Alberto Alba Villarreal v. State, 13-15-00037-CR

Background

Alberto Alba Villarreal was indicted (Nov. 6, 2013) on two counts: (1) false-statement in connection with sale of a security (Vernon’s art. 581-29(C)(3)/(1)) and (2) theft of property (Penal Code §31.03(e)(7)), allegedly arising from a November 2008 membership/LLC agreement with Enrique Garrido.
The operative agreement was signed Nov. 3, 2008; Garrido paid $1 million by checks Nov. 6–7, 2008 and later deposited another $1 million in 2009. Garrido was an account signatory and the contract granted Villarreal managerial control.
Trial evidence: the Texas Securities Board (TSB) investigated, TSB attorneys participated in prosecution and testified, and the DA’s office prosecuted with substantial TSB involvement. Garrido was a key witness; a videotaped statement made by Garrido while in state custody was not produced at trial.
Defense moved to dismiss on separation-of-powers grounds, statute-of-limitations grounds, challenged the sufficiency/variance of the indictment and proof, raised statutory exemptions under the Securities Act, sought exclusion or mistrial for spoliation (lost videotape), and objected to judicial comment on evidence. Trial court denied these motions; jury convicted; sentence suspended and community supervision imposed.
Core contested legal themes: (a) whether TSB’s role usurped prosecutorial discretion (separation of powers / interested prosecutor), (b) whether the securities statute criminalizes negligence via a civil/"reasonable investor" materiality standard, (c) statute-of-limitations triggering/when offense completed for contract-based fraud/theft, (d) evidentiary defects/variance and discovery/spoliation remedies.

Issues

Issue	State's Argument	Villarreal's Argument	Held (trial-court posture)
1. Separation of powers / use of TSB attorneys to prosecute	TSB prosecutors participated as "lead" but acted with DA consent; prosecution proper	TSB exceeded investigatory role, acted as special prosecutors and witnesses, violating separation of powers and rendering convictions void	Trial court allowed TSB attorneys to participate and prosecutions to proceed (objections overruled)
2. Constitutionality of art. 581-29(C)(3)/(C)(1) (mental state/materiality)	Statute criminally proscribes misstatements/omissions; jury may apply materiality standard	Statute uses civil/"reasonable investor" materiality and permits negligence-based liability, violating Due Process/Fifth and Sixth Amendments	Trial court rejected facial/unconstitutional challenge and submitted the charge
3. Statute of limitations for securities and theft counts	TIMELY: various post-contract acts continue offense; tolling or continuing-conduct/aggregation theories apply	UNTImELY: offense completed when contract formed (Nov. 3, 2008); five-year limitations expired Nov. 3, 2013; indictment filed Nov. 6, 2013	Trial court denied dismissal for limitations; case proceeded to verdict
4. Sufficiency/variance/exemptions/spoliation/jury instruction & judge comment	Proof established fraud/misstatement and theft; evidence of misappropriation and lack of effective consent; exemptions not applicable; no reversible discovery harm	Evidence insufficient (Garrido had signatory control; consent; manager authority); indictment alleged U.S. currency but proof showed checks; State failed to plead/disprove statutory exemptions; lost videotape required striking testimony or mistrial; judge improperly commented on weight of evidence	Trial court admitted disputed evidence, denied relief for spoliation, refused requested exemption instruction, overruled variance and sufficiency objections, and allowed trial judge's comment to stand

Key Cases Cited

Jackson v. Virginia, 443 U.S. 307 (U.S. 1979) (standard for reviewing sufficiency of the evidence)
Bridwell v. State, 804 S.W.2d 900 (Tex. Crim. App. 1991) (applying civil "reasonable investor" materiality in securities penal context)
Elonis v. United States, 135 S. Ct. 2001 (U.S. 2015) (civil/reasonable-person standards cannot substitute for required mens rea in criminal statutes)
Taylor v. State, 450 S.W.3d 528 (Tex. Crim. App. 2014) (theft in contract settings completes when intent to deprive exists at time of agreement)
Dean v. State, 433 S.W.2d 173 (Tex. Crim. App. 1968) (State must disprove statutory exemptions once evidence raises them)
Jenkins v. State, 912 S.W.2d 793 (Tex. Crim. App. 1993) (prosecutor must produce witness statements in possession; failure can mandate striking testimony)
Young v. United States ex rel. Vuitton et Fils S.A., 481 U.S. 787 (U.S. 1987) (rule against appointment of an interested prosecutor)
Gollihar v. State, 46 S.W.3d 243 (Tex. Crim. App. 2001) (material variance rule; prejudice/double-jeopardy and notice analysis)