fine Against Insurance Agent Who Misused Client Funds

Misapplication of fiduciary property can land you in some serious legal trouble. The degree of the offense depends on the value of the “misapplied” properly. Under current Texas law, if you misapply property worth $300,000 or more, you can be charged with a first-degree felony. This means if convicted, you are facing up to 99 years in prison and a $10,000 fine.

If you think such sentences are not real, consider this recent decision by the Texas Court of Criminal Appeals. In this case, the defendant operated an insurance agency. He accepted $350,000 in funds from two of his customers, who expected he would use the money to procure two performance bonds. Instead, the defendant failed to obtain the bonds and then pocketed the $350,000 for himself.

Prosecutors subsequently charged the defendant with a first-degree felony. A jury found the defendant guilty. The defendant then opted to let the jury, rather than the judge, determine his sentence. The jury assessed the defendant’s punishment at 10 years in prison and a $10,000 fine, but it also recommended suspending the prison term.

After reviewing the verdict, however, the judge orally sentenced the defendant to the 10-year suspended prison term. The judge did not mention the $10,000 fine, which the jury did not elect to suspend. Instead, the judge simply told the defendant he was on 10 years community supervision (probation).

Since the judge failed to mention $10,000 fine, there was a dispute as to whether or not the defendant was actually required to pay it. Before the Court of Criminal Appeals, the defendant maintained that under Texas law, the “oral pronouncement [of a sentence] has been held to control over the written judgment.” The prosecution argued the trial court is “generally powerless to change lawful jury verdicts” and is bound by its sentencing recommendations.

The Court of Criminal Appeals agreed with the prosecution. It held the sentence was pronounced orally–by the jury–in the defendant’s presence. The judge’s “failure to separately orally pronounce the $10,000 fine” made no difference to the lawful nature of the sentence. Accepting the defendant’s reasoning, the appeals court said, would effectively allow the judge to overrule the jury’s sentence.

Speak with a League City White Collar Crimes Defense Lawyer Today

As you can see, white collar crimes like misapplication of fiduciary property are not minor affairs. They are serious felonies with potentially life-changing consequences. That is why you need to work with an experienced Galveston white collar criminal defense attorney if you are charged with fraud or similar offenses. Contact the Law Offices of Tad Nelson & Associates in Houston if you need to speak with an attorney right away at (281) 280-0100 .