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Dwayne B.
Dwayne B., Lawyer
Category: Criminal Law
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Experience:  Numerous criminal trials ranging from traffic to murder, practicing Criminal Law for 20+ years.
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Texas law. If an investor in real estate first lien notes

Resolved Question:

Texas law. If an investor in real estate first lien notes suspects the broker he is working through is not very competent and on that suspicion takes his money out of the brokers hand once the notes are due and paid off by the borrower; and it is later found out the broker was involved in a Ponzi scheme; and the broker is later arrested and sent to federal prison; is the investor subject to any clawback? If so, what portion of his initial investment is at risk of clawback. What are the statute of limitations for this form of fraud in Texas? and when does the clock start?
Submitted: 1 year ago.
Category: Criminal Law
Expert:  Dwayne B. replied 1 year ago.

JD 1992 :


Hello, and thank you for contacting Just Answer. I am an expert here and and I look forward to assisting you today.


JD 1992 :

I will be on and off the website today periodically.

JD 1992 :

However, the answers to your questions will be pretty general because a lot depends on the exact facts of the case and whatever type of prosecution they pursue.

JD 1992 :

I would be glad to discuss them with you but I want to make sure that you understand they can't be black and white answers because there are a lot of possible variations.

Customer:

Yes but the statute of limitations is black and white? what is the SOL in TX for this crime. It is 4 years for fraud. What triggers starting the clock?

JD 1992 :

It is black and white to an extent. The statute of limitations sometimes doesn't "run against the state" meaning the state can bring a suit for their damages at any point.

Customer:

and if the "state" is not involved?

JD 1992 :

The statute of limitations in Texas for fraud is four years. With fraud it can be from the time of discovery or from the time it "should have reasonably been discovered".

JD 1992 :

For most state criminal codes under which fraud would fall it is a 5 year statute of limitations.

JD 1992 :

For criminal cases it would be 5 years from the date the crime was committed, not when it was discovered.

JD 1992 :

The investor would be subject to a clawback, but the issue is then whether the funds were used in the scheme, to what extent (if any) the person was aware of the scheme, and when the money was removed from the investor.

JD 1992 :

I think a good argument would be possible that none of the initial investment would be subject to clawback, just any increase in the account.

Customer:

ELPFUL. The broker was arrested in 2007. I suspected mismangement in 2005 when I got my investment out. So in Texas the SOL is 4 years? In some states 2 Aand in some more. I read somewhere that an investor is not subject to clawback if they reasonably suspected incompetence or mismanagement and withdrew their investment. Does that, or something reasonably like it, ring a bell?

JD 1992 :

Yes, 4 years on fraud. That sounds right, plus the farther back you withdrew your money then the less likely that they will try to recover the money. Then they also usually only go after increases and not initial investments from people that took their money out before the scheme came to light.

Customer:

de minimum non curat lex. Thanks. Been helpful.

JD 1992 :

You're welcome and best wishes to you.

JD 1992 :

Please ask any follow up questions in this thread. When all of your questions have been answered, then I would ask that you give a Positive Rating (of course I'd suggest Excellent) since that is the only way I get credit for my work and also please consider clicking "BONUS" as a nice way of saying "thanks" for a job well done, although this is neither required nor expected. When looking at the answer I ask you to bear in mind I can’t control what the law is and whether it helps you, I can only tell you what it says, and I assume you want truthful information.


 


However, please do not issue a rating of any kind until all of your questions have been answered and please use the Reply button to ask additional questions or to provide answers to my questions.

Dwayne B., Lawyer
Category: Criminal Law
Satisfied Customers: 27402
Experience: Numerous criminal trials ranging from traffic to murder, practicing Criminal Law for 20+ years.
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