Villarreal v. State
| Decision Date | 20 October 2016 |
| Docket Number | NUMBER 13-15-00037-CR |
| Parties | Alberto Alba VILLARREAL, Appellant, v. The STATE of Texas, Appellee. |
| Court | Texas Court of Appeals |
Gerald H. Goldstein, Goldstein, Goldstein & Hilley, San Antonio, TX, for Alberto Alba Villarreal.
Luis V. Saenz, District Attorney, Rene G. Gonzalez, Assistant District Attorney, Brownsville, TX, for the State of Texas.
Before Chief Justice Valdez and Justices Rodriguez and Garza
Appellant Alberto Alba Villarreal was charged on November 6, 2013 with one count of securities fraud (Count I), see TEX. REV. CIV. STAT. ANN. art. 581–29(C)(West, Westlaw through 2015 R.S.), and one count of theft by deception (Count II). See TEX. PENAL CODE ANN. § 31.03(e)(7) (Westlaw, West through 2015 R.S.). The jury found Villarreal guilty of both counts and sentenced him to ten years for Count I and five years for Count II, with the sentences to run concurrently. Villarreal's ten-year sentence was suspended, and he was placed on community supervision for ten years.
By eighteen issues, Villarreal contends: (1) the convictions are void because they were prosecuted by the Texas Securities Board (TSB), which Villarreal claims is a violation of constitutional separation of powers; (2–3) subsections (1) and (3) of article 581–29(C) of the Texas Revised Civil Statutes (the Texas Securities Act or TSA) are unconstitutional because they assign criminal penalties to ordinary negligence; (4–5) the trial court erred in denying Villarreal's motion to dismiss because the statute of limitations had expired on both counts; (6–7) the evidence was insufficient to sustain a conviction on each count; (8) the securities fraud count failed to state an offense; (9) the trial court erred in denying Villarreal's request for the inclusion of the statutory exception in the jury charge; (10–11) a material variance existed between the indictment allegations for each count and the proof at trial; (12) the prosecutor engaged in misconduct when she gave advice to the complainant regarding his civil suit against Villarreal; (13) the trial court erred in permitting the TSB to act as prosecutors and witnesses in this case; (14) the trial court erred in not striking the complainant's testimony and failing to grant a mistrial when the State did not produce the complainant's videotaped statement; and (15–18) the trial court improperly commented on the State's evidence, causing egregious harm.
We affirm Villarreal's conviction for theft by deception (Count II). We reverse and render a judgment of acquittal on Villarreal's conviction for securities fraud (Count I).
This case involves Villarreal and the complainant Enrique Garrido Cruz (Garrido). It is undisputed that both men came from "humble beginnings" in Mexico to become successful business owners—Villarreal in the insurance industry and Garrido in the auto parts business. Villarreal planned to form Nafta Holdings, L.L.C., an insurance company. Garrido wanted to diversify and go into the insurance business with Villarreal.
The evidence reveals that on November 3, 2008, Villarreal and Garrido entered into a company agreement (the Agreement) that formed Nafta Holdings. The Agreement set out that its effective date was November 3, 2008, and pursuant to the Agreement, each party committed $2,000,000 to the company. By November 7, 2008, Garrido had deposited $1,000,000 into a venture account at Wells Fargo Bank (Wells Fargo), where both Villarreal and Garrido were signatories on the account. And on November 7, 2008, Garrido received a 24% membership interest in Nafta Holdings. Trial testimony discussing a bank record review and an exhibit further revealed that sometime after November 13, 2008, almost $1,000,000 was transferred from Wells Fargo into an account at First National Bank (First National) where Villarreal was the only authorized signatory.
According to the testimony at trial, in June 2009, Garrido, who was concerned about the "health" of the company, asked Villarreal for an accounting before he invested the second $1,000,000. Villarreal provided Garrido with a list of expenses totaling $1,196,557.78. It is undisputed that Garrido did not invest his remaining $1,000,000 commitment and that Villarreal did not invest any of his $2,000,000 commitment. Garrido and Villarreal's relationship continued for approximately four years after Garrido made his initial investment.
It is also undisputed that Villarreal unsuccessfully sued First National after he had deposited the Nafta Holdings funds with it and after First National refused to release those funds. In December 2011, when Villarreal had returned none of Garrido's money, Garrido hired an attorney to file a complaint against Villarreal with the TSB.
Villarreal was indicted for securities fraud and theft by deception on November 6, 2013.1 Sometime before the November indictment, Garrido filed a civil lawsuit against Villarreal.2
The trial in this case began on January 5, 2015, and the jury found Villarreal guilty of securities fraud and of theft by deception. It sentenced Villarreal to ten years and five years respectively, in the Institutional Division of the Texas Department of Criminal Justice, with the sentences to run concurrently. Villarreal's ten-year sentence was suspended, and he was placed on community supervision for ten years. This appeal followed.
By his first issue, Villarreal asserts a separation-of-powers challenge. He contends that the trial court erred when it denied his challenge to the District Attorney's appointment of special prosecutors who worked for the TSB at the time. He claims that special prosecutors from the executive branch prosecuted his case and not the District Attorney from the judicial branch, and therefore, his convictions are void. The State responds that the trial court did not err in denying Villarreal's challenge because Cameron County's District Attorney retained ultimate control and authority over Villarreal's prosecution and because Texas law recognizes a district attorney's discretion to appoint attorneys to serve as special prosecutors without violating the separation-of-powers provision of the Texas Constitution. We agree with the State.
The powers of the Government of the State of Texas shall be divided into three distinct departments, each of which shall be confided to a separate body of magistracy, to wit: Those which are Legislative to one; those which are Executive to another, and those which are Judicial to another; and no person, or collection of persons, being of one of these departments, shall exercise any power properly attached to either of the others, except in the instances herein expressly permitted.
TEX. CONST. art. 2, § 1. This separation-of-powers doctrine prohibits one branch of government from exercising a power that inherently belongs to another. See id. ; see also Gen. Servs. Comm'n v. Little – Tex Insulation Co. , 39 S.W.3d 591, 600 (Tex. 2001) ; Tex. Ass'n of Bus. v. Tex. Air Control Bd. , 852 S.W.2d 440, 444 (Tex. 1993).
To establish a violation of separation of powers under the Texas Constitution, a defendant must show (1) that one department has assumed, or has been delegated, to whatever degree, a power that is more "properly attached" to another, or (2) that one department has so unduly interfered with the functions of another that the other department cannot effectively exercise its constitutionally assigned powers. State v. Williams , 938 S.W.2d 456, 458 (Tex. Crim. App. 1997) (quoting Armadillo Bail Bonds v. State , 802 S.W.2d 237, 239 (Tex. Crim. App. 1990) ); Medrano v. State , 421 S.W.3d 869, 877 (Tex. App.–Dallas 2014, pet. ref'd) ; Wilkerson v. State , 347 S.W.3d 720, 724 (Tex. App.–Houston [14th Dist.] 2011, pet. ref'd) ; see also Ex parte Perry , 483 S.W.3d 884, 894–95 (Tex. Crim. App. 2016). Rushing v. State , 50 S.W.3d 715, 723 (Tex. App.–Waco 2001) (op. on reh'g), aff'd , 85 S.W.3d 283, 287 (Tex. Crim. App. 2002). As applied in this case, the doctrine would be violated if the functioning of the judicial process in a field constitutionally committed to the control of the judicial branch is assumed by or delegated to the executive branch or is interfered with by the executive branch. See Little – Tex Insulation Co ., 39 S.W.3d at 600 ; State Bd. of Ins. v. Betts , 158 Tex. 83, 308 S.W.2d 846, 851–52 (1958) ; see In re Dean , 393 S.W.3d 741, 747–48 (Tex. 2012) ; Hightower v. Baylor Univ. Med. Ctr ., 348 S.W.3d 512, 522 (Tex. App.–Dallas 2011, pet. denied). The separation-of-powers doctrine requires that "any attempt by one department of government to interfere with the powers of another is null and void." Meshell v. State , 739 S.W.2d 246, 252 (Tex. Crim. App. 1987) (en banc); Medrano , 421 S.W.3d at 877–79.
The TSA provides for its administration and enforcement as follows:
The administration of the provisions of this Act shall be vested in the Securities Commissioner. It shall be the duty of the Securities Commissioner and the Attorney General to see that its provisions are at all times obeyed and to take such measures and to make such investigations as will prevent or detect the violation of any provision thereof. The Commissioner shall at once lay before the District or County Attorney of the proper county any evidence which shall come to his knowledge of criminality under this Act. In the event of the neglect or refusal of such attorney to institute and prosecute such violation, the Commissioner shall submit such evidence to the Attorney General, who is hereby authorized to proceed therein with all the rights,...
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