Under Texas law, a real estate investor who forges signatures and notary stamps to sell houses already pledged to lenders can face serious felony charges, including forgery, hindering secured creditors, and aggregated theft. A 67-year-old former president of a Dallas house-flipping company that operated under the well-known "We Buy Ugly Houses" franchise brand was sentenced this week to more than 15 years in federal prison after pleading guilty to wire fraud in a scheme that cost roughly 80 investors about $40 million. That was a federal case, but the same conduct in Frisco, Collin County, or anywhere in the Dallas-Fort Worth area would run directly into several Texas statutes.
The following is general legal commentary from L & L Law Group, PLLC on how Texas law treats these issues in Collin County and across the Dallas-Fort Worth area. It is not legal advice about any specific case, and everyone is presumed innocent unless and until proven guilty.
Is Forging a Signature or Notary Stamp on a Deed a Crime in Texas?
Yes. Under Texas law, forging a signature or notary acknowledgment on a deed or other real estate document is forgery under Penal Code Section 32.21. The statute makes it an offense to make, alter, or pass a writing with intent to defraud or harm another so that it appears to be the act of someone who did not authorize it. Deeds, releases, and other instruments that affect title to property are treated seriously, and forgery of such a document can be charged as a state jail felony or higher depending on the type of writing and the value involved. According to reporting on the Dallas case, the defendant admitted forging signatures and notary stamps so he could sell properties without telling investors or paying off their notes.
What Is Hindering Secured Creditors Under Texas Law?
Texas makes it a crime to sell or dispose of property that secures a debt in order to defeat the lender’s interest. Under Penal Code Section 32.33, a person who has signed a security agreement commits an offense if they sell, transfer, or otherwise dispose of the secured property with intent to hinder enforcement of that interest, without the secured party’s consent. When an investor lends money on the promise that a specific house secures the loan, selling that house without paying off the note can fall squarely within this statute. The punishment is tied to the value of the secured property, so a pattern of sales involving many homes can reach the felony levels reserved for large losses.
Can Borrowing Against the Same House Multiple Times Be Charged as Theft?
It can. When money is obtained through deception, such as promising lenders a secured interest in a property that is already encumbered far beyond its value, Texas prosecutors may charge theft under Penal Code Section 31.03 because the lender’s consent was induced by deception. Reporting indicates that, beginning in 2018, the Dallas operator took out multiple loans on individual properties, sometimes gave investors deeds he never recorded, and used new investor money to pay personal expenses and interest owed to earlier investors. Under Section 31.09, amounts taken in one continuing scheme can be aggregated, which in a case with tens of millions of dollars in losses would place the charge in the first-degree felony range.
How Serious Are These Charges in Frisco and Collin County Courts?
They are among the most serious property crimes a Texas court handles. A first-degree felony theft charge carries a range of 5 to 99 years or life in prison and a fine of up to $10,000, and forgery and hindering-secured-creditor counts can be stacked alongside it. Courts in Collin County and across the Dallas-Fort Worth area will also focus heavily on restitution to investors, and many victims pursue civil suits over their losses. Because real estate investment schemes often involve dozens of lenders and properties, these cases tend to be document-heavy, relying on deed records, loan agreements, bank statements, and notary logs.
What Defenses Might Apply in a Texas Real Estate Investment Fraud Case?
The key defense questions usually involve intent and documentation. Forgery, theft by deception, and hindering secured creditors all require proof that the person acted with intent to defraud, deprive, or hinder, so the defense may argue that losses resulted from a failed business or a downturn in the housing market rather than a criminal plan. Other issues can include whether a particular investor actually held a valid, perfected security interest, whether a signature was authorized, how the loss amount was calculated, and whether aggregation across many transactions was proper. Early review of title records and the loan paperwork often shapes the entire case.
How L&L Law Group Can Help
L & L Law Group, PLLC defends clients across Frisco, Collin County, and the Dallas-Fort Worth area in cases involving forgery, hindering secured creditors, theft, and other white-collar and real estate fraud allegations. Our attorneys examine the deed records, loan documents, and financial trails early, identify where the state’s intent and loss theories are weakest, and work to protect our clients’ rights and reputations at every stage. If you or someone you know is under investigation or facing charges connected to real estate investments, property loans, or disputed documents, contact L & L Law Group for a confidential consultation.
Is a failed real estate investment automatically a crime? No. A business that loses money is not a crime by itself. Criminal charges generally require proof of intent to defraud, such as forged documents or knowingly false promises about the security for a loan.
What if the deed was never recorded? An unrecorded deed can affect whether an investor holds an enforceable interest in the property, which may matter to charges like hindering secured creditors. It can also be evidence the state points to when alleging deception.
Will I have to pay restitution even if I am not convicted of every count? Restitution is typically tied to the offenses of conviction or to the terms of a plea agreement, so the scope of any plea can significantly affect the amount owed.