United States v. Vaughan, 4:22-cr-00162

Defendants were executives at Electronic Transactions Systems Corp. (ETS), a credit/debit card processor, alleged to have concealed hidden fees from merchant clients between 2012 and 2019.
ETS charged undisclosed fees (including but not limited to a 0.3% markup) embedded in transaction costs, affecting about 7,000 merchants and 87 million transactions.
These markups inflated ETS's valuation, leading to a lucrative sale for the main defendants; three co-defendants pleaded guilty before trial.
The First Superseding Indictment charged conspiracy to commit wire fraud, describing a broad scheme involving various hidden fees, but provided examples focused on the 0.3% fee.
During trial, defendants moved for a mistrial, arguing the government constructively amended the indictment by introducing evidence about other hidden markups (not just the 0.3%).
The court previously denied a similar argument pretrial, and this opinion addresses the renewed motion for mistrial based on the constructive amendment claim.

Issue	Defendants' Argument	Government's Argument	Held
Whether Indictment was Constructively Amended	The indictment only charged overcharges via undisclosed 0.3% fee; evidence of other markups constitutes constructive amendment.	Indictment broadly charged scheme to overcharge via hidden fees; examples were illustrative, not exclusive.	No constructive amendment; motion denied.
Scope of Proof vs. Specific Examples	The government should be held to the 0.3% example in all evidence/proof.	Specific fee examples were not meant to limit overall fraud theory; indictment covers all hidden markups.	Indictment not limited to examples; government may prove broader scheme.
Bar of Further Evidence/Argument	All evidence or argument about fees other than 0.3% markup should be barred.	Such evidence is within charged conduct (conspiracy to defraud via hidden markups).	No bar; evidence about other embedded fees permitted.
Application of Precedent on Amendments	Previous cases show constructive amendment where trial proof went beyond indictment.	Precedent allows proof of acts not expressly listed if within scope of indicted scheme.	Court finds government conduct consistent with precedent; no amendment.

U.S. v. Threadgill, 172 F.3d 357 (5th Cir. 1999) (constructive amendments violate Fifth Amendment right to grand jury indictment)
U.S. v. Quintanilla, 114 F.4th 453 (5th Cir. 2024) (broadly stated charges not limited by specific examples)
U.S. v. Hanson, 161 F.3d 896 (5th Cir. 1998) (not all factual variations create constructive amendments)
U.S. v. Girod, 646 F.3d 304 (5th Cir. 2011) (constructive amendment requires proof or theory beyond indictment)
U.S. v. Malatesta, 583 F.2d 748 (5th Cir. 1978) (government can prove acts not specifically mentioned if within indictment’s scope)
U.S. v. Miller, 471 U.S. 130 (1985) (as long as essential elements are stated, conviction can rest on multiple means)