Is fraud a felony in Texas?
It depends on the amount and the statute. Most Texas fraud offenses are graded by value: below $2,500 they are misdemeanors, at $2,500 they become felonies, and they climb to a first degree felony at $300,000, using ladders like the one in Tex. Penal Code §32.32. Some are felonies regardless of amount, such as credit card abuse under §32.31. Federal mail and wire fraud carry up to 20 years, and up to 30 where a financial institution is affected.
- The grade follows the money in most Texas fraud statutes, and the State's loss figure is contestable.
- Credit card abuse is a state jail felony at any amount. Identity theft is graded by the number of items, not dollars.
- Fraud cases start as paper investigations. You usually know before you are arrested.
- Intent to deceive is the element everything turns on, and bad bookkeeping is not intent.
- Talking to investigators without a lawyer is how civil disputes become convictions.
Fraud cases are unlike street cases in one controlling way: they are built backwards from documents, over months, before anyone is charged. That means the period when you suspect you are being looked at is not dead time. It is the most valuable time the defense will ever have. Peter M. Barrett has defended fraud and white collar cases in state and federal court since 1994 and has tried more than 150 jury trials. He is a Past President of the Dallas Criminal Defense Lawyers Association (2005). See our Dallas white collar crime defense page.
How Texas grades a fraud charge
Take §32.32, false statement to obtain property or credit, as the model. The offense is knowingly making a materially false or misleading statement to obtain property or credit, and the grade runs from a Class C misdemeanor under $100 through a state jail felony at $2,500, a third degree felony at $30,000, a second degree at $150,000, and a first degree felony at $300,000 or more. Insurance fraud under §35.02 uses the same ladder on the value of the claim.
Two statutes break the pattern, and they are the ones prosecutors reach for. Credit card or debit card abuse under §32.31 is a state jail felony with no minimum dollar amount, a $40 charge included, and it rises to a third degree felony against an elderly person. Fraudulent use or possession of identifying information under §32.51 is graded by how many items of information were held: a state jail felony under five items, up to a first degree felony at fifty or more. One spreadsheet of customer data can satisfy that top bracket. Our identity theft guide covers it in detail.
When the case goes federal
The same conduct becomes a federal case when a federal agency works it or a federal program or institution is touched. The two workhorses are 18 U.S.C. §1341 (mail fraud) and §1343 (wire fraud): a scheme to defraud plus a single mailing or a single wire, which in 2026 means any email, text, transfer or online submission. Each carries up to 20 years, rising to 30 years and a fine of up to $1,000,000 where the scheme affects a financial institution or relates to a declared disaster. Health care billing has its own statutes, covered in health care fraud in Texas, and federal court brings the sentencing guidelines, where the alleged loss figure drives the range. See our federal crime defense page.
How these cases actually begin
- a bank's fraud department files a report and freezes an account;
- an insurer's special investigation unit asks for a recorded statement;
- an employer's audit finds transactions it does not like and calls the police to collect a debt;
- a civil lawsuit generates records that get forwarded to a district attorney;
- a detective calls and says he would like to hear your side.
Every one of those is an invitation to build the State's case for it. You are under no obligation to give a statement, sign anything, or "clear things up" before speaking to a lawyer, and the polite recorded interview is where most fraud convictions are actually made. Read how to use the right to remain silent before returning any investigator's call.
What the defense works with
- Intent. Fraud requires intent to deceive or defraud. Sloppy records, optimistic statements on an application, or a business that failed owing money are not crimes without it.
- Materiality. The false statement has to matter to the decision. Errors nobody relied on do not carry the charge.
- The amount. Value and loss are calculated numbers, and calculated numbers have assumptions. Moving the figure one bracket down changes the punishment range.
- Authority and consent. In family, business partner and employer cases, the card or account was often used with permission that was real when given and disputed later.
- Restitution and resolution. Where the facts are bad, early restitution and a negotiated grade can be the difference between a felony record and a survivable outcome. That is a strategy decision to make deliberately, not a payment to make in panic.
Do not amend, backdate or delete anything once you know there is an inquiry. Altered records convert a defensible intent case into an obstruction case. Preserve everything, say nothing on the record, and get counsel between you and the investigators. Request a free, confidential case review or call (214) 526-0555.
Common questions
What is the penalty for fraud in Texas?
Value-graded offenses run from a Class C misdemeanor under $100 to a first degree felony, 5 to 99 years or life, at $300,000 or more. Credit card abuse is a state jail felony at any amount, and identity theft is graded by the number of items of information, up to a first degree felony at fifty items.
Can fraud charges be dropped if I pay the money back?
Restitution does not erase the offense, but in practice it shapes outcomes: grade reductions, deferred resolutions, and dismissals in genuinely civil disputes. Paying before you have counsel can also be read as an admission, so sequence it with a lawyer.
Should I talk to the investigator to clear things up?
Not without counsel. Fraud cases are made from documents plus your recorded explanation of them. Investigators are allowed to hold documents you have not seen and to compare your answers against them. Politely decline and route the contact through a lawyer.
What makes a fraud case federal instead of state?
A federal agency's involvement, a federal program's money, a financial institution, or interstate wires and mailings. Mail and wire fraud under 18 U.S.C. sections 1341 and 1343 carry up to 20 years, and up to 30 where a financial institution is affected.
How long do fraud investigations take?
Months, often years, and mostly in silence. The useful window is the one before charges: evidence preserved, statements avoided, and in some cases a presentation to the prosecutor that stops the case from being filed at all.
The law this article describes, at the source. Every figure above can be checked against it.
- Tex. Penal Code §32.32: false statement to obtain property or credit
- Tex. Penal Code §32.31: credit card or debit card abuse
- Tex. Penal Code §32.51: fraudulent use or possession of identifying information
- Tex. Penal Code §35.02: insurance fraud
- 18 U.S.C. §1341: mail fraud
- 18 U.S.C. §1343: wire fraud
This article is general legal information about Texas and federal law, not legal advice about your case. Reading it does not create an attorney-client relationship. Laws change, so confirm the current rule with a licensed criminal defense attorney about your specific facts. Request a free, confidential case review.