United States v. Michael Smith
749 F.3d 465
| 6th Cir. | 2014Background
- Michael D. Smith and Christopher Cello Smith operated Target Oil, an oil-and-gas venture accused of defrauding investors in multiple states.
- Michael Smith oversaw Target Oil’s operations, investor communications, and drilling program direction; Christopher Smith was VP and lead salesman.
- Trial included conspiracy to commit mail fraud and multiple substantive mail-fraud counts; both were convicted on several counts and sentenced to 120 and 60 months respectively, with substantial restitution.
- Evidence showed information packets contained exaggerated production prospects and misleading royalties, coupled with high-pressure sales tactics by closers.
- Appeals challenged sufficiency of the evidence, alleged constructive amendments/variances, sentencing within the guidelines, forfeiture, and Brady-related new-trial claims; the court affirmed all district-court rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of Count 1 | Smith argues no false statements or agreement to deceive investors. | Smith contends lack of genuine misrepresentations and collaboration. | Sufficient evidence supported conspiracy to commit mail fraud. |
| Constructive amendment/variance regarding Count 1 | Evidence of drilling permits under Kentucky-Indiana fit the conspiracy. | Evidence improperly altered the indictment’s scope. | No constructive amendment or material variance; evidence aligned with the conspiracy. |
| Sentencing reasonableness and Apprendi | Apprendi/ Alleyne require jury findings for any elements increasing punishment. | Apprendi/ Alleyne do not apply where no statutory max/min; district court can consider acquitted conduct within guidelines. | Sentences deemed procedurally and substantively reasonable; Apprendi not violated. |
| Forfeiture judgment | Forfeiture supported by traceable proceeds from Target Oil fraud. | Challenge to amount and linkage of specific assets. | Forfeiture upheld; evidence supported connection to proceeds and conspiracy. |
| Motions for new trial based on Brady violations | Suppressed impeachment evidence and new material undermined trial fairness. | No Brady violation or prejudice; evidence timely disclosed or not exculpatory. | District court did not abuse; no Brady error requiring new trial. |
Key Cases Cited
- Schmuck v. United States, 489 U.S. 705 (Supreme Court, 1989) (mail-fraud schemes need not rely on direct misstatements; acts within the execution of the scheme suffice)
- Cantrell, 278 F.3d 543 (6th Cir. 2001) (conspiracy elements and proof of intent in mail fraud cases)
- Bridge v. Ph. Bond. & Indem. Co., 553 U.S. 639 (Supreme Court, 2008) (loss calculations and sufficiency considerations in fraud cases)
- United States v. White, 551 F.3d 381 (6th Cir. 2008) (use of acquitted conduct within guidelines is permissible)
- Gall v. United States, 552 U.S. 38 (Supreme Court, 2007) (post-Gall framework for reviewing sentencing decisions)
- Jamieson, 427 F.3d 394 (6th Cir. 2005) (definition of scheme to defraud and scope of misrepresentations)