Tag Archives: contracts

Timber Fraud: A Violation of Trust

There are a variety of ways to fraud landowners when harvesting timber.

We generally think of two types of situations. In one, the fraudster steals the timber outright without the owner’s consent, knowledge or agreement. In the second situation, the theft is perpetrated with an agreement that is poorly written and therefore jeopardizes the rights and/or benefits of the landowner.

As you know, I have talked before about the importance of having a well-written contract to establish a good understanding of the parameters of a timber sale. A solid contract is foundational to ensuring clarity and fair dealings. However, it also ensures that, when there is a fraud attempt in implementing that contract, there is legal ground for making charges stick in a court of law.

Good contracts have three major purposes:

  • – Provide a binding agreement between two or more persons and/or organizations where a failure to comply with the terms results in some financial, material or even legal recourse for the contracting party.
  • – Establish a business arrangement for the supply of goods or services at a fixed price or hourly rate which details the quality, quantity and performance standards of the work performed or the product supplied.
  • – Details what happens when standards are not met.

Once signed, it is exceedingly difficult to dispute a written contract and claim misunderstanding. By definition, it is assumed that all parties understood the specifics of the arrangement, so the words used and the details that are outlined in the contract are critical. If the dispute becomes a legal issue, outsiders who were not party to the discussions will only weigh the words on the page.

Even the use of certain terms can make all the difference. The use of terms such as cords, tons and board feet can create a large discrepancy between what was understood at the time and the actual cash a landowner receives. For example, five dollars a cord is a much lower value than $5 a ton.

In the case below, there was a legitimate contract between the landowner and the harvester. As landowners become savvier in ensuring contracts that are fair, clear and comprehensive, however, there seems to be a rise in cases that focus on the implementation of the contract itself.

Josh Mizrany, Investigator with Texas A&M Forest Service Law Enforcement Department, says, “The past few years we have seen an increase in Timber Fraud cases. Most of these cases started off with a legitimate contract, but then the landowner only receives partial payment, or no payment at all.”

In this case from Jasper County in North Texas. Troy Grice, 49, entered into a timber harvesting agreement through his company, Apex Timber, with a Jasper county landowner. In the contract, the landowner and harvester agreed to harvesting 314 acres of timber with specific amounts to be paid to the landowner at specific intervals. The contract was agreed to in January of 2019.

Grice was arrested on March 5, 2020 for timber fraud and indicted by a grand jury on February 25, 2021, for Third Degree felony timber fraud.

Although the contract is not specifically referenced in this case, it is implied that the agreements as to amounts and payments and timeliness were crucial in ensuring a conviction in this case. Read on to see how a well-written contract, an understanding of the legal terminology for timber fraud, and quick action with the help of professionals come together to protect landowners.

If you are faced with timber theft on your land, don’t hesitate to get help!

If you are unfamiliar with selling timber, you are urged to contact your local timber specialist for help. They can assist you with securing a professional resource manager to help select trees for harvest, estimate values and find potential buyers.

The Case from Jasper County in North Texas

Troy Grice is charged with defrauding a Jasper County landowner of between $20,000 and $100,000 worth of timber.

The harvest was halted by the landowner in April of 2019, after delinquent payments started occurring. The landowner reached out to Texas A&M Forest Service law enforcement for help.

Once the Texas A&M Forest Service Law Enforcement Department was notified of the unpaid balance, they began investigating the case. During the investigation, Texas A&M Forest Service officials were able to verify that Grice had not paid all of the money owed to the landowner.

Troy Grice of Groveton, Texas, was arrested on March 5, 2020, in Trinity County. The case was turned in to District Attorney Anne Pickle on February 25. Grice was indicted on a charge of timber purchase as trustee with intent to defraud which brings the case before a grand jury.

After hearing testimony, the grand jury decided that there was probable cause for Grice to be charged with a felony of the third degree, the Texas A&M Forest Service said.

Timber As Trust Money

“The Texas Natural Resource Code has a section which states that money collected from timber is trust money,” Mizrany said. “And if the trustee of that money doesn’t pay all of the beneficiaries for the timber within 45 days of the timber being sold, that person has committed the offense of timber fraud.”

Mizrany stresses the importance of acting quickly when there is an issue of timber fraud. “If you go into an agreement with a timber harvesting company and payment has stopped, or you’re not receiving all of the revenue that you’re owed-that they’ve contractually agreed to-it’s important to notify the Texas A&M Forest Service law enforcement department right away,” said Mizrany.


Trees Felled, But Where’s My money?

Dear Aaron: My Trees have fallen and I can’t get paid!

As I was contemplating this month’s topic, I received a phone call from an irate landowner and small businessman.

In talking with a colleague about a theft and fraud presentation a few years back, he came up with the title for this month’s newsletter. I didn’t use the title back then, but I knew it would come in handy one day. Sadly, it is too appropriate in many instances, especially the following.

Verbal agreements do not always stand up

About six weeks ago, the caller mentioned above reached a verbal agreement with a professional logger to harvest the trees on his property for a share of the market price the logger receives. The logger said he’d put the verbal agreement in a contract and then bring the contract over for both parties to sign and consummate the deal.

No contract, but tree harvest proceeds!

Meanwhile, harvesting began and no contract. The landowner didn’t think too much of it. He was busy and, as a business owner, he knew how hectic things can get. He signs contracts all the time in his business, so he wasn’t concerned with the delay in getting a contract for this timber deal. He’d hired a professional and he expected a professional to honor his word and deliver as promised. The logger had new equipment and a new pickup which added to the professional image.

Can you guess where this is going?

Six weeks have gone by. Harvesting is complete. The log deck has timber processed and waiting to be hauled and there is no logging equipment on site. The logger shows up with the scale tickets for the job, but the prices are not what was originally agreed. In fact, the prices are much lower. As it stands now, no payment has been made to the landowner.

What’s your next move if you’re the landowner?

Call a timber security specialist?

Call the sheriff?

Call your lawyer?

Call the state forestry agency that can assist with investigations?

Fortunately for the landowner, he lives in a state where the state forestry agency may be able to assist with this case and hopefully bring enough heat to bear on the logger to resolve the issues, maybe. After all, the landowner does not have a written contract and the verbal agreement wasn’t witnessed by anyone else.

Beware those who seem honest, yet do not follow through

Life is very busy for a small business owner and, for that matter, it’s busy for most of us. As you run from project to project, it’s tempting to let details slide, and trust that everything will work out in the end.

I hope that sharing this story, will cause you to take a minute to pause and look around your business and your life. Are you busy taking care of business and not paying attention to those “unimportant” details that may turn out to be very important after all?

If you’ve followed this site for any length of time, you’ve seen a few articles about written contracts. You can find the links to those articles below.

Things to know about contracts for timber harvest

I suggest it’s time once again to review not only the importance of well written contracts but key items to consider and include to ensure your contracts are fair, accurate, well-documented and reflect the verbal agreements you have made. Finally, even if your contracts are solid, when things go wrong you need to know who to call. As timber security experts DRM is ready to assist should the need arise.

Prevent Legal Theft with Solid Contracts

Contract Fraud

Selling Trees