Fraud under the Texas Penal Code is not one offense but a family of them, spread across several chapters and tied together by a common idea: using deception to take or risk another person’s money or property. Depending on the dollar value involved, a single fraud charge in Texas can range from a fine-only Class C misdemeanor to a first-degree felony carrying five years to life in prison.1Attorney General. Penal Code Offenses by Punishment Range Prosecutors can also stack charges when a scheme touches more than one statute.
How Penalties Scale With the Dollar Amount
Most fraud offenses in the Penal Code follow the same value-based ladder. The dollar threshold sets the offense classification, and the classification sets the range of punishment a court can impose:1Attorney General. Penal Code Offenses by Punishment Range
- Under $100 — Class C misdemeanor: fine up to $500, no jail time.
- $100 to $749 — Class B misdemeanor: up to 180 days in county jail, fine up to $2,000.
- $750 to $2,499 — Class A misdemeanor: up to one year in county jail, fine up to $4,000.
- $2,500 to $29,999 — State jail felony: 180 days to two years in state jail, fine up to $10,000.
- $30,000 to $149,999 — Third-degree felony: two to ten years in prison, fine up to $10,000.
- $150,000 to $299,999 — Second-degree felony: two to 20 years in prison, fine up to $10,000.
- $300,000 or more — First-degree felony: five to 99 years or life in prison, fine up to $10,000.
Two features of the ladder matter in practice. The $10,000 fine cap applies to every felony level, so the financial penalty stays flat even as prison exposure climbs sharply. And in several fraud statutes an elderly-victim enhancement bumps each tier up one level. A $20,000 fraud that would ordinarily be a state jail felony becomes a third-degree felony if the victim is elderly.
The Main Fraud Offenses
Insurance Fraud
Under Chapter 35, you commit insurance fraud when you knowingly present false or misleading information to an insurer to support a claim for payment.2State of Texas. Texas Penal Code Section 35.02 – Insurance Fraud The statute covers every type of insurance policy: health, auto, homeowner, life, and commercial. Inflating repair estimates, filing claims for damage that never happened, and staging collisions are all common examples.
Penalties follow the value of the fraudulent claim on roughly the same ladder above. A claim under $100 is a Class C misdemeanor. A claim of $300,000 or more is a first-degree felony. A first-degree charge also applies if the fraudulent act put someone at risk of death or serious bodily injury, regardless of the claim’s dollar value.2State of Texas. Texas Penal Code Section 35.02 – Insurance Fraud
Credit Card and Debit Card Abuse
Section 32.31 covers using someone else’s credit or debit card without permission, presenting an expired or revoked card to obtain something of value, and possessing a card with intent to use it fraudulently.3State of Texas. Texas Penal Code Section 32.31 – Credit Card or Debit Card Abuse It also reaches merchants who knowingly accept cards they know are stolen or forged.
The baseline offense is a state jail felony: 180 days to two years in a state jail facility and a fine of up to $10,000.1Attorney General. Penal Code Offenses by Punishment Range When the victim is elderly, the charge jumps to a third-degree felony carrying two to ten years.
Identity Theft
Section 32.51 makes it a crime to obtain, possess, transfer, or use someone else’s identifying information without consent and with intent to harm or defraud.4State of Texas. Texas Penal Code Section 32.51 – Fraudulent Use or Possession of Identifying Information Identifying information includes Social Security numbers, driver’s license numbers, financial account data, biometric records, and similar personal identifiers. Opening credit accounts in someone else’s name, filing fraudulent tax returns, and impersonating another person online for financial gain all fall within this section.
Unlike most fraud offenses, the penalty depends on the number of identifying items involved rather than a dollar amount:
- Fewer than 5 items: state jail felony (180 days to 2 years, fine up to $10,000).
- 5 to 9 items: third-degree felony (2 to 10 years).
- 10 to 49 items: second-degree felony (2 to 20 years).
- 50 or more items: first-degree felony (5 to 99 years or life).
Healthcare Fraud
Chapter 35A addresses fraud against healthcare benefit programs, including Medicaid and private health plans.5State of Texas. Texas Penal Code Chapter 35A – Health Care Fraud It targets providers who bill for services never performed, upcoding to inflate reimbursements, and kickback arrangements that steer patients to particular providers. Penalties follow a value-based ladder similar to insurance fraud and can reach first-degree felony levels for large-scale schemes.
Misapplication of Fiduciary Property
Section 32.45 applies to anyone who intentionally misuses property they hold in a fiduciary capacity, such as a trustee, guardian, or business officer. Penalties follow the standard value ladder from Class C misdemeanor through first-degree felony, and each tier bumps up one level when the victim is elderly.
Fraudulent Securing of Document Execution
Section 32.46 targets anyone who tricks another person into signing a document that affects property rights or financial interests without that person’s knowing consent.6State of Texas. Texas Penal Code Section 32.46 – Fraudulent Securing of Document Execution It’s the statute prosecutors use when someone forges a power of attorney or gets a homeowner to unknowingly sign away a deed.
What Prosecutors Have To Prove
Every fraud conviction requires the state to prove three core elements beyond a reasonable doubt.
Intent
Fraud is always an intentional crime. The prosecution must show you acted with the conscious objective to deceive another person for financial or personal gain.7State of Texas. Texas Penal Code Section 6.03 – Definitions of Culpable Mental States An honest mistake, a misunderstanding, or simple negligence will not support a conviction. Because intent is an internal mental state, prosecutors build it through circumstantial evidence: emails discussing the scheme, financial records showing suspicious transfers, patterns of similar transactions, or testimony from co-conspirators. When that evidence is ambiguous, reasonable doubt becomes a real possibility.
Deception
The state must prove the defendant made false statements, created misleading documents, or concealed material facts to induce the victim to act. Forged contracts, fabricated invoices, altered financial statements, and false insurance claims all qualify. Omissions count too: deliberately withholding information that would change someone’s decision can be deceptive even without an outright lie.
Harm or Risk of Harm
Texas law does not require the victim to actually lose money. Creating a substantial risk that someone could lose property or money is enough. That said, the amount of actual or intended loss drives both the classification of the offense and the length of any prison sentence. Courts look at both what the defendant took and what the defendant tried to take, so an unsuccessful scheme can still support serious charges if the intended loss was large.
Restitution
Beyond fines and incarceration, Texas courts can order defendants to repay victims for their financial losses. Article 42.037 of the Code of Criminal Procedure gives the sentencing court discretion to order restitution, and if the court decides not to, the judge must state the reasons on the record.8State of Texas. Texas Code of Criminal Procedure Article 42.037 – Restitution Restitution can cover the full value of lost or damaged property, and judges may order payment at the value of the property on the date of sentencing if it exceeds the value at the time of the offense. Judges order restitution in the vast majority of fraud cases, and the obligation survives even after a defendant completes a prison sentence.
Statute of Limitations
Texas sets different filing deadlines depending on the type of fraud and how it is classified. Miss the window, and the state loses the ability to prosecute at all:9State of Texas. Texas Code of Criminal Procedure Chapter 12 – Limitation and Venue
- Most Chapter 32 felonies, including credit card abuse, identity theft, and misapplication of fiduciary property: seven years from the date of the offense.
- Insurance fraud: five years.
- Real property fraud under Section 32.60: ten years.
- All misdemeanor fraud offenses (Class A, B, or C): two years.
The clock generally starts on the date the offense is committed, not the date the victim discovers it. When the defendant flees the state or is under a pending indictment, the limitations period can be tolled.
Consequences Beyond the Sentence
A fraud conviction carries collateral effects that often outlast the prison term or probation. Any felony conviction in Texas results in the loss of voting rights during incarceration and supervision, the loss of the right to possess firearms, and significant barriers to employment. Fraud convictions hit particularly hard because they involve dishonesty, which makes employers, licensing boards, and financial institutions especially reluctant to extend trust.
Professional licenses are a major vulnerability. Licensing boards for accountants, attorneys, healthcare providers, real estate agents, insurance agents, and financial advisors all treat fraud convictions as directly relevant to fitness for practice. Suspension or revocation is common, and some boards impose permanent bars.
Victims can also pursue civil lawsuits separately from criminal proceedings. A criminal acquittal does not prevent a civil suit because the burden of proof is lower in civil court. Defendants who beat the criminal charges may still face judgments requiring them to repay losses and, in some cases, additional damages.
When Federal Charges Stack On Top
The Penal Code is not the whole picture. A fraud scheme that crosses state lines or uses the U.S. mail, the internet, or the banking system can draw federal prosecution alongside the state case. Federal mail fraud under 18 U.S.C. § 1341 applies when a scheme to defraud involves sending anything through the Postal Service or a commercial interstate carrier, and it carries up to 20 years in prison.10Office of the Law Revision Counsel. 18 U.S. Code 1341 – Frauds and Swindles If the scheme affects a financial institution, the maximum jumps to 30 years and a $1,000,000 fine.
Federal sentencing works differently from Texas. Instead of fixed ranges tied to offense classification, the federal system uses sentencing guidelines that add offense levels based on the dollar amount of loss. Losses of $6,500 or less add nothing to the base level. Losses above $550,000 add 14 levels, and losses exceeding $550 million add 30 levels.11United States Sentencing Commission. Loss Table from Section 2B1.1(b)(1) – Theft, Property Destruction, and Fraud Each added level translates to meaningfully more prison time. Large-dollar schemes face far heavier sentences in federal court than in state court.
Federal prosecutors also have a separate conspiracy statute. Under 18 U.S.C. § 371, agreeing with even one other person to commit fraud and taking any step toward carrying it out is a standalone crime punishable by up to five years, even if the fraud itself was never completed.12Office of the Law Revision Counsel. 18 U.S. Code 371 – Conspiracy to Commit Offense or to Defraud United States Federal statute of limitations periods are generally five years, extending to ten years for fraud affecting a financial institution.13Office of the Law Revision Counsel. 18 U.S. Code Chapter 213 – Limitations Dual state and federal exposure is something people charged with fraud in Texas frequently underestimate.