WHAT IS FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS?
A person commits the offense of fraudulent transfer of a motor vehicle by transferring a vehicle he or she knows is subject to a security interest, lien, or lease without prior authorization from the owner, creditor, or lessor. A person may also be charged with fraudulent transfer of a motor vehicle by refusing to disclose the vehicle’s location upon the owner’s request.
WHAT IS THE LAW ON FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS?
Tex. Penal Code § 32.34. FRAUDULENT TRANSFER OF A MOTOR VEHICLE.
(b) A person commits an offense if the person acquires, accepts possession of, or exercises control over the motor vehicle of another under a written or oral agreement to arrange for the transfer of the vehicle to a third party and:
(1) knowing the vehicle is subject to a security interest, lease, or lien, the person transfers the vehicle to a third party without first obtaining written authorization from the vehicle’s secured creditor, lessor, or lienholder;
(2) intending to defraud or harm the vehicle’s owner, the person transfers the vehicle to a third party;
(3) intending to defraud or harm the vehicle’s owner, the person disposes of the vehicle in a manner other than by transfer to a third party; or
(4) the person does not disclose the location of the vehicle on the request of the vehicle’s owner, secured creditor, lessor, or lienholder.
(c) For the purposes of Subsection (b)(2), the actor is presumed to have intended to defraud or harm the motor vehicle’s owner if the actor does not take reasonable steps to determine whether or not the third party is financially able to pay for the vehicle.
(d) It is a defense to prosecution under Subsection (b)(1) that the entire indebtedness secured by or owed under the security interest, lease, or lien is paid or satisfied in full not later than the 30th day after the date that the transfer was made.
(e) It is not a defense to prosecution under Subsection (b)(1) that the motor vehicle’s owner has violated a contract creating a security interest, lease, or lien in the motor vehicle.
(f) An offense under Subsection (b)(1), (b)(2), or (b)(3) is:
(1) a state jail felony if the value of the motor vehicle is less than $30,000;
(2) a felony of the third degree if the value of the motor vehicle is $30,000 or more but less than $150,000;
(3) a felony of the second degree if the value of the motor vehicle is $150,000 or more but less than $300,000; or
(4) a felony of the first degree if the value of the motor vehicle is $300,000 or more.
(g) An offense under Subsection (b)(4) is a Class A misdemeanor.
WHAT IS THE PENALTY CLASS FOR FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS?
The penalty classification for fraudulent transfer of a motor vehicle depends on the vehicle’s value, and the person’s conduct. Fraudulent transfer of a motor vehicle is a:
- Class A misdemeanor, punishable by up to one year in jail:
- if the person does not disclose the location of the vehicle to the owner, secured creditor, lessor, or lienholder upon request;
- State jail felony, punishable by 180 days to two years in a state jail facility, if:
- the value of the motor vehicle is less than $30,000;
- Third degree felony, punishable by two to ten years in prison, if:
- the value of the motor vehicle is $30,000 or more but less than $150,000;
- Second degree felony, punishable by two to 20 years in prison, if:
- the value of the motor vehicle is $150,000 or more but less than $300,000;
- First degree felony, punishable by five to 99 years or life in prison, if:
- the value of the motor vehicle is $300,000 or more.
WHAT IS THE PUNISHMENT RANGE FOR FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS?
The punishment range for fraudulent transfer of a motor vehicle increases with the value of the motor vehicle, unless the person commits the offense by failing to disclose the vehicle’s location, as follows:
- Class A misdemeanor, if the person fails to disclose the vehicle’s location:
- up to one year in jail, maximum fine of $4,000;
- State jail felony, if the value is less than $30,000:
- 180 days to two years in a state jail facility, maximum fine of $10,000;
- Third degree felony, if the value is $30,000 or more but less than $150,000:
- Two to ten years in prison, maximum fine of $10,000;
- Second degree felony, if the value is $150,000 or more but less than $300,000:
- Two to 20 years in prison, maximum fine of $10,000;
- First degree felony, if the value is $300,000 or more:
- Five to 99 years or life in prison, maximum fine of $10,000.
WHAT ARE THE PENALTIES FOR FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS?
A person charged with fraudulent transfer of a motor vehicle may be eligible for probation after a conviction, or deferred adjudication without a conviction.
- What is the maximum length of probation for fraudulent transfer of a motor vehicle? If a person is convicted of a Class A misdemeanor, he or she may be placed on probation for up to two years. For state jail and third degree felony fraudulent transfer of motor vehicle convictions, the probation term may range from two to five years, and may not exceed ten years for second degree and first degree felonies.
- What is the maximum length of deferred adjudication for fraudulent transfer of a motor vehicle? To avoid a conviction, a person may plead guilty or nolo contendere (“no contest”) to a judge, and be placed on deferred adjudication. The period of deferred adjudication may not exceed two years for a Class A or Class B misdemeanor. The deferred adjudication term for a state jail felony is between two and five years, with the possibility of extending it up to ten years. The deferred adjudication term may not exceed ten years for first degree, second degree, and third degree felonies.
WHAT ARE THE DEFENSES TO FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS?
If the person accused of fraudulent transfer pays the entire debt secured or owed within 30 days after transferring the vehicle, the person may show he or she paid the debt as a defense to prosecution.
- What if the vehicle owner or lienholder violated the contract? The statute specifically provides that a violation of the contract by the owner or lienholder is “not a defense to prosecution under Subsection (b)(1).” Thus, intentionally transferring a vehicle subject to a lien or security interest without authorization is against the law, even if the lienholder or secured creditor violated the contract.
WHAT IS THE STATUTE OF LIMITATIONS FOR FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS?
The limitation period for fraudulent transfer of a motor vehicle categorized as a Class A misdemeanor is two years. For fraudulently transferring a motor vehicle of a felony amount, the limitation period is three years.
FRAUDULENT TRANSFER OF A MOTOR VEHICLE IN TEXAS
Fraudulent transfer of a motor vehicle is the deception of a lienholder or creditor in which the vehicle is transferred to a third party in an attempt to defraud the lienholder or creditor.
TEXAS FRAUDULENT TRANSFER OF A MOTOR VEHICLE COURT CASES
The case law regarding fraudulent transfer of a motor vehicle in Texas gives examples of how the statute applies.
In Cisneros v. State, the defendant’s father-in-law owned a tow truck company. The victim, John, paid the company to tow his car, and advised another body shop would soon retrieve it. The body shop did not pick up his car. After 26 days, the defendant submitted forms to the Texas DMV for a storage lien and title, asserting John had not paid the towing fee, and that the company had the car for over 30 days. John called a month later, and the defendant said the car was theirs. She then sold the car, and transferred title. She was convicted of fraudulently transferring John’s motor vehicle, and the appellate court affirmed. No. 03-17-00317-CR (Tex. App—Austin Nov. 28, 2018, pet. ref’d).
