Federal Court Upholds 5-Year Prison Term for Texas Woman Convicted of Embezzling from Former Partner

January 30th, 2019 by Tad Nelson in White Collar, White Collar Crime

Not every white collar crime is the result of a grand conspiracy to commit fraud. Oftentimes, these cases simply involve a personal relationship gone bad. Maybe a couple had a bad breakup, and one party decides to appropriate money or property from the other. While the appropriator may think they are just “taking what they are owed,” as far as the law is concerned, it is fraud and embezzlement.

Defendant Ordered to Pay Over $2 Million in Restitution

For example, the U.S. Court of Appeals for the Fifth Circuit recently affirmed the conviction and 5-year prison sentence of a Texas woman who stole more than $2 million from her former partner. According to the evidence presented at trial, the defendant and the victim had known one another since high school. The victim went on to operate a successful oil field business, and at some point he asked the defendant to assist him with his accounting. The couple subsequently began a personal relationship and started living together, although they never married.

During this time period, the defendant was largely responsible for keeping the books for the victim’s business. The defendant held a power of attorney signed by the victim to facilitate her in this role. At one point, the defendant used this power of attorney to open several bank accounts where she was the only authorized signer and her personal post office box was listed as the address. Eventually, the victim ended up depositing over $2.7 million of business checks into these accounts. But according to prosecutors, the defendant transferred that money into her personal accounts or used the money to buy property not related to the victim’s business. Nor did the defendant “report any of those funds on her tax returns.”

After the defendant’s personal relationship with the victim ended, the victim finally learned about the shady bank accounts. This ultimately led to a grand jury indicting the defendant for mail fraud, wire fraud, money laundering, and tax evasion. At trial, the defense sought to introduce evidence suggesting the victim knew about the accounts the entire time–and that he was a physically abusive “misogynist and racist.” The judge refused to admit this evidence. The jury convicted the defendant on all charges. In addition to sentencing the defendant to 5 years in prison, she was ordered to pay the victim over $2 million in restitution.

The defendant’s appeal largely centered on the trial judge’s evidentiary rulings. The Fifth Circuit declined to order a new trial, however, finding the judge acted appropriately. Of particular note, the defendant argued she should have been allowed to present evidence that she was “informally married” to the victim, as that would help demonstrate her lack of intent to defraud him or the government. The trial court refused to allow this evidence as it was “not a legal theory” or recognized defense to the alleged crimes. The Fifth Circuit added that the defendant’s own testimony–that she was once engaged to but never married the victim–further “negated” the relevance of her belief in a so-called informal marriage.

Speak with a League City White Collar Crimes Lawyer Today

If you are facing charges such as wire fraud or failure to pay taxes, you need experienced legal counsel by your side. The Houston white collar criminal defense attorneys at the Law Offices of Tad Nelson & Associates can help. Call us today to schedule a free consultation so we can sit down and discuss your case.

 

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