Under Texas law, a startup founder who raises money by giving investors pitch materials with false revenue figures can face serious felony charges, including making a false statement to obtain property and theft. A Tampa technology CEO who once appeared on a Forbes 30 Under 30 list recently agreed to plead guilty to federal wire fraud after prosecutors said his fundraising decks claimed millions in revenue the company did not have. That case is a federal matter, but the same conduct in Frisco or the Dallas-Fort Worth area would run directly into several Texas statutes, and one of the deceived investors was reportedly a Texas venture-capital firm.
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 It a Crime in Texas to Give Investors a Pitch Deck With False Revenue Numbers?
Yes. When a person makes a materially false written statement about their financial condition to obtain money or credit, Texas law treats it as an offense under Penal Code Section 32.32, false statement to obtain property or credit. A fundraising pitch deck that overstates a company’s revenue to persuade investors to hand over money fits squarely within that statute, because the founder uses a false written representation to acquire property, here investor funds. The offense is graded by the value of the property or credit obtained, so a claim that draws in millions of dollars can be charged as a high-level felony. The key questions are whether the statement was materially false and whether the person knew it was false when they made it.
Can the Same Conduct Also Be Charged as Theft?
Yes. Obtaining money through deception is a form of theft under Penal Code Section 31.03, which makes it an offense to unlawfully appropriate property with intent to deprive the owner of it, including when consent is induced by deception. When a founder collects investment funds based on fabricated financial results, the state can allege the investors’ consent was not effective because it was obtained by deception. Because these schemes usually involve multiple investors and payments, Texas allows the separate amounts to be aggregated into one charge under Section 31.09, which can raise the total value into the first-degree-felony range and increase the potential punishment.
How Does Texas Securities Law Apply to Investor Fraud?
Selling an investment in a company can involve the offer or sale of a security, and Texas has its own securities-fraud statute in the Texas Securities Act, Government Code Section 4008.052. That provision makes it an offense to knowingly make an untrue statement of a material fact, or omit a material fact, in connection with the offer or sale of a security. Overstating revenue in a deck used to raise capital is the kind of material misstatement the statute addresses. Securities-fraud offenses in Texas can be charged as felonies, with the level tied to the amount involved, and they can be brought in addition to theft and false-statement charges arising from the same conduct.
How Serious Are These Charges in Frisco and Collin County Courts?
They can be first-degree felonies carrying substantial prison exposure. A theft, false-statement, or securities-fraud offense involving hundreds of thousands or millions of dollars can be punishable by up to life or a term of years in prison and a fine of up to $10,000, along with court-ordered restitution to the investors. Prosecutors in Collin County and across the Dallas-Fort Worth region treat investor-fraud allegations as serious white-collar matters, and cases are often built on emails, pitch materials, bank records, and the company’s actual accounting. Restitution to the people who lost money is frequently a central issue at sentencing.
What Defenses Might Apply in a Texas Investor-Fraud Case?
Several defenses can matter. Because false-statement, theft-by-deception, and securities-fraud offenses all require proof of knowledge and intent, the defense may argue that the founder genuinely believed the figures were accurate, that projections and forward-looking statements were not false statements of present fact, or that the alleged misstatements were not material to the investors’ decisions. The defense may also challenge whether the losses were caused by the statements or by ordinary business failure, and whether the loss amount and aggregation were properly calculated. Each of these turns on the specific documents, communications, and accounting records in the 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 matters involving theft by deception, false statements to obtain property or credit, securities fraud, and related white-collar allegations. Our attorneys review the pitch materials, financial records, and investor communications early, identify where the state’s knowledge, materiality, and loss theories are weakest, and work to protect our clients’ rights at every stage. If you or someone you know is under investigation or facing charges involving fundraising, investor money, or allegedly misleading financial statements, contact L & L Law Group for a confidential consultation.
Are optimistic projections the same as false statements? Not necessarily. Genuine forward-looking projections differ from false statements of present fact. Whether a revenue figure was a projection or a knowing misrepresentation of current results is often the central dispute.
Can I be charged if the company simply failed? Business failure alone is not a crime. Charges require proof that the person knowingly made material misrepresentations or appropriated funds through deception, not merely that the venture lost money.
Why are there several charges for one fundraising round? A single course of conduct can violate more than one statute at once, such as theft, false statement to obtain property, and securities fraud, so prosecutors often bring stacked counts.