Fraudulent Use or Possession Charges in Texas: Identity Theft and Fake Credit Cards

The popularity of online shopping continues to increase in no small part due to the Coronavirus Pandemic.  See, “Americans Keep Clicking to Buy, Minting New Online Shopping Winners,” written by Nathaniel Popper and published by the New York Times on May 1, 2020.  Along with it, opportunities abound for illegally accessing things like credit card numbers; debit card numbers; checking account numbers with corresponding banking routes; Social Security identification numbers; state driver’s license numbers; home and business addresses; and more.

Researchers warn that credit card data is often stolen via the internet.  Some of the most prolific avenues on the web to grab personal financial information include: (1) data breaches involving retail stores or financial institutions; (2) public Wi-Fi networks; (3) phishing e-mail schemes; and (4) spyware and malware.  Of course, the tried-and-true traditional method of getting another person’s financial information is still very popular:  stealing physical credit cards or other personal documentation out of someone’s car or trash.  For details, read “5 Ways Your Credit Card Info Might Be Stolen And How To Prevent It,” written by Holly D. Johnson and published by Bankrate on September 25, 2020.

Personal data is extremely valuable on the black market.  Having access to this information allows someone to use another person’s credit card, debit card, or banking information to buy things, which is one type of fraud.  Access to this type of information can also allow someone to create new lines of credit, applying for fake credit cards and more using accurate information in a more sophisticated type of deception.

According to the Federal Trade Commission,  fraudulent use of credit card numbers was the most popular form of identity theft in 2019.  This involved either (1) misuse of an existing account or (2) the creation of a fake credit card account using stolen identification information.  Texas is one of the top states for identity theft, according to the FTC’s latest statistics.

• For more, see: Credit Card Fraud and Theft In Texas: Lots Of Credit Cards Here in DFW; and Credit Card Fraud Is Very Profitable And Easy To Do, No Wonder Credit Card Crimes Are Happening All Over The Country.

Texas Penal Code and Credit Card Fraud

Credit card fraud and other forms of identity theft have not escaped our lawmakers.  In Texas it is a crime, statutorily defined in the Texas Penal Code, to use or to possess another person’s identifying information with the intent to profit from it in some way.  Texas Penal Code §32.51.

Another statute is also available to prosecutors in these cases:  the Credit Card Abuse statute found in Texas Penal Code §32.31.  However, as one Galveston Assistant District Attorney warned his brethren, “the Credit Card Abuse statute does not adequately punish or meet the elements of crimes involving true identity thieves. Correctly charging and proving large-scale identity theft is time-consuming and labor-intensive, but the effort is worth it.”

For this reason, those who are arrested and charged after being found having custody or possession of another’s personal information may find themselves facing the more serious charge of violation of Texas Penal Code §32.51.  Usually, these are cases where people have been caught in possession of a large number of fake IDs, credit cards, debit cards, or thumb drives full of stolen identifiers that can be used to create fake cards or IDs. Sometimes, the prosecution focuses upon point of sale using the false information but often, these cases begin with a traffic stop by a Texas police officer or deputy sheriff.

What is Identifying Information?

Under Texas Penal Code 32.51(1), “identifying information” is defined as information that alone or in conjunction with other information identifies a person, including a person’s:

(A)  name and date of birth;

(B)  unique biometric data, including the person’s fingerprint, voice print, or retina or iris image;

(C)  unique electronic identification number, address, routing code, or financial institution account number;

(D)  telecommunication identifying information or access device; and

(E)  social security number or other government-issued identification number.

The Crime of Fraudulent Use or Possession of Identifying Information

If someone has the “intent to harm or defraud another” and “obtains, possesses, transfers, or uses” one of the following items, then he or she can be charged with the crime of fraudulent use or possession of identifying information as defined in Texas Penal Code §32.51(b):

(1)  identifying information of another person without the other person’s consent or effective consent;

(2)  information concerning a deceased natural person, including a stillborn infant or fetus, that would be identifying information of that person were that person alive, if the item of information is obtained, possessed, transferred, or used without legal authorization; or

(3)  identifying information of a child younger than 18 years of age.

The Presumption of Intent

Intent is key in these cases.  Under the statute itself, “… the actor is presumed to have the intent to harm or defraud another… ” if he possesses one of the following:

(1)  identifying information of three (3) or more other persons;

(2)  information concerning three (3) or more deceased persons, including a stillborn infant or fetus, that would be identifying information of that person were that person alive, if the item of information is obtained, possessed, transferred, or used without legal authorization; or

(3)  information concerning three (3) or more persons or deceased persons that is either “identifying information” as defined in subdivision (1) of the statute or involving a “telecommunications access devise as defined in subdivision (2) of the statute.

Under that subdivision, this includes  a card, plate, code, account number, personal identification number, electronic serial number, mobile identification number, or other telecommunications service, equipment, or instrument identifier or means of account access that alone or in conjunction with another telecommunication access device may be used to: (A)  obtain money, goods, services, or other thing of value;  or  (B)  initiate a transfer of funds other than a transfer originated solely by paper instrument.

If the prosecutor can enter evidence into the record of any one of these three things in the possession of the accused, intent will not have to be proven.  It is legally presumed to exist under the law.

Of note, however, is that this presumption does not apply to a business or other commercial entity or a government agency that is engaged in a business activity or governmental function that does not violate a penal law of this state.  Texas Penal Code §32.51(b).

Penalties Upon Conviction for Fraudulent Use or Possession of Identifying Information

Pursuant to   Texas Penal Code §32.51(c),  conviction for the fraudulent use or possession of identifying information constitutes a felony.  However, how serious the punishment in sentencing for that felony charge will depend upon the specific circumstances of the case, as pled and proven by the prosecutor.  The higher the number of pieces of identifying information established by admissible evidence to be in the possession of the accused, then the more severe the penalty.

Referencing the statute:

• One (1) to Four (4) Pieces of Identifying Information constitutes a State Jail Felony, which is punishable by imprisonment for a time period of six months (180 days) to 2 years.
• Five (5) to Nine (9) Pieces of Identifying Information constitutes a Third Degree Felony, punishment by imprisonment for a time period of 2 to 10 years as well as a monetary fine up to $10,000.
• Ten (10) to Fifty (50) Pieces of Identifying Information constitutes a Second Degree Felony, punishment by imprisonment for a time period of 2 to 20 years as well as a monetary fine up to $10,000.
• Fifty or More (50+) Pieces of Identifying Information constitutes a First Degree Felony, punishment by imprisonment for a time period of 5 to 99 years as well as a monetary fine up to $10,000.

Things can become even more serious in some scenarios.  Under the language of the statute, defined in Texas Penal Code §32.51(c ) (1), the punishment is statutorily increased to the next higher category of offense if it is shown on the trial of the offense that:

(1)  the offense was committed against an elderly individual as defined by Texas Penal Code §22.04 ( i.e., an person 65 years of age or older); or

(2)  the actor fraudulently used identifying information with the intent to facilitate an offense under  Article 62.102 of the Texas  Code of Criminal Procedure (dealing with registration and verification of those released on parole, etc.).

Importance of Intent in These Cases

To obtain a conviction for fraudulent possession of identifying information, the prosecutor must produce authenticated and admissible evidence the accused not only: (1) exercised actual care, control, or custody of the items, but that (2) he was conscious of his connection with them and (3) possessed them knowingly. Brown v. State, 911 S.W.2d 744, 747 (Tex.Crim.App. 1995).

When the contraband is not found on the accused’s person or it is not in the exclusive possession of the accused, the prosecution has the burden of proof to establish with additional, independent facts and circumstances that there is an evidentiary link between the accused and a knowing possession of the contraband. Willis v. State, 192 S.W.3d 585, 593 (Tex. App.-Tyler 2006, pet. ref’d); Lassaint v. State, 79 S.W.3d 736, 740 (Tex. App.-Corpus Christi 2002, no pet.).

Importance of Location Where Items Are Found

Where the identifying information is found is important, too.  If the accused does not have exclusive possession of the place where the items were found, things get complicated for the prosecution.  Here, the state has to provide admissible evidence that links the accused to specific items as well as providing evidence that demonstrates that the accused’s connection with the items was more than fortuitous. Evans v. State, 202 S.W.3d 158, 161-62 (Tex.Crim.App. 2006); Pollan v. State, 612 S.W.2d 594, 596 (Tex.Crim.App. [Panel Op.] 1981).

There is no set formula provided in the law for the prosecution to use to prove this part of the State’s case.  Instead, “each case depends on the evidence adduced therein” and the prosecution must provide admissible facts that “are sufficient to permit a reasonable inference” that the accused exercised control over the contraband.   See Taylor v. State, 106 S.W.3d 827, 831 (Tex. App.-Dallas 2003, no pet.); Porter v. State, 873 S.W.2d 729, 732 (Tex. App.-Dallas 1994, pet. ref’d).

Defending Against Charges of Fraudulent Use or Possession of Identifying Information in Texas

An experienced Texas criminal defense attorney may find several different bases upon which to challenge the prosecution’s case against a client facing felony charges alleging Fraudulent Use or Possession of Identifying Information in violation of Texas Penal Code §32.51.

Each case must be analyzed on its own particular circumstances.

A successful defense may begin with a challenge to the traffic stop itself, where law enforcement initially came into contact with the accused and discovered the alleged contraband.  In Texas, traffic stops may fail to meet both statutory and/or constitutional standards.  If so, then they are illegal stops and the defense can move to dismiss the case outright or seek to exclude any evidence obtained during the stop.  See, e.g., “4 Shocking Texas Traffic Stops: Current Texas Law for Arrest after Pulled Over By Police.”

There may be arguments against the search and seizure, as well.  If constitutional parameters are not followed in the search, the seizure, or the arrest, then the entire case may be vulnerable to dismissal.  See:

• Illegal Search Warrants: Challenging the Underlying Affidavit;
• What is Probable Cause for Police to Arrest in Texas?;
• Challenging the Search Warrant in Texas: Illegal Search and Seizure; and
• Search of a Residence in Texas: When Police Search Your Home.

Focusing upon the elements of the criminal statute itself, the defense lawyer may find holes in the prosecution’s case involving evidence to support the element of intent to possess the contraband.  If the accused lacked the intent (e.g., “I didn’t know that stuff was in my apartment”), then there may be a basis for a motion to suppress; a motion to dismiss; a motion for an instructed verdict; or a negotiated plea deal (e.g., when facing several different charges).

For more, see:

• Examining Trials in Texas;
• What is a Motion to Suppress? and
• Will You Go to State Jail or Texas Prison? The Importance of Plea Negotiations.

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For more information, check out our web resources, read Michael Lowe’s Case Results, and read his in-depth article, “The Early Part of a Texas Criminal Case in State or Federal Court.”