United States v. Matthew Simpson
2014 U.S. App. LEXIS 839
| 5th Cir. | 2014Background
- Simpson and Shafer were among 19 co-defendants indicted for a long-running conspiracy (2003–2010) to defraud telecommunications companies and related entities by creating and using shell corporations, false identities, and fraudulent documents to obtain services and avoid payment.
- After a 10‑week trial, Simpson was convicted of (1) conspiracy to commit wire and mail fraud; (2) aiding and abetting transmission of spam under the CAN‑SPAM Act; (3) obstruction of justice for deleting/altering electronic records; and (4) false registration of a domain name. He was acquitted on a separate obstruction count.
- Shafer was convicted of conspiracy to commit wire and mail fraud. Most other co‑conspirators pleaded guilty; two other trial defendants were acquitted.
- Sentences: Simpson received 480 months (total) and restitution ~$17.7M; Shafer received 108 months and restitution ~$3.26M; forfeiture orders entered against both.
- On appeal the Fifth Circuit affirmed all convictions except Simpson’s false‑domain registration conviction (Count Seven), which it reversed for insufficient evidence that the domain was knowingly used in the conspiracy after the statute’s effective date; Simpson’s sentence was vacated and remanded accordingly. Shafer’s conviction and sentence were affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of indictment (Count One) | Simpson: indictment too indefinite; alleges a sprawling multi‑group, multi‑year conspiracy without an overarching agreement | Government: Count One alleges elements, manner/means, and 140+ overt acts identifying conduct and victims | Affirmed: indictment sufficient under §1349, §1341, §1343 standards |
| Existence of single conspiracy | Both defendants: evidence showed multiple separate conspiracies or mere buyer‑seller relations (Simpson re: Faulkner) | Government: common goal, interrelated scheme parts, overlapping participants support single conspiracy | Affirmed: jury reasonably found a single conspiracy; buyer‑seller theory rejected |
| CAN‑SPAM conviction (aiding and abetting spam) | Simpson: §1037(a)(2) is vague/overbroad under First Amendment; evidence insufficient (spam was phone/fax rather than email) | Government: statute targets intentionally misleading commercial email; evidence showed email spam and active steps by Simpson to facilitate/hide spam | Affirmed: statute constitutional as applied; sufficient evidence of email‑based misconduct |
| Obstruction of justice (§1512(c)(1)) | Simpson: mere deletion of email insufficient; no nexus to an official proceeding | Government: Simpson deleted files after learning of executed search warrants, misrepresented drive status, instructed others to delete — sufficient nexus/intent | Affirmed: evidence supported conviction; defendant foresaw/anticipated official proceeding |
| False registration of domain (§3559(g)) | Simpson: conviction violates Ex Post Facto and statute of limitations (registration pre‑effective date); insufficient evidence of use after statute took effect | Government: relied on 2005 renewal within statute period | Reversed (Simpson): insufficient evidence that camophone.com was knowingly used in the conspiracy after the statute's effective date; conviction vacated |
| Brady/newly discovered evidence (AT&T litigation) | Simpson: failure to disclose prior sealed DOJ suit against AT&T deprived him of impeachment material; warrants new trial | Government: evidence not material to witnesses at trial and would not have altered outcome | Affirmed: district court did not abuse discretion; evidence not material under Brady |
| Rule 404(b) admission (mortgage‑fraud email) | Shafer: admission of email referencing a loan package impermissibly introduced 404(b) evidence | Government: sentence‑relevant, limited, and of marginal probative weight | Affirmed: any error harmless given minimal impact |
| Sentencing: loss attribution and standards (Shafer) | Shafer: loss amounts inflated, some losses pre‑date his involvement, higher burden of proof required, and two criminal‑history points wrongly applied | Government: district court held evidentiary hearing, relied on agent testimony/records, used preponderance standard, and Shafer was on probation when the offense occurred | Affirmed: district court findings not clearly erroneous; preponderance standard applies; criminal‑history points proper |
| Forfeiture jury right | Shafer: Southern Union Co. requires jury findings for forfeiture amounts | Government: forfeiture is indeterminate and statutory; no jury right to determine amount | Affirmed: no jury right to determine forfeiture amount under applicable precedents |
Key Cases Cited
- United States v. Cooper, 714 F.3d 873 (5th Cir.) (standards for indictment sufficiency)
- United States v. Mitchell, 484 F.3d 762 (5th Cir. 2007) (factors for single vs. multiple conspiracies)
- Cleveland v. United States, 531 U.S. 12 (2000) (limits on mail fraud statute for regulatory filings)
- Bolger v. Youngs Drugs Prods. Corp., 463 U.S. 60 (1983) (First Amendment protection for commercial speech)
- Arthur Andersen LLP v. United States, 544 U.S. 696 (2005) (nexus requirement for obstruction statutes)
- Aguilar, 515 U.S. 593 (1995) (obstruction nexus and foreseeability principles)
- Libretti v. United States, 516 U.S. 29 (1995) (no constitutional right to jury trial for criminal forfeiture)
- Apprendi v. New Jersey, 530 U.S. 466 (2000) (facts increasing statutory maximum must be found by jury)