                                                                                                       ACCEPTED
                                                                                                  13-14-00653-CR
                                                                                  THIRTEENTH COURT OF APPEALS
                                                                                         CORPUS CHRISTI, TEXAS
        FILED                                                                               9/24/2015 11:09:40 AM
                                                                                                 Dorian E. Ramirez
IN THE 13TH COURT OF APPEALS              NO. 13-14-00653-CR                                                CLERK
        CORPUS CHRISTI
                                          NO. 13-14-00654-CR
          9/24/15
DORIAN E. RAMIREZ, CLERK
BY Delia S. Rodriguez                IN THE COURT OF APPEALS     RECEIVED IN
                                                           13th COURT OF APPEALS
                                                           CORPUS CHRISTI/EDINBURG, TEXAS
                               FOR THE THIRTEENTH   DISTRICT OF  TEXAS
                                                              9/24/2015 11:09:40 AM
                                                                DORIAN E. RAMIREZ
                                                                       Clerk
                                         AT CORPUS CHRISTI
                               ________________________________________
                                          WILLIAM C. MAYS,
                                              Appellant,

                                                 VS.

                                        THE STATE OF TEXAS,
                                               Appellee.
                               ________________________________________

                        ON APPEAL FROM THE 214TH DISTRICT COURT
                                OF NUECES COUNTY, TEXAS
                    TRIAL COURT NUMBERS 13-CR-3264-F AND 13-CR-3265-F
                          ________________________________________

                                        BRIEF FOR THE STATE
                               ________________________________________

                                                       Melanie K. Good
                                                        State Bar No. 24074735
                                                        Special Assistant District Attorney
                                                       Angela Cole
                                                        State Bar No. 24012443
                                                        Special Assistant District Attorney
                                                       606 N. Carancahua, STE 803
                                                        Corpus Christi, Texas 78401
                                                       Phone: (361) 887-1085
                                                       Fax: (361) 884-7820

                                                       Attorneys for Appellee
                               TABLE OF CONTENTS
                                             PAGE
IDENTITY OF PARTIES AND COUNSEL…………………………………….......iv
INDEX OF AUTHORITIES………………………………………………………….v
STATEMENT OF THE CASE……………………………………………………….1
STATEMENT REGARDING ORAL ARGUMENT…………………………….......2
STATEMENT OF PROCEDURAL HISTORY………………………………….......2
STATEMENT OF FACTS……………………………………………………………4
SUMMARY OF THE ARGUMENT………………………………………………..24
ARGUMENT………………………………………………………………………...28
    I. Appellant cannot raise a double jeopardy challenge for the first time on
    appeal without preserving any potential error at trial, and no double
    jeopardy violation has occurred because Appellant was convicted of and
    punished for two distinct offenses.……………………………………………28

    II. The trial court did not abuse its discretion in denying Appellant’s
    challenge for cause of Juror No. 36 because the Judge properly examined
    and rehabilitated the juror, and in the alternative, even if the trial court did
    commit error, the error was not preserved by Appellant’s trial counsel who
    failed to request additional preemptory strikes or even object to Juror
    No. 36 being impaneled on the jury…………………………………………..38

    III. It was not improper for the State’s investigator to comment on
    Appellant’s failure to appear pursuant to a subpoena because the Fifth
    Amendment privilege does not apply to pre-arrest, pre-miranda silence,
    Appellant never invoked his Fifth Amendment privilege, any potential
    error caused by the comment was cured by the trial court’s instruction
    to the jury, and in the alternative, the comment was harmless and did not
    contribute to Appellant’s conviction.………....................................................45

    IV. The trial court properly admitted evidence identifying Jerry and
    Marianne Sevier as investors in Appellant’s program to allow the State
    to demonstrate how Appellant had used funds belonging to victims who
    were listed in the indictment, to make payments to the Seviers; such
    evidence is not extraneous evidence of bad acts, but in the alternative,
                                              ii
   even if it was, it was still proper because same transaction contextual
   evidence is admissible. ……………………………………………………….62

   V. The Trial Court did not abuse its discretion in allowing testimony
   from the State’s Securities Regulatory Expert that aided the jury in its
   understanding of an incredibly complex industry and gave an opinion
   on how certain facts in evidence measured up to certain terminologies
   within the industry.……………………………..……………………………..71

   VI. The trial court did not error in denying Appellant a directed
   verdict because when multiple offenses are aggregated into one offense,
    the proper venue for prosecution is any county in which any of the
   individual offenses, or any element thereof, occurred, even though
   venue for some of the individual offenses, if tried separately, would be in
   different counties……………………………………………………………...96

   VII. The trial court did not abuse its discretion in denying Appellant’s
   request for a particularly worded instruction on witness bias because
   the requested bias instruction would have been duplicative and a direct
   comment on the credibility of the State’s witnesses, in the alternative,
   even if it was error to deny the requested instruction, the error was
   harmless.……………………………………………………………………..101

   VIII. Aside from a brief reference to the Texas Constitution, Appellant
   fails to cite any authority in support of his eighth issue on appeal and
   thereby has inadequately briefed the issue, leaving this Court nothing to
    review on the matter.………………………………………………………..106

   IX. The evidence, viewed in the light most favorable to the prosecution,
   is sufficient for a rational trier of fact to have found beyond a reasonable
   doubt that Appellant had the requisite intent to commit securities fraud
   and theft……………………………………………………………………...108

PRAYER FOR RELIEF……………………………………………………………117

CERTIFICATE OF COMPLIANCE……………………………………………….117

CERTIFICATE OF SERVICE……………………………………………………..117

APPENDIX…………………………………………………………………………118
                                     iii
                    IDENTITY OF PARTIES AND COUNSEL

        The following are parties to the trial court’s judgments and their counsel in the
trial court:

      William Charlton Mays, represented by John Gilmore, 622 Tancahua Street,
      Corpus Christi, Texas 78401; and Christopher Dorsey, 606 N. Carancahua,
      STE 1001, Corpus Christi, Texas 78401-0675.

      The State of Texas, represented by Angela Cole, Melanie Good, and Rachael
      Luna, Attorneys with the Texas State Securities Board, sworn in as Special
      Prosecutors for the Nueces County District Attorney’s Office, 606 N.
      Carancahua, STE 803, Corpus Christi, Texas 78401.

      The following are appellate counsel:

      John Lamerson and Jacqueline Rae Lamerson, PO Box 241, Corpus Christi,
      Texas 78403, representing William C. Mays.

      Melanie Good and Angela Cole, 606 N. Carancahua, STE 803, Corpus Christi,
      Texas 78401, representing The State of Texas.




                                           iv
                        INDEX OF AUTHORITIES

TEXAS CASES                                                           PAGES

  Adami v. State, 524 S.W.2d 693 (Tex. Crim. App. 1975)………………………..43

  Almanza v. State, 686 S.W.2d 157 (Tex. Crim. App. 1984)……………………104

  Alvarado v. State, 912 S.W.2d 199 (Tex. Crim. App. 1995)……………………..71

  Bailey v. State, 155 S.W.3d 346 (Tex. App. ---El Paso, 2004),
  rev’d on other grounds, 201 S.W.3d 730 (Tex. Crim. App 2006)……………….78
  Bartlett v. State, 270 S.W.3d 147 (Tex.Crim.App.2008)………………… 103, 104
  Birchfield v. State, 401 S.W.2d 825 (Tex. Crim. App. 1966)……………………34

  Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361 (Tex.1987)……..74, 80

  Black v. State, 645 S.W.2d 789 (Tex. Crim. App. 1983)………………………...97

  Bower v. State, 769 S.W.2d 887 (Tex. Crim. App. 1989)………………………..52

  Bridwell v. State, 804 S.W.2d 900 (Tex. Crim. App. 1991)……………………...79

  Campbell v. C.D. Payne and Geldermann Securities, Inc.,
  894 S.W.2d 411 (Tex. App.--- Amarillo 1995)………………………………87, 89
  Cantu v. State, 842 S.W.2d 667 (Tex. Crim. App. 1992)………………………...72

  Cheney v. State, 755 S.W.2d 123 (Tex. Crim. App. 1988)…………………..36, 37

  Christensen v. State, 240 S.W. 3d 25
  (Tex. App. ---Houston 2007)…………………………………....108, 111, 113, 166

  Clayton Brokerage Co. of St. Louis v. Mouer, 520 S.W.2d 802
  (Tex.Civ.App. –Austin 1975), dism'd as moot on rehearing per
  curiam, 531 S.W.2d 805 (Tex.1975)……………………………………………..88
  Cortez ex rel. Estate of Puentes v. HCCI-San Antonio, Inc.,
  159 S.W.3d 87 (Tex. 2005)…………………………………………..38, 39, 43, 43
  Cox v. State, 523 S.W.2d 695 (Tex. Crim. App. 1975)………………………….90

                                     v
Cox v. State, 658 S.W.2d 668 (Tex. App.---Dallas 1983, pet. ref’d)……...115, 116

Crum & Forster, Inc. v. Monsanto Co., 887 S.W.2d 103
(Tex. App.---Texarkana 1994)……………………………………………74, 75, 92
Devoe v. State, 354 S.W.3d 457 (Tex. Crim. App. 2011)………………………..67
Dewalt v. State, 307 S.W.3d 437 (Tex. App.--Austin 2010)……………………..97
Digges v. State, No. 05-10-00239-CR, 2012 WL 2444543
(Tex. App.---Dallas June 28, 2012) (mem. op., not designated
for publication)……………………………………………………….74, 78, 79, 90
Dinkins v. State, 894 S.W.2d 330, 356 (Tex. Crim. App. 1995)……………..52, 53

Duckett v. State, 797 S.W.2d 906 (Tex. Crim. App. 1990)………………………74

E.I. du Pont de Nemours and Company, Inc. v. C.R. Robinson,
923 S.W.2d 549 (Tex. 1995)……………………………………………………. 72
Escamilla v. State, 143 S.W.3d 814 (Tex. Crim. App. 2004)……………………43

Ex parte Hernandez, 953 S.W.2d 275 (Tex. Crim. App. 1997)………………...106

Gonzalez v. State, 973 S.W.2d 427 (Tex. App.—Austin, 1998)
aff'd, 8 S.W.3d 640 (Tex. Crim. App. 2000)……………………………..28, 29, 36
Greenberg Traurig of N.Y., P.C. v. Moody, 161 S.W.3d 56
(Tex. App.---Houston [14th Dist.] 2004)………………………………...82, 83, 84
Hallet v. Houston Northwest Medical Center, 689 S.W.2d 888
(Tex. 1985)……………………………………………………………………….43
Hernandez v. State, 829 S.W.2d 806 (Tex. Crim. App. 1991)………………….108

Highland Capital Management, L.P.v Ryder Scott Co.,
402 S.W.3d 719 (Tex. App. ---Houston [1st Dist.])……………………………...78
Holden v. Widenfeller, 929 S.W.2d 124
(Tex. App.---San Antonio 1996, pet. denied)…………………………………….74
Huett v. State, No. 05-95-00964-CR, 1998 WL 297206
(Tex. App.---Dallas June 9, 1998) (mem. op., not designated
for publication)…………………………………………………………………...90

                                     vi
In re Christus Spohn Hosp. Kleberg, 222 S.W.3d 434 (Tex. 2007)……………...74

In re T.T., 39 S.W.3d 355 (Tex. App. ---Houston [1st Dist.]2001)……………..103

Johnson v. State, 357 S.W.3d 653 (Tex. Crim. App. 2012)……………………...48

Kemph v. State, 12 S.W.3d 530 (Tex. App.--- San Antonio, 1999)…………….105

King v. State, 29 S.W.3d 556 (Tex. Crim. App. 2000)………………………….108

King Commodity Co. of Texas v. State, 508 S.W.2d 439
(Tex.Civ.App.--- Dallas 1974, no writ)…………………………………………..88
Lagrone v. State, 942 S.W.2d 602 (Tex. Crim. App. 1997)………………….71, 72

Langs v. State, 183 S.W.3d 680 (Tex. Crim. App. 2006)………….…28, 29, 30, 32

Louder v. De Leon, 754 S.W.2d 148 (Tex. 1988)………………………………..80

Lyondell Petrochemical Co. v. Fluor Daniel, Inc., 888 S.W.2d 547
(Tex. App.-Houston [1st Dist. 1994), writ denied (Mar. 30, 1995)……………...91
Margraves v. State, 34 S.W.3d 912 (Tex.Crim.App.2000)……………………..104
Martinez v. State, 754 S.W.2d 799
(Tex. App.---San Antonio 1988, pet. ref’d)……………………………………..115

McConathy v. Dal Mac Commercial Real Estate, Inc., 545 S.W.2d 871
(Tex. Civ. App.---Texarkana 1976, no writ)……………………………………..78
Mega Child Care, Inc. v. Tex. Dep’t of Protective & Regulatory Servs.,
29 S.W.3d 303 (Tex. App.---Houston [14th District] 2000), aff’d
145 S.W.3d 170 (Tex. 2004)……………………………………………..74, 77, 80
Merryman v. State, 391 S.W.3d 261
(Tex. App.---San Antonio 2012, pet ref’d) …………………………………….113

Mines v. State, 852 S.W.2d 941 (Tex. Crim. App. 1992)………………………...39

Montgomery v. State, 810 S.W.2d 372 (Tex. Crim. App. 1991)…………………66

Moody v. State, 827 S.W.2d 875 (Tex. Crim. App. 1992)……………………….52


                                  vii
Morales v. State, 389 S.W.3d 915 (Tex. App.-- Houston, 2013)………………...45

Moreno v. State, 721 S.W.2d 295 (Tex. Crim. App. 1986)………………………67

Neal v. State, 256 S.W.3d 264 (Tex. Crim. App. 2008)……………………...56, 57

Peterson v. State, 645 S.W.2d 807 (Tex. Crim. App. 1983)…………………....115

Pierce v. State, 777 S.W.2d 399 (Tex. Crim. App. 1989)………………………..71

Prible v. State, 175 S.W.3d 724 (Tex. Crim. App. 2005)………………………..62

Rhoades v. State, 934 S.W.2d 113 (Tex. Crim. App. 1996)…………………….106

Rogers v. State, 853 S.W.2d 29 (Tex. Crim. App. 1993)………………………...67

Rose v. State, 716 S.W.2d 162 (Tex. App.---Dallas 1986)……………………….90

Salinas v. State, 369 S.W.3d 176 (Tex. Crim. App. 2012)…………………...45, 46

Santellan v. State, 939 S.W.2d 155 (Tex. Crim. App. 1997)…………………….62

Searsy v. Commercial Trading Corp., 560 S.W.2d 637 (Tex. 1977)………...87, 88

Shappley v. State, 520 S.W.2d 766 (Tex. Crim. App. 1974)……………………..34

Sifford v. State, 505 S.W.2d 866 (Tex. Crim. App. 1974)……………………42, 44

Snowden v. State, 353 S.W.3d 815 (Tex. Crim. App. 2011)……………..56, 57, 58

State v. Gonzalez, 855 S.W.2d 692 (Tex. Crim. App. 1993)…………………....106

State v. Weaver, 982 S.W.2d 892 (Tex. Crim. App. 1998)…………………..97, 98

Swap Shop v. Fortune, 365 S.W.2d 151 (Tex. 1963)………………………….....38

Sterling Trust Co. v. Adderley, 168 S.W.3d 835 (Tex. 2005)……………………77

Taylor v. State, 450 S.W.3d 528
(Tex. App.---Houston 2014)…………………………………….108, 112, 113, 115

Teeter v. State, No. PD-1169-09, 2010 WL 3702360
(Tex. Crim. App., Sept. 22, 2010) (not designated for publication)…………...…28

                                   viii
Templeton v. Dreiss, 961 S.W.2d 645 (Tex. App.---San Antonio 1998)…….74, 91

Templin v. State, 711 S.W.2d 30 (Tex. Crim. App. 1986)……………………68,69

Valdez v. State, 623 S.W.2d 317 (Tex.Crim.App. 1979)……………………….111

Weatherby v. State, 61 S.W.3d 733 (Tex. App.—Fort Worth, 2001)……52, 53, 56

Weaver v. State, 652 S.W.2d 420
(Tex. App. – Houston [1st District] 1982)………………………………..…43, 44

Welder v. Welder, 794 S.W.2d 420
(Tex. App.---Corpus Christi 1990)……………………………………….74, 81, 82

Wesbrook v. State, 29 S.W.3d 103 (Tex. Crim. App. 2000),
cert. denied, 532 U.S. 944 (2001)………………………………………………...52
Wirth v. State, 361 S.W.3d 694 (Tex. Crim. App. 2012)……………………….108

Wood v. State, 573 S.W.2d 207 (Tex. Crim. App. 1978)………………………...97
Wyatt v. State, 23 S.W.3d 18 (Tex. Crim. App. 2000)…………………………...67
Yount v. State, 872 S.W.2d 706 (Tex. Crim. App. 1993)………………………...93

FEDERAL CASES

Blockburger v. United States, 284 U.S. 299 (1932)……………………………...32

Brecht v. Abrahamson, 507 U.S. 619 (1993)………………………………….….56

Garner v. United States, 424 U.S. 648 (1976)…………………………………...48

Highland Capital Management, L.P. v. Schneider,
551 F.Supp.2d 173 (S.D.N.Y. 2008)……………………………………………..90
Minnesota v. Murphy, 465 U.S. 420 (1984)………………………….48, 49, 50, 51

Miranda v. Arizona, 384 U.S. 436 (1966)………………………………………..48

Reves v. Ernst & Young, 494 U.S. 56 (1990)………………………………...87, 89

Roberts v. United States, 445 U.S. 552 (1980)……………………………….48, 49

                                   ix
S.E.C. v. Glenn W. Turner Enterprises, Inc., 474 F.2d 476
(9th Cir.1972), cert. denied, 414 U.S. 821 (1973)………………………………..88
S.E.C. v. W.J. Howey Co., 328 U.S. 293 (1946)……………………………...87, 88

Tcherepnin v. Knight, 389 U.S. 332 (1967)………………………………………78

TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976)…………………….78

United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991)…………………90

United States. v. Monia, 317 U.S. 424 (1943)………………………………..47, 48

United States v. Gaudin, 55 U.S. 506 (1995)…………………………………….78

STATUTES AND RULES

Code Crim. Proc. Ann. art. 13.17 (West Supp. 2014)…………………………....97

Code Crim. Proc. Ann. art. 36.14 (West Supp. 2014)…………………………..103

Tex. Penal Code Ann. § 31.03………………………………………………..33, 36

Tex. Penal Code Ann. § 31.09………………………………………………98, 100

Tex. Penal Code Ann. § 32.32………………………………………………..36, 37

Tex. R. of App. P. 38.1(i)……………………………………………………….106

Tex. R. App. P. 44.2………………………………………………………….55, 56

Tex. R. Evid. 404(b)………………………………………………………….66, 67

Texas Securities Act
Tex. Rev. Civ. Stat. Ann. art. 581-1 et seq.
(West 2010 & Supp.2014)………..................33-35, 37, 72, 77-78, 86-87, 100, 107

OTHER AUTHORITIES

Wells, Joseph T., “Ponzi Scheme”, Encyclopedia of Fraud (3d ed. 2007)………65




                                      x
                                     No. 13-14-00653-CR
                                     No. 13-14-00654-CR

WILLIAM C. MAYS, Appellant,                                  THE COURT OF APPEALS

v.                                                           FOR THE THIRTEENTH

THE STATE OF TEXAS, Appellee                                 DISTRICT OF TEXAS


                                 BRIEF FOR THE STATE

TO THE HONORABLE COURT OF APPEALS:

                              STATEMENT OF THE CASE
       This is an appeal by the defendant from a felony jury trial conducted on

September 15-18, 2014, in the 214th District Court of Nueces County, Texas,

before the Honorable J. Manuel Bañales. The jury found the defendant guilty of

Theft and Securities Fraud as alleged in the indictments. After receiving evidence,

the jury assessed punishment at 10 years on the Theft offense and 20 years on

Securities Fraud offense, to be served concurrently.              In his appeal from the trial

court’s judgment and sentences to that effect, Appellant presents nine issues for

review.1




1
  While it may appear from Appellant’s Brief that he has only raised eight issues, Appellant
addresses an issue regarding a denial of jury bias instruction in his “Argument” section that is not
listed in his “Issues Presented” or “Table of Contents” sections. (Appellant’s Brief at 4-5, 8-9,
23). Appellant also seems to have mistakenly numbered two issues with the roman numeral
“VII” in his “Argument” section. (Appellant’s Brief at 23-24).

                                                 1
               STATEMENT REGARDING ORAL ARGUMENT

       Believing that the facts and legal arguments are adequately presented in the

briefs and record, that the dispositive issues have been authoritatively decided, and

that the decisional process would not be significantly aided by oral argument, see

Tex. R. App. P. 39.1, the State does not request oral argument in this case.

                  STATEMENT OF PROCEDURAL HISTORY

       Appellant was charged by indictment on September 26, 2013, with four

felony offenses:      Money Laundering,2 in the amount of $200,000 or more;

Securing Execution of Documents by Deception,3 in the amount of $200,000 or

more; Theft,4 in the amount of $200,000 or more; and Securities Fraud,5 in the

amount of $100,000 or more, all first degree felonies. (1 C.R. [13-14-00653-CR,

hereinafter “653”] at 6-7; 1 C.R. [13-14-00654-CR, hereinafter “654”] at 6-8) Each

offense was charged separately and given a separate cause number. On September

12, 2014, the State filed an Amended Motion to Consolidate Cause Nos. 13-CR-

3264-F and 13-CR-3265-F for trial, which was granted. (1 C.R. [653] at 80-82; 1

C.R. [654] at 83-85). Prior to jury selection, the State moved to strike two victims

named in the indictments, Marianne and Jerry Sevier, which was granted. (2 R.R.

at 6-7).

2
  See Tex. Penal Code Ann. § 34.02 (West 2011).
3
  See Tex. Penal Code Ann. § 32.46 (West 2011).
4
  See Tex. Penal Code Ann. § 31.03 (West 2011).
5
  See Tex. Rev. Civ. Stat. Ann. Art. 581-29 (West 2010 & Supp. 2014).

                                              2
      The case was tried to a jury on September 15-18, 2014. (1 C. R. [653] at

152-154; 1 C.R. [654] at 155-157). After the State rested its case-in chief, the

Defense presented its case, after which the jury found Appellant guilty on the Theft

and Securities Fraud offenses. (1 C.R. [653] at 107; 1 C.R. [654] at 110; 5 R.R. at

152). After receiving evidence on the issue of punishment, the jury assessed

Appellant’s punishment at confinement for ten years on the theft charge and

twenty years on the securities fraud charge, in the Institutional Division of the

Texas Department of Criminal Justice on (1 C.R. [653] at 122; 1 C.R. [654] at 128

6 R.R. at 72-73). The sentences were imposed on September 18, 2014, and the

trial court ordered that they be served concurrently. (6 R.R. at 80). The trial

court’s judgments were signed on September 26, 2014. (1 C.R. [653] at 137-138; 1

C.R. at 143-144).

      The trial court signed certificates of Appellant’s right of appeal on

September 18, 2014. (1 C.R. [653] at 108; 1 C.R. [654] at 114). Appellant filed

first notices of appeal, pro se, on September 23, 2014. (1 C.R. [653] at 135; 1 C.R.

[654] at 141.) Appellant filed second notices of appeal through defense counsel on

November 10, 2014, and his appeals are now before this Court. (1 C.R. [653] at

144; 1 C.R. [654] at 150).




                                         3
                                STATEMENT OF FACTS

       Appellant, William C. Mays, worked as Vice President of Investments for

Frost National Bank in Corpus Christi, Texas for four years from around 2000 to

2004.6 While at Frost Bank he advised customers about investing in mutual funds,

annuities, stocks, and bonds. (5 R.R. at 44). When he left Frost Bank, he decided to

become an independent advisor, and in September 2004, Appellant formed his own

company, Mays Financial Group, with an office at One Shoreline Plaza, at 800 N.

Shoreline Blvd., Corpus Christi, Texas. (5 R.R. at 46, 49). Over the next several

years, until 2011, Appellant worked in an independent contractor capacity,

remotely being associated with various investment advisory firms. (5 R.R. at 44-

45, 51). Some of Appellant’s clients at Frost Bank, including some of the victims

in the indictment, transferred their accounts from Frost to the other mutual funds

and annuities that Appellant was able to offer through his association with these

other investment advisory firms. (3 R.R. at 54; 4 R.R. at 23; 4 R.R. at 138-139; 4

R.R. at 146; 5 R.R. at 45-46).

                             Mounting Financial Difficulties

       In 2009, Appellant entered into a Loan and Security Agreement with Accion

Texas, Inc., giving Accion a blanket lien on all of Mays Financial Group’s assets,


6
  Although the record does not clearly say Appellant worked at Frost from 2000 to 2004, it is
derived from his testimony that he worked at Frost for four years before he became an
independent advisor in 2004. (5 R.R. at 42-43:24).

                                                4
including furniture, fixtures, inventory, and any accounts receivables. (7 R.R. at

State’s Ex. 11; 4 R.R. at 36-39). In January 2011, Appellant was sued in Travis

County, Texas in connection with an unpaid residential lease, which led to a

judgment against him in an amount of $20, 289. (7 R.R. at State’s Ex. 8). At the

time of the lawsuit, Appellant was already having trouble paying rent on a different

rental home he was living in as well. (4 R.R. at 91:5-17; 7 R.R. at State’s Ex. 15).

      Not long after the suit in Travis County was filed, the Appellant was

divorced and ordered in March 2011 to pay $1,100/month in child support. (7 R.R.

at State’s Ex. 7).   One month after the divorce decree, in April 2011, the IRS

issued a Notice of Federal Tax Lien against Appellant and his ex-wife in the

amount of $42,924.56. (7 R.R. at State’s Ex. 9).

      Around October 2011, Appellant decided to no longer be associated with

(and thus no longer supervised by) an investment advisory firm, and as of

November 2011, he was no longer licensed to act as an investment advisor. (7 R.R.

at State’s Ex. 12A; 4 R.R. at 42; 5 R.R. at 49, 51:21). Two months later, in January

2012, Appellant was sued by American Express for unpaid credit card claims in

the amount of $34,119. (7 R.R, State’s Ex.10). It was during this climate that

Appellant began to solicit the victims in this case.




                                           5
                         The Overall Investment Scheme

      From March 2011 to October 2012, Appellant solicited individuals to invest

their money with his business, Mays Financial Group. Appellant knew each of the

victims because he had previously served as their financial advisor while he was

still registered and licensed. (3 R.R. at 54; 4 R.R. at 23; 4 R.R. at 138-139; 4 R.R.

at 146; 5 R.R. at 45-46).       All of the victims testified about representations

Appellant had given them concerning how their money would be invested. Four of

the five victims generally understood that Appellant would be trading their funds

and investing the funds in commodities such as gold and silver. (3 R.R. at 31-32; 4

R.R. at 131, 134, 164). One of the victims understood that her funds would be

invested in small businesses and possibly later traded. (4 R.R. at 91:5-17).

      The victims received promissory notes or “Agreements” signed by

Appellant, outlining the monthly returns they could expect to receive and how long

the term of the investment was for, at the end of which, their principal investment

could be returned to them. (7 R.R. at State’s Ex. 2, 5, 13, 14, 21, 24).

                              Victim: Diane Lechuga
      Ms. Lechuga testified that she first met Appellant in the early 2000’s when

he was working at Frost Bank as a financial advisor handling her retirement

accounts and 401K. (4 R.R. at 7). In 2011, Appellant approached Ms. Lechuga

about investing with him. According to Ms. Lechuga, Appellant represented to her


                                           6
that he would be investing her funds in small businesses (4 R.R. at 9). Ms.

Lechuga did not have sufficient funds readily available to invest; however,

Appellant suggested that she borrow funds from her 401K account. (4 R.R. at 14).

Ms. Lechuga followed his advice and borrowed enough to invest $25,000 on

March 22, 2011. (4 R.R. at 12; 7 R.R. at State’s Ex. 4).

      Eliza Lujan, a financial examiner employed with the Texas State Securities

Board, prepared charts summarizing the financial records and explaining how Ms.

Lechuga’s funds were used. (4 R.R. at 78-79). Ms. Lujan’s chart, State’s Exhibit

15, showed the source and use of funds deposited and withdrawn from a Mays

Financial Group bank account ending in 5440, held at Frost Bank, for the time

period of March 23, 2011 through April 22, 2011. (7 R.R. at State’s Ex. 15). Ms.

Lujan testified that the beginning balance in the account on March 23, 2011 was

$64.28, and that she had identified only one deposit to the account during this time

period, which was a check from Diane Lechuga for $25,000, dated March 22,

2011, the funds of which became available on March 23, 2011. (4 R.R. at 90-91).

      Ms. Lujan identified and described the various expenses paid from Ms.

Lechuga’s funds, including a check, dated March 24, 2011, written to Dawn Green

in the amount of $3,589.50 with the notation “January, February, March.” (4 R.R.

at 91). She testified that Dawn Green was the owner of the home at 467 Southern

Street. (Id.). She identified other expenses paid out of Ms. Lechuga’s funds, such


                                          7
as: $3,030 paid to American Express, Capital One, HSBC and American Recovery

Service as an agent for American Express; $1,319.56 for storage, restaurants and

groceries; $1,100 paid to Celeste Robertson for child support and cash withdrawals

of $2,092.50. (4 R.R. at 91-92). She testified that the ending balance on April 22,

2011 was (-$161.10). (4 R.R. at 92).

      While on the stand, Appellant admitted that he had used Ms. Lechuga’s

funds to write a check the day after she invested with him, to pay for three months

of past due rent (January/February/March 2011) for the rental home he was

currently living in, at 467 Southern Street. (5 R.R. at 90, 95-96). He also admitted

to using Ms. Lechuga’s funds to pay for utilities, child support, health insurance,

gasoline and insurance for his truck, old electric bills and a business line of credit

he had opened five years earlier. (5 R.R. at 57-61). Appellant further admitted

that the cash from a cash withdrawal that had been identified on the financial

examiner’s chart was used to pay a car title repayment loan (5 R.R. at 57).

      Ms. Lechuga testified that Appellant never disclosed any negative

information about his business or his personal financial condition. (4 R.R. at 17).

Appellant never told her that the assets of Mays Financial Group were pledged to

Accion or that her funds would be used for any other purpose than investing in

small businesses.    (4 R.R. at 18). She specifically testified that it was never

disclosed to her that her funds would be used for paying child support, credit cards,


                                          8
loan payments, rent, utility bills or negative balances on checking accounts. (Id.).

Ms. Lechuga testified that if she had known her funds would be used that way or

had been told about any of the financial problems Appellant and his company were

having, she never would have invested. (4 R.R. at 18-19).

                               Victim: Judson Hall

      Mr. Hall first met Appellant around 2003-2006 when Appellant was working

at Frost Bank as a financial advisor handling his 401K. (4 R.R. at 129). In 2011,

Appellant approached Mr. Hall about an investment opportunity where he would

be trading in stocks and commodities which would pay dividends of 6%. (4 R.R.

at 131). Appellant had trading for Mr. Hall in the past, and his understanding was

that 100% of his investment funds would be used for trading purposes. (Id.). Mr.

Hall testified that the investment period was to be for one year, and then he could

either pull his money out or become a “partner” and receive 10% after that. (4 R.R.

at 132). On September 5, 2011, Mr. Hall wrote a check for $50,000 for this

investment. (4 R.R. at 130; 7 R.R. at State’s Ex. 21).

      Mr. Hall testified that initially he was receiving his monthly payments

according to the agreement, but when the payments “disappeared,” he decided to

terminate his agreement with Appellant. (4 R.R. at 132-133). In August 2012, Mr.

Hall met with Appellant to inform him that he wanted his principal investment

amount of $50,000 returned to him when his agreement matured in September


                                         9
2012. (4 R.R. at 133). Appellant tried to persuade Mr. Hall to keep his funds

invested with him, but Mr. Hall remained persistent that he wanted his money

back. (Id.). Mr. Hall received a check from Appellant for $35,0007 and another for

$2,500 as partial return of his original $50,000 investment. (4 R.R. at 134).

       The State’s financial examiner, Eliza Lujan, prepared a chart showing the

source and use of Mr. Hall’s funds deposited and withdrawn from the Mays

Financial Group bank account ending 5440, held at Frost Bank. (7 R.R. at State’s

Ex. 16). Ms. Lujan testified that the beginning balance on March 23, 2011 was

$401.42, and she identified the main source of funds deposited during this time

period as $50,000 from Judson Hall which accounted for 94% of the funds

available for use in the account (4 R.R. at 93-94). She identified various expenses

paid during including rent and utilities for 467 Southern Street totaling $8,636.84;

cash withdrawals of $8,204.90 and $7,780 paid to an individual named Randy

Graham. (4 R.R. at 96).

       She also identified other expenses such as: $6,372.62 for storage, restaurants

and groceries; $4,400 paid to Celeste Robertson for child support; $2,361.45 to

Texaco, Shell, Access Ford and G&L Detail; $1,353 to Capital One and HSBC and

$1,064 in loan payments to Accion Texas, Inc. (4 R.R. at 96). Ms. Lujan also

7
  On October 16, 2012, Stephen and Susan Morris invested $50,000 with Appellant. The
following day, Appellant wrote a check to Victim Judson Hall for $35,000, using the funds
invested by Mr. and Mrs. Morris. (4 R.R. at 101).

                                              10
identified one payment of $2,500 to a TD Ameritrade account ending in 1793

under the name of William C. Mays. Ms. Lujan testified that the ending balance in

the Frost Bank account on January 13, 2012 was ($229.87). (4 R.R. at 96-97).

      On another chart, States’ Exhibit 17, Ms. Lujan identified what happened to

the $2500 that had been sent to Appellant’s TD Ameritrade account ending in

1793. (7 R.R. at State’s Ex.17). She explained to the jury that the $2,500 was the

only source of funds deposited to the TD Ameritrade account from November

2011 through July 2012. (4 R.R. at 98). Ms. Lujan testified that she identified

securities purchased in the amount of $617.62 on November 16, 2011, and that the

next day, Appellant settled the transaction for a loss of $502.97. (4 R.R. at 98:24-

25). Ms. Lujan explained that the remaining funds from the original $2,500, which

after the purchase and loss was $1,850, was transferred back to Appellant’s

account at Frost Bank. (4 R.R. at 98). Ms. Lujan summarized State’s Exhibit 17 as

ultimately showing that of the $50,000 invested by Judson Hall, only $617.62 was

used for trading. (4 R.R. at 99).

      During Appellant’s testimony, he admitted that he used Mr. Hall’s funds to

pay rent, utilities and house cleaning at his home at 467 Southern. (5 R.R. at 66).

Appellant testified that he paid his child support, made purchases at Texaco, Shell

and G&L Detail, and paid money to Randy Graham to settle a lawsuit. (5 R.R. at

68, 72). He also admitted to using Mr. Hall’s funds to pay for storage, restaurant


                                        11
and groceries expenses, and for payments towards his Capital One and HSBC

credit cards, which Appellant claimed were mixed personal and business expenses.

(5 R.R. at 68, 72-73).

      Mr. Hall testified that Appellant never disclosed any negative information to

him about his personal financial condition or that of Mays Financial Group. (4

R.R. at 136). Nor did he disclose to Mr. Hall that the assets of Mays Financial

Group were pledged to Accion Texas, that he had a pending IRS tax lien or a final

judgment against him for more than $20,000 in connection with a lawsuit for

unpaid rent. (4 R.R. at 135). Mr. Hall testified that Appellant never disclosed to

him that he would use his funds for any other purpose than trading, and if he had

known how Appellant was going to use his funds, or any of the information about

the judgment, tax liens, or his financial condition, he would not have invested with

Appellant. (4 R.R. at 136).

                              Victim: Kathleen Trial

      Mrs. Trial, a retired 72 year old woman, remembers first meeting Appellant

sometime around 2005, when he was assigned to be her financial advisor at Frost

Bank. (3 R.R. at 26, 28-29). In 2012, Appellant contacted Mrs. Trial about an

investment opportunity that involved buying and selling commodities such as gold

and silver. (3 R.R. at 30-31). Mrs. Trial testified that Appellant represented to her

that the investment would last for one year, and it would pay 1.5% return on a


                                         12
monthly basis, at the end of which she could decide whether she wanted her

principal returned to her or if she wanted to keep it invested. (3 R.R. at 31-32, 35; 7

R.R. at State’s Ex. 2). Mrs. Trial told Appellant that she didn’t want to do

anything that was unsafe. Appellant never discussed any risks with Mrs. Trial. (3

R.R. at 31:5-15, 32:6-11) On August 9, 2012, Mrs. Trial signed a check that

Appellant filled out for her to invest $25,000 with Mays Financial Group. (7 R.R.

at State’s Ex. 1). Appellant filled out the check for Mrs. Trial (with the exception

of her signature) due to the tremors in her hands. (3 R.R. at 32-33).

      Mrs. Trial testified that she received monthly payments for September,

October, November and December of 2012, and eventually, after much difficulty,

received a payment in January. (3 R.R. at 36). January was the last payment they

ever received from Appellant. (Id.). Thereafter, Mrs. Trial testified that she stayed

in contact with Appellant through text messaging. The State introduced, and had

Mrs. Trial read from, screen shots that she had taken on her phone of text message

conversations she had with Appellant. (7 R.R. at State’s Ex.3). A sample of some

of the text message conversations follows, as read by Mrs. Trial:

      January 7, 2013, 12:51 p.m.

      Hey Ms. Kay, Happy New Year. Working on closing the books for
      2012. Dividens [sic] will be out shortly.

      My response: Thank you. Did you go public?


                                          13
      Not yet, about 18 to 24 months away, working on a project to import
      water from Alaskan glaciers.

      Oh, my gosh, that’s a ways from gold and silver; what’s the deal.
      Still focused on the futures, this is just another arrow in the quiver.

(3 R.R. at 41). Mrs. Trial testified that she was surprised at Appellant’s comment
about importing water, because he had never mentioned anything else but the gold
and silver commodities to her. (3 R.R. at 41). Much of the text message
conversations focused on Mrs. Trial trying to get monthly payments that were past
due, below is another example, as read by Mrs. Trial:

      Where are our dividens? [sic]

      February 21, 2013 at 1:03 p.m.

      I know I agreed to the 1st through the 6th, that is a deadline for me.
      Just hang in there, I will always protect you guys.

      You sent me a text last week and told me you would deposit February
      and March on Wednesday, February the 20th, I trust you to keep your
      word, but I am losing that feeling of trust. Where can we meet?

      In Dallas, we’ll be in CC in 2 weeks. Please just relax, you are my
      partner, will always take care of you guys.

      You can transfer our dividens [sic] from anywhere to anywhere. You
      are not answering my question, which is: Why have we not received
      our dividens? [sic] Are you out of funds?

      February 21st, 2013 at 1:37 p.m.

      Your dividens [sic] will transfer, I guess it’s within 48 hours. My
      thoughts are these…this company will go public in the next 2 years,
      which means you guys command 5% of the company. The first year
                                          14
      is always a test for me because business on this side is ruthless. At
      12% that’s a gift.

      I appreciate the fact that you see business as an exciting challenge but
      we do not. We went into this thinking we would make a small
      amount of interest in a safe investment. We are not interested in
      making big money, just at investment. Just a steady increase. I am
      not comfortable with staying in this type of investment. Plan on
      pulling out funds out at the end of our one year.

(3 R.R. at 46-47). The State’s financial examiner prepared a chart, State’s Exhibit

18, showing how Mrs. Trial’s funds were used. (7 R.R. at State’s Ex. 18). Ms.

Lujan testified that the beginning balance of Appellant’s account on August 7,

2012 was $8.00, and she identified a $25,000 check dated August 10, 2012 from

Giles and Kathleen Trial. (4 R.R. at 99). Ms. Lujan described the various expenses

paid out of this account including, $5,025.89 for rent and utilities; $3,100 payable

to Celeste Robertson for child support; and $3,090 in cash. (4 R.R. at 100). She

further identified payments totaling $3,000 to Jerry & Jodie Sevier, Giles and

Kathleen Trial, and Jud Hall and $1,935.81 to various stores including Warehouse

Liquors, HEB & Sprouts. (4 R.R. at 100). Ms. Lujan also identified a transfer of

$20,000 to a TD Ameritrade account ending 5177; however, Ms. Lujan testified

that when she reviewed the TD Ameritrade account, the vast majority of those

funds were sent back to the Frost Bank account without ever being traded. (4 R.R.




                                        15
at 99-100, 103:21-104:7). Ms. Lujan testified that the ending balance of the Frost

Bank account on October 15, 2012 was $234.50. (4 R.R. at 99-100).

      Mrs. Trial testified that Appellant never disclosed any negative information

about his personal financial condition or that of Mays Financial Group. (3 R.R. at

47). She also testified that Appellant never told her that her money would be used

for paying rent, loan payments, groceries or child support. Mrs. Trial testified that

if Appellant had disclosed to her that he would be spending her money on any of

those things she would not have invested with him. (3 R.R. at 47-48).

                          Victims: Susan and Stephen Morris

      Mr. and Mrs. Morris first met Appellant around early 2000. He was their

financial advisor at Frost Bank. (4 R.R. at 162). Appellant informed Mr. Morris

that he was retiring, and about a year after that, Appellant contacted Mr. Morris

and told him about an investment opportunity he had for him. (4 R.R. at 163).

Appellant represented to Mr. Morris that he had put together about four or five

people who were pooling their money with him and that he had been doing very

well. (4 R.R. at 164). Appellant offered Mr. Morris the opportunity to invest in

commodities with him, and told Mr. Morris that the minimum investment amount

was $100,000. (Id.).

      Mr. Morris did not invest with Appellant at this time, but about a year later.

Appellant approached Mr. and Mrs. Morris again, this time stating that the


                                         16
minimum amount to invest had decreased to $25,000. (4 R.R. at 164). Again,

Appellant represented to Mr. Morris that he would be investing in commodities.

(Id.). Appellant represented to Mr. Morris that the investment period was for one

year, and then he could have his money back or decide to stay invested with him.

(4 R.R. at 164-165).

      Appellant told Mr. Morris that after three years, his company would be

going public and there was a possibility that if stayed invested that long, he could

triple his money.      (4 R.R. at 165).    Mr. Morris, however, specifically told

Appellant that he and his wife could only do the investment for one year, and after

that he would need his money back. (Id.). Appellant told Mr. Morris that for a

$50,000 investment he would receive a $500 monthly dividend payment.

Appellant did not discuss any risks related to the investment opportunity. (4 R.R.

at 165).

      On October 16, 2012, Mr. and Mrs. Morris agreed to invest $50,000 with

Mays Financial Group and Mrs. Morris deposited the check into Appellant’s

account at Frost Bank. (7 R.R. at State’s Ex. 23). After a lot of phone calls and

texts sent to Appellant, Mr. and Mrs. Morris received only two dividend payments.

(4 R.R. at 155). Due to the failure of Appellant to follow the agreement regarding

monthly payments, Mr. Morris requested their money back. (4 R.R. at 166).

According to Mr. Morris, Appellant told him they would have to wait until the one


                                          17
year period expired and then he would return their funds and all the interest he

hadn’t paid. (Id.). Mr. Morris testified that Appellant never returned their funds.

(4 R.R. at 166-167).

      Ms. Lujan, the financial examiner from the Texas State Securities Board,

prepared a chart, State’s Exhibit 19, showing how Mr. and Mrs. Morris’ funds

were used. (7 R.R. at State’s Ex. 19). Ms. Lujan testified that the beginning

balance of Appellant’s account on August 7, 2012 was $234.50, and she identified

a $50,000 check from Stephen and Susan Morris dated October 16, 2012 which

accounted for over 73% of the funds available for use during the time period from

October 16, 2012 thru February 5, 2013. Ms. Lujan identified various expenses

paid during this time period, including a $35,000 check written on October 16,

2012 payable to Jud Hall with the notation “principal return.” (4 R.R. at 100). She

identified other checks payable to other investor/victims including: Jud Hall

($2,500), Giles & Kathleen Trial ($1,125), Stephen & Susan Morris ($1,000) and

Diane K. Lechuga ($544.48) totaling $42,669.48 or almost 63 % of the funds

available. (4 R.R. at 100-101).

      She further identified other expenses including, rent, utilities, and house

cleaning ($5,466.79); cash withdrawals ($1,980.85); child support ($1,100) and

one transfer of $14,000 to a TD Ameritrade account ending in 5177 in the name of

Mays Financial Group. Ms. Lujan, however, testified that the vast majority of the


                                        18
funds sent to the TD Ameritrade were not traded, but instead were sent back to

Appellant’s Frost Bank account. (4 R.R. at 103:23-104:1, 109:13-23; 7 R.R. at

State’s Ex. 20). She testified that the ending balance of Appellant’s Frost Bank

account as of February 5, 2013, was ($-1.71). (4 R.R. at 102).

      During his own testimony, Appellant acknowledged that the only investor

who received more than $2,000 in returns was Jud Hall.            Appellant also

acknowledged that his bank account only had $234.50 available prior to the

investment of Mr. and Mrs. Morris. Appellant admitted that on the same day he

the investment check for $50,000 from Mr. and Mrs. Morris was deposited to his

account, he then wrote a check for $35,000 on the same day to return Judson Hall

some of his principal. (5 R.R. at 105-106)

      Mr. Morris testified that Appellant never disclosed any negative information

to him about his personal financial condition or that of Mays Financial Group. (4

R.R. at 167). Nor did he disclose to Mr. Morris that the assets of Mays Financial

had been pledge, that the IRS filed a Notice of Tax Lien against him or that there

was a final judgment against him for more than $20,000. (4 R.R. at 167-168). Mr.

Morris said that Appellant never disclosed that he would use his funds for any

other purpose than trading commodities. (4 R.R. at 167-168) Furthermore, he

testified that Appellant never disclosed to him that he was no longer registered

with the State as an investment advisor at the time of his investment (4 R.R. at


                                        19
168). Mr. Morris testified that if it had been disclosed to him that Appellant would

be spending his funds in the manner he did, or if Appellant had disclosed to him

information showing that he and his company were suffering financially, he would

not have invested. (4 R.R. at 169).

                                Investigator Sabban

      Rani Sabban, an investigator for the Texas State Securities Board, testified at

trial regarding his interview of Appellant. While Appellant initially did not appear

pursuant to an administrative subpoena that the Texas State Securities Board had

issued to him, the Appellant later voluntarily came into the headquarters of the

Texas State Securities Board in Austin, Texas, to informally speak with

Investigator Sabban. (4 R.R. at 42-43, 49). The interview took place in July 2013,

two months before Appellant was indicted (4 R.R. at 49; 1 C.R. [653] at 7; 1 C.R.

[654] at 8). At the time of the interview, Appellant was not in custody, and was

free to leave at any time. (4 R.R. at 58, 64).

      The Texas State Securities Board had requested that Appellant bring with

him documentation concerning his business, Mays Financial Group, and

investments that he had sold in relation to his business. (4 R.R. at 43, 58-59, 76-

77). When Appellant arrived at the Texas State Securities Board headquarters, he

had brought with him two promissory notes he had given in exchange for money




                                           20
from two individuals, Marianne and Jerry Sevier.8 (4 R.R. at 76-77; 7 R.R. at

State’s Ex. 13, 14). Appellant identified Marianne and Jerry Sevier as investors

with Mays Financial Group. (4 R.R. at 60).                 Appellant did not produce to

Investigator Sabban any of the agreements or promissory notes for Diane Lechuga,

Kathleen Trial, Judson Hall, or Susan and Stephen Morris, though when asked

about these individuals, he acknowledged that they also were investors in his

program. (4 R.R. at 59-60, 66, 76-77).

       Investigator Sabban testified that he asked Appellant to describe in general

how his investment program at Mays Financial Group worked, and that Appellant

stated that his program involved him taking investor funds and trading them in the

futures market, making them a 6% rate of return. (4 R.R. at 60-61). Appellant was

asked by Investigator Sabban what he specifically did with the victims’ money

once he had received their investment funds. (4 R.R. at 61). Appellant represented

to Investigator Sabban that he had deposited all of the victims’ funds into his Mays

Financial Group account at Frost Bank, and from there had transferred “100 % of

the funds” to a TD Ameritrade account, where he would use the funds in trading.

(Id.). Appellant also represented to Investigator Sabban that he made daily trades




8
  Marianne and Jerry Sevier were the two victims that the State moved to be stricken from the
indictment, which the trial court granted. (2 R.R. at 6-7).

                                               21
out of the TD Ameritrade Account and had been earning an average of $6,000 per

day. (Id.).

       When questioned by Investigator Sabban as to what he was doing with these

profits, Appellant stated that 6% of the profits were being transferred out of the TD

Ameritrade Account to go back to his investors, and then anything over a 6%

profit, he would keep as pay for himself, which was on average about $3,000 to

$4,000 a month. The State’s financial examiner, Eliza Lujan, who analyzed the

TD Ameritrade account and created a chart summarizing the account statements,

specifically testified that these claims by Appellant concerning his use of investor

funds and the amount of profits he was generating from trading, were false. (4 R.R.

at 110-111; 7 R.R. at State’s Ex. 20).

       Appellant admitted to Investigator Sabban that there was no money left in

the TD Ameritrade account. (4 R.R. at 62). When Investigator Sabban inquired as

to whether he had lost all the money trading, Appellant admitted there had been

some trading losses, but nothing significant. (Id.). When pressed for what actually

had happened to the victims’ money, Appellant couldn’t give the Investigator an

answer. (4 R.R. at 62).     Investigator Sabban asked Appellant if he ever had

discussed any potential risks of the investment with the victims before they

invested. (4 R.R. at 63). He testified that Appellant represented to him that he had

told each victim that the investment would be risky and that it would be pretty


                                         22
much a “crapshoot”, and they were just going to have to trust him. (4 R.R. at

63.64).

                              Appellant’s Testimony

      Appellant testified that he was a licensed securities investment adviser for 16

years and that he was aware of the rules requiring full disclosure of information

about an investment when promoting an investment to any potential investors. (5

R.R. at 96). He also stated that he was aware of the rules within the industry that

required quarterly disclosure of advisers to their employer firms on any significant

financial matters they may have pending, including judgments and liens that an

adviser might have. (Id.).

      Appellant admitted during his testimony that he did not disclose to the

victims that he would be using their funds for personal expenses. (5 R.R. at 97).

He further admitted that he did not disclose other important financial information

to the investors, including the federal tax lien filed against him; the Travis County

judgment for more than $20,000 against him; or that the assets of Mays Financial

Group had been pledged to Accion Texas. (5 R.R. at 97-98). Appellant testified

that he planned to use investor funds for both business and personal expenses;

however, he admitted that he did not have specific discussions with the investors

about business expenses because the victims had not specifically asked him about

it. (5 R.R. at 52, 102).


                                         23
                      SUMMARY OF THE ARGUMENT

      Appellant cannot raise a double jeopardy challenge for the first time on

appeal because he did not preserve any potential error at trial, and there is no

double jeopardy violation apparent from the face of the record. Further, there is no

double jeopardy violation in this case because Appellant was convicted and

punished for the two distinct offenses of securities fraud and theft. These offenses

require different elements and the statutes from which both offenses arise are

clearly aimed at punishing different conduct.

      The trial court did not abuse its discretion in denying Appellant’s challenge

for cause of a large group of veniremembers during voir dire, which included Juror

No. 36, a juror that was impaneled on the jury. It was not an abuse of discretion

for the trial court to deny Appellant’s challenge for cause because the trial court

judge, after further examination and clarification of Juror No. 36, and the rest of

the veniremember group, was able to properly rehabilitate them and find that the

venire members had either misunderstood the law or had been confused about the

question that had been originally posed to them by Appellant’s trial counsel. More

importantly, however, Appellant’s trial counsel not only failed to use a preemptory

strike on Juror No. 36, but he also failed to request further preemptory strikes or

even object to Juror No. 36 being impaneled.




                                         24
      The trial court did not commit error in denying Appellant a mistrial on the

grounds that the State’s investigator had commented on the fact that Appellant

initially failed to appear pursuant to an administrative subpoena. This comment

was not improper because the Fifth Amendment privilege does not apply to pre-

arrest, pre-miranda silence, and Appellant’s failure to appear pursuant to the

subpoena took place before his indictment and arrest. Moreover, Appellant is

further barred from invoking the Fifth Amendment’s protections because he never

invoked his Fifth Amendment privilege. Also, any potential error caused by the

comment was cured by the trial court’s instruction to the jury to disregard the

comment, and in the alternative, even if the instruction to disregard did not cure the

error, the comment was harmless and did not contribute to Appellant’s conviction.

      The trial court did not abuse its discretion in admitting evidence identifying

Jerry and Marianne Sevier as investors in Appellant’s program. Such evidence

was not extraneous evidence of bad acts against the Seviers, but instead was

evidence presented by the State to demonstrate how Appellant had used funds

belonging to the victims who remained in the indictment, since the State presented

evidence that Appellant made payments to the Seviers out of other investors’

funds. By admitting Appellant’s own statements to the State’s investigator that the

Seviers were investors in his program, the State was able to prove that Appellant

was using investors’ money in his program to pay other earlier investors. In the


                                         25
alternative, even if this Court were to find that such evidence was extraneous

evidence of bad acts, the trial court still did not abuse its discretion in admitting the

evidence because same transaction contextual evidence is admissible.

        It was not an abuse of discretion for the trial court to allow testimony from

the State’s Securities Regulatory Expert. The State’s expert in this case gave an

appropriate opinion on whether certain transactions in the case were “securities”

and whether certain facts in the case were “material”. Such questions have been

recognized by both Texas and federal authorities to be mixed questions of law and

fact.   Ultimately, the State’s expert gave opinions that aided the jury in its

understanding of an incredibly complex industry and its determination of how

certain facts in evidence measured up to terminology within the securities industry.

        In this case, the evidence was sufficient to find that venue in Nueces County

was proper for the offenses involving one of the victims, Susan Morris, who

resided in San Patricio County, because Appellant was charged with aggregated

offenses, and several of the offenses that were aggregated with the offense

involving this victim occurred in Nueces County, Texas.

        The trial court did not abuse its discretion in denying Appellant’s request for

specific language in the jury charge relating to witness bias. As far as Appellant’s

bias instruction reflected the law, it would have been duplicative to what the trial

court had already included in its charge.           However, Appellant’s remaining


                                           26
requested language ultimately would have amounted to the judge commenting on

the credibility of the government’s witnesses and giving what would appear to be

his own suggestion to jurors on how they should specifically evaluate a witness’

credibility. In the alternative, even if it was an abuse of discretion, the denial of

such an instruction was harmless, in that Appellant’s trial counsel clearly

communicated to the jurors their belief of bias on the part of the State’s expert

witness through cross examination and closing argument.

      Aside from a brief reference to the Texas Constitution, Appellant fails to cite

any authority in support of his eighth issue on appeal, claiming that Appellant had

been imprisoned for a mere debt in violation of the Texas Constitution. Appellant

has inadequately briefed the issue, and has thus left this Court nothing to review on

the matter.

      Finally, evidence was sufficient to find that the Appellant had the requisite

criminal intent to commit securities fraud and theft because evidence at trial

established that Appellant did not use investor funds according to his agreement

with the investors, but instead used the vast majority of these funds for his personal

benefit, often times on the very same day the investors’ submitted their funds to

him. Furthermore, any minimal performance by Appellant could very well have

been an attempt on his part to appear that he was using funds in a proper manner,

and does not negate the intent he had to deprive and defraud the victims.


                                          27
                                  ARGUMENT

I. Appellant cannot raise a double jeopardy challenge for the first time on
appeal without preserving any potential error at trial, and no double jeopardy
violation has occurred because Appellant was convicted of and punished for
two distinct offenses.

      A. Appellant is barred from bringing a double jeopardy claim for the
      first time on appeal because he did not preserve any potential error at
      trial and no such violation is apparent on the face of the record.

      An appellant can forfeit a potential multiple-punishment double-jeopardy

claim if he did not properly preserve such a claim at trial. Gonzalez v. State, 973

S.W.2d 427, 431 (Tex. App.—Austin, 1998) aff'd, 8 S.W.3d 640 (Tex. Crim. App.

2000) (“We regard it as the appellant's burden to preserve, in some fashion, a

double jeopardy objection at or before the time the charge is submitted to the

jury.”); Langs v. State, 183 S.W.3d 680, 686 (Tex. Crim. App. 2006) (“This court

has, however, made it clear that a potential multiple-punishment double-jeopardy

claim may be forfeited if a defendant does not properly preserve that claim.”); see

also Teeter v. State, No. PD-1169-09, 2010 WL 3702360, at 2 (Tex. Crim. App.,

Sept. 22, 2010) (not designated for publication).

      When an appellant fails to preserve a potential multiple-punishment double

jeopardy claim at the trial level, the only way such a claim may be brought for the

first time on appeal is if undisputed facts show that a double jeopardy violation is

clearly apparent from the face of the record. Langs, 183 S.W.3d at 682 (“In this

case we reiterate that the face of the trial record must clearly show a double
                                         28
jeopardy violation before a defendant may successfully raise a ‘multiple

punishment’ double jeopardy claim for the first time on appeal.”) The Texas Court

of Criminal Appeals has made clear, however, that “when separate theories for an

offense are issued to the jury disjunctively, a double jeopardy violation is not

clearly apparent on the face of the record if one of the theories charged would not

constitute a double jeopardy violation and there is sufficient evidence to support

that valid theory.” Id. at 687; see e.g. Gonzalez, 973 S.W.2d at 431 (“The record in

this case is clear that no objection was made, and thus the jury's general verdict

finding appellant guilty of both aggravated robbery and injury to an elderly person

is proper under the circumstances.”).

      Appellant in this case failed to raise any double jeopardy challenges prior to

trial, and made no double jeopardy objections at trial, and thus has forfeited his

right to raise such a claim for the first time on appeal. Furthermore, the undisputed

facts of the case do not demonstrate a double jeopardy violation that is clearly

apparent from the face of the record. Appellant was convicted of both securities

fraud and theft.    The State charged Appellant with securities fraud in the

disjunctive, listing various manner and means in which jurors could find that he

had committed fraud against the victims. (1 C.R. [654] at 6-8, 105-106).

      Among the manner and means that were charged were intentionally failing

to disclose to victims, prior to their investment with Appellant, that the assets of


                                         29
Mays Financial Group had already been pledged to Accion Texas, that the IRS had

already filed a tax lien in the amount of $42, 924.56 against Appellant, and that a

judgment in the amount of $20, 289.59 had been obtained against Appellant for

unpaid rent. (1 C.R.[654] at 6-8, 105-106).The State further charged Appellant for

failing to disclose his personal financial condition and the financial condition of his

company, Mays Financial Group. Id. It is important to note that all of these

referenced disjunctive manner and means of committing fraud in no way involve

what Appellant actually did with the victim’s funds- that goes towards the offense

of theft, which necessarily requires an appropriation of property.

      The State further charged in the disjunctive that Appellant had failed to

disclose to victims that their funds would be used for purposes other than those the

victims had intended the funds to be used for, including paying his personal

expenses. (1 C.R. [654] at 6-8, 105-106). While these failures to disclose at least

closely resemble some of the elements of theft, the distinction that remains is that

the offense of securities fraud is what Appellant failed to tell his victims before

they invested, not what he did after. The only reason that some of the evidence to

prove theft and some of the evidence to prove this particular manner and means of

fraud would be the same is because, in order to prove that Appellant failed to

disclose to victims what he actually intended to do with the funds, the State must

necessarily show what he did with their funds. Ultimately, however, the State


                                          30
charged the Appellant disjunctively, allowing the jury to find him guilty of

securities fraud by choosing any one or a combination thereof of the different

manner and means paragraphs that were listed in the jury charge.

      In the case of Langs v. State, the Texas Court of Criminal Appeals found

that there was not a double jeopardy violation apparent from the face of the record

because at least one of the theories that had been charged in the disjunctive would

not have constituted a double jeopardy violation. 183 S.W.3d at 687; see also

Gonzalez, 973 S.W.2d at 431 (“We conclude that as long as the general verdict of

the jury can be reconciled in such a fashion that it does not implicate the double

jeopardy clauses of the federal and state constitutions, then the convictions and

punishments must stand.”)

      The Court of Criminal Appeals held in Langs that “[t]he fact that the jury’s

verdict could have relied on a theory that would violate the Double Jeopardy

Clause, is not sufficient to show a constitutional violation ‘clearly apparent on the

face of the record.’ ” Langs, 183 S.W.3d at 687. Thus, under Langs’ rationale, a

general verdict of securities fraud with several disjunctive theories will not

constitute a violation clearly apparent from the record if any of those theories

charged by the State would not constitute a double jeopardy violation with theft.

      Given the various manner and means of fraud that were charged to the jury

were based upon judgments and liens that were not disclosed to victims, the jury’s


                                         31
general verdict finding Appellant guilty of securities fraud is enough for this Court

to find, as the Texas Court of Criminal Appeals did in Langs, that there is no

double jeopardy violation apparent from the face of the record. As such, because

Appellant failed to raise a double jeopardy objection at trial, this Court should find

that Appellant has forfeited his right to bring this claim for the first time on appeal.

      B. Appellant was charged with the two distinct offenses of securities
      fraud and theft which require different elements and the statutes from
      which both offenses arise are clearly aimed at punishing different
      conduct.

      The Texas Court of Criminal Appeals adheres to the “same elements” test

first espoused in Blockburger v. United States, 284 U.S. 299 (1932), in determining

if two convictions constitute “multiple punishments” under the Double Jeopardy

Clause. Langs, 183 S.W.3d at 685. In Langs, the Court stated:

      The applicable rule is that where the same act or transaction
      constitutes a violation of two distinct statutory provisions the test to
      be applied to determine whether there are two offenses or only one,
      is whether each provision requires proof of a fact which the     other
      does not.
Id. As this rule indicates, an individual in the same transaction can be guilty of

separate offenses. Appellant’s only support for his double jeopardy claim is the

single observation that “[e]ach offense references the same money Defendant

received through his business.” (Appellant’s Brief at 14). Appellant incorrectly

stated in his brief that he had been charged with two offenses under two provisions

of the Texas Penal Code that related to fraud and theft. (Appellant’s Brief at 12).

                                           32
While Appellant was in fact charged with Theft under Texas Penal Code § 31.03,

he was also charged with Securities Fraud under Section 29-C of the Texas

Securities Act, Tex. Rev. Civ. Stat. Ann. Art. 581-1 et seq. (West 2010 and Supp.

2014), a completely separate statute from the Texas Penal Code. Both offenses

require proof of facts that the other does not. Below is a side by side element

comparison:

         2ND DEGREE THEFT                      1ST DEGREE SECURITIES FRAUD
1. The Defendant, William C. Mays             1. The Defendant, William C. Mays
2. In Nueces County, Texas                    2. In Nueces County, Texas
3. did then and there, on the dates listed    3. did then and there, on the dates listed
below                                         below
4. unlawfully appropriate, to wit:            4. directly or through agents
acquire or otherwise exercise control
over property other than real property
5. to wit: current money of the United        5. sell or offer for sale
States of America
6. from the following owners on the           6. promissory notes and Agreements by
dates alleged and in the following            William Mays or The Mays Financial
amounts…                                      Group
7. and said appropriations were without       7. being securities, to wit: promissory
the effective consent of said owners…         notes and investment contracts to each
                                              of the persons listed below on the dates
                                              alleged and in the following amounts…
8. and all of said amounts were obtained      8. and the Defendant committed fraud in
as alleged as part of one scheme and          connection with the sales or offers for
continuing course of conduct and              sale of said securities by [list of failures
                                              to disclose/misrepresentations]
9. the aggregate value of the property so     9. and all of said amounts were obtained
appropriated was more than $100,000           pursuant to one scheme and continuing
but less than $200,000                        course of conduct
                                              10. and the aggregate amount that was
                                              obtained was $100,000 or more.



                                         33
      Without even listing the seven different manner and means of fraud under

Securities Fraud in these charts, it is clear from a side by side comparison that both

offenses contain different elements. The most obvious element that must be met in

Securities Fraud, that is not required in Theft, is that there must be a security.

More importantly, however, and the key distinction that goes to the heart of

securities fraud, is that securities fraud may be committed without a sale ever

taking place, or money ever changing hands. This is significant because one of the

required elements for theft is that there must be an unlawful appropriation over

property.

      Under the Texas Securities Act, a person commits securities fraud when they

engage in fraud or a fraudulent practice “[i]n connection with the sale, offering for

sale or delivery of the purchase, offer to purchase, invitation of offers to purchase,

invitations of offers to sell, or dealing in any other manner in any security or

securities.” Tex. Rev. Civ. Stat. Ann. Art. 581-29-C (1) (emphasis added).         In

other words, the TSA’s fraud proscriptions apply to both cases where a sale was

made and those in which an alleged perpetrator has only made offers or

solicitations. See Birchfield v. State, 401 S.W.2d 825, 828 (Tex. Crim. App. 1966)

and Shappley v. State, 520 S.W.2d 766, 768 (Tex. Crim. App. 1974) (Where both

courts found that reliance on a particular misrepresentation or failure to disclose is




                                          34
not required under the Act since violations can occur through mere offers and

solicitations.)

       Thus, if a person can commit securities fraud through offerings and

solicitations, the true nature or gravamen of the offense itself that the legislature

was seeking to punish is the fraud itself, since a sale or a deprivation of property is

not required. In the jury charge in this case, which tracked the language in the

Texas Securities Act, “fraud and fraudulent practice” were defined as “any

misrepresentations, in any manner, of a relevant fact; or an intentional failure to

disclose a material fact; or any scheme, device or other artifice to obtain a

commission or profit so gross or exorbitant as to be unconscionable.” (1 C.R. [654]

at 104); see Texas Securities Act, Tex. Rev. Civ. Stat. Ann. Art. 581-4(F).

       The legislature, by seeking to punish securities fraud, even if no sale was

consummated, was seeking to punish the particular conduct of engaging in

misrepresentations and intentionally withholding information in connection with

securities. Thus, the offenses that Appellant was convicted of could be described as

punishing both Appellant’s acts prior to victims investing with him, in which he

failed to disclose a number of material facts to them, and punishing his acts after

the victims invested with him, in which he used their investment funds for his

personal benefit.




                                          35
      Texas courts have attributed such distinctions to the State legislature’s intent

in many similar cases. In Gonzalez v. State, the Third Court of Appeals held, and

the Texas Court Criminal Appeals Court affirmed, that an appellant could be

convicted and punished for both the crimes of aggravated robbery and injury to an

elderly person, despite the fact that both offenses stemmed from the same single

incident. 973 S.W.2d 427, 430-31 (Tex. App. –Austin, 1998) aff'd, 8 S.W.3d 640

(Tex. Crim. App. 2000). The Third Court of Appeals in its rationale pointed to the

fact that aggravated robbery could be completed by a mere threat of imminent

bodily injury, while the offense of injury to an elderly person required proof of an

actual injury. Id. The same can be said of Securities Fraud and Theft, in that

Securities Fraud can be completed with a mere offer to sell a security, while Theft

requires an appropriation of property.

      Similarly, in Cheney v. State, in comparing the offense of giving a false

statement to obtain property or credit (Texas Penal Code Sec. 32.32) and the

offense of Theft (Texas Penal Code Section 31.03), the Texas Court of Criminal

Appeals found that each Section was distinct in purpose:

      In object or purpose, however, a clear and marked difference exists
      between the two provisions. Section 32.32, supra, by its own
      language, proscribes the making of written false or misleading
      statements to obtain property and credit. It is the act of making such
      statements that is the gravamen of the offense, while actual
      acquisition of property or credit is not a required element of the
      offense. On the other hand, the purpose or object of Section 31.03,
      supra, is to proscribe conduct resulting in the actual acquisition of
                                         36
      property by unlawful means, in this case by false pretext. Seen
      another way, while both Section 31.03, supra, and Section  32.32,
      supra, require use of deception under the facts of this case, the
      deceptive conduct takes different forms.

755 S.W.2d 123, 129 (Tex. Crim. App. 1988). The same rationale applies to this

case. As the Court of Criminal Appeals has recognized, the gravamen of the

offense of Theft is the proscription of unlawful conduct that results in the actual

acquisition of property. Id. The offense of Securities Fraud, like the offense of

giving a false statement to obtain property or credit in Texas Penal Section 32.32,

proscribes fraudulent conduct contained in mere offers to sell a security, with proof

of an actual sale not being a required element of the offense. Texas Securities Act,

Tex. Rev. Civ. Stat. Ann. Art. 581-29(C). In contrast to Theft, the “gravamen” of

Securities Fraud is the fraud- it is the misrepresentations or failure to disclose

material information to others in connection with securities.

      Therefore, with the “gravamen” of the offenses of Securities Fraud and

Theft being different, along with both offenses requiring different elements, this

Court should find that there is no double jeopardy violation for Appellant being

convicted and punished for both offenses.




                                         37
II. The trial court did not abuse its discretion in denying Appellant’s challenge
for cause of Juror No. 36 because the Judge properly examined and
rehabilitated the juror, and in the alternative, even if the trial court did
commit error, the error was not preserved by Appellant’s trial counsel who
failed to request additional preemptory strikes or even object to Juror No. 36
being impaneled on the jury.

      A. It was not an abuse of discretion for the trial judge to deny
      Appellant’s challenges for cause of a particular group of venire
      members that included Juror No. 36 because further examination and
      clarification by the trial court resulted in the group affirming they could
      in fact presume Appellant innocent.

      It is within the sound discretion of a trial court to decide whether to strike a

venire member for cause when bias or prejudice is not established as a matter of

law, and an error is committed only when that discretion has been abused. Cortez

ex rel. Estate of Puentes v. HCCI-San Antonio, Inc., 159 S.W.3d 87, 93 Tex.

(2005). Due to the fact that trial judges are present during voir dire, “they are in a

better position to evaluate [a] juror’s sincerity and his capacity for fairness and

impartiality.” Id. at 93 (quoting Swap Shop v. Fortune, 365 S.W.2d 151, 154 (Tex.

1963)).

      On appeal, a review of such discretion must take into consideration more

than just isolated answers that might favor one litigant or the other; instead, the

entire examination must be considered.              Cortez, 159 S.W.3d at 93

(“[V]eniremembers are not necessarily disqualified when they confess ‘bias,’ so

long as the rest of the record shows that is not the case.”) Answers that at first


                                         38
might appear partial or biased can often be the result of inappropriate and

confusing questions, and can even be a result of a misunderstanding or ignorance

of the law. Id. at 92; see also Mines v. State, 852 S.W.2d 941, 945 n.7 (Tex. Crim.

App. 1992) (vacated on other grounds).              Thus, further examination or

“rehabilitation” of a juror may be warranted to demonstrate a juror’s prior

confusion or a misunderstanding of the law. Cortez, 159 S.W.3d at 92-93.

      In this case, Juror No. 36 was never specifically objected to; rather, he was a

part of a group of venire members that Appellant’s trial counsel had collectively

challenged for cause as a result of the group’s response to one of his questions

during voir dire. Appellant’s trial counsel first asked the venire panel if anyone

thought his client was guilty simply because he had been indicted by a grand jury,

and no juror responded or raised their paddle. (2 R.R. at 94).

      Then, Appellant’s trial attorney followed up with a different question- “Does

anybody feel he must have done something wrong?” and again repeated the

question, “Feel that he did something wrong, must have done something wrong.”

In response to these questions, 17 jurors, including Juror No. 36, raised their

paddles. (2 R.R. at 94-95). Later, when the Court was inquiring of any challenges

for cause, Appellant’s trial counsel challenged the large group of venire members

for cause on their inability to adhere to a presumption of innocence. (2 R.R. at

161-162). The trial judge decided to bring the group of venire members in again


                                         39
for further examination to make sure there had been no confusion. (2 R.R. at 165).

The judge addressed the venire members:

       Thank you for coming in ladies and gentlemen. During the
       examination Mr. Gilmore asked if any one of you thought that he
       had done something wrong          as a reason for him being here.
       Remember that question, more or less? I’m sure I didn’t get it
       verbatim. Now, even though you may think that he may have done
       something wrong, that may not mean that he is guilty of the offense
       charged. Even if you feel that he may have done something wrong,
       if you are not convinced that he committed an offense beyond a
       reasonable doubt, can you find him not guilty if you haven’t found
       that he did not commit an offense beyond a reasonable doubt? Can
       you still find him not guilty despite the fact that maybe he did
       something wrong but if it doesn’t constitute an offense, you would
       still be obligated to find him not guilty. Can all of you do that?

(2 R.R. at 165-166). The record indicates that the whole group answered yes. (2

R.R. at 166). At this time, the trial judge allowed further examination of the group.

When asked whether the group could presume the Appellant innocent at this stage,

Juror No. 36 expressed doubt that he could, saying that, as Appellant identified in

his brief, “in my opinion, if a grand jury has indicted him, obviously there is

something there.” (2 R.R. at 168). Appellant in his brief claims that after this point

“the juror was never properly rehabilitated by the judge”, yet the record strongly

demonstrates that the judge did in fact rehabilitate the juror. (Appellant’s Brief at

15).




                                          40
      After Juror No. 36’s comments, the trial judge then asked him if he realized

that a grand jury indictment was only an accusation, giving an example of when

someone has been given a traffic ticket for speeding, stating that at that point, it is

still just a charge or accusation of speeding that would still need to be proven in

court. (2 R.R. at 168-169). The judge continued, ultimately rehabilitating and

clarifying for Juror No. 36:

      THE COURT: All right. So here we are in a more serious charge than a
      traffic citation. And the way to get a case into district court is by way of
      indictment. And an indictment is simply an accusation that an offense has
      been committed. At trial, if the jury feels that  it’s     not     convinced
      beyond a reasonable doubt that the defendant committed the offense, then
      the jury must find him not guilty. If he presumes him innocent and there’s
      not enough evidence, then the jury finds him not guilty, follow me? Can
      you do that, sir?
      JUROR NO. 36: Yes, sir.

      THE COURT: So you can presume him innocent right now until the State
      proves guilty beyond a reasonable doubt?

      JUROR NO. 36: Yes, sir.

(2 R.R. at 170). Afterwards, when again pressed by Appellant’s trial counsel,

Juror No. 36 explained that the judge had now clarified things for him, and stated

that he could presume Appellant innocent. (2 R.R. at 171). Thus, while Juror No.

36 had initially expressed that he thought the Appellant had done something

wrong, and had perhaps initially given too much weight to the fact that there was a

grand jury indictment against him, after the judge explained it was only an


                                          41
accusation, he clearly affirmed that he could presume Appellant innocent until the

State had presented enough evidence of guilt beyond a reasonable doubt.

      The trial court in this case, in his discretion, determined that these answers

were not grounds for this juror, as well as the group of venire members, to be

struck for cause, and that the original question the way it had been phrased may

have been confusing for the group. (2 R.R. at 171). Thus, it was not an abuse of

discretion for the trial judge to overrule Appellant’s challenges to this group of

venire members. Moreover, the court, upon further clarification and examination,

rehabilitated Juror No. 36 to the degree that this Court should find that no error

occurred.

      B. In the alternative, assuming that it was error for the trial court to
      deny Appellant’s challenge for cause of the venire member group,
      Appellant still failed to preserve any error for review by this Court.

      The Texas Supreme Court and the Texas Court of Criminal Appeals have

stated that in order to preserve error when a challenge for cause is denied, an

appellant must show that he in fact was forced to take an objectionable juror.

Cortez, 159 S.W.3d at 91; see also Sifford v. State, 505 S.W.2d 866, 867 (Tex.

Crim. App. 1974) (“Assuming the record shows the prospective juror was subject

to challenge for cause, it does not reflect that the appellant requested an additional

challenge after he had exhausted all of his peremptory challenges, or that he was

forced to take an objectionable juror. No error is shown.”)


                                          42
      In order to do so, when an appellant’s challenge for cause for a juror has

been denied and that particular juror becomes impaneled on the jury, an appellant

must show that he had exhausted all his preemptory strikes prior to that juror, that

he had requested additional preemptory strikes and, if this request was denied, that

he then notified the court that, as a result of the denial, a specific objectionable

juror will remain on the jury venire. Cortez, 159 S.W.3d at 89-91; Escamilla v.

State, 143 S.W.3d 814, 821 (Tex. Crim. App. 2004). The rationale behind this is to

ensure that “the court is made aware that objectionable jurors will be chosen while

there is still time to determine if the party was in fact forced to take objectionable

jurors.” Cortez, 159 S.W.3d at 91 (quoting Hallet v. Houston Northwest Medical

Center, 689 S.W.2d 888, 890 (Tex. 1985)).

      Many Texas courts have not allowed appellants to raise this issue on appeal

when they failed to request additional preemptory strikes after they had exhausted

all of their strikes. Adami v. State, 524 S.W.2d 693, 700 (Tex. Crim. App. 1975)

(“[A]s to appellant’s contentions concerning jurors Roberson and Woodeal, the

record does not reflect that appellant requested additional peremptory challenges to

use on these jurors, or that the court would not have given additional challenges if

request had been made.”); Weaver v. State, 652 S.W.2d 420, 423 (Tex. App. –

Houston [1st District] 1982) (“Regardless, appellant may not raise this issue on

appeal since he did not request an additional peremptory challenge after exhaustion


                                          43
of his original ten challenges to use on a second juror, whose presence he alleged

to be objectionable.”); see also Sifford, 505 S.W.2d at 867.

      In this case, before any peremptory strikes were used, Appellant challenged

for cause the large group of venire members that included Juror No. 36, and the

trial court, after further examination and clarification of the group, denied that

challenge.   (2 R.R. at 171).     After the State and Appellant used all of their

respective peremptory strikes, the Judge announced who the panel would be from

the remaining venire members that had not been struck, which included Juror No.

36. (2 R.R. at 172). The trial judge, after announcing the panel, asked if there

were any objections to the jurors chosen, and Appellant’s trial counsel clearly said

“No, Your Honor.” (2 R.R. at 172).

      By failing to give any indication to the judge that there was a juror on the

panel that he objected to, he demonstrated to the judge the exact opposite, that

there were no objectionable jurors on the panel. Appellant’s counsel failed to

request additional peremptory strikes at this time, and he failed to object to the

juror that he now wishes to challenge on appeal, and as such, he has not preserved

any potential error for this Court to review on this issue.




                                          44
III. It was not improper for the State’s investigator to comment on
Appellant’s failure to appear pursuant to a subpoena because the Fifth
Amendment privilege does not apply to pre-arrest, pre-miranda silence,
Appellant never invoked his Fifth Amendment privilege, any potential error
caused by the comment was cured by the trial court’s instruction to the jury,
and in the alternative, the comment was harmless and did not contribute to
Appellant’s conviction.

      A. The Fifth Amendment does not protect against comments on
      Appellant’s failure to appear pursuant to a pre-arrest, pre- Miranda,
      administrative subpoena, and thus any comment on the Appellant’s
      failure to do so was not improper.
      The Texas Court of Criminal Appeals has definitively held that “pre-arrest,

pre-Miranda silence is not protected by the Fifth Amendment right against

compelled self-incrimination, and that prosecutors may comment on such silence

regardless of whether a defendant testifies.” Salinas v. State, 369 S.W.3d 176, 179

(Tex. Crim. App. 2012); see also Morales v. State, 389 S.W.3d 915 (Tex. App.--

Houston, 2013).

      The Court of Criminal Appeals first squarely addressed this issue in 2012 in

the case of Salinas v. State, 369 S.W.3d 176 (Tex. Crim. App. 2012). In that case

the defendant, at the request of police officers, voluntarily accompanied them to

the police station for questioning.   Id. at 177. The defendant answered every

question that was posed to him, until he was asked a question about whether

certain shotgun shells found at a crime scene would match a shotgun found at his

home. The defendant in response to this question remained silent. Id. At trial, the

State was allowed to introduce evidence of the defendant’s silence in response to

                                        45
this question over the objection of counsel; the defendant did not testify at trial,

and was convicted. Id.

      In appealing this conviction, it was argued that the State could not introduce

evidence of his silence because he could invoke his right to remain silent whether

or not he was in custody.      The Texas Criminal Court of Appeals disagreed,

ultimately observing “[i]n pre-arrest, pre-Miranda circumstances, a suspect’s

interaction with police officers is not compelled. Thus, the Fifth Amendment right

against compulsory self-incrimination is simply irrelevant to a citizen’s decision to

remain silent when he is under no official compulsion to speak.” Id. at 179.

      In this case, Appellant seeks the protection of the Fifth Amendment from

comments on his failure to respond to an administrative subpoena, though as the

record indicates, Appellant eventually did submit to an interview with the State’s

investigator and produce records that were in response to those requested in the

subpoena. (4 R.R. at 43, 49, 58-63). Appellant received this subpoena prior to his

interview with the State’s investigator which took place in July of 2013. (4 R.R. at

43, 49). He was indicted in September of 2013, and subsequently arrested. (1 C.R.

[653] at 6-7, 9; 1 C.R. [654] at 6-8, 10). Thus, Appellant was in a “pre-arrest, pre-

Miranda” circumstance when he received the Texas State Securities Board

subpoena. It therefore follows that Appellant’s silence or failure to respond to an




                                         46
administrative subpoena is not protected by the Fifth Amendment and the State

may comment on such absence or “silence.”

      B. Appellant failed to affirmatively invoke his Fifth Amendment
      privilege when he initially failed to appear pursuant to an
      administrative subpoena, barring Appellant from claiming any of its
      protections.
      Appellant asserts that the State violated his Fifth Amendment right when its

investigator commented on the fact that, prior to him voluntarily coming in to be

interviewed by the investigator, he had failed to appear pursuant to a subpoena he

received from the Texas State Securities Board. (Appellant’s Brief at 15-16). There

is no evidence from the record, including Appellant’s direct examination

testimony, to indicate that Appellant’s initial failure to appear was the result of his

invocation of a Fifth Amendment privilege. Given that the Fifth Amendment

privilege is not ordinarily self-executing, Appellant’s failure to invoke this

privilege prevents him from asserting its protection over his initial failure to act in

response to a subpoena.

      The Fifth Amendment privilege against compelled self-incrimination is not

self-executing, but is a privilege that ordinarily must be invoked. United States v.

Monia, 317 U.S. 424, 427 (1943) (“[t]he [Fifth] Amendment speaks of

compulsion. It does not preclude a witness from testifying voluntarily in matters

which may incriminate him. If, therefore, he desires the protection of the privilege,

he must claim it or he will not be considered to have been ‘compelled’ within the

                                          47
meaning of the Amendment.”); Garner v. United States, 424 U.S. 648, 655 (1976)

(“Unless a witness objects, a government ordinarily may assume that its

compulsory processes are not eliciting testimony that he deems to be incriminating.

Only the witness knows whether the apparently innocent disclosure sought may

incriminate him, and the burden appropriately lies with him to make a timely

assertion of the privilege.”); Roberts v. United States, 445 U.S. 552, 559 (1980)

(“[P]etitioner did not assert his privilege or in any manner suggest that he withheld

his testimony because there was any ground for fear of self-incrimination.”);

Minnesota v. Murphy, 465 U.S. 420, 428 (1984) (“[N]othing in our prior cases

suggests that the incriminating nature of a question, by itself, excuses a timely

assertion of the privilege.”); Johnson v. State, 357 S.W.3d 653 (Tex. Crim. App.

2012) (“To seek the protection of the Fifth Amendment, a defendant in a criminal

case normally must affirmatively assert the privilege.”).

      An exception to this rule is when an individual is subjected to custodial

interrogation in which the setting contains “inherently compelling pressures which

work to undermine the individual’s will to resist and to compel him to speak where

he would not otherwise do so freely.” Murphy, 465 U.S. at 430 (citing Miranda v.

Arizona, 384 U.S. 436, 467 (1966)).        Thus, the safeguard requirements of a

Miranda warning, and an exception to the rule that an individual must

affirmatively assert the privilege, are only applicable within the context of an


                                         48
inherently coercive custodial interrogation. Id. at 430 (citing Roberts v. United

States, 445 U.S. 552, 560 (1980)). Merely being required by the Government to

appear to give testimony and speak truthfully is not considered an inherently

compelling pressure that rises to the level of a custodial interrogation where an

individual is not required to assert his Fifth Amendment privileges. Id. at 427.

      In Murphy, the United States Supreme Court found that a defendant who

was on probation and under a court order to periodically meet with his probation

officer, and speak truthfully to that officer, was not compelled into giving

incriminating statements that he gave in response to the probation officer’s

questions about his possible involvement with a previous offense. Id. at 432-434.

In that case, the Supreme Court found that the defendant should have asserted his

Fifth Amendment right, and the circumstances of being under a court order to meet

with his probation officer was not enough to give rise to a coercive situation in

which he didn’t need to affirmatively assert the privilege. Id. This was true even

though his refusal to meet with his probation officer may have resulted in future

confinement. Id. The Murphy court specifically compared the defendant’s situation

to that of a person who is required to appear and give testimony pursuant to a

subpoena, stating:

      [T]he general obligation to appear and answer questions truthfully
      did not in itself convert Murphy’s otherwise voluntary statements
      into compelled ones. In that respect, Murphy was in no better
      position than the ordinary witness at a trial or before a grand jury
                                         49
      who is subpoenaed, sworn to tell the truth,        and    obligated   to
      answer on the pain of contempt, unless he invokes the privilege and
      shows that he faces a realistic threat of self- incrimination.      The
      answers of such a witness to questions put to him are not compelled
      within the meaning of the Fifth Amendment unless the witness is
      required to answer over his valid claim of the privilege. This     much
      is reasonably clear from our cases.
Id. at 427 (emphasis added). In this case, Appellant is claiming the protection of

his Fifth Amendment right against self-incrimination, and therefore to remain

silent, in response to an administrative subpoena.        Appellant necessarily, in

asserting that this right was violated when the investigator commented on his

initial failure to appear pursuant to the subpoena, must rely on the notion that he

did not need to affirmatively invoke the privilege, since there is no evidence in the

record whatsoever that Appellant did so.

      What also must follow is that the subpoena request in and of itself must have

given rise to certain circumstances that allow Appellant to claim the Fifth

Amendment’s protections without its invocation, a line of reasoning that was

squarely rejected by the Supreme Court’s holding in Murphy. Murphy’s holding

was clear that the obligation to appear and give testimony under a subpoena is not

a coercive circumstance from which an individual is relieved of the requirement to

affirmatively invoke their Fifth Amendment privilege if they wish to rely upon its

protections later. Murphy, 465 U.S. at 435. (“A state may require a probationer to




                                           50
appear and discuss matters that affect his probationary status; such a requirement,

without more, does not give rise to a self-executing privilege.”)

      Furthermore, it is also important to note that even if Appellant had invoked

this privilege at this point in time, Appellant may very well have waived the

privilege when he later did appear at the Texas State Securities Board’s

headquarters and spoke with the State’s investigator. (4 R.R. at 49). The State’s

investigator testified that the subpoena had requested testimony from the Appellant

in relation to Mays Financial Group, and requested him to produce documents in

relation to Mays Financial Group. (4 R.R. at 43). According to the investigator’s

testimony, he and the Appellant discussed Mays Financial Group at length and the

Appellant even produced documentation in relation to Mays Financial Group that

he gave the investigator. (4 R.R. at 49, 58-63).

      There is nothing from the record that indicates that Appellant ever

affirmatively invoked his Fifth Amendment right when he chose to initially not

appear in response to the TSSB’s subpoena, and as such, he is barred from

claiming that this right was violated by the state investigator’s comments.

Moreover, the fact that Appellant later voluntarily came in and discussed topics

and produced records that were the same as those requested in the subpoena,

indicates that Appellant’s initial failure was not an exercise of his Fifth




                                          51
Amendment right, and even if it was, his later appearance waived any privilege

that Appellant claims was violated.

      C. Even if this Court were to find that the comment on Appellant’s
      initial failure to appear pursuant to a subpoena was improper, the
      trial court’s instruction to the jury to disregard the comment was
      enough to cure the error.
      An instruction to disregard a particular comment is presumed to cure the

harm. Wesbrook v. State, 29 S.W.3d 103, 115 (Tex. Crim. App. 2000), cert.

denied, 532 U.S. 944 (2001). It is also presumed that a jury will follow a court’s

instructions to disregard a particular comment. Id. at 116; see also Weatherby v.

State, 61 S.W.3d 733, 738 (Tex. App.—Fort Worth, 2001).

      Thus, except in extreme cases, when a trial court is prompt in instructing a

jury to disregard a particular comment, it cures any error caused by the comment,

and as a result, a trial court does not commit error in denying a mistrial. E.g.,

Bower v. State, 769 S.W.2d 887, 907 (Tex. Crim. App. 1989) (“We agree that the

argument made by the prosecutor was a comment on the defendant’s failure to

testify. However, we believe that the error was cured by the court’s sustaining of

appellant’s objection and the instruction to disregard.”); Moody v. State, 827

S.W.2d 875, 890 (Tex. Crim. App. 1992) (“We find that any potential error in the

witness’s mentioning of an arrest jacket was cured by the trial court’s instruction to

disregard; thus there was no error in denying the motion for mistrial.”); Dinkins v.

State, 894 S.W.2d 330, 356 (Tex. Crim. App. 1995) (“[W]e agree with appellant

                                          52
that this testimony constituted a comment on appellant’s post-arrest silence and

was therefore inadmissible. However, this does not lead to an automatic reversal.

      In the instant case, the trial judge sustained appellant’s objection and

instructed the jury to disregard Hobbs’ testimony. Therefore, we find the error was

cured.”); see also Weatherby, 61 S.W.3d at 738 (“In light of the trial court’s

prompt instruction to the jury to disregard the comment and appellant’s failure to

rebut the presumption that the instruction cured the harm, we hold the trial court

did not err by denying his motion for mistrial.”). These cases illustrate that an

instruction to disregard, like the instruction by the trial court in this case, is enough

to cure any error from improper comments.

      In this case, the comment in front of the jury that Appellant challenges is in

the following exchange between the State’s prosecutor and the State’s investigator:

      Q: Did the State Securities Board issue a subpoena to the defendant?

      A: Yes, ma’am.

      Q: What did that subpoena require?

      A: The subpoena was a request for two things: For Mr. Mays to come
      in and provide testimony related to Mays Financial Group and for
      Mr. Mays to provide documents in his possession related to   Mays
      Financial Group.

      Q: To your knowledge, did the defendant appear to give testimony
      pursuant to the subpoena?

      A: No, he didn’t.


                                           53
      Q: Did he eventually come in for an interview?

      A: Yes, ma’am, he did.

(4 R.R. at 42-43). Appellant’s trial counsel after this exchange objected to any

comment on Appellant’s failure to appear. (4 R.R. at 45). They also requested a

jury instruction to disregard the comment and moved for a mistrial. (4 R.R. at 46-

47). The trial court denied the motion for a mistrial. (4 R.R. at 47). It then

instructed the jury with the following:

      THE COURT: Members of the jury, you will remember that when I
      gave you instructions at the time of jury selection, that I told you
      about the right of a person to not testify at his trial. That right is
      based on the Constitution of the United States and the Constitution of
      Texas and the laws of the State of Texas. The right not to testify
      extends not only during the course of the trial, but also to events
      outside of the courtroom. And I am sure you are familiar with those
      TV programs where you see an officer advising a person of his rights,
      of his Miranda rights, if you will. So the right extends to events and
      places outside of the courtroom; and a person may refuse to talk to
      police officers to give them a statement or for other purposes; and a
      person may even, if he shows up at that point, decline to say
      anything to a police officer. So the right to not visit with the police
      officer or an agent of the State is also included within the fifth
      amendment privilege that a person has.

(4 R.R. at 47-48). The trial court went on to instruct the jury further:

      THE COURT: And, members of the jury, in that regard, I will instruct
      you to disregard any testimony offered by the witness either in
      response to a question or what was stated in a question, that the
      defendant did not appear at the office of this officer in response to the
      subpoena.




                                          54
(4 R.R. at 48-49). Irrespective of whether the comment was improper or not, the

trial court in this case promptly gave instructions to the jury to disregard any

comment by the state’s investigator that alluded to the fact that Appellant did not

initially appear pursuant to the subpoena. This instruction, as it was found in

Moody, Dinkins, Bowers, and Weatherby, was enough to cure any error from the

comment. Particularly since the duration of the testimony that proceeded after the

instruction was about when the Appellant decided to not remain silent, and instead

decided to appear and speak with the State’s investigator. (4 R.R. at 49, 58-63).

Furthermore, the jury heard testimony from the Appellant himself both at the

guilt/innocence phase and the punishment phase of the trial. (5 R.R. at 38-106, 6

R.R. at 41-54).

       This isolated comment, if this Court were to find it to be improper, was

cured by the trial court’s prompt and direct instructions to the jury to disregard, and

as such, the trial court committed no error in denying Appellant’s request for a

mistrial.

       D. In the alternative, assuming the State’s comment was improper and
       the trial court’s instruction was not enough to cure the error, this Court
       should find beyond a reasonable doubt that the comment was harmless
       in that it did not contribute to Appellant’s conviction.
       Only when a reviewing court has determined that an instruction to disregard

was ineffective to cure an error, does a reviewing court go on to determine the

harm, if any, from the comment and its impact on a jury’s verdict. Tex. R. App. P.

                                          55
44.2; see Weatherby, 61 S.W.3d at 737. If this Court were to find, beyond a

reasonable doubt, that the comment challenged by Appellant did not contribute to

the verdict, then the comment is deemed harmless, and does not warrant a reversal.

Neal v. State, 256 S.W.3d 264, 284 (Tex. Crim. App. 2008) (“If we find, beyond a

reasonable doubt, that a constitutional error did not contribute to the verdict, then

the error was harmless such that we will not reverse the judgment.”) see also

Brecht v. Abrahamson, 507 U.S. 619 (1993) (“Our inquiry here is whether, in light

of the record as a whole, the State’s improper use for impeachment purposes of

petitioner’s post-Miranda silence had substantial and injurious effect or influence

in determining the jury’s verdict.”).

      To make this determination, this Court must “calculate, as nearly as

possible, the probable impact of the error on the jury in light of the other

evidence.” Neal, 256 S.W.3d at 284. The Texas Criminal Appeals Court, in

interpreting Texas Rules of Appellate Procedure 44.2(a), has stated “[t]he

harmless-error inquiry under Rule 44.2(a) should adhere strictly to the question of

whether the error committed in a particular case contributed to the verdict in that

case.” Snowden v. State, 353 S.W.3d 815, 821 (Tex. Crim. App. 2011).          In this

case, the evidence against Appellant was overwhelming, and the isolated reference

about the Appellant’s decision to initially not appear pursuant to a subpoena did




                                         56
not affect, persuade, or prejudice the jury in its fact-finding function and its

ultimate verdict.

      Several cases illustrate the weight and impact that courts are to give to

certain isolated comments and other constitutional errors under this harm analysis.

In Neal v. State, the Texas Court of Criminal Appeals addressed the issue on

appeal of whether evidence seized from a motel room, which had been found to be

inadmissible, had contributed to the jury’s guilty verdict. The Texas Court of

Criminal Appeals found the evidence had not contributed to the jury verdict, and

thus rendered the error harmless. 256 S.W.3d at 284. In arriving at its decision,

the Criminal Court of Appeals observed that the evidence from the motel room and

the way it was presented at trial was just “adding one more vivid detail to the much

larger story of the events surrounding the murder…” and observed that the

evidence “was not essential to the State’s case.” Id. The Court also attributed its

decision to the fact that the State had presented overwhelming evidence of the

appellant’s guilt outside of the evidence obtained from the motel room. Id.

      Similar to Neal, in the case of Snowden v. State, the Texas Court of Criminal

Appeals was reviewing the issue of whether the State’s prosecutor had improperly

commented on the appellant’s failure to testify at trial, and whether such comments

contributed to the guilty verdict.    353 S.W.3d 815 (Tex. Crim. App. 2011).

Finding that the trial court erred in not sustaining the original objection to the


                                         57
prosecutor’s comment, the Texas Court of Criminal Appeals nevertheless found

that the comment itself was harmless and had not contributed to the verdict. Id. at

826.

       The Snowden Court arrived at its decision by pointing out that “[t]his error

was isolated” and that it “was never repeated or emphasized.” Id. at 825. It also

observed that “[t]he evidence against the appellant was substantial, if not

overwhelming”, noting that the case would come down to whether or not the jury

had found the victim credible, with the Court reasoning that if the jury did not

believe the victim, any reference to the appellant’s failure to testify would not have

mattered. Id. The Court ultimately concluded, “the precise error in this case, in our

view, did not move the jury from a state of non-persuasion to a state of persuasion

on any material issue in the case, nor is it reasonably likely to have caused such

prejudice as to distract the jury or divert it from its proper fact-finding role.” Id.

       In this case, the reference to Appellant’s initial failure to appear pursuant to

a subpoena was an isolated comment. (4 R.R. at 43). After the judge instructed the

jury to disregard it, the State never repeated or emphasized it. Furthermore, unlike

Snowden in which the appellant in that case never took the stand at trial, the jury in

this case not only got to hear testimony from the State’s investigator about

conversations he had with Appellant, but they also got to hear from Appellant

himself both at the guilt/innocence stage of the trial, and at punishment.        As the


                                           58
Texas Court of Criminal Appeals reasoned in Snowden, much of the jury’s

decision could have come down to whether or not they found Appellant’s own

testimony credible, and regardless if they did or did not, the fact that he on an

earlier occasion, before speaking to the State’s investigator, decided not to appear

pursuant to an administrative subpoena, would not have had significance in their

verdict.

      Furthermore, like the Court of Criminal Appeals found in Neal and

Snowden, the evidence presented by the State against Appellant in this case is

overwhelming. The jury heard testimony from victims such as Kathleen Trial who

testified that Appellant had represented to her and her husband that their

investment of $25,000 would be invested in commodities, particularly gold and

silver. (3 R.R. at 31-32).   The jury also heard from Diane Lechuga that the

Appellant initially represented that her investment of $25,000, which she testified

she obtained at the Appellant’s recommendation by borrowing against her 401K,

would be used to invest in small businesses and later possibly traded in

commodities. (4 R.R. at 10-11, 14, 27-28). They also heard from Judson Hall and

Stephen Morris that Appellant represented to them that their investments would be

invested in stocks and commodities. (4 R.R. at 131, 134, 164).

      The jury then was shown, through the testimony of the State’s witness Eliza

Lujan, a financial examiner for the Texas State Securities Board, that each victim’s


                                         59
funds had not been used in the manner that was represented to them by Appellant.

Having reviewed bank accounts belonging to the Appellant, Ms. Lujan testified

that the victims’ funds were instead used for personal expenses such as rent,

utilities, house cleaning for his personal residence, credit card payments, loan

payments, cash withdrawals, payments on past judgments obtained against him,

restaurants, groceries, child support, and payments to others that had also invested

with him. (4 R.R. at 91-92, 96, 99-102).

      The State also presented evidence through Ms. Lujan and Mr. Sabban, the

State’s investigator, that Appellant, prior to and while he was approaching many of

the victims to invest with him, was having significant financial difficulties. Ms.

Lujan testified that the balance of Appellant’s bank accounts, prior to receiving the

victims’ funds was extremely low, sometimes reflecting a negative balance, with

some victims’ investments being spent in as little as a month’s time. (4 R.R. at 90,

92-93, 99, 100-101, 103).

      The jury heard evidence from Ms. Lujan that suggested that at the time of

Diane Lechuga’s investment, who was the first investor, Appellant was three

months behind on his rent for a home he was renting in Corpus Christi. (4 R.R. at

91:5-17). Specifically, Ms. Lujan testified seeing a check written in March for

$3,589.50, to Appellant’s landlord with the notation of “Jan., Feb., Mar.” (Id.).

Ms. Lujan testified that the funds out of which the check was drawn had originated


                                           60
from Ms. Lechuga’s investment funds. (7 R.R. “Exhibit Volume” 9 at State’s Ex.

15).

          The State further presented evidence of a tax lien against Appellant in the

amount of $42,924.56, a divorce decree ordering Appellant to make $1100 per

month in child support payments, a lawsuit for unpaid credit card debt, loan

documents showing that the assets of Mays Financial had been pledged, and a

judgment in excess of $20,000 for unpaid rent from a landlord in Austin, Texas. (7

R.R. “Exhibit Volume” at State’s Ex. 6, 7, 8, 9, 10, 11). The jury heard the victims

testify that Appellant had never disclosed these financial troubles to them prior to

their investments. (3 R.R. at 47-48; 4 R.R. at 17-19, 135-136, 155, 167-170). Even

Appellant himself, on cross-examination admitted that he did not disclose to the

victims some of his and his company’s financial problems, or the fact that he was

planning on using some of their funds for personal expenses. (5 R.R. at 96-98).

          Given the overwhelming amount of evidence the State introduced against

Appellant, and that the comment by the State’s investigator was isolated and

neither repeated nor emphasized, this Court should find the comment harmless, and

that the trial court did not commit error in denying Appellant a mistrial.




9
    The “Exhibit Volume” of the reporter’s record is captioned “Volume 7 of 7 Volumes.”

                                                61
IV. The trial court properly admitted evidence identifying Jerry and
Marianne Sevier as investors in Appellant’s program to allow the State to
demonstrate how Appellant had used funds belonging to victims listed in the
indictment, to make payments to the Seviers; such evidence is not extraneous
evidence of bad acts, but in the alternative, even if it was, it was still proper
because same transaction contextual evidence is admissible.

      A. Evidence identifying Jerry and Marianne Sevier as investors in
      Appellant’s program was not extraneous evidence of bad acts against
      the Seviers, but instead established that investors in his program had
      received portions of funds belonging to the victims who remained in the
      indictment.

      In Appellant’s fourth issue, he asserts that the trial court erred in allowing

testimony and evidence over the objection of his defense counsel, regarding parties

that were struck from the indictment before trial. (Appellant’s Brief at 17-19).

      A trial court’s ruling on the admissibility of evidence, including those

alleged to be extraneous offenses, is reviewed under an abuse of discretion

standard. Prible v. State, 175 S.W.3d 724, 731 (Tex. Crim. App. 2005); see also

Santellan v. State, 939 S.W.2d 155, 169 (Tex. Crim. App. 1997). As long as the

trial court’s ruling is within the “zone of reasonable disagreement,” there is no

abuse of discretion, and the trial court’s ruling will be upheld. Prible, 175 S.W.3d

at 731; Santellan, 939 S.W.2d at 169.

      During trial, the prosecution presented evidence through the testimony of

Investigator Rani Sabban that included statements the Appellant made and

documents the Appellant produced to Investigator Sabban during an interview that

took place in July 2013. (4 R.R. at 49, 59-63). Specifically, the State introduced
                                         62
what was admitted into evidence as State’s Exhibits 13 and 14, documents the

Appellant gave to Investigator Sabban regarding Jerry and Marianne Sevier. (4

R.R. at 59; 7 R.R. at State’s Ex. 13, 14). Defense counsel objected and a bench

conference followed. (4 R.R. at 50-58).

      The State indicated that the evidence was being offered to show that the

Defendant turned over the records and acknowledged that Jerry and Marianne

Sevier were investors in his program. (4 R.R. at 50). Furthermore, the State

explained that they planned to show that the some of the victims in the indictment

who had invested after the Seviers, had portions of their funds used to make ponzi

payments to the Sevier’s. (4 R.R. at 56). Although the Seviers were no longer in

the indictment at the time of trial, the State still had the burden to demonstrate

what happened to each of the funds belonging to the victims who remained in the

indictment, and the State indicated that some of the victims remaining in the

indictment had their funds used to pay the Seviers. (4 R.R. at 56). It was thus

necessary for the State to provide evidence of who the Seviers were in relation to

Appellant. The State indicated that the evidence ultimately “goes to show that

there was a continuing scheme and course of conduct” in that Appellant, when

making what he claimed were “monthly interest payments” to his investors, was

regularly using victim’s funds to pay earlier investors (4 R.R. at 53). The State

simply sought to show that the Seviers were earlier investors.


                                          63
      The evidence admitted as State’s Exhibits 13 and 14 therefore did not

constitute extraneous or bad acts against the Seviers. State’s Exhibit 13 and 14,

along with the testimony elicited from Investigator Sabban regarding those

exhibits, solely served the purpose of identifying for the jury the individuals who

had received other victims’ money, and that these individuals were also investors

in Appellant’s program. The identity of who the Seviers were would come into

question during later testimony that the State offered through its financial

examiner, Ms. Lujan, who had traced and testified to how the funds of those listed

in the indictment were used. (4 R.R. at 50:8-20, 51, 56, 100; 7 R.R. at State’s Ex.

18). For example, in State’s Exhibit 18, Ms. Lujan had listed a $1500 payment out

of the funds that had been invested by Kathleen Trial, one of the victims in the

indictment, was paid to the Seviers. (7 R.R. at State’s Ex. 18; 4 R.R. at 100).

      It is important to note that after introducing State’s Exhibits 13 and 14, only

one question was asked of Investigator Sabban regarding the Sevier’s.

      Q:     Did the defendant tell you who Marianne and Jerry Sevier
             were?

      A:     Yes, ma’am. He just identified them as investors with Mays
             Financial Group.

(4 R.R. at 60). There was no additional testimony elicited from Investigator

Sabban or the State’s financial examiner about how the funds specifically invested




                                         64
by Jerry and Marianne Sevier were used or whether they had been victims of

securities fraud, whatsoever.

      While the State’s financial examiner could testify as to individual names she

identified in the Appellant’s bank accounts who were receiving victims’ funds, she

could not testify with any personal knowledge who those individuals were or how

they were connected with Appellant.            Appellant’s statements to the State’s

investigator demonstrated that victims’ funds were going to individuals, who the

Appellant himself acknowledged, were investors in his program.           This is the

quintessential definition of a Ponzi scheme, using later investors’ funds to make

payments to earlier investors. (4 R.R. at 234); Wells, Joseph T., “Ponzi Scheme”,

Encyclopedia of Fraud (3d ed. 2007).

      The copies of the Appellant’s promissory notes to the Seviers, and the

admission by Appellant that the Seviers were investors in his program, do not

constitute evidence of bad acts because that testimony and those promissory notes

do not suggest any wrong doing by Appellant to the Seviers. The State, however,

had every right to produce evidence in showing Appellant’s wrongdoing to the

other victims’ in the indictment, including when Appellant used victims’ funds to

pay other investors (the Seviers) in his program. Thus, the trial court did not error

in allowing the State to admit this evidence during trial.




                                          65
      B. In the alternative, assuming that the evidence was extraneous
      evidence of bad acts, the trial court still did not commit error in its
      admittance because this evidence was contextual, within the same
      transactions that were occurring during Appellant’s scheme and
      continuing course of conduct.

      Even assuming the evidence admitted at trial regarding the Sevier’s was

evidence of extraneous “bad acts”, it was still properly admitted within the

discretion of the trial court as it was relevant as contextual, same transaction

evidence. While such evidence is not permitted “to prove the character of a person

in order to show that he acted in conformity therewith,” the State did not introduce

such evidence to highlight Appellant’s character. Tex. R. Evid. 404(b). The

promissory notes turned over by Appellant to Investigator Sabban, and his

statements identifying the Seviers as investors in his program, were not, in and of

themselves, evidence of any wrongdoing, and thus could not produce a negative

inference on Appellant’s character that he had in some way also victimized the

Seviers.

      Texas Rule of Evidence 404(b) does, however, allow evidence of extraneous

misconduct to be admitted as long as the evidence serves another purpose under

the rule. Montgomery v. State, 810 S.W.2d 372, 394 (Tex. Crim. App. 1991); Tex.

R. Evid. 404(b). Specifically, Rule 404(b) recognizes that such evidence may be

“admissible for other purposes, such as proof of motive, opportunity, intent,




                                         66
preparation, plan, knowledge, identity, or absence of mistake or accident.” Tex. R.

Evid. 404(b).

      In interpreting this rule, the Texas Court of Criminal Appeals has also

recognized that same transaction contextual evidence may also be admissible

where “several crimes are intermixed, or blended with one another, or connected

so that they form an indivisible criminal transaction, and full proof by testimony …

of any one of them cannot be given without showing the others.” Devoe v. State,

354 S.W.3d 457, 470 (Tex. Crim. App. 2011); Wyatt v. State, 23 S.W.3d 18, 25

(Tex. Crim. App. 2000) (quoting Rogers v. State, 853 S.W.2d 29, 33 (Tex. Crim.

App. 1993)). The Court of Criminal Appeals has reasoned that the admissibility of

such evidence stems from the fact that “it has long been the rule in this State that

the jury is entitled to know all relevant surrounding facts and circumstances of the

charged offense; an offense is not tried in a vacuum.” Wyatt, 23 S.W.3d at 25

(quoting Moreno v. State, 721 S.W.2d 295, 301 (Tex. Crim. App. 1986).

      In Devoe, the appellant was convicted of capital murder for the intentional

murder of two individuals during the same criminal transaction. Devoe, 354

S.W.3d at 461. The appellant in that case claimed that it was error that the trial

court allowed him “to be tried on copious amounts of extraneous offense evidence”

during the guilt/innocence phase of trial, in violation of Rule 404(b). Id. at 469.

The appellant in Devoe had complained that the trial court allowed the State to


                                         67
present extraneous offense evidence pertaining to “the theft of Brinlee’s gun, the

aggravated assault of Wilson in Llano, the killing of Allred in Marble Falls, and

the robbery of DeHart in Pennsylvania.” Id. at 469. The State in that case had

argued that each of the extraneous offenses, beginning with the burglary and theft

of Brinlee’s gun, and ending with the robbery of DeHart, constituted one

continuous episode because those extraneous offenses were necessary to properly

explain what happened and clarify the nature of the crime alleged. Id. at 469-470.

The Texas Court of Criminal Appeals agreed with the State and with the lower trial

court’s ruling that had concluded:

      The evidence is so intermingled between all of the events that
      occurred it would just—it would be impossible to do so without
      leaving a hole, a gaping hole in the State’s case. So, the Court does
      find that this is one continuing course of conduct.

Id. at 470. In the present case, the State also argued that the evidence identifying

the Seviers as investors was necessary in order for the State to be able to prove that

“investor funds had been used for purposes other than those intended” and that

“investor funds had not been used as promised”, as alleged in the indictment. (4

R.R. at 50, 53, 55; 1 C.R. [654] at 7.)

      Appellant cites Templin v. State, to support his claim that “a Defendant is

entitled to be tried on the accusation in the state’s pleading and not for a collateral

crime or for being a criminal generally.” 711 S.W.2d 30, 31 (Tex. Crim. App.

1986); (Appellant’s Brief at 18). Appellant further states that “in Templin, the
                                          68
Texas Court of Criminal Appeals held that it was reversible error to introduce

evidence that the defendant had taken illicit mind-altering substances so therefore

he had taken them at that point.” (Appellant’s Brief at 18). Appellant incorrectly

states the facts of this case, as there was no discussion of “mind-altering

substances” in the Templin case.          In Templin, the Appellant, who was

approximately 27 years old at the time of trial, was accused of murdering his wife

by electrocution. Id. at 32.     The trial court allowed testimony from two of

Appellant’s second cousins who testified that when appellant was ten or twelve

years old, appellant told them that he had electrocuted dogs and cats. Id. at 31.

       On appeal, the Court of Criminal Appeals found that the appellant’s

admissions to his relatives regarding prior execution of animals was in fact

relevant to material elements of the State’s theory of the case, however, the Court

held that the prejudicial and inflammatory nature of the evidence was so great that

it outweighed its probative value. Id. at 33-34. The Court’s holding notably took

into consideration the remoteness of the prior conduct, which was 10-12 years

earlier when the appellant was a child, and pointed to the fact that the State had

used the extraneous transaction evidence during final argument that had an

inflammatory effect. Id. at 34-35.

      Contrary to Appellant’s assertion that Templin is comparable to this case,

the record in this case is devoid of any inflammatory evidence concerning the


                                         69
Seviers, as the State never introduced evidence or a chart, as it did with the victims

that remained in the indictment, to show how the Seviers’ investment funds were

used. Without such evidence, along with no testimony from the Seviers, there was

no evidence of how the Seviers’ funds were used, let alone if their funds were used

in a manner that was inconsistent with their consent.

      Furthermore, the payments to the Seviers with the victims’ money in this

case all occurred during and between the alleged dates of the scheme that the State

identified in its indictment against Appellant, making such payments contextual

same-transaction evidence, which is admissible. (7 R.R. at State’s Ex. 18; 1 C.R.

[654] at 6-7). Thus, there was no issue of remoteness as in the Devoe case, since

the payments were taking place during the same scheme and course of conduct that

the State was alleging Appellant to have committed against the victims who

remained in the indictment. Templin is not only distinguishable from this case, but

stands in stark contrast to the type of extraneous offenses that were at issue in that

case, compared to the evidence at issue in this case, which is arguably not even

extraneous.

      The evidence admitted at trial in regards to the Seviers was not evidence of

an extraneous act, but merely evidence used by the State to demonstrate how each

victim’s funds were used, including to whom they were given. Yet even if this

Court were to find that such evidence was extraneous, the Court was within its


                                          70
discretion to allow such evidence as it was relevant contextual, same transaction

evidence. The trial court thus did not error in admitting the limited evidence the

State introduced that identified the Seviers as investors in Appellant’s program.

V. The Trial Court did not abuse its discretion in allowing testimony from the
State’s Securities Regulatory Expert that aided the jury in its understanding
of an incredibly complex industry and gave an opinion on how certain facts in
evidence measured up to certain terminologies within the industry.

       In Appellant’s fifth point, he challenges the trial court’s decision to allow

testimony from the State’s Securities Regulatory Expert, Travis Iles, claiming his

opinions were “conclusory, implied legal conclusions, and cumulative.” (Appellant

Brief’s at 19). Appellant specifically argues that the trial court abused its discretion

by failing to satisfy all three of the conditions espoused in Alvarado v. State:

     (1) that the witness qualifies as an expert by reason of his knowledge,
     skill, experience, training, or education; (2) that the subject matter of
     the testimony is an appropriate one for expert testimony; and (3) that
     admitting the expert testimony will actually assist the factfinder in
     deciding the case.
912 S.W.2d 199, 215-216 (Tex. Crim. App. 1995); (Appellant Brief at 19-20).10

       The decision whether to allow a witness to testify as an expert is committed

to the sound discretion of the trial court. Pierce v. State, 777 S.W.2d 399 (Tex.

Crim. App. 1989) Thus, the standard of review for a trial court’s ruling regarding

the admissibility of expert testimony is an abuse of discretion. Lagrone v. State,

10
   After referencing the three conditions in Alvarado, Appellant stated “this witness’s testimony
raises all three questions.”

                                                71
942 S.W.2d 602, 616 (Tex. Crim. App. 1997). An abuse of discretion occurs only

when such a ruling is found to be “so clearly wrong as to lie outside that zone

within which reasonable persons might disagree.” Cantu v. State, 842 S.W.2d 667,

682 (Tex. Crim. App. 1992). This is true despite the fact that this Court, in the

same circumstances, may have ruled differently or if the trial court committed a

mere error in judgment. E.I. du Pont de Nemours and Company, Inc. v. C.R.

Robinson, 923 S.W.2d 549, 558 (Tex. 1995).

      In this case, the trial court did not abuse its discretion in allowing the State’s

expert, Travis Iles, to testify because Mr. Iles’ extensive background and

experience in securities regulation allowed him to aid the jury in explaining

complexities of the industry and how certain facts and exhibits in evidence

measured up to certain terminology used within the industry.

      A. The State’s expert witness gave opinions on issues that are mixed
      questions of law and fact, which are appropriate for expert testimony.

      Appellant was convicted of first degree securities fraud under the Texas

Securities Act, in which it is a felony to engage in any fraud or fraudulent practice

in connection with the sale, offering for sale, or purchase of any security. Tex. Rev.

Civ. Stat. Ann. Art. 581–29(C) (West 2010 and Supp. 2014). The Texas Securities

Act defines “fraud” or “fraudulent practice” to include “an intentional failure to

disclose a material fact.” Id. at art. 581-4(F).       The State used its securities


                                          72
regulatory expert, Travis Iles, of the Texas State Securities Board, to give his

opinion on whether certain transactions in the case were securities and whether

certain facts in evidence were “material” facts.

      Appellant challenges the trial court’s discretion in admitting Mr. Iles’

testimony on the grounds that his opinions were “conclusory and implied legal

conclusions.” (Appellant Brief’s at 19). Specifically, Appellant refers to Mr. Iles’

testimony explaining securities and materiality, and his opinions on whether the

transactions in the case and that facts in evidence measured up to these industry

standards, asserting that these issues were inappropriate for expert testimony. Id. at

19-20.

      Yet, expert opinion testimony has been found appropriate on questions of

mixed law and fact, and often necessarily involve the identification of a legal

standard under which an expert will give his or her opinion. In this case, Mr. Iles

gave his opinions, based upon the testimony and the evidence admitted at trial, on

whether certain transactions between the victims and the Appellant were

“securities”, and whether certain facts in evidence were “material.” Both the

questions of whether a security exists and whether facts are material have been

held as questions of mixed law and fact.           Thus, the opinions of the State’s

securities regulatory expert were appropriate and the trial court did not abuse its

discretion in allowing his testimony.


                                          73
                1. Opinions addressing mixed questions of law and fact are
                appropriate for expert testimony.

        While expert witnesses may not testify on pure questions of law, it is well

settled that expert testimony can be appropriate in cases in which the opinion

offered is on a mixed question of law and fact.11 This is so even if such opinions

encompass an ultimate issue or fact in the case. Tex. R. Crim. Evid. 704. See also

Duckett v. State, 797 S.W.2d 906, 914 (Tex. Crim. App. 1990). Some Courts have

gone on further to describe the types of issues that are considered mixed questions

of law and fact:

        An issue involves a mixed question of law and fact when a standard or
        measure has been fixed by law and the question is whether the person
        or conduct measures up to that standard.

Crum & Forster, Inc. v. Monsanto Co., 887 S.W.2d 103, 134 (Tex. App.---
Texarkana 1994, no writ).12


11
   Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361, 365 (Tex.1987) (“Fairness and efficiency
dictate that an expert may state an opinion on a mixed question of law and fact as long as the opinion is
confined to the relevant issues and is based on proper legal concepts.”); In re Christus Spohn Hosp.
Kleberg, 222 S.W.3d 434, 440 (Tex. 2007), ref. Birchfield (“[A]n expert may state an opinion on mixed
questions of law and fact, such as whether certain conduct was negligent or proximately caused injury,
that would be off limits to the ordinary witness.”); Templeton v. Dreiss, 961 S.W.2d 645, 673 (Tex. App.-
--San Antonio 1998) (“The general rule is that expert opinion is not usually admissible on a question of
law…But where the words or phrases are technical and aid is needed in their interpretation there is no
prohibition against the use of expert opinion testimony.”) Holden v. Widenfeller, 929 S.W.2d 124, 133
(Tex. App.---San Antonio 1996, pet. denied) ; Welder v. Welder, 794 S.W.2d 420, 432 (Tex. App.---
Corpus Christi 1990).
12
  See also Mega Child Care, Inc. v. Tex. Dep’t of Protective & Regulatory Servs., 29 S.W.3d 303, 309
(Tex. App.---Houston [14th District] 2000), aff’d 145 S.W.3d 170 (Tex. 2004); Digges v. State, No. 05-
10-00239-CR, 2012 WL 2444543, at 7 (Tex. App.---Dallas June 28, 2012) (mem. op., not designated for
publication).




                                                   74
      In Crum, the appellants were insurance companies appealing from an

adverse judgment that found them liable for “wrongfully obtaining and

manipulating a financial interest” in a particular prior insurance litigation. 887

S.W.2d at 113. The Texarkana Court of Appeals aptly described the complex case

in its opinion as “litigation about litigation.” Id. The insurance companies on

appeal had challenged the lower court’s decision to allow the appellee’s expert

witness to give an opinion regarding the propriety of certain agreements that were

at issue, arguing it had erroneously admitted legal conclusions from the expert. Id.

at 115.

      The appellee’s expert witness in Crum had given testimony that in his

opinion, certain agreements that were in evidence “were illegal and against Texas

public policy.” Id. at 133. The opinion further states that the expert testified that at

the time the agreements were entered into, and in the manner they were entered

into, the agreements were “against the public policy of the State of Texas as

pronounced by our Supreme Court.” Id. at 133-134. The expert witness even cited

specific caselaw to support his opinion during his testimony. Id. Yet the Court of

Appeals, particularly in light of the complexity of the law and subject matter of the

case, found that the lower court had not abused its discretion in allowing the

expert’s testimony, finding that the expert’s opinion was on a mixed question of

law and fact:


                                          75
      To the extent that the witness discussed both the law and its
      application in the factual context of the case on trial, the testimony
      involved a mixed question of law and fact. Most           of   Parsons's
      testimony pertained to the facts of the case, but his testimony is
      sprinkled with legal ramifications. As we previously stated, this is a
      case about litigation, and it would be impossible to discuss the case
      without bringing in legal principles. For example, he explained the
      term subrogation to the jury. The defining of this term is in a sense
      legal, but at the same time it is also an insurance term and the
      definition was helpful to the jury in understanding the testimony…
      The appellants also complain about the explanation of the legal
      meaning of a Mary Carter agreement. To the extent that the         legal
      principles involving a Mary Carter agreement were applied to the
      facts in this case, this constitutes a question of mixed law and fact.

Id. The appellants’ claims in Crum in many respects mirror those of Appellant’s in

this case. Appellant, in support of his claim that Mr. Iles impermissibly testified to

a legal conclusion, points to the fact that Mr. Iles explained the terms “security”

and “materiality” before he shared his opinions. (Appellant’s Brief at 19). Yet this

line of reasoning suggests that while experts can testify and opine on how certain

facts measure up to certain legal standards, they must do so without alluding to or

explaining the legal standard whatsoever.

      To allow no reference to a legal standard when an expert is opining on an

issue that is a mixed question of law and fact would effectively prevent an expert

witness in explaining his methodology in reaching his opinion on how a particular

set of facts or evidence meets a legal standard. Furthermore, the Crum court

recognized that the term “subrogation”, though legal in nature, was also a term in

the insurance industry, the explanation of which aided the jury in its understanding
                                          76
of the insurance industry and how the expert reached his opinion. Likewise, in this

case, the terms “security” and “materiality”, though legal in nature, are also terms

within the securities regulatory industry, and Mr. Iles’ explanation of these

industry terminologies aided the jury in understanding how he reached his

opinions.13

       In the present case, the legal standard against which the testimony and

evidence in the case were analyzed by Mr. Iles was the Texas Securities Act, and

thus Mr. Iles’ testimony, like the above referenced cases, was one on a mixed

question of law and fact.

               2. It is well settled that the questions of whether a certain
               instrument is a “security” and whether certain facts are
               “material” are mixed questions of law and fact.

       In interpreting the Texas Securities Act (the “Act”), the Texas Supreme

Court, citing Section 10-1(A) of the Act, acknowledged that the Texas legislature

intended the Act to be interpreted in harmony with federal securities laws. Sterling

Trust Co. v. Adderley, 168 S.W.3d 835, 840 (Tex. 2005); see TSA, Tex. Rev. Civ.

13
   See also Mega Child Care, where the Fourteenth District Court of Appeals found that an
expert witness’ testimony as to whether the appellants in the case had operated a child care
center in violation of the Human Resources Code was a mixed question of law and fact. 29
S.W.3d at 309. The expert witness testified that the appellants were “operating under a violation
of the law and violating quite a few standards in the minimum standards for daycare licensing.”
Id. The court found that such opinions were appropriate for expert testimony, stating “[h]ere, the
legal standard against which appellants’ actions were analyzed was Chapter 42 of the Human
Resources Code. Thus, [the expert] offered an opinion on a mixed question of law and fact
regarding whether appellants’ actions violated the code.” Id. at 309-310.

                                               77
Stat. Ann. 581-10-1(A) (“This Act may be construed and implemented to

effectuate its general purpose to maximize coordination with federal and other

states’ law and administration…”) see also Highland Capital Management, L.P.v

Ryder Scott Co., 402 S.W.3d 719, 741 (Tex. App. ---Houston [1st Dist.]) (“Texas

courts generally cite decisions of the federal courts to interpret the TSA.”). Thus,

the issue of whether a particular instrument is a security and the issue of

materiality have been analyzed at both the state and federal levels in the context of

securities laws.

        Both the United States Supreme Court and Texas courts have recognized

that the question of whether a particular instrument or transaction is a “security” is

a mixed question of law and fact to be decided by the fact-finder.14                        Likewise,

the question of whether certain facts are “material” has also been held to be a

mixed question of law and fact to be decided by the fact-finder.15


14
   Tcherepnin v. Knight, 389 U.S. 332, 336 (1967) (“[I]n searching for the meaning and scope of the word
‘security’ in the Act, form should be disregarded for substance and the emphasis should be on economic
reality.”); McConathy v. Dal Mac Commercial Real Estate, Inc., 545 S.W.2d 871, 875 (Tex. Civ. App.---
Texarkana 1976, no writ) (“In determining whether a transaction is an investment contract, the courts will
disregard the form and will look to the substance of the transaction, giving effect to the economic realities
of the scheme.”); Bailey v. State, 155 S.W.3d 346, 351 (Tex. App. ---El Paso, 2004), rev’d on other
grounds, 201 S.W.3d 730 (Tex. Crim. App 2006) “([W]hether a certificate of deposit or some other
labeled instrument is a security cannot be determined in the abstract but must be determined after a
careful consideration of the context. It is, in other words, a fact question that should have been put to the
jury with appropriate instructions.”); Digges v. State, No. 05-10-00239-CR, 2012 WL 2444543, at 5 (Tex.
App.---Dallas June 28, 2012) (mem. op., not designated for publication) (“[W]hether an investment
qualifies as a security is a mixed question of law and fact.”).
15
   TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 450 (1976) (“The issue of materiality may be
characterized as a mixed question of law and fact, involving as it does the application of a legal standard
to a particular set of facts.”); U.S. v. Gaudin, 55 U.S. 506 (1995) (“The question whether the defendant’s
statement was material to the federal agency’s decision is the sort of mixed question of law and fact that

                                                     78
       The facts and challenges to the expert testimony in Digges v. State are

synonymous with those in the present case. Digges v. State, No. 05-10-00239-CR,

2012 WL 2444543 (Tex. App.---Dallas June 28, 2012) (mem. op., not designated

for publication).       In Digges, the appellant was appealing his securities fraud

conviction, and had argued on appeal that the trial court had erred in allowing the

securities expert to testify both abstractly about securities and specifically in giving

an opinion in the case. Id. at 1,7. The securities expert in the case was Joseph

Rotunda, the Director of the Enforcement Division of the Texas State Securities

Board. Id. at 3. At trial, Mr. Rotunda gave his opinion that the agreements in the

case were securities. The appellant in Digges, similar to Appellant in this case, had

objected to Mr. Rotunda’s testimony on the basis that it was “inappropriate, in the

context of this proceeding where the role to decide questions of law should rest

entirely and solely” with the judge. Id. at 7. Yet the Dallas Court of Appeals

disagreed; affirming his conviction, the court found that “it was not inappropriate

for the trial court to allow Rotunda to testify concerning this mixed question of law

and fact.” Id.




has typically been resolved by juries.”); Bridwell v. State, 804 S.W.2d 900, 904 n. 7 (Tex. Crim. App.
1991); Digges, No. 05-10-00239-CR, 2012 WL 2444543, at 5 (Tex. App.---Dallas June 28, 2012) (mem.
op., not designated for publication) (“Materiality is a factual issue properly submitted to the jury for
determination.”).



                                                  79
      It is important to note that many of these cases have affirmed expert

testimony that involved opinions on the ultimate issue of the case, such as whether

a particular individual or company violated a legal code or standard or was

negligent. Birchfield, 747 S.W.2d 361 (Tex. 1987); Louder v. De Leon, 754

S.W.2d 148 (Tex. 1988); Mega Child Care, 29 S.W.3d 303, 309 (Tex. App.---

Houston [14th District] 2000), aff’d 145 S.W.3d 170 (Tex. 2004). This is notably

important because, in this case, the State’s expert never gave an opinion on

whether the Appellant had violated the Texas Securities Act, had failed to disclose

certain facts to victims, or had committed securities fraud.

      Instead, Mr. Iles only gave an opinion that the transactions and agreements

that took place between the victims and the Appellant were securities under the

Texas Securities Act and that certain facts in evidence constituted “material” facts

under the Act. Assuming the jury adopted all of the opinions of Mr. Iles, they still

on their own had to determine whether the Appellant had intentionally failed to

disclose those material facts in connection with the sale of securities, and that the

State had proven he had done so beyond a reasonable doubt, in order to find him

guilty.




                                          80
            3. Welder and Greenberg support expert testimony on mixed
            questions of law and fact, yet both contain distinguishable facts
            that demonstrate the State’s expert witness’ testimony in this case
            was appropriate.

      Appellant relies on this Court’s opinion in Welder v. Welder, 794 S.W.2d

420 (Tex. App--- Corpus Christi 1990, no writ), for the proposition that attorneys

are prohibited from testifying as experts. (Appellant’s Brief at 21). Yet the expert

testimony at issue in that case was not the testimony of an expert who was an

attorney, but an expert who was a tax accountant. Id. at 428-429. The expert in

Welder had testified to the methodologies that he and his team had used in tracing

assets to calculate which was separate property and which was community

property, referencing the “community-out-first presumption” as one of the main

tracing methods. Id. at 432. It is important to note that the “community-out-first

presumption”, as this Court acknowledged in Welder, was a legal rule of tracing

that had been developed by courts to distinguish the character of funds which are

withdrawn from an account of mixed separate and community funds. Id. at 433

(emphasis added).

      Seeking to challenge that the legal rule the accountant had used in tracing

the assets, the appellant’s attorney had cross-examined the accountant by asking

him to discuss and interpret specific caselaw. Welder, 794 S.W.2d at 428. This

Court found such questions inappropriate in that the questions would just be


                                         81
eliciting statements and interpretations of law from the accountant, finding that a

challenge to a legal standard used by an expert was more appropriately reviewed

by an appeals court. Id. at 433. Thus, as this Court observed Welder, while

appellants have the right to challenge the impropriety of a legal standard or legal

methodology used by an expert, it is “certainly” acceptable for an expert to explain

his methodology in coming to his opinion, including the legal standard to which

his opinion pertains, as long as it is within the context of applying the legal

standard to the facts. Welder, 794 S.W.2d at 433.

       Like the accountant in Welder, Mr. Iles explained terminology within the

securities regulatory industry in order for the jury to follow how he arrived at his

opinions which were directed at how the testimony in the case and the facts in

evidence measured up to the legal standards of “security” and “materiality” within

the industry.

       Appellant also references Greenberg Traurig of N.Y., P.C. v. Moody, 161

S.W.3d 56 (Tex. App.---Houston [14th Dist.] 2004). In that case, investors had

brought a civil action against a corporation they had invested with, as well as the

corporation’s law firm, for conspiracy to commit securities fraud. Id. at 62-63. The

law firm was appealing a judgment in favor of the investors based in part on their

challenge of the testimony and opinions from the investors’ expert witnesses at

trial. Id.   The investors’ expert witnesses at trial consisted of a former securities


                                           82
law professor from the University of Oklahoma College of law, and a former

Justice of the Texas Supreme Court. Id. at 90.

      While the court of appeals found that the trial court had committed

reversible error in admitting their testimony, the testimony given by the experts is

quite distinguishable from the testimony given by the State’s expert in this case.

During the former professor’s testimony, the trial court allowed the admission of a

Texas Pattern Jury Charge, in which the Professor was allowed to go through the

charge and testify in detail about several duties owed by a fiduciary, including an

attorney, to their client. Id. at. 94. Furthermore, the investors’ trial counsel read

verbatim portions of caselaw to the professor and asked him specific questions

regarding the cases and the rationale behind the cases. Id.

      The former Texas Supreme Court Justice during the majority of his

testimony explained his interpretation of the Texas Disciplinary Rules of

Professional Conduct, and also testified that the rules of professional conduct were

relevant to establishing the standard of care with regard to the negligence of

attorneys. Id. at 95. He also was allowed to testify on the role of a judge versus a

jury member. Id. at 98-99.

      The court of appeals, in analyzing the experts’ testimony, found that both

expert witnesses’ testimony consisted of opinions and statements that were not

only irrelevant to the issues of the case, but also alarmingly contrary to the law. Id.


                                          83
at 97, 98. The harm in the admission of their opinions was thus undeniable, as the

court of appeals also pointed out that the two experts’ testimonies consisted of

more than half of the investors’ case, with one of the experts being on the stand for

eight days- which consisted of exactly half of the trial. Id. at 99-100.

        While the Greenberg court did caution at the end of its opinion the impact of

attorneys testifying as legal experts, the experts in the Greenberg case, particularly

the former Justice of the Texas Supreme Court who was able to explain the proper

roles of judges and juries, may very well have “given the appearance that he had

more authority than the trial judge, who was supposed to be the administrator of

the court.” Id. at 99. But the State’s expert in this case gave no appearance of

superiority to the trial judge or any impression that he was the one, instead of the

judge, to give the jury the correct legal standard. On at least five separate

occasions, jurors were told either by the judge, or Mr. Iles’ himself, that the judge

was the one who would instruct them as to the law.16 Three separate times on

cross-examination Mr. Iles affirmed this:




16
   (3 R.R. at 7:10-18) (“Members of the jury, I will decide matters of the law in this case, it is your duty to
listen to and consider the evidence and to determine fact issues that may be submitted to you during the
course of the trial. After you have heard all of the evidence, I will give you instructions to follow so that
you can make your decision. The instructions will contain all of the instructions of the law that you will
need in this case to make a decision.”); (4 R.R. at 58: 7-8) (“Members of the jury, I want to remind you
that I told you earlier that the Judge is to decide matters of law…”); (4 R.R. at 251:17-23; 4 R.R. at
252:14-16; 4 R.R. at 273:19-22).


                                                      84
          Q: The basis, the legal basis of your opinions, is going to be the same law
          that is going to be provided to the jury by the Judge, correct?

          A: I am not going to speak for Judge Banales. He is the one that tells us
          what the law is. And I am not going to say what he is going to rule on, in
          that regard.17

          Q: But you agree with me that the Judge is going to tell the jury about the
          law, correct?

          A: Correct.18

          Q: Okay. And you agree, that the Judge is the one who is ultimately going to
          tell the jury what the legal standards are?

          A: Yes, I do.19

          The concerns that existed for the Greenberg court are distinguishable from

the present case. Mr. Iles made it clear that it was the judge that was to decide

what the legal standard was for the jury to use in its deliberations. Furthermore,

unlike the expert witnesses in Greenberg, who were on the stand for multiple days

and consisted of over half the time of trial, Mr. Iles was on the stand for

approximately one hour and fifteen minutes, which included thirty-three minutes of

cross examination. (4 R.R. at 220-273). Mr. Iles was one of eight witnesses that

testified for the State. Mr. Iles did not represent the majority of the State’s time or

evidence, and thus, even if this Court were to find that the trial court committed

17
     (4 R.R. at 251:17-23)
18
     (4 R.R. at 252:14-16)
19
     (4 R.R. at 273:19-22)

                                           85
error, the error would be harmless and not rise to the level of reversible error as the

legally improper and irrelevant opinions of the experts in Greenberg were.

       B. The opinion given by the State’s Expert aided the jury in its
       understanding of the case.

       While the trier of fact determines whether a particular instrument is a

security, such a determination may not be an easy one, particularly in light of the

terminology within the legal definitions and analyses required of the instruments

alleged in the indictment in this case. The State specifically alleged in its securities

fraud indictment that Appellant had committed fraud in connection with the offer

and sale of “securities, to wit: promissory notes and investments contracts.” (1

C.R. [654] at 6).

       The Texas Securities Act, instead of providing one generic definition of the

term “security”, addresses it in its definition section as a term that is inclusive of

certain types of transactions and instruments.20 Tex. Rev. Civ. Stat. Ann. Art. 581-


20
   “The term ‘security’ or ‘securities’ shall include any limited partner interest in a limited
partnership, share, stock, treasury stock, stock certificate under a voting trust agreement,
collateral trust certificate, equipment trust certificate, preorganization certificate or receipt,
subscription or reorganization certificate, note, bond, debenture, mortgage certificate or other
evidence of indebtedness, any form of commercial paper, certificate in or under a profit sharing
or participation agreement, certificate or any instrument representing any interest in or under an
oil, gas or mining lease, fee or title, or any certificate or instrument representing or secured by an
interest in any or all of the capital, property, assets, profits or earnings of any company,
investment contract, or any other instrument commonly known as a security, whether similar to
those herein referred to or not. The term applies regardless of whether the ‘security’ or
‘securities’ are evidenced by a written instrument. Provided, however, that this definition shall
not apply to any insurance policy, endowment policy, annuity contract, optional annuity contract,
or any contract or agreement in relation to and in consequence of any such policy or contract,
issued by an insurance company subject to the supervision or control of the Texas Department of
                                                 86
4 (West 2010 & Supp. 2014). “Notes” and “Investment Contract” are included

within that long list of transactions and instruments, though the Act does not

provide any further guidance or definitions of these terms or instruments. Id.; see

also S.E.C. v. W.J. Howey Co., 328 U.S. 293, 298 (1946) (“The term ‘investment

contract’ is undefined by the Securities Act or by relevant legislative reports.”).

       Instead, the interpretation of these terms, both at the federal and state level,

has been done through the courts. Howey, 328 U.S. at 298 (“But [investment

contract] was common in many state ‘blue sky’ laws in existence prior to the

adoption of the federal statute and, although the term was also undefined by the

state laws, it had been broadly construed by state courts so as to afford the

investing public a full measure of protection.”); Reves v. Ernst & Young, 494 U.S.

56, 62 (1990) (“[t]he phrase ‘any note’ should not be interpreted to mean literally

‘any note,’ but must be understood against the backdrop of what Congress was

attempting to accomplish in enacting the Securities Acts.”).

       The prevailing rule in Texas is that “because of the obvious similarities

between the Texas Securities Act and the federal Securities Exchange Act, Texas

courts look to decisions of the federal courts to aid in the interpretation of the

Texas act.” Campbell v. C.D. Payne and Geldermann Securities, Inc., 894 S.W.2d

411, 417 (Tex. App.--- Amarillo 1995) (citing Searsy v. Commercial Trading

Insurance when the form of such policy or contract has been duly filed with the Department as
now or hereafter required by law.”
                                             87
Corp. 560 S.W.2d 637 (Tex. 1977) (interpreting the term “investment contract”

under the Texas Securities Act).

      The legal standard for an investment contract is whether there is an

investment of money in a common enterprise with an expectation of profits which

are to come solely from the efforts of others. S.E.C. v. W.J. Howey Co., 328 U.S.

293, 301 (1946); Searsy, 560 S.W.2d at 640; Clayton Brokerage Co. of St. Louis v.

Mouer, 520 S.W.2d 802 (Tex.Civ.App. Austin), dism'd as moot on rehearing per

curiam, 531 S.W.2d 805 (Tex.1975); King Commodity Co. of Texas v. State, 508

S.W.2d 439 (Tex.Civ.App.-- Dallas 1974, no writ). This legal standard is typically

broken down into four requirements: (1) an investment of money (2) a common

enterprise (3) expectation of profits and (4) solely from the efforts of others. Id.

      If this legal standard was not complicated enough, the Texas Supreme Court

in Searsy espoused a test they thought reasonable in order to determine whether the

last requirement of profits coming “solely from the efforts of others” is met: “[T]he

more realistic test is ‘whether the efforts made by those other than the investor are

undeniably significant ones, those essential managerial efforts which affect the

failure or success of the enterprise’.” 560 S.W.2d at 641 (citing S.E.C. v. Glenn W.

Turner Enterprises, Inc., 474 F.2d 476 (9th Cir. 1973), cert. denied, 414 U.S. 821

(1973).




                                          88
      The legal standard in determining which notes are “securities” is just as

complex. Both federal and Texas courts have adopted what is known as the

“family resemblance test” in determining whether certain notes are securities or

whether they are of the type that resemble more of a particular set of notes that

have been judicially recognized as not securities, such as those related to consumer

financing. Reves, 494 U.S. at 62, 66 (“We conclude, then, that in determining

whether an instrument denominated a ‘note’ is a ‘security’, courts are to apply the

version of the ‘family resemblance’ test that we have articulated.”); Campbell v.

C.D. Payne and Geldermann Securities, Inc., 894 S.W.2d 411, 418 (Tex. App.---

Amarillo 1995) (“We find the ‘family resemblance’ test to be reasonable and

applicable to the determination of whether the notes in question here were

"securities" within the purview of the Texas Securities Act.”)

      While all notes are first presumed to be securities, this presumption can be

rebutted by showing a strong resemblance to those already recognized as not

securities, through the weighing of four factors: (1) the motivation of the

transaction (2) the plan of distribution of the instrument (whether it is an

instrument in which there is common trading for speculation or investment) (3) the

reasonable expectations of the investing public and (4) whether there exists another

regulatory scheme which significantly reduces the risk of the instrument. Reves,

494 U.S. at 66-67; Campbell, 894 S.W.2d at 418.


                                         89
       These are some of the legal standards that the jury in this case had to discern

in making their decision of whether the transactions and agreements in the case

were in fact “notes” or “investment contracts”, and thus “securities”, under the

Texas Securities Act. It is thus not hard to see why it is not uncommon for the

federal government and the State of Texas to utilize expert testimony of securities

experts in order to aid juries in their understanding of the facts and evidence in

complex securities cases.21 Employees of the Texas State Securities Board have

routinely filled this role.22

       The State’s expert in this case, also an employee of the Texas State

Securities Board, explained the requirements of an investment contract and the

factors to be analyzed when reviewing notes before he shared his opinions and

walked the jury through the testimony and facts in evidence to show them how he


21
  See United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991) (“Particularly in complex
cases involving the securities industry, expert testimony may help a jury understand unfamiliar
terms and concepts.”); Highland Capital Management, L.P. v. Schneider, 551 F.Supp.2d 173,
178 (S.D.N.Y. 2008) (“In securities cases, federal courts have admitted expert testimony to assist
the trier of fact in understanding trading patterns, securities industry regulations, and complicated
terms and concepts inherent in the practice of the securities industry.”); See also Cox v. State,
523 S.W.2d 695 (Tex. Crim. App. 1975); Rose v. State, 716 S.W.2d 162 (Tex. App.---Dallas
1986); Huett v. State, No. 05-95-00964-CR, 1998 WL 297206 (Tex. App.---Dallas June 9, 1998)
(mem. op., not designated for publication); Digges v. State, No. 05-10-00239-CR, 2012 WL
2444543 (Tex. App.---Dallas June 28, 2012) (mem. op., not designated for publication).
22
  Cox, Rose, Huett, and Digges, supra n. 21, are all Texas cases in which at least one employee
of the Texas State Securities Board testified in an expert capacity for the State. Id.



                                                 90
came to his opinions that those legal standards had been met. (4 R.R. 227:24-

241:23). So while experts in general are not permitted to testify on questions of

pure law, “where the words or phrases are technical and aid is needed in their

interpretation there is no prohibition against the use of expert opinion testimony.”

Templeton v. Dreiss, 961 S.W.2d 645, 673 (Tex. App.---San Antonio 1998).

      Yet even as complicated as some of the legal analysis and requirements of

the law are with regard to understanding securities, the First District Court of

Appeals out of Houston recognized that expert testimony may also be appropriate

for specifically applying a legal standard to a set of facts, even if that legal

standard or regulation seems to be in straightforward, clear language:

      Clear regulatory language, cast in ordinary and familiar words, is not
      enough. Without express standards in a regulation for guidance, a
      jury lacks a critical stepping stone toward forming an opinion
      regarding whether the abstract mandate of the regulation has as a
      factual matter been met, and is not equally as able to form such an
      opinion as a person familiar, through prior experience, with what,
      factually, constitutes compliance with the regulation.      In such an
      instance, the specialized experience and knowledge of others, via
      their testimony as expert witnesses, is called for, to assist the jury to
      measure compliance with the regulation—and, when offered in such
      an instance, such testimony should be admitted. Accordingly, [the
      expert’s] opinion was an admissible opinion on a mixed question of
      law and fact, not an inadmissible opinion on a pure question of law.

Lyondell Petrochemical Co. v. Fluor Daniel, Inc., 888 S.W.2d 547, 555 (Tex.

App.-Houston [1st Dist. 1994), writ denied (Mar. 30, 1995). Expert testimony is

appropriate in not only those cases in which there are complex terms in which a


                                         91
jury may be unfamiliar, but also those cases in which expertise and knowledge of

the subject matter could also aid the jury in understanding how the facts and

evidence of a particular case measure up to an particular regulation or legal

standard within an industry. In this case, the State’s expert witness aided the jury

in doing both- he explained investment contract, notes, and materiality, and then

walked the jury through the facts and evidence when sharing with them how he

came to his opinions that the agreements in the case were securities and that certain

facts in evidence were material.

      Moreover, without the aid of expert guidance on questions that are

necessarily mixed questions of securities law and facts, an average jury member

could be prevented from otherwise realizing or grasping the significance of certain

testimony or facts until long after at the conclusion of the case. This reality was

recognized by the Crum court who observed:

      In our system, the trial judge does not generally instruct the jury as to
      the law of the case until all the evidence is in, but in a case   with
      complex factual and legal issues such as this, it may be difficult for
      the jury to understand the ramifications of the evidence without
      guidance while it is being introduced. Any legal explanation by the
      judge during the introduction of the evidence might be construed
      as an impermissible comment on the weight of the evidence, and
      judges are not generally prepared at that point in the trial to   give
      such instructions.

887 S.W.2d at 134-135. The State’s expert witness aided the jury in understanding

certain terminology within the securities laws that assisted them in understanding


                                         92
the significance of the evidence and testimony they heard, even providing

examples, such as the types of notes that are not considered securities, to help them

fully grasp terms that they would use in their decision. (4 R.R. 231:13 - 232:2).

      Ultimately, at the end of the day, “the threshold determination for admitting

expert testimony is whether such testimony, if believed, will assist the untrained

layman trier of fact to understand the evidence or determine a fact in issue.” Yount

v. State, 872 S.W.2d 706, 708 (Tex. Crim. App. 1993). In cases in involving

securities fraud, such as the present case, opinion testimony like the one given by

the State’s expert witness, is an incredible aid to the jury in understanding an

unfamiliar industry with terminology that the jury must use when reviewing and

analyzing the facts and testimony that were presented to them.

      C. The State’s Expert Witness was qualified to testify as an expert
      witness in Securities Regulation.

      Finally, while Appellant suggests that his challenge to the State’s expert

witness includes a challenge to his qualifications, Appellant’s trial counsel, after

having an opportunity to cross-examine Mr. Iles during a Daubert Challenge,

objected only to Mr. Iles’ opinions, and never made any objection to his

qualifications. (4 R.R. at 208:6-21). Moreover, the record contains ample

testimony from Mr. Iles demonstrating his extensive background in securities

regulation to support the trial court’s decision to allow him to testify as an expert.



                                          93
      Mr. Iles testified that he had been a licensed to practice as an attorney in

Texas since 2002. (4 R.R. at 178:25, 179:1). He began his employment with the

Texas State Securities Board (“TSSB”) in 2001 as an attorney in the agency’s

Inspections and Compliance Division, and after a few years in that division, he

transitioned to work as an attorney in the agency’s Enforcement Division. (4 R.R.

at 178:7-10). At the time of trial, he was serving as the Assistant Director of

Enforcement of the agency’s Austin Branch Office. (4 R.R. at 178:11-15).

      Mr. Iles testified he had served as a special assistant prosecutor for several

different counties’ District Attorney’s Offices around the State of Texas and had

testified in both state and federal proceedings as a witness. He was an active

member in the North American Securities Administrator’s Association, and

testified that he had participated in numerous training presentations and panels in

securities related conferences and seminars. (4 R.R. at 182:9-25).

      In his position as Assistant Director of Enforcement, Mr. Iles testified that,

he served in a supervisory capacity over the other staff attorneys and financial

examiners in the Austin office. (4 R.R. at 184:1-11). He also testified that his

work, on almost a daily basis, involved determining whether or not certain

transactions and products appeared to be securities, giving the agency jurisdictional

authority to conduct investigations and enforce any violations of the Texas

Securities Act. (4 R.R. at 184:12 -186:1). Given Mr. Iles’ extensive background


                                         94
and experience in securities regulation, and the fact that Appellant’s trial counsel

never objected to Mr. Iles’ qualifications as an expert witness, the trial court did

not abuse its discretion in determining Mr. Iles was qualified to testify as an expert

witness.

         Appellant in his brief alludes to the fact that his trial counsel did not have

enough time to prepare for cross examination of Mr. Iles due to the fact they had

not received a curriculum vitae or report before trial. (Appellant Brief’s at 20).

However, Appellant fails to mention that the only time such documents were

requested from the State were verbally requested on the Friday before the Monday

of trial. It is also important to note that Appellant never filed a motion with the trial

court or served upon the State a request for a curriculum vitae or report from its

disclosed expert.

         Appellant had notice prior to trial about the nature of Mr. Iles’ testimony as

he was designated as the State’s securities expert in the State’s Motion To Exempt

Witnesses From the Rule. (See 13-14-00654-CR, C.R. at 23-26). The State’s

Motion explained its request for Mr. Iles to be exempt from the rule due to the fact

that he would be reaching and basing his opinions upon the testimony and evidence

admitted during trial. Mr. Iles thus had no opinions to report prior to the time of

trial.




                                           95
      Despite there not being a report before trial, the trial court provided

Appellant’s trial counsel the opportunity to voir dire and cross examine Mr. Iles

outside of the presence of the jury. The trial court at this time also allowed the

State to proffer the entire testimony of Mr. Iles that it planned to elicit in front of

the jury, giving Appellant’s trial counsel an exact account of the questions Mr. Iles

would be answering and the opinions he would be giving.

      In summary, the State’s securities regulatory expert in this case was

qualified to testify as an expert, gave appropriate opinion testimony on issues that

are mixed questions of law and fact, and aided the jury in its understanding of

standards within the securities industry and how the facts and testimony of this

case measured up to those standards. As such, the trial court did not abuse its

discretion in allowing the State’s expert to give expert testimony.

VI. The trial court did not error in denying Appellant a directed verdict
because when multiple offenses are aggregated into one offense, the proper
venue for prosecution is any county in which any of the individual offenses, or
any element thereof, occurred, even though venue for some of the individual
offenses, if tried separately, would be in different counties.

      In Appellant’s sixth issue, he asserts that there was insufficient proof of

venue in Nueces County, Texas for one of the victims in the indictment, Susan

Morris, and that an instructed verdict should have been granted to Appellant.

      In reviewing the legal sufficiency of the evidence of venue, it is to be viewed

in the light most favorable to the verdict, and then a determination is to be made as


                                          96
to whether a rational trier of fact could have found venue was proper by a

preponderance of the evidence. Dewalt v. State, 307 S.W.3d 437, 457 (Tex. App.--

Austin 2010); Code Crim. Proc. Ann. art. 13.17 (West Supp. 2014).        Proof of

venue may be established by direct or circumstantial evidence. See Black v. State,

645 S.W.2d 789, 791 (Tex. Crim. App. 1983).

      When elements of a single offense are committed in more than one county,

the proper venue for prosecution of that offense may be established in either

county where any one of the elements occurred. Wood v. State, 573 S.W.2d 207,

210–211 (Tex. Crim. App. 1978). Likewise, when multiple offenses that have

occurred in more than one county have been aggregated together under a single

offense, the proper venue may be established in any county where any one of the

individual offenses occurred. State v. Weaver, 982 S.W.2d 892 (Tex. Crim. App.

1998).

      In defendant in Weaver had been indicted in Harris County for theft in an

amount between $20,000 and $100,000. 982 S.W.2d at 892. Pursuant to Section

31.09 of the Texas Penal Code, the indictment had aggregated into a single offense

multiple thefts involving 32 victims that had occurred over a year and half period

of time. Id. at 893. The indictment alleged these thefts were “pursuant to one

scheme and continuing course of conduct.”       Id. at 893.   While some of the




                                        97
individual thefts had occurred in Harris County, some had occurred outside of

Harris County. Id.

      The defendant on appeal had sought to sever the non-Harris County thefts

from the aggregated theft charge, arguing that venue for prosecution of those

offenses would not have been proper in Harris County. Id. at 893. The Texas

Court of Criminal Appeals disagreed, holding that Harris County was a proper

venue for all of the thefts that had been aggregated into the single offense, even

those committed outside of Harris County. Id. at 893 (“When several thefts are

aggregated into a single offense under Section 31.09, the proper county for

prosecution…is any county in which the individual thefts or any element thereof

occurred.”)

      In support of its holding, the Court of Criminal Appeals, in interpreting

aggregation in the penal code, reasoned that there was “no indication the 63rd

Legislature intended Section 31.09 to apply only to a thief who commits multiple

thef’ts in the same county.” Weaver, 982 S.W.2d at 895. It also observed that there

was “no indication the 63rd Legislature intended to treat thieves who commit

multiple thefts in the same county any differently from thieves who commit

multiple thefts in different counties.” Id. This case made clear that in aggregated

offenses, the State is not under an obligation to prove that all of the individual

offenses occurred within the county that the prosecution takes place. The Court of


                                        98
Criminal Appeal’s holding in Weaver directly contradicts Appellant’s assertion that

he was entitled to a directed verdict due to the fact that the offenses against the

Morrises occurred outside of Nueces County.

      The facts of the present case are very similar to Weaver. Appellant sold

investments totaling $150,000 to four families over a period of nineteen months

from March 2011 through October 2012. (2 R.R. at 33-34; 4 R.R. at 12, 129-130,

151; 7 R.R. at State’s Ex. 4,7, 21, 23). During this time period, Appellant resided

in Corpus Christi, Texas at 467 Southern Street and later at 422 Sharon Street. (5

R.R. at 90). Appellant testified that his office was in his home during this time

period. (5 R.R. at 67). Three of the four victims named in the indictment resided in

Corpus Christi and testified that the Appellant met with them in their homes when

he offered and sold them the investments. (2 R.R. at 27, 30; 4 R.R. at 6, 10; 4 R.R.

at 128).

      Though the Appellant met with Susan and Stephen Morris at their home in

San Patricio County, there was evidence presented at trial that Appellant contacted

Mr. Morris via telephone to discuss and explain the commodities investment

opportunity prior to the in-person meeting at their home. (4 R.R. at163-164).

Moreover, the very same day that the Morris’ funds became available to Appellant,

he used their funds to write a $35,000 check to Judson Hall, one of the other

victims who resided in Nueces County, and delivered that check to Mr. Hall in


                                         99
Nueces County, Texas in furtherance of his scheme and continuing course of

conduct. (4 R.R. at 134; 4 R.R. at 103).

       Like the indictment in Weaver, the indictments in the present case alleged

that all monies were obtained pursuant to “one scheme and continuing course of

conduct.” (1 C.R. [653] at 6-7; 1 C.R. [654] at 6-8).             Both     the    theft    and

securities fraud offenses in the present case are aggregated offenses, 23 and thus

venue for such offenses is proper in any county in which any of the individual

offenses occurred.      The record in this case establishes that at least three the

individual theft and securities fraud offenses occurred here in Nueces County, and

therefore Nueces County was a proper venue for prosecution of all the offenses in

the indictment, even those concerning Susan Morris. Thus, the trial court did not

error in denying Appellant a directed verdict, and Appellant’s sixth issue on appeal

should be overruled.




23
  Section 29-2 of the Texas Securities Act mirrors the language in Section 31.09 of the Penal
Code: “When amounts are obtained in violation of this Act under one scheme or continuing
course of conduct, whether from the same or several sources, the conduct may be considered as
one offense and the amounts aggregated in determining the grade of the offense.” Tex. Rev. Civ.
Stat. Ann. Art. 581-29-2 (West 2010 & Supp. 2014).

                                              100
VII. The trial court did not abuse its discretion in denying Appellant’s request
for a particularly worded instruction on witness bias because the requested
bias instruction would have been duplicative and a direct comment on the
credibility of the State’s witnesses, in the alternative, even if it was error to
deny the requested instruction, the error was harmless.

      At trial, Appellant’s trial counsel objected that their request for a particularly

worded instruction regarding witness bias had not been included in the jury charge.

(5 R.R. at 109). The trial court overruled the objection. (Id.).            Appellant’s

requested instruction began with the language, “[y]ou are the sole judges of the

credibility or ‘believability’ of each witness and the weight to be given the

witness’s testimony. An important part of your job will be making judgments about

the testimony of witnesses including the defendant who testified in this case.” (1

C.R. [654] at 96-97). This language was similar to the language that was included

in the charge that was ultimately read and given to the jury, which read:

      No statement, ruling or remark which I may have made during the
      presentation of testimony was intended to indicate my opinion as to
      what the facts are. You are the exclusive judges of the facts proved,
      of the credibility of the witnesses and the weight to be given their
      testimony, but the law you shall receive in these written instructions
      and you must be governed thereby. In determining the credibility of
      the witnesses, you alone must decide upon the believability of the
      evidence and its weight and value.

1 C.R. [654] at 108.     With regard to the beginning of Appellant’s requested

instruction, and any similar language contained within it, the requested language

would be largely duplicative to what the trial court gave as instructions to the jury.


                                          101
Indeed, if such language had been the extent of the requested instruction, the State

likely would not have taken issue with it. Yet Appellant’s requested instruction

went much farther.

      In particular, the requested charge included several paragraphs containing a

series of questions that the judge was to direct the jury members to specifically ask

themselves in weighing the credibility and motive of the witnesses. (1 C.R. at

[654] at 96-97; 5 R.R. at 7). Specifically, the charge would have required the

Judge to make particular suggestions in the thought process of the jury with regard

to the witnesses in the case:

       I suggest that you ask yourself a few questions. Did the person
      impress you as honest? Did the witness have any particular reason not
      to tell the truth? Did the witness have a personal interest in the
      outcome of the case? Did the witness have any relationship with
      either the government or the defense?

(1 C.R. [654] at 96) (emphasis added). The aim at having such language was to

direct the judge to instruct the jury to specifically question the credibility of a

witness that had a relationship with the government. This purpose is confirmed in

Appellant’s brief when he asserts that the instruction was aimed in particular at one

of the State’s witness, stating “defense asked for and did not receive a jury

instruction regarding the bias of witnesses, specifically the expert witness, Travis

Iles.” (Appellant’s Brief at 23) (emphasis added). Appellant went on to explain the

reason behind the request stemmed from testimony during trial that the State’s

                                         102
expert witness “worked for the agency prosecuting the exact same crime alleged.”

(Appellant’s Brief at 23).     This type of targeting of particular witnesses, or

suggestions by a judge to question the credibility of particular witnesses, is strictly

prohibited. In re T.T., 39 S.W.3d 355, 359 (Tex. App. ---Houston [1st Dist.]2001)

(“[O]ur statutes, court-made rules, and judicial decisions emphatically and

repeatedly prohibit Texas judges from commenting on the weight of the

evidence.”).

      Article 36.14 of the Texas Code of Criminal Procedure clearly dictates that a

trial court in a written jury charge is strictly prohibited from “expressing any

opinion as to the weight of the evidence, summing up the testimony, discussing the

facts or using any argument in his charge calculated to arouse sympathy or excite

the passions of the jury.” Code Crim. Proc. Ann. art. 36.14 (West Supp. 2014). The

requested language in Appellant’s proposed instruction would have amounted to

the trial court making an impermissible comment on the credibility of the State’s

witnesses.

      The jury charge in this case accurately reflected the law when it instructed

that “you alone must decide upon the believability of the evidence and its weight

and value.” (1 C.R. [654] at 108). For it is jurors, and not the trial court, that are

the exclusive judges of the credibility of the witnesses and the weight to give their

testimony. Bartlett v. State, 270 S.W.3d 147, 150 (Tex.Crim.App.2008) (“The


                                         103
jurors are the exclusive judges of the facts and the weight to be given to the

testimony.”); Margraves v. State, 34 S.W.3d 912, 919 (Tex.Crim.App.2000) (“The

jurors are the exclusive judges of the facts, the credibility of the witnesses, and the

weight to give their testimony.”).

      Under Appellant’s rationale that such an instruction was needed due to the

fact that an expert witness happened to be employed by the same governmental

unit that was also prosecuting the case, any detective from a district attorney’s

office, who testifies in an expert capacity based upon their experience in the field,

would warrant such an instruction. The trial court was within its discretion in

denying the exact language of the Appellant’s requested instruction because it had

comparable language that reflected the law, and Appellant’s specific language

could have amounted to an impermissible comment by the trial court on the

credibility of the State’s witnesses.

      In the alternative, even if this Court were to find that the trial court abused

its discretion in not adopting Appellant’s precise requested language, the denial of

this request was harmless. When reviewing the degree of harm, the harm must be

determined by reviewing the whole jury charge, the state of the evidence, including

the contested issues and weight of probative evidence, the argument of counsel and

any other relevant information revealed by the record. Almanza v. State, 686




                                         104
S.W.2d 157, 171 (Tex. Crim. App. 1984); Kemph v. State, 12 S.W.3d 530, 533

(Tex. App.--- San Anontio, 1999).

      As Appellant alluded to in his brief, Appellant’s trial counsel brought out on

cross examination of the State’s expert witness that he was employed with the

same agency that employed some of the prosecuting attorneys. (4 R.R. at 248-249).

Appellant’s attorneys clearly communicated to the jury their bias concerns of the

State’s expert when one of the Appellant’s trial counsel asked him point blank on

cross examination, “Would you agree with me or is it fair to say that you are a

biased witness?” (4 R.R. at 248). He was also asked, “And so you are with the

same bureaucracy, correct?” (4 R.R. at 249).

      Again, during closing argument, Appellant’s trial counsel alluded to the fact

that they believe the State’s expert witness was biased by, referring to him several

times as the State prosecutors’ “boss”. (5 R.R. at 128). Appellant’s trial counsel

argued at one point:

      And frankly, their boss is biased. I think that is inaccurate to come up
      here and be a bureaucrat in the same organization, to be the boss of
      the prosecutors and to come up here and say that he is not biased. I
      think that is not true.

(5 R.R. at 135). The jury clearly understood that Appellant’s trial counsel believed

that the State’s expert was biased.    To be denied a jury charge that perhaps

suggested bias was not harmful to Appellant because the jury, in having the

opportunity to hear Appellant’s cross examination and closing argument, had heard
                                        105
enough facts about the State’s expert witness to make its own determination of

whether they found him credible. As such, the trial court in this case did not abuse

its discretion, and even if it were found that it did, its denial of Appellant’s

requested language in the jury instructions was harmless.

VIII. Aside from a brief reference to the Texas Constitution, Appellant fails to
cite any authority in support of his eighth issue on appeal and thereby has
inadequately briefed the issue, leaving this Court nothing to review on the
matter.

      Texas Rule of Appellate Procedure 38.1 requires that an appellant’s brief

must include “appropriate citations to authority and to the record.” Tex. R. App. P.

38.1(i). The Texas Court of Criminal Appeals has held that “[w]hen a party raises

a point of error without citation of authorities or argument, nothing is presented for

appellate review.” State v. Gonzalez, 855 S.W.2d 692, 697 (Tex. Crim. App.

1993).   Likewise, general citations to certain articles or amendments, without

more, will result in an issue being deemed inadequately briefed and overruled.

Rhoades v. State, 934 S.W.2d 113, 119 (Tex. Crim. App. 1996) (“It is not

sufficient that appellant globally cite the ‘Sixth Amendment,’ and nothing else, in

support of his request for reversal…Point of error two is inadequately briefed, and

it is, therefore overruled.”) See also Ex parte Hernandez, 953 S.W.2d 275 (Tex.

Crim. App. 1997) (“These are merely bare assertions unsupported by argument,

analysis, or authority. Therefore, this Court shall not consider appellant’s state

constitutional argument.”).
                                         106
      In this case, Appellant’s argument for his eighth issue on appeal is

comprised of the following three sentences:

      In this subject case, the State has taken a contractual agreement, civil
      in nature in to the realm of criminal prosecution. This is a violation
      of the Defendant’s constitutional right against incarceration for mere
      debts. As the Constitution of the State of Texas states, “No person
      shall ever be imprisoned for debt.” Tex. Const. Art. I, §8.

(Appellant’s Brief at 24). Appellant cites no other legal authority for this position,

besides the “global cite” to a particular article of the Texas Constitution. He also

fails to cite any facts or anywhere to the record or even any exhibits in support of

his position that the case at hand is civil and not criminal in nature, and only

involves “mere debts.” Appellant has clearly inadequately briefed this issue, and

therefore this Court should not consider this argument on appeal.

      Moreover, while the Constitution for the State of Texas may prohibit

imprisonment for mere failure to pay a debt, it does not prohibit imprisonment for

fraud or deception in connection with what might be considered a “debt.” Even the

definition of “security” under the Texas Securities Act includes “notes” and

“evidence of indebtedness” as examples of transactions and instruments that are

included within the definition of security. Texas Securities Act, Tex. Rev. Civ.

Stat. Ann. Art. 581-4(A) (West 2010 & Supp. 2014). In light of the foregoing, this

Court should overrule Appellant’s eighth issue.



                                         107
IX. The evidence, viewed in the light most favorable to the prosecution, is
sufficient for a rational tier of fact to have found beyond a reasonable doubt
that Appellant that the requisite intent to commit securities fraud and theft.

      In Appellant’s ninth issue, he asserts that the State did not meet its burden in

establishing the requisite criminal intent for the offenses that he was convicted of

in this case. (Appellant’s Brief at 24-25). In reviewing the sufficiency of the

evidence, a court must view “all of the evidence in the light most favorable to the

verdict and then determine whether a rational trier of fact could have found the

essential elements of the crime beyond a reasonable doubt.” Christensen v. State,

240 S.W.3d 25, 31(Tex. App.--Houston 2007) (citing King v. State, 29 S.W.3d

556, 562 (Tex. Crim. App. 2000).

      The Court of Criminal Appeals has also held that when reviewing the

sufficiency of the evidence with regard to intent, that “[courts] should look at

events occurring before, during and after the commission of the offense.” Taylor v.

State, 450 S.W.3d 528, 536 (Tex. App.--Houston 2014); Wirth v. State, 361

S.W.3d 694, 697 (Tex.Crim.App. 2012). A jury may infer intent from any facts

that tend to prove its existence, such as the acts, words and conduct of the

defendant. Christensen, 240 S.W.3d at 32 (citing Hernandez v. State, 829 S.W.2d

806, 810 (Tex. Crim. App. 1991). Appellant supports his challenges to the intent

element of both offenses on two grounds. First, Appellant points to the self-

serving testimony of Appellant at trial in which “[he] testified that he always


                                         108
intended to invest the money as per his agreement with the victims, and he also

promised to pay the witnesses back for any losses they incurred.” (Appellant’s

Brief at 25). Second, Appellant asserts that because he partially performed by

“both investing some money and paying some moneys owed to the witnesses”, that

this also shows he had no criminal intent. (Appellant’s Brief at 25).

      A. The Appellant’s self-serving claims that he had no intent to deceive
      and defraud the victims in this case stands in stark contrast to
      Appellant’s immediate use of investor funds to cover his personal
      expenses and his mounting financial difficulties.

      Despite Appellant’s testimony that it was his intent to invest the victims

money as he agreed with them, the record is replete with testimony and evidence

from which a rational juror could infer Appellant’s criminal intent.

      For example, Diane Lechuga invested $25,000 with Appellant on March 22,

2011; the funds became available to Appellant on March 23, 2011. (4 R.R. at 90-

91). Prior to Ms. Lechuga’s investment, the balance in Appellant’s bank account

was $64.28. (4 R.R. at 90-91). The very next day, Appellant wrote a check, dated

March 24, 2011 in the amount of $3,589.50 to three months of unpaid, past due

rent. (4 R.R. at 91; 7 R.R. at State’s Ex. 15). Appellant himself admitted to using

Ms. Lechuga’s funds in this manner. (5 R.R. at 90, 95-96). The State’s financial

examiner testified that Appellant used Ms. Lechuga’s funds to also pay for credit

card bills, restaurants and groceries, and child support, and that all of her funds

were spent in less than a month, with an ending balance of $-161.10 in Appellant’s
                                         109
account by April 22, 2011. (4 R.R. at 92). Appellant wasted no time in using this

victim’s funds to cover his personal expenses, and a rationale trier of fact could

have viewed these actions as evidence of his criminal intent.

      Another timeline that demonstrates Appellant’s intent to defraud the victims

in this case is the timeline surrounding Judson Hall’s investment and Susan and

Stephen Morris’ investment. Judson Hall testified that he invested $50,000 with

Appellant on September 5, 2011, but over time had become concerned about his

investment due to Appellant failing to make promised interest payments. (4 R.R. at

130, 133). This concern led Mr. Hall, one month prior to the 1 year term of the

agreement (September 2012), to notify Appellant he wanted his $50,000 returned

to him, pursuant to their agreement. (4 R.R. at 133).

      Mr. Hall testified that Appellant represented to him that it may take him

awhile to return his funds since he had to pull them out of all the investments that

had them in. (4 R.R. at 133). Upon tendering a check to Mr. Hall for $35,000, Mr.

Hall testified that Appellant told him to hold the check for a week, because “Frost

Bank would not release the funds” until then. (4 R.R. at 134). The reality was,

Appellant was waiting for the funds from Susan and Stephen Morris’ $50,000

investment to become available in his account, which he had just deposited the day

before. (4 R.R. at 101). State’s Exhibits 16 and 19 reflect that the majority of Jud

Hall’s and Mr. and Mrs. Morris’ investment funds were used to make Ponzi like


                                         110
payments to earlier investors and for personal expenses including child support,

rent, groceries and loan payments. (7 R.R. at State’s Ex. 16, 19).

      Courts have held that deception after an alleged crime is a circumstance that

may permit an inference of guilt.” Christensen, 240 S.W.3d at 35; Valdez v. State,

623 S.W.2d 317, 321 (Tex. Crim. App. 1979). When asked by Investigator Sabban

what he specifically did with the victims’ funds, the Appellant stated that he had

deposited all of the victims’ funds into his Mays Financial Group account at Frost

Bank, and from there had transferred “100% of the funds” to a TD Ameritrade

account, where he would use the funds in trading. (4 R.R. at 61). The financial

examiner, Eliza Lujan, later testified that only a small amount of funds were ever

transferred to TD Ameritrade, with the majority being transferred right back to his

Frost bank account. (4 R.R. at 99-100; 103:21-104:7). A rationale trier of fact

could have inferred guilt and criminal intent from Appellant’s deceptive remarks to

Investigator Sabban.

      A rational trier of fact could similarly have inferred guilt and criminal intent

from Appellant’s test message conversations he had with Kathleen Trial. (7 R.R. at

State’s Ex. 3). In these conversations, the jury heard Appellant make several

different representations as to how he was using Ms. Trial’s funds and how he was

allegedly making profits for Mays Financial Group, including investing in

imported water from Alaskan glaciers, purchasing property tax certificates, and


                                         111
flipping houses (7 R.R. at 10, 15,18-19, 21).        Appellant in these texts also

represented at different times that he was waiting on TD Ameritrade wires that he

had already requested, along with similar transfers he had already made, in order to

pay Mrs. Trial her monthly interest payments; as the texts indicate, these payments

never came. (7 R.R. at 16-17, 20, 24). A rationale trier of fact could have inferred

guilt from these texts as being deceptive in nature, particularly after reviewing the

State financial examiner’s charts on how the Appellant spent the victims’ funds. (7

R.R. at State’s Ex. 15-20).

      B. Appellant’s phony interest payments to victims, along with his
      method of transferring a small amount of victim funds to his TD
      Ameritrade Account, and then back to his Frost Bank account,
      demonstrate a clear criminal intent to hide his actions in furtherance of
      his scheme, not partial performance.

      Appellant suggests that his “partial performance” of both investing some

funds and making “interest” payments to the victims, demonstrates that he lacked

the requisite criminal intent for Securities Fraud and Theft. In Taylor v. State, the

Houston Court of Appeals observed that the mere existence of partial performance

may not negate criminal intent:

      [T]he fact that partial or even substantial work has been done
      on a contract will not invariably negate either the intent to
      deprive or the deception necessary to establish the unlawfulness of
      the initial appropriation. A contractor still may be convicted of theft
      under circumstances—to be sure, circumstances beyond the mere
      “failure to perform the promise in issue”—in which a rational fact-
      finder could readily conclude that he never intended, even at the
      outset, to perform fully or satisfactorily on the contract, and always
                                         112
      harbored the requisite intent or knowledge to deceive his customer
      and thereby deprive him of the value of at least a substantial portion
      of the property thus unlawfully appropriated.

450 S.W.3d 528, 537 (Tex. App.--Houston 2014); See Merryman v. State, 391

S.W.3d 261, 272 (Tex. App.--San Antonio 2012, pet ref’d). Furthermore, the Court

of Appeals of Houston in Christensen, a case cited by Appellant, observed that

courts are not only to consider partial performance, but also whether a defendant

experienced personal gain from the property obtained from alleged victims and

whether a defendant used deception to obtain the property. 240 S.W.2d at 32-34.

      At trial, Appellant introduced Defendant’s Exhibit 1, which outlined the

purported interest payments he had made to the victims, along with the partial

return of $43,000, of Judson Hall’s investment. (7 R.R. at Def. Ex. 1). The

Appellant admitted that the only investor that received more than about $2,000 in

interest payments was Judson Hall, whom he admitted to partially paying back by

using the investment funds he had received from Susan and Stephen Morris. (5

R.R. at 105, 106).

      The exhibit showed that Susan and Stephen Morris, after investing $50,000

had received $1,000, Kathleen Trial after investing $25,000 had received $1,875,

and Diane Lechuga after investing $25,000, had received $2,007.96 from

Appellant. (7 R.R. at Def. Ex. 1). Yet these payments were supposed to be

interest payments generated from the profits that Appellant was making from


                                        113
investing the victims’ funds. (7 R.R. at State’s Ex. 2, 5, 13, 14, 21, 24). Appellant

had a direct interest in making these payments, in order to appear that he had

properly invested these victims funds and was actively making profits off of such

investments. In fact, the victims testified they began to question Appellant’s

motives and actions with their money when he started failing to make these

payments. (3 R.R. at 36-37; 4 R.R. at 15-16, 132-133, 154-155; 7 R.R. at State’s

Ex. 3).

      It was also demonstrated by the State’s financial examiner in her charts, that

the purported “interest” payments received by these victims did not originate from

any profits generated by Appellant, but originated from the funds of other

investors. (7 R.R. at State’s Ex. 15-20). A rational trial trier of fact could have

inferred that making these phony “interest” payments was necessary for Appellant

to further his scheme and delay his actions from being discovered.

      The testimony from the State’s financial examiner regarding Appellant’s TD

Ameritrade account also sheds light on Appellant’s claims of partial performance

by investing some of the victims’ funds. The financial examiner testified that out

of the $34,000 of victim funds that she observed Appellant transfer to his TD

Ameritrade account, he transferred back $31,180. (4 R.R. at 109). These funds did

not represent profits made from the TD Ameritrade account, as the financial

examiner testified that the total amount of profits Appellant generated from the


                                        114
account was $1,857.20 (Id.), demonstrating that Appellant had simply moved

investor funds back and forth between his accounts.

          Such actions could have caused a rationale trier of fact to believe that the

small amount of monies invested by the Appellant, and payments made in

furtherance of his scheme, using other investor funds, was to put on an appearance

of intending to satisfy his obligations to the investors while knowing he would not.

See Taylor, 450 S.W.3d at 539.

          Each of the cases cited by Appellant in his brief are distinguishable from the

facts in this case, for those courts found that there had been substantial

performance of the matters for which funds had been tendered. In Peterson, the

Court held the evidence was legally insufficient to show criminal intent when the

construction project was 95% complete. See Peterson v. State, 645 S.W.2d 807,

811-812 (Tex. Crim. App. 1983).             In Martinez, the evidence was legally

insufficient to show theft when evidence showed payment of “almost half of the

amount owed” before a dispute even arose as to the amount that was still unpaid.

See Martinez v. State, 754 S.W.2d 799,800 (Tex. App.-San Antonio 1988, pet.

ref’d).      In Cox, the evidence showed that “a great deal of the services” had been

performed and there was no evidence to show any representation or promise that

was false at the time the complainant surrendered any money to the defendant in




                                            115
that case. See Cox v. State, 658 S.W.2d 668, 670 (Tex. App.-Dallas 1983, pet.

ref’d).

          The present case is distinguishable from these referenced cases because the

record is clear that Appellant used the vast majority of the funds for his own

personal gain including rent, utilities, child support, credit card payments, loan

payments, groceries, fuel and truck insurance. (7 R.R., Exhibit 15-16; 18-19).

Testimony from the victims that had they known of the financial difficulties

Appellant and his company were experiencing, they would never have invested,

demonstrated the motive Appellant had in not disclosing these material facts to

them when he solicited them to invest in his company. Overall, this evidence was

sufficient for a rational juror to find beyond a reasonable doubt that Appellant

acted with criminal intent as the record was full of evidence of deception and

personal financial gain by Appellant. Christensen, 240 S.W.2d at 32-34.




                                          116
                              PRAYER FOR RELI EF

      Appellant's trial was without prejudicial error, and his constitutional rights

were not violated. For the foregoing reasons, the State respectfully requests that

the judgment of the trial court be affirmed. See Tex. R. App. P. 43.2(a).




                                                  Special Assistant District Attorney
                                                 606 N. Carancahua, STE 803
                                                 Corpus Christi, Texas 7840 I
                                                 Phone: (361) 887-1085
                                                 Fax: (36 1) 884-7820

                       CERTIFICATE OF COMPLIANCE

       This is to certify that the word county of the computer program used to
prepare this brief indicates that such brief contains 29,386 words, not counting the
following if patt of this brief: the caption, identity of parties and counsel, statement
regarding oral argument, table of contents, index of authorities, statement of the
case, statement of procedural hist01y, signature, proof of service, certification,
certificate of compliance, and appendix. See Te".2,~


                                                 fielanie Go


                          CERTIFICATE OF SERVICE

       This is to certify that a copy of this brief was served via certi fi ed electronic
service provider (or mailed if electronic service could not be made) this 24th day
of September 20 15, to Appellant's attorney, John Lamerson, P.O. Box 241, Corpus
Christi, Texas 78403; lamersonlawfirm @gmail.com




                                           117
                                            APPENDIX

                       THE TEXAS SECURITIES ACT


Sec. 1. Short Title of Act. This Act shall be known and may be cited as "The Securities Act."

Sec. 4. Definitions. The following terms shall, unless the context otherwise indicates, have the
following respective meanings:

A. The term "security" or "securities" shall include any limited partner interest in a limited
partnership, share, stock, treasury stock, stock certificate under a voting trust agreement,
collateral trust certificate, equipment trust certificate, preorganization certificate or receipt,
subscription or reorganization certificate, note, bond, debenture, mortgage certificate or other
evidence of indebtedness, any form of commercial paper, certificate in or under a profit sharing
or participation agreement, certificate or any instrument representing any interest in or under an
oil, gas or mining lease, fee or title, or any certificate or instrument representing or secured by an
interest in any or all of the capital, property, assets, profits or earnings of any company,
investment contract, or any other instrument commonly known as a security, whether similar to
those herein referred to or not. The term applies regardless of whether the "security" or
"securities" are evidenced by a written instrument. Provided, however, that this definition shall
not apply to any insurance policy, endowment policy, annuity contract, optional annuity contract,
or any contract or agreement in relation to and in consequence of any such policy or contract,
issued by an insurance company subject to the supervision or control of the Texas Department of
Insurance when the form of such policy or contract has been duly filed with the Department as
now or hereafter required by law.

B. The terms "person" and "company" shall include a corporation, person, joint stock company,
partnership, limited partnership, association, company, firm, syndicate, trust, incorporated or
unincorporated, heretofore or hereafter formed under the laws of this or any other state, country,
sovereignty or political subdivision thereof, and shall include a government, or a political
subdivision or agency thereof. As used herein, the term "trust" shall be deemed to include a
common law trust, but shall not include a trust created or appointed under or by virtue of a last
will and testament or by a court of law or equity.

C. The term "dealer" shall include every person or company other than an agent, who engages in
this state, either for all or part of his or its time, directly or through an agent, in selling, offering
for sale or delivery or soliciting subscriptions to or orders for, or undertaking to dispose of, or to
invite offers for any security or securities and every person or company who deals in any other
manner in any security or securities within this state. Any issuer other than a registered dealer of
a security or securities, who, directly or through any person or company, other than a registered
dealer, offers for sale, sells or makes sales of its own security or securities shall be deemed a
dealer and shall be required to comply with the provisions hereof; provided, however, this
section or provision shall not apply to such issuer when such security or securities are offered for
sale or sold either to a registered dealer or only by or through a registered dealer acting as fiscal

                                                  118
agent for the issuer; and provided further, this section or provision shall not apply to such issuer
if the transaction is within the exemptions contained in the provisions of Section 5 of this Act.

D. The term "agent" shall include every person or company employed or appointed or authorized
by a dealer to sell, offer for sale or delivery, or solicit subscriptions to or orders for, or deal in
any other manner, in securities within this state, whether by direct act or through subagents;
provided, that the officers of a corporation or partners of a partnership shall not be deemed
agents solely because of their status as officers or partners, where such corporation or partnership
is registered as a dealer hereunder.

E. The terms "sale" or "offer for sale" or "sell" shall include every disposition, or attempt to
dispose of a security for value. The term "sale" means and includes contracts and agreements
whereby securities are sold, traded or exchanged for money, property or other things of value, or
any transfer or agreement to transfer, in trust or otherwise. Any security given or delivered with
or as a bonus on account of any purchase of securities or other thing of value, shall be
conclusively presumed to constitute a part of the subject of such purchase and to have been sold
for value. The term "sell" means any act by which a sale is made, and the term "sale" or "offer
for sale" shall include a subscription, an option for sale, a solicitation of sale, a solicitation of an
offer to buy, an attempt to sell, or an offer to sell, directly or by an agent, by a circular, letter, or
advertisement or otherwise, including the deposit in a United States Post Office or mail box or in
any manner in the United States mails within this State of a letter, circular or other advertising
matter. Nothing herein shall limit or diminish the full meaning of the terms "sale," "sell" or
"offer for sale" as used by or accepted in courts of law or equity. The sale of a security under
conditions which entitle the purchaser or subsequent holder to exchange the same for, or to
purchase some other security, shall not be deemed a sale or offer for sale of such other security;
but no exchange for or sale of such other security shall ever be made unless and until the sale
thereof shall have been first authorized in Texas under this Act, if not exempt hereunder, or by
other provisions of law.

F. The terms "fraud" or "fraudulent practice" shall include any misrepresentations, in any
manner, of a relevant fact; any promise or representation or prediction as to the future not made
honestly and in good faith, or an intentional failure to disclose a material fact; the gaining,
directly or indirectly, through the sale of any security, of an underwriting or promotion fee or
profit, selling or managing commission or profit, so gross or exorbitant as to be unconscionable;
any scheme, device or other artifice to obtain such profit, fee or commission; provided, that
nothing herein shall limit or diminish the full meaning of the terms "fraud," "fraudulent," and
"fraudulent practice" as applied or accepted in courts of law or equity.

G. "Issuer" shall mean and include every company or person who proposes to issue, has issued,
or shall hereafter issue any security.

H. "Broker" shall mean dealer as herein defined.

I. "Mortgage" shall be deemed to include a deed of trust to secure a debt.




                                                  119
J. If the sense requires it, words in the present tense include the future tense, in the masculine
gender include the feminine and neuter gender, in the singular number include the plural number,
and in the plural number include the singular number; "and" may be read "or" and "or" may be
read "and".

K. "No par value" or "non-par" as applied to shares of stock or other securities shall mean that
such shares of stock or other securities are without a given or specified par value. Whenever any
classification or computation in this Act mentioned is based upon "par value" as applied to
shares of stock or other securities of no par value, the amount for which such securities are sold
or offered for sale to the public shall be used as a basis of such classification or computation.

L. The term "include" when used in a definition contained in this Act shall not be deemed to
exclude other things or persons otherwise within the meaning of the term defined.

M. "Registered dealer" shall mean a dealer as hereinabove defined who has been duly registered
by the Commissioner as in Section 15 of this Act provided.

N. "Investment adviser" includes a person who, for compensation, engages in the business of
advising another, either directly or through publications or writings, with respect to the value of
securities or to the advisability of investing in, purchasing, or selling securities or a person who,
for compensation and as part of a regular business, issues or adopts analyses or a report
concerning securities, as may be further defined by Board rule. The term does not include:

(1) a bank or a bank holding company, as defined by the Bank Holding Company Act of 1956
(12 U.S.C. Section 1841 et seq.), as amended, that is not an investment company;

(2) a lawyer, accountant, engineer, teacher, or geologist whose performance of the services is
solely incidental to the practice of the person's profession;

(3) a dealer or agent who receives no special compensation for those services and whose
performance of those services is solely incidental to transacting business as a dealer or agent;

(4) the publisher of a bona fide newspaper, news magazine, or business or financial publication
of general and regular circulation; or

(5) a person whose advice, analyses, or report does not concern a security other than a security
that is:

(A) a direct obligation of or an obligation the principal or interest of which is guaranteed by the
United States government; or

(B) issued or guaranteed by a corporation in which the United States has a direct or indirect
interest and designated by the United States Secretary of the Treasury under Section 3(a)(12),
Securities Exchange Act of 1934 (15 U.S.C. Section 78c(a)(12)), as amended, as an exempt
security for purposes of that Act.


                                                 120
O. "Federal covered investment adviser" means an investment adviser who is registered under
the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.), as amended.

P. "Investment adviser representative" or "representative of an investment adviser" includes each
person or company who, for compensation, is employed, appointed, or authorized by an
investment adviser to solicit clients for the investment adviser or who, on behalf of an investment
adviser, provides investment advice, directly or through subagents, as defined by Board rule, to
the investment adviser's clients. The term does not include a partner of a partnership or an officer
of a corporation or other entity that is registered as an investment adviser under this Act solely
because of the person's status as an officer or partner of that entity.

Q. "Registered investment adviser" means an investment adviser who has been issued a
registration certificate by the Commissioner under Section 15 of this Act.

Sec. 29. Penal Provisions. Any person who shall:

A. Sell, offer for sale or delivery, solicit subscriptions or orders for, dispose of, invite offers for,
or who shall deal in any other manner in any security or securities without being a registered
dealer or agent as in this Act provided shall be deemed guilty of a felony of the third degree.

B. Sell, offer for sale or delivery, solicit subscriptions to and orders for, dispose of, invite orders
for, or who shall deal in any other manner in any security or securities issued after September 6,
1955, unless said security or securities have been registered or granted a permit as provided in
Section 7 of this Act, shall be deemed guilty of a felony of the third degree.

C. In connection with the sale, offering for sale or delivery of, the purchase, offer to purchase,
invitation of offers to purchase, invitations of offers to sell, or dealing in any other manner in any
security or securities, whether or not the transaction or security is exempt under Section 5 or 6 of
this Act, or in connection with the rendering of services as an investment adviser or an
investment adviser representative, directly or indirectly:

(1) engage in any fraud or fraudulent practice;

(2) employ any device, scheme, or artifice to defraud;

(3) knowingly make any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the circumstances under which
they are made, not misleading; or

(4) engage in any act, practice or course of business which operates or will operate as a fraud or
deceit upon any person, is:

(a) guilty of a felony of the third degree, if the amount involved in the offense is less than
$10,000;




                                                  121
(b) guilty of a felony of the second degree, if the amount involved in the offense is $10,000 or
more but less than $100,000; or

(c) guilty of a felony of the first degree, if the amount involved is $100,000 or more.

D. Knowingly violate a cease and desist order issued by the commissioner under the authority of
Section 23A, 23B, or 23-2 of this Act shall be deemed guilty of a felony of the third degree.

E. Knowingly make or cause to be made, in any document filed with the commissioner or in any
proceeding under this Act, whether or not such document or proceeding relates to a transaction
or security exempt under the provisions of Sections 5 or 6 of this Act, any statement which is, at
the time and in the light of the circumstances under which it is made, false or misleading in any
material respect shall be deemed guilty of a felony of the third degree.

F. Knowingly make any false statement or representation concerning any registration made or
exemption claimed under the provisions of this Act shall be deemed guilty of a state jail felony.

G. Make an offer of any security within this State that is not in compliance with the requirements
governing offers set forth in Section 22 of this Act shall be deemed guilty of a state jail felony.

H. Knowingly make an offer of any security within this State prohibited by a cease publication
order issued by the Commissioner under Section 23C of this Act shall be deemed guilty of a state
jail felony.

I. Render services as an investment adviser or an investment adviser representative without being
registered as required by this Act shall be deemed guilty of a felony of the third degree.

J. A conviction of an offense under this section may be enhanced as provided by Section 12.42,
Penal Code.

Sec. 29-1. Limitation. An indictment for an offense under Subsection C of Section 29 may be
brought only before the fifth anniversary of the day on which the offense is committed.

Sec. 29-2. Aggregation of Amounts Involved in Securities Fraud. When amounts are obtained
in violation of this Act under one scheme or continuing course of conduct, whether from the
same or several sources, the conduct may be considered as one offense and the amounts
aggregated in determining the grade of the offense.

Sec. 31. Construction. Nothing herein contained shall limit or diminish the liability of any
person or company, or of its officers or agents, now imposed by law to prevent the prosecution
of any person or company, or of its officers or agents, for the violation of the provisions of any
other statute.




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