Being involved in the sale or lease of a motor vehicle usually does not place the transaction’s participants at risk of committing a felony crime. Texas criminal laws impose penalties on motor vehicle dealers and others who engage in fraudulent activities that deceive owners or buyers.

Fraudulent Transfer of a Motor Vehicle in Texas

The Texas Penal Code makes it a crime to engage in the fraudulent transfer of a motor vehicle. The crime is committed when a person takes possession or control of another person’s vehicle to transfer it to a third party under any of the following circumstances:

• The vehicle has a lien or security interest on it or is subject to a lease agreement and the offender transfers the vehicle to another person without the consent of the lien holder, secured creditor or lease holder
• Transferring ownership of a vehicle while intending to harm or defraud the owner
• Disposing of a vehicle while intending to defraud the owner
• Failing to disclose a vehicle’s location after a request by the owner, secured creditor, lienholder or leaseholder

Fraudulent Transfer Penalties

Texas criminal laws treat the fraudulent transfer of a motor vehicle as a serious offense. When the value of the vehicle exceeds $20,000, prosecutors can charge a person with a third-degree felony that is punishable by a prison sentence ranging from two to 10 years and a fine not to exceed $10,000. Judges may also impose a sentence of probation in place of a prison sentence if the circumstances of the case warrant the showing of leniency toward the offender.

Possible Legal Defenses

Individuals can protect themselves from a fraudulent transfer charge by maintaining records and documentation when they purchase and, subsequently, sell a motor vehicle. The documentation requirements imposed on car dealers by the Texas Department of Motor Vehicles can help individuals defend against criminal charges.

Records that should be retained on every car that is purchased or sold include the following:

• Copy of the certificate of title application
• Copy of vehicle title
• Odometer disclosure statement
• Bill of sale
• Retail agreement
• Sales agreement or contract

Proving the circumstances surrounding the acquisition of a vehicle can be critical when defending against one’s allegations. For example, a person who purchases a vehicle from a dealer in a transaction that appears to be legitimate might have problems months or years later trying to sell the vehicle. The paperwork that a buyer obtains from a car dealer can help defend against a claim of intent to defraud when the new owner tries to sell the vehicle.

If you are accused of participating in the fraudulent transfer of a motor vehicle, get the help you need by reaching to Rand Mintzer, Attorney at Law at 713-862-8880.