Opinion ID: 3090871
Heading Depth: 2
Heading Rank: 2

Heading: Conspiracy (Simpson and Shafer)

Text: Both defendants argue that there is insufficient evidence supporting their conviction of conspiracy to commit wire and mail fraud. We review the sufficiency of the evidence de novo. See United States v. Shum, 496 F.3d 390, 391 (5th Cir. 2007). “When reviewing the sufficiency of the evidence, we view all evidence, whether circumstantial or direct, in the light most favorable to the government, with all reasonable inferences and credibility choices to be made in support of the jury’s verdict.” United States v. Ford, 558 F.3d 371, 375 (5th Cir. 2009). 5 Case: 12-10574 Document: 00512501580 Page: 6 Date Filed: 01/15/2014 No. 12-10574
Simpson argues that the evidence is insufficient because: (1) the trial evidence did not prove the existence of a single conspiracy as alleged in the indictment; (2) his relationship with Michael Faulkner was a “buyer-seller” relationship, and thus he could not be held liable for Faulkner’s business misconduct; and (3) evidence of fraudulent regulatory filings became the “gravamen” of the conspiracy, in violation of Cleveland v. United States, 531 U.S. 12 (2000). We address each argument in turn.
“The question whether the evidence establishes the existence of one conspiracy (as alleged in the indictment) or multiple conspiracies is a fact question within the jury’s province.” United States v. Mitchell, 484 F.3d 762, 769 (5th Cir. 2007). “We will affirm the jury’s finding that the government proved a single conspiracy ‘unless the evidence and all reasonable inferences, examined in the light most favorable to the government, would preclude reasonable jurors from finding a single conspiracy beyond a reasonable doubt.’” Mitchell, 484 F.3d at 769 (quoting United States v. Morris, 46 F.3d 410, 415 (5th Cir. 1995)). The principal considerations in counting the number of conspiracies are (1) the existence of a common goal; (2) the nature of the scheme; and (3) the overlapping of the participants in the various dealings. Id. at 770. “This court has broadly defined the criterion of a common goal in counting conspiracies.” Id. For example, in Morris, we held that the common goal of profiting from the illicit business of buying and selling cocaine constituted a single conspiracy. Morris, 46 F.3d at 415. Likewise, the jury here could reasonably have concluded that the common goal of the charged conspiracy was to derive personal gain from the creation of shell companies and other fraudulent actions to defraud telecommunications companies out of services and property. 6 Case: 12-10574 Document: 00512501580 Page: 7 Date Filed: 01/15/2014 No. 12-10574 Regarding the nature of the scheme, “the existence of a single conspiracy will be inferred where the activities of one aspect of the scheme are necessary or advantageous to the success of another aspect or to the overall success of the venture, where there are several parts inherent in a larger common plan.” Id. at 416. Here, the jury could reasonably have found “several parts inherent in a larger common plan,” in which the fraud scheme was dependent on various conspirators continuing to perform their functions. Some co-conspirators created shell companies or falsified documents, while some used those companies or false documents to obtain telecommunications services, and some used their positions or expertise in various ways to avoid detection and to avoid paying the bills. Finally, the third criterion “examines the interrelationships among the various participants in the conspiracy.” Id. The more interconnected the relationships, the more likely it is that there is a single conspiracy. See id. Here, there was evidence of Simpson’s repeated concerted action with a core group of co-conspirators, including with Faulkner, who Simpson alleges was the primary perpetrator of fraud. Though the other players in the conspiracy changed over time, the jury could reasonably have found that Simpson was consistently involved with core conspirators to defraud companies of goods and services. William Watts, a primary actor in the conspiracy, testified that Simpson was part of the “inner circle.” Jason Watts, another conspirator, testified that Simpson and Faulkner acted in concert to set up shell companies, shared databases, and worked together in their business arrangements. In sum, Simpson is particularly poorly positioned to contest the proof of a single conspiracy, when the evidence supports the conclusion that he was consistently near the center of the scheme.
Simpson next argues that the evidence showed that he had a buyer-seller relationship with Faulkner, rather than a co-conspirator relationship, and that 7 Case: 12-10574 Document: 00512501580 Page: 8 Date Filed: 01/15/2014 No. 12-10574 he cannot be held liable for Faulkner’s business dealings. Simpson provides no evidentiary support for this assertion. By contrast, the government points to multiple pieces of trial evidence that showed, inter alia, that Faulkner described Simpson as part of the infrastructure that he managed, and split profits with Simpson for at least several months. Jason Watts testified that Simpson and Faulkner acted in concert, shared information and worked together in their business arrangements. Though Simpson challenged these assertions at trial, judging the credibility of the evidence was the province of the jury.
Simpson next argues that the evidence supporting the conspiracy charge was drawn largely from fraudulent regulatory filings, in violation of Cleveland v. United States, 531 U.S. 12 (2000). Cleveland held that the federal mail fraud statutes do not extend to fraudulent filings seeking licenses from public entities. Id. at 20-21. Simpson summarily argues that fraudulent regulatory filings became the basis for a theory of prosecution. Although fraudulent regulatory filings were included in the evidence for various purposes, we have already detailed substantial evidence, not including those filings, which supports his conviction. Further, the district court repeatedly emphasized to the jury, including in the final jury charge, that it could not convict Simpson on the basis of regulatory filings or violations. Simpson has not shown that a reasonable juror could not have found that he was guilty of all the elements of conspiracy beyond a reasonable doubt.
Shafer also argues that there is insufficient evidence supporting his conviction for conspiracy to commit wire and mail fraud. Shafer never disputed that he recruited people without assets to be directors of shell corporations on behalf of Faulkner. Shafer’s contention is that Faulkner told him that he was 8 Case: 12-10574 Document: 00512501580 Page: 9 Date Filed: 01/15/2014 No. 12-10574 exploiting a “legal loophole” in the regulatory framework, and that their business practices were legal. In short, Shafer argues that he had no intention to further any unlawful objective of the conspiracy, and that the government never established that he did. As we stated above, to prove conspiracy, “the government must prove beyond a reasonable doubt that an agreement existed to violate the law and each conspirator knew of, intended to join, and voluntarily participated in the conspiracy.” United States v. Chon, 713 F.3d 812, 818 (5th Cir. 2013). “The existence of an agreement to violate the law may be established solely by circumstantial evidence and may be inferred from ‘concert of action.’” Chon, 713 F.3d at 818-19. Finally, “[w]hile a conspirator must knowingly participate in some way in the larger objectives of the conspiracy, he does not need to know all details of the unlawful enterprise or have a major role in the unlawful enterprise.” Id. at 819. Shafer cannot show that there was insufficient evidence that he joined the conspiracy. There is evidence that he knew of the unlawful purpose of the conspiracy, and acted in concert with the other conspirators to carry it out. See Chon, 713 F.3d at 818-19. Shafer himself acknowledges that William Watts, a co-conspirator, testified that Shafer was at a meeting where four coconspirators, including Faulkner, Simpson, Watts and Shafer, planned to use the shell companies to acquire telecommunications services and not pay for them. Watts also described Shafer as being part of “inner circle” during the time that he was involved in the conspiracy. Though Shafer attacks Watts’ credibility and inability to remember the exact date and details of the meeting, the jury is, of course, the best judge of credibility. Shafer has not shown that a reasonable juror could not have found that he was guilty of all the elements of conspiracy beyond a reasonable doubt. 9 Case: 12-10574 Document: 00512501580 Page: 10 Date Filed: 01/15/2014 No. 12-10574