If you are under investigation for fraud in Texas, do three things immediately: stop talking about the case with anyone other than a lawyer, preserve every document rather than deleting anything, and hire counsel before you agree to a single interview.

Fraud investigations are built almost entirely from records and statements, and the statements are usually the part the target hands over voluntarily. The window between learning you are under investigation and being charged is the most valuable period in the entire case, and most people spend it doing things that hurt them.

There is no version of this where waiting improves your position.

How Do You Know You Are Actually Under Investigation?

Sometimes agents tell you. More often, the signals are indirect.

Watch for:

  • A target letter from a U.S. Attorney’s Office, which says outright that you are a subject or target of a grand jury investigation
  • A grand jury subpoena for documents or testimony, whether directed to you or to your business
  • Agents contacting your colleagues, clients, or bank rather than you
  • A bank asking about transactions or freezing an account
  • A civil audit turning quiet, especially an IRS examination where the auditor stops returning calls, which can signal a referral to Criminal Investigation
  • Search warrant execution at a home or office

The subpoena to a third party is the most commonly missed signal. By the time investigators approach you directly, they usually already have the records.

Is Your Case Federal or State?

It matters enormously, and the answer shapes everything else.

Federal fraud charges typically come from the wire and mail fraud statutes, 18 U.S.C. Sections 1343 and 1341. Both carry up to 20 years per count, rising to 30 years where a financial institution is affected. Related statutes cover bank fraud, healthcare fraud, and securities fraud, and Section 1349 reaches attempt and conspiracy at the same penalty level.

Two features make federal cases harder:

  • Each transaction can be a separate count. Ten wire transfers can mean ten counts
  • Loss amount drives the sentence under the federal guidelines, often more than the conduct itself

Texas state fraud charges come mainly from Penal Code Chapter 32, including forgery under Section 32.21, credit card abuse under Section 32.31, misapplication of fiduciary property under Section 32.45, and securing execution of a document by deception under Section 32.46. Theft under Section 31.03 is graded by a value ladder, so the alleged amount determines whether you are facing a misdemeanor or a first-degree felony.

Federal and state authorities can both investigate the same conduct. A state case does not shield you from a federal one.

Should You Talk to Investigators?

No, not without counsel present, and this holds even when you are innocent.

The reason is structural rather than tactical. Under 18 U.S.C. Section 1001, making a false statement to a federal agent is itself a felony carrying up to five years, whether or not the underlying fraud happened. Investigators can charge you for the interview even if they cannot charge you for the conduct.

Every one of these is a mistake:

  • “I’ll just explain, then it goes away.” It does not. It gives them a recorded account to attack
  • “I don’t need a lawyer, I did nothing wrong.” Innocent people misremember dates and amounts. Those become inconsistencies
  • Talking without knowing the theory. You cannot explain your way out of an allegation you have not seen

You are allowed to decline politely and say you will respond through counsel. That is not an admission and cannot be used as evidence of guilt.

What Should You Do About Documents?

Preserve everything. Immediately. Then stop touching it.

Deleting records during an investigation converts a case you might have won into one you will not. Obstruction of justice under 18 U.S.C. Section 1512 and destruction of records under Section 1519 are separate felonies, and prosecutors charge them readily because they are easier to prove than fraud.

Do this:

  • Issue a litigation hold, in writing, if a business is involved
  • Suspend automatic deletion policies for email and messaging platforms
  • Preserve devices, including personal phones used for work
  • Route document collection through counsel so privilege is protected where it applies
  • Do not “organize” or “clean up” files. Even innocent tidying looks like spoliation

If you already deleted something, tell your lawyer immediately. It is a manageable problem when disclosed early and a catastrophic one when discovered later.

Who Should You Not Talk To?

Almost everyone, and this is the instruction clients find hardest.

  • Co-workers and co-defendants. These conversations become conspiracy evidence, and the other person may already be cooperating
  • Anyone who could be a witness. Contacting them can support a witness tampering charge under Section 1512
  • Family and friends. No privilege attaches, and they can be subpoenaed
  • Your accountant. There is no federal accountant client privilege in criminal matters. Your CPA can be compelled to testify
  • Anyone on social media. Assume investigators are reading it

The spousal communications privilege offers some protection in Texas, but it has limits and exceptions. Do not rely on it as a plan.

One workaround your lawyer may use: a Kovel arrangement, where the accountant is retained by the attorney, so their work falls within attorney-client privilege.

Why Does Hiring Counsel Early Actually Change the Outcome?

After indictment, the government has committed publicly and reversing course is far harder.

What counsel can do before charges:

  • Learn the theory through contact with the prosecutor, so you know what is actually alleged
  • Make a pre-indictment presentation that corrects a factual misunderstanding, which sometimes ends the matter
  • Negotiate the charge selection, including the counts and the alleged loss amount that will drive sentencing
  • Argue for declination or a civil rather than criminal resolution
  • Manage parallel proceedings, since fraud investigations often run alongside regulatory or civil actions

Loss amount is worth emphasizing. In federal fraud sentencing, the difference between an alleged $400,000 loss and an alleged $1.6 million loss can be years. That number is contestable, and it is far easier to shape before it appears in an indictment.

Common Questions About Fraud Investigations

Does receiving a subpoena mean I will be charged?

No. Subpoenas go to witnesses, subjects, and targets alike. But it does mean you need counsel to determine which one you are before you respond.

Can I be charged if I did not personally profit?

Yes. Fraud requires a scheme and intent to deceive, not personal enrichment. Facilitating someone else’s scheme is enough.

How long do fraud investigations take?

Federal white collar investigations commonly run one to three years. The general federal statute of limitations is five years, longer for bank fraud.

Should I return the money to fix this?

Talk to a lawyer first. Restitution can help at sentencing, but unilateral repayment can also look like an admission or consciousness of guilt.

The First 48 Hours After You Learn You Are a Target

Order matters here.

  1. Say nothing substantive to anyone, including a polite “I’d like to have counsel present” to any agent
  2. Write down what happened while it is fresh, and give it only to your lawyer, which keeps it privileged
  3. Issue a document preservation hold and stop all deletion
  4. Do not contact potential witnesses, no matter how innocent the reason feels
  5. Retain counsel experienced in fraud investigations, ideally before you respond to any subpoena
  6. Ask about a Kovel arrangement if accountants are involved

Flatiron Legal Advisors handles serious white collar allegations through our Texas criminal defense team, and our attorneys work federal matters including conspiracy prosecutions. Because fraud investigations frequently touch a business entity, we can address the civil litigation exposure in parallel.

Schedule a confidential consultation before you respond to investigators.

Reviewed by the Flatiron Legal Advisors criminal defense team. This article is general information, not legal advice for your specific case.