Indictment Notice via Incorporation-by-Reference and Post-Ciminelli Wire-Fraud Sufficiency for Stock-Manipulation Schemes

Case: United States v. Paul Spivak (6th Cir. July 22, 2026) (not recommended for publication)
Disposition: Affirmed (denial of motions to dismiss, acquittal/new trial, plea withdrawal; upheld plea factual bases)

I. Introduction

Paul Spivak founded U.S. Lighting Group, Inc. (“USLG”). The government alleged that, across two time periods, Spivak and others used mechanisms common to microcap promotions—reverse-merger positioning, “call rooms” staffed by unregistered brokers, timed promotions, and coordinated buying/selling—to manipulate USLG’s market price and extract investor money.

The operative Second Superseding Indictment (“SSI”) separated the case into: (1) a 2016–2019 conspiracy (Count 1) involving alleged “call room” activity and sales of free-trading and restricted shares, and (2) a 2021 “pump-and-dump” conspiracy (Count 2) involving undercover agents and coordinated stock purchases/sales. After a Phase 1 jury trial, Spivak was convicted on Count 1 and two wire-fraud counts (Counts 27 and 28) tied to two 2016 wire transfers from Richard Mallion (through HSF Investment Services, Inc.) to USLG. He was acquitted on numerous other substantive fraud counts. The next day, he pleaded guilty to Phase 2 counts in exchange for dismissal of remaining obstruction counts.

On appeal, Spivak challenged (a) indictment sufficiency (notice) as to Counts 27 and 28, (b) the sufficiency of evidence supporting the Phase 1 convictions, (c) denial of plea withdrawal, and (d) the adequacy of the factual basis for his guilty pleas.

II. Summary of the Opinion

• Motion to dismiss (notice challenge): The Sixth Circuit held Counts 27 and 28 were adequately pleaded. The SSI’s wire-fraud section incorporated prior scheme allegations by reference, tracked the statutory elements, and specified the relevant wires (dates/amounts/banks/defendant) in a chart.
• Sufficiency of the evidence: The court upheld the wire-fraud convictions (Counts 27 and 28) and the Count 1 conspiracy conviction. It accepted that market-manipulation conduct aimed at investor money constitutes a “scheme to defraud,” and found sufficient direct/circumstantial evidence linking the wires to the scheme.
• Ciminelli argument rejected: The court found Ciminelli v. United States inapposite because the scheme’s object was investor money, not an abstract “right to control” information interest.
• Plea withdrawal: Applying the United States v. Bashara factors, the court found no abuse of discretion in denying withdrawal (including given a ~3 month delay and sworn plea admissions). Any confusion in the district court’s “protective motion” rationale was harmless.
• Factual basis for pleas: Under plain-error review, the court found “some evidence” supported the pleas via the prosecutor’s proffer and the plea agreement’s factual-basis addendum; a defendant narrative was not required.

III. Analysis

A. Precedents Cited

1) Indictment sufficiency and notice

• United States v. Grenier (standard of review): Legal conclusions on a motion to dismiss are reviewed de novo.
• United States v. Superior Growers Supply, Inc. (Sixth Amendment notice): The Notice Clause requires defendants be informed of charges.
• United States v. Deakins (constitutional sufficiency): An indictment must charge each element, fairly inform the defendant, and protect against double jeopardy; “when/where/against whom” factual details matter.
• Hamling v. United States and United States v. McAuliffe: Tracking statutory language can be enough if accompanied by facts and circumstances that identify the specific offense.
• United States v. Reed (en banc) and United States v. Lee: The court reads the indictment as a whole, with “necessary implications,” and construes it practically.
• United States v. Howard: Examples where indictments were sufficient when they alleged means, date, and location-like particulars.
• United States v. Gibson: Even if forfeiture issues arise, sufficiency is reviewed de novo and indictments are construed liberally in favor of validity.

How they shaped the holding: These cases supplied a doctrinal path to uphold an indictment that is “thin” in the wire-counts section but “thick” when read holistically: incorporation-by-reference plus a transaction chart can satisfy both notice and double-jeopardy functions.

2) Sufficiency of the evidence

• United States v. Vichitvongsa and Jackson v. Virginia: The court asks whether any rational trier of fact could find the elements beyond a reasonable doubt, viewing evidence favorably to the prosecution.
• United States v. Lowe: Circumstantial evidence alone can sustain conviction; it need not eliminate every hypothesis of innocence.
• United States v. Prince: Recited wire-fraud elements and treated direct and circumstantial evidence with equal weight.
• United States v. Garcia and United States v. Tragas: Reinforced that chains of inference can suffice and that appellants bear a “very heavy burden” on insufficiency claims.

How they shaped the holding: The panel used the Jackson/Vichitvongsa framework to accept inferential linkage between the two 2016 wire transfers and the alleged manipulation scheme, emphasizing that sparse direct testimony on the specific wires does not defeat sufficiency if the surrounding evidence supports the inference.

3) Wire fraud after Ciminelli and the property requirement

• Ciminelli v. United States: Rejected the “right-to-control” theory (deprivation of valuable economic information) as a basis for wire-fraud liability.
• Kousisis v. United States: Quoted for the principle that § 1343 can be violated by scheming to obtain the victim’s money regardless of whether the victim is left economically worse off; the statute targets schemes aimed at traditional property interests.

How they shaped the holding: The court treated Ciminelli as a narrow limitation (no conviction based solely on deprivation of information), while using Kousisis to emphasize that money remains the paradigmatic property interest and that “no economic harm” arguments do not defeat wire fraud when the scheme is to obtain money by deceit.

4) Conspiracy verdicts and inconsistent acquittals

• United States v. Hunt and United States v. Deitz: Defined conspiracy elements and allowed inference from circumstantial evidence.
• United States v. Powell: Inconsistent verdicts are generally not reviewable; acquittal on a predicate/substantive count does not nullify conviction on a compound count.
• United States v. Randolph: Recognized narrow exceptions where inconsistency signals irrationality or where guilt on one count necessarily excludes guilt on another.
• Bullock v. United States and United States v. Saadey: Conspiracy is a distinct offense focused on the unlawful agreement.
• United States v. Rowan: A jury may convict on one count using evidence it appears to reject on others.

How they shaped the holding: These cases permitted the panel to uphold the conspiracy conviction notwithstanding acquittals on various substantive securities-fraud counts, rejecting the idea that the jury’s restricted-stock acquittals “gutted” the conspiracy.

5) New trial motions (Rule 33) and brevity of district court reasoning

• United States v. Hughes: Abuse-of-discretion review for Rule 33 denials.
• Rita v. United States: The adequacy of explanation depends on circumstances; brevity can be permissible when context supplies reasoning.

6) Plea withdrawal (Rule 11(d)(2)(B))

• United States v. Dixon: Abuse-of-discretion review for denial of plea-withdrawal motions.
• United States v. Walden: Rule aims to undo hasty pleas—not tactical pleas later regretted.
• United States v. Bazzi and United States v. Spencer: Burden on defendant; withdrawal is not an absolute right; government need not show prejudice absent a “fair and just reason.”
• United States v. Bashara (and abrogation note in United States v. Caseslorente): Seven-factor framework.
• United States v. Haygood: No factor is controlling; relevance varies by circumstances.
• United States v. Benton, United States v. Valdez, United States v. Goldberg, United States v. Catchings: Sixth Circuit timing precedent treating ~1–3 month delays as weighing against withdrawal absent compelling justification.
• United States v. Martin, United States v. Ellis, and the reference to Griffing (table): Sworn plea admissions, comprehension, and inconsistent innocence claims weaken withdrawal arguments.

How they shaped the holding: The panel treated the three-month gap as significant under Sixth Circuit patterns; placed weight on Spivak’s sworn admissions and his background/competence; and deemed the district court’s application of Bashara within its “broad discretion,” notwithstanding a confusing “protective” rationale.

7) Factual basis for pleas (Rule 11(b)(3))

• United States v. Mobley and United States v. Pitts: Plain-error framework for unpreserved Rule 11 challenges and the sources a court may consult (including plea papers, indictment, PSR).
• United States v. Tunning: “Ideal” practice is defendant’s narrative, but not required.
• United States v. Short: Reaffirmed that no on-the-record colloquy is required; “some evidence,” not “strong evidence,” suffices.
• United States v. Baez: A written plea agreement’s factual description plus defendant acknowledgment can satisfy Rule 11(b)(3).
• TSC Indus., Inc. v. Northway, Inc.: Provided the materiality standard (substantial likelihood a reasonable investor would consider it significant).
• Pereira v. United States: A wire is sufficient if “incident to an essential part of the scheme.”

How they shaped the holding: The panel relied on Short and Baez to validate a factual basis grounded in the prosecutor’s summary plus a detailed factual-basis addendum initialed by Spivak, and used Pereira to handle the “link the wires to the scheme” argument.

B. Legal Reasoning

1) Notice and indictment drafting: incorporation plus transaction chart

Spivak argued the SSI gave inadequate notice because only two pages addressed the Phase 1 wire-fraud counts. The court’s answer was structural: the wire-fraud section expressly incorporated paragraphs and conspiracy counts describing the “foregoing scheme,” then set out § 1343 language, and finally specified the wire transactions (dates, amounts, banks, relevant defendant) in a chart.

The Sixth Circuit’s reasoning effectively treats incorporation-by-reference as a constitutionally meaningful “glue”: if the incorporated allegations are detailed enough to describe a scheme, and the wire count identifies the wires with transactional specificity, the indictment can satisfy (i) element pleading, (ii) notice, and (iii) double-jeopardy protection even if the wire-count section is brief.

2) Wire fraud and market manipulation: “scheme” and “property”

The panel treated the alleged conduct as traditional fraud aimed at money: using unregistered/banned participants, concealing control and kickbacks, and soliciting purchases to inflate price. It rejected the defense framing that investors received “what they bargained for” (shares), leaning on Kousisis v. United States to underscore that the statute focuses on schemes to obtain money, not on whether the victim ends “economically worse off” in some netted-out sense.

Importantly, the court did not rest wire fraud solely on “call rooms” as such; it emphasized the alleged deceptive architecture (concealment of control, unlicensed/banned brokers, and a market-inflation plan designed to draw investor money).

3) Linking specific wires to the scheme—thin direct proof, sufficient inferences

For Count 27 ($10,000), the court highlighted direct evidence (texts indicating “the 10 was Richard”) interpreted as proceeds from stock sales. For Count 28 ($5,000), the link was inferential (timing, matching ledgers, proximity to Count 27, and other evidence of expected remittances to USLG). Applying Jackson’s deferential standard, the panel held a rational juror could connect both wires to the scheme.

4) Conspiracy survives substantive-count acquittals

Spivak’s “two-sided theory” argument—restricted-stock acquittals undermine conspiracy—ran into United States v. Powell and related Sixth Circuit authority: inconsistency generally does not warrant reversal. The panel then assessed sufficiency independently and found evidence supporting at least the free-trading manipulation agreement, including testimony that Spivak directed purchases to stabilize price and coordinated with others (e.g., Church) to “prop up the stock price.”

5) Plea withdrawal: the Sixth Circuit’s timing discipline and weight of sworn admissions

While the district court arguably misstated one rationale (“protective” motion), the panel treated the core Bashara analysis as decisive: the delay was substantial under circuit patterns; Spivak’s sworn plea admissions undercut innocence claims; and the plea-colloquy record showed understanding and voluntariness.

6) Factual basis: “some evidence” from plea documents and proffer

Reviewing for plain error, the panel credited the prosecutor’s on-record proffer and the initialed factual-basis addendum describing artificial inflation, concealed commissions, sharing of proceeds, and specific securities/wire events. It also addressed materiality by linking concealed commissions and concealment mechanisms to investor decisionmaking and the scheme’s operation.

C. Impact

• Charging practice in wire-fraud cases: The opinion strengthens the practical sufficiency of indictments that (i) plead the scheme in one place, (ii) incorporate those allegations into substantive counts, and (iii) use a transaction chart for wires. Defendants may find it harder to win “too few pages” notice challenges where incorporation and transactional specificity exist.
• Post-Ciminelli defense limits: The court’s treatment signals that many fraud prosecutions will remain untouched by Ciminelli so long as the alleged object is money (or another traditional property interest), even if the case involves concealment, nondisclosure, or market-structure deception.
• Market-manipulation narratives in wire-fraud frames: By accepting market-inflation conduct and concealed arrangements as a “scheme to defraud” aimed at investor money, the opinion supports prosecutorial use of § 1343 alongside (or in parallel with) securities-fraud theories, particularly where there are identifiable wires (payments, transfers, purchase-related transactions).
• Plea withdrawal predictability: The decision reinforces the Sixth Circuit’s relatively strict approach to timing (even ~2–3 months) and its reliance on plea-colloquy admissions. “Exhaustion after trial” arguments face headwinds when the plea record reflects understanding and voluntariness.
• Rule 11 factual basis doctrine: The case adds to a line of authority (including United States v. Short) that permits factual-basis findings from prosecutor proffers and written plea addenda, lowering the practical necessity of a defendant narrative—especially under plain-error review.

IV. Complex Concepts Simplified

• Reverse merger: A private company becomes publicly traded by merging into an existing public “shell” company; the private company’s owners obtain shares in the public entity without a traditional IPO.
• Restricted vs. free-trading shares: Restricted shares typically cannot be immediately sold on the public market (they may be subject to holding periods/limitations). Free-trading shares can be sold on the open market.
• Call rooms / “pirates”: Boiler-room style operations where salespeople cold-call to pressure investors. Lawfulness depends on registration/compliance and truthfulness; the alleged illegality here centered on unregistered/banned participants and concealed arrangements used to manipulate demand and price.
• “Scheme to defraud” (wire fraud): A plan to obtain money or property through lies or deceptive omissions. The “wire” element is satisfied if interstate communications/transfers are used as part of executing the scheme.
• Right-to-control theory (rejected): A now-invalid theory that wire fraud can be based on depriving someone of economically valuable information alone. After Ciminelli, the scheme must target traditional property (like money).
• Inconsistent verdicts: Juries may acquit on some counts and convict on others. Appellate courts generally do not reverse just because the verdicts seem logically inconsistent.
• Rule 11(d)(2)(B) plea withdrawal: Before sentencing, a defendant may withdraw a plea only for a “fair and just reason,” assessed with factors (timing, reasons for delay, innocence claims, voluntariness, background, experience, and potential prejudice).
• Rule 11(b)(3) factual basis: The court must find facts showing the defendant’s conduct fits the crime. This can come from plea papers, prosecutor proffers, and other record sources; it need not be a defendant’s own narrative.
• Plain-error review: If an issue wasn’t raised in the trial court, the appellant must show a clear error that affected substantial rights and seriously harmed the fairness/integrity of proceedings.

V. Conclusion

United States v. Paul Spivak is a consequential (though unpublished) Sixth Circuit treatment of fraud procedure in a securities-manipulation setting. The court (1) endorsed incorporation-by-reference plus transaction-level charts as a robust method to satisfy constitutional notice for wire-fraud counts, (2) confined Ciminelli v. United States to its “information-as-property” limitation while affirming wire-fraud liability where the object is investor money, (3) reaffirmed that conspiracy convictions can stand despite acquittals on related substantive counts, and (4) underscored the difficulty of withdrawing guilty pleas—particularly after meaningful delay and sworn admissions—while validating “some evidence” factual bases grounded in plea addenda and prosecutor proffers.