Obstruction-of-Justice for “Procuring” Perjury: Coordinating Exonerating Testimony Can Support a §3C1.1 Subornation Enhancement

I. Introduction

In United States v. Fullerton (5th Cir. July 21, 2026), the Fifth Circuit affirmed lengthy sentences imposed on Michael Fullerton (286 months after a guilty plea) and Tiffany Fullerton (108 months after trial convictions) arising from a multi-application fraud that extracted $3,027,526.11 from the COVID-era Paycheck Protection Program (“PPP”). The scheme used defunct entities, falsified payroll/tax records, identity misuse (including a CPA’s identity and “Robles” as a straw owner), and extensive laundering through layered transfers, cashier’s checks, and out-of-state ventures.

The consolidated appeals presented three clusters of issues: (1) Michael’s challenges to four Guideline enhancements (sophisticated means, sophisticated laundering, leadership role, and obstruction by perjury); (2) Tiffany’s challenges to the denial of a new trial and to sentencing determinations (obstruction by suborning perjury and intended-loss/relevant-conduct calculation); and (3) a clerical error in Tiffany’s written judgment.

The decision is especially significant for its treatment of §3C1.1 obstruction based on subornation/procurement of perjury: the court upheld the enhancement where the record supported an inference that the defendant coordinated with the perjuring witness and defense counsel to elicit exonerating false testimony—without requiring proof that she explicitly instructed the witness to lie.

II. Summary of the Opinion

The Fifth Circuit:

  • Affirmed Michael Fullerton’s sentence, rejecting challenges to enhancements for:
    • Sophisticated means (§2B1.1(b)(10)(C)) based on concealment techniques including shells/defunct entities, forged records, identity misuse, and fictitious professionals.
    • Sophisticated laundering (§2S1.1(b)(3)) based on multi-level “layering” of transactions (accounts, cashier’s checks, bank credits, casino activity), without impermissible double-counting.
    • Leadership role (§3B1.1(a)) finding at least five “participants,” including an employee (Gaines) who plausibly acted knowingly in falsifying records/software.
    • Obstruction (§3C1.1) for perjury at Tiffany’s trial, supported by adequate district court findings.
  • Affirmed Tiffany Fullerton’s conviction-related rulings and sentence:
    • Denied new trial because purported newly discovered evidence from Michael’s PSR about 1990s conduct involving his ex-wife did not satisfy the Berry factors (including probability of acquittal, diligence, and likely admissibility).
    • Upheld obstruction enhancement (§3C1.1) for suborning/procuring Michael’s perjury based on pretrial coordination and elicitation of lies.
    • Upheld intended-loss calculation including the “Starx” loan; the Fifth Circuit applied plain-error review because the relevant-conduct objection was not preserved, and found no clear or obvious error given the PSR findings and lack of rebuttal.
  • Remanded solely to correct a clerical error in Tiffany’s written judgment: it incorrectly referenced conspiracy to commit wire fraud despite her acquittal on that object. The correction was ordered under Federal Rule of Criminal Procedure 36.

III. Analysis

A. Precedents Cited and Their Role

1. Standards of review and deference to district court findings

  • United States v. Lopez, 168 F.4th 316 (5th Cir. 2026): supplied the general framework—Guidelines application reviewed de novo; factual findings for clear error. The panel repeatedly invoked this bifurcated standard across enhancements and loss calculations.
  • United States v. Clements, 73 F.3d 1330 (5th Cir. 1996) and United States v. Fullwood, 342 F.3d 409 (5th Cir. 2003): provided the Fifth Circuit’s articulation of clear error (“definite and firm conviction”) and “plausible in light of the record as a whole.” These cases supported affirmance where the record plausibly supported the sentencing court’s inferences.

2. Sophisticated means under §2B1.1(b)(10)(C)

  • United States v. Miller, 906 F.3d 373 (5th Cir. 2018): reinforced that sophisticated means may appear “somewhere in the overall scheme” even if parts are unsophisticated. The panel used this to reject Michael’s attempt to isolate transactions and minimize complexity.
  • United States v. Valdez, 726 F.3d 684 (5th Cir. 2013): provided both a limiting example (mere transfers between personal accounts) and a key principle: sophisticated means includes “some method” making detection more difficult. The panel used Valdez’s principle against Michael, concluding his concealment conduct went well beyond simple transfers.
  • United States v. Clements, 73 F.3d 1330 (5th Cir. 1996): was pivotal to reject the argument that offshore accounts are required. Clements supported the proposition that concealment can be “sophisticated” without exotic financial infrastructure.

3. Sophisticated laundering under §2S1.1(b)(3) and double-counting limits

  • United States v. Hagen, 60 F.4th 932 (5th Cir. 2023): supplied the anti-double-counting principle—conduct supporting the sophisticated laundering enhancement may not duplicate conduct supporting a different enhancement for the underlying offense. The panel relied on Hagen to frame the issue and then found separate conduct supported each enhancement.
  • United States v. Charon, 442 F.3d 881 (5th Cir. 2006) and United States v. Miles, 360 F.3d 472 (5th Cir. 2004): supported application where “two or more levels” (“layering”) of transactions are used. Miles also provided an on-point analog involving cashier’s checks and casino activity.

4. Leadership role and defining a “participant” under §3B1.1(a)

  • United States v. Boutte, 13 F.3d 855 (5th Cir. 1994) and United States v. Alfaro, 919 F.2d 962 (5th Cir. 1990): supplied the definition of “participant” as someone criminally responsible who knowingly participates in some part of the enterprise and plays a role in bringing about the offense. These cases allowed the panel to treat Gaines as a participant based on knowing falsification, even absent indictment/conviction.

5. Obstruction of justice—perjury findings and sufficiency

  • United States v. Smith, 804 F.3d 724 (5th Cir. 2015) (quoting United States v. Dunnigan, 507 U.S. 87 (1993)): supplied the perjury definition—false testimony on a material matter with willful intent, not confusion or faulty memory.
  • United States v. Storm, 36 F.3d 1289 (5th Cir. 1994) and United States v. Laury, 985 F.2d 1293 (5th Cir. 1993): established that while element-by-element findings are preferable, findings are sufficient if they encompass all factual predicates for perjury. The panel relied on these cases to uphold the district court’s explanation even without a formal checklist.

6. New trial for newly discovered evidence (Berry factors) and admissibility

  • United States v. Piazza, 647 F.3d 559 (5th Cir. 2011): supplied the Berry factors and the general caution that new trial motions are disfavored.
  • Baisden v. I'm Ready Prods., Inc., 693 F.3d 491 (5th Cir. 2012): provided the abuse-of-discretion standard for reviewing denial of a new trial motion.
  • United States v. Peña, 949 F.2d 751 (5th Cir. 1991) and United States v. Shugart, 117 F.3d 838 (5th Cir. 1997): emphasized that evidence must “probably produce an acquittal” and that evidence merely “bolster[ing]” an existing theory is insufficient.
  • United States v. Wall, 389 F.3d 457 (5th Cir. 2004): supported the view that strong independent evidence can defeat materiality/probability-of-acquittal arguments; also reiterated that new trial motions cannot rest on inadmissible evidence.
  • United States v. Sullivan, 112 F.3d 180 (5th Cir. 1997) (citing United States v. Time, 21 F.3d 635 (5th Cir. 1994)): reinforced the diligence requirement where the defendant knew information and had opportunity to investigate.
  • United States v. Pompa, 434 F.3d 800 (5th Cir. 2005) and United States v. Wall, 389 F.3d 457 (5th Cir. 2004): were used to support waiver/forfeiture principles—failure to contest Rule 403 admissibility reasoning can waive the admissibility argument on appeal.

7. Suborning perjury as obstruction of justice under §3C1.1

  • United States v. Johnson, 352 F.3d 146 (5th Cir. 2003): defined subornation as “procure another to commit any perjury” (quoting 18 U.S.C. § 1622) and clarified that mere knowledge is not enough; procurement is required.
  • United States v. Kilgarlin, 157 F. App'x 716 (5th Cir. 2005) (per curiam) and United States v. Lowder, 148 F.3d 548 (5th Cir. 1998): supplied broader modes of “procurement”—insinuation or inducing counsel to call a witness known to lie can qualify, even without an explicit instruction to lie.
  • United States v. Graves, 5 F.3d 1546 (5th Cir. 1993): emphasized deference to district courts’ credibility assessments (“superior knowledge of the witnesses and proceedings”) and supported inference-based findings by a preponderance.
  • United States v. Guzman-Rendon, 864 F.3d 409 (5th Cir. 2017): supported the panel’s alternative harmlessness holding for the obstruction enhancement because the district court stated it would impose the same sentence with or without the enhancement.

8. Intended loss, relevant conduct, and forfeiture/plain error

  • United States v. Harris, 597 F.3d 242 (5th Cir. 2010): supported the general principle that fraud defendants are responsible for intended loss.
  • United States v. Neal, 578 F.3d 270 (5th Cir. 2009): supported applying plain-error review where the trial court lacked an opportunity to correct the specific ground later pressed on appeal.
  • United States v. Brooks, 33 F.4th 734 (5th Cir. 2022): provided the four-part plain error framework.
  • United States v. Scher, 601 F.3d 408 (5th Cir. 2010): supplied the rule that courts may rely on PSR information with indicia of reliability unless rebutted with evidence showing inaccuracy/material untruth. This was central to affirming inclusion of the Starx loan in intended loss.

9. Clerical error correction

  • United States v. Cooper, 979 F.3d 1084 (5th Cir. 2020): supported remand under Rule 36 to correct a judgment that misstated the offense of conviction.

B. Legal Reasoning

1. Sophisticated means: concealment does not require offshore accounts

The panel treated “sophisticated means” as a functional inquiry: whether the defendant adopted methods that materially increased the difficulty of detection. Applying Valdez and Clements, the court rejected a bright-line “offshore account/untraceable asset” requirement. Instead, it emphasized that Michael used multiple concealment devices: defunct/shell entities, falsified W-2/W-3 and tax forms generated by manipulated software, identity misuse (CPA and father-in-law), fictitious professionals, and false emails, plus use of third-party identities (Tiffany and Robles) and out-of-state transfers.

2. Sophisticated laundering: “layering” can be independent of sophisticated fraud means

Under §2S1.1(b)(3), the court focused on multi-level transactions intended to make tainted funds appear legitimate. Importantly, it addressed the Hagen double-counting constraint by separating: (a) fraud concealment tactics supporting sophisticated means, from (b) laundering “layering” supporting sophisticated laundering. Examples cited included movement of PPP proceeds across personal and business accounts and repeated use of cashier’s checks, credits, and casino-related transactions—conduct analogous to Miles.

3. Leadership role: “participant” status may be inferred from knowingly falsifying records

Michael conceded leadership but disputed whether the conspiracy had five “participants.” The fifth person was “Gaines,” who rebuilt and manipulated business software and entered false information to generate fake tax and payroll records. Using Boutte and Alfaro, the court held the threshold is modest: a participant need only knowingly assist some part of the enterprise that helps bring about the offense. Given the weeks-long “massive task” and the nature of the falsification, the district court could plausibly infer knowledge.

4. Perjury-based obstruction: findings need not be element-by-element if substantively complete

Michael argued the sentencing court failed to make “specific findings of points of perjury.” The Fifth Circuit applied Storm and Laury to hold that although element-by-element findings are preferable, they are not required so long as the court’s explanation captures falsity, materiality, and willfulness. Here, the court found Michael’s testimony “demonstrably false,” directed to the “elements of the offense,” and part of an early plan to “take responsibility,” supporting willfulness under Dunnigan/Smith.

5. New trial: evidence must change the case, not merely echo an existing theme

Tiffany’s new-trial theory relied on decades-old conduct in Michael’s PSR suggesting he previously involved his ex-wife without her knowledge. Applying Piazza, Peña, Shugart, and Wall, the panel emphasized: (i) the evidence did not meaningfully speak to Tiffany’s state of mind in the PPP era, (ii) it would not probably produce an acquittal given extensive independent evidence of her knowing involvement, (iii) diligence was lacking because she had ample access to Michael and the topic, and (iv) she waived the admissibility argument by not contesting the district court’s Rule 403 rationale.

6. Suborning perjury: “procurement” may be inferred from coordinated elicitation of false testimony

The most doctrinally notable aspect is the affirmation of Tiffany’s obstruction enhancement for suborning/procuring Michael’s perjury. The court acknowledged, per Johnson, that mere awareness a witness will lie is not enough; the defendant must “procure” the perjury. But drawing from Kilgarlin and Lowder, it held procurement can occur without explicit instruction: insinuation or inducing counsel to call the witness, coupled with conduct designed to elicit the lie, can suffice.

Factually, the district court relied on: Michael’s stated willingness to “take the fall,” detailed and lengthy pretrial conversations between Michael and Tiffany (and later Tiffany’s counsel) about “what questions to ask,” and trial questioning aimed at eliciting exonerating falsehoods. Under Graves, the Fifth Circuit deferred to the sentencing court’s inference from the totality of circumstances.

The opinion also insulated the result through harmless error analysis under Guzman-Rendon, because the district court stated it would impose the same sentence regardless of the obstruction enhancement.

7. Intended loss and relevant conduct: preservation matters; PSRs carry weight absent rebuttal

Tiffany’s intended-loss complaint ultimately hinged on whether the “Starx” loan should count as relevant conduct. The Fifth Circuit applied Neal to find forfeiture because she did not squarely present the relevant-conduct objection in the district court, triggering plain-error review under Brooks. On the merits, the court emphasized Scher: the sentencing court may rely on PSR findings with indicia of reliability unless rebutted. The PSR stated Tiffany’s involvement began “in April 2020” and held her accountable for six loans including Starx; she offered no evidence to show that was materially untrue. Thus there was no clear or obvious error.

C. Impact

  • Broader exposure to obstruction enhancements in “family defense” settings: The decision reinforces that a defendant who coordinates with a friendly witness (even a spouse) and shapes the presentation of exonerating testimony may face §3C1.1 consequences if the testimony is perjurious and the coordination supports an inference of procurement. It underscores that procurement can be circumstantial and does not require a “smoking gun” instruction to lie.
  • PPP fraud sentencing continues to treat multi-entity concealment and document fabrication as “sophisticated means”: The opinion confirms that sophisticated means in PPP cases can be built from domestic, paper-and-software deception—shell/defunct entities, forged tax/payroll records, identity misuse—without offshore accounts.
  • Layering patterns (cashier’s checks, credits, multi-account flows, casinos, out-of-state business ventures) will support sophisticated laundering: The court’s reliance on “two or more levels” of transactions provides a roadmap for how prosecutors and probation offices will argue §2S1.1(b)(3) in financial-crime cases.
  • Litigation practice takeaway—preserve the right theory: Tiffany’s loss-amount claim shows the risk of objecting on one ground (not charged/not illegal) while failing to meet the Government’s relevant-conduct theory, inviting plain-error review on appeal.
  • PSR reliability and rebuttal burden: The opinion reinforces that defendants must present rebuttal evidence, not just argument, to dislodge PSR findings.
  • Judgment accuracy: The remand under Rule 36 highlights that written judgments must match verdicts precisely, especially where a defendant is acquitted on one object of a conspiracy.

IV. Complex Concepts Simplified

  • “Sophisticated means” (§2B1.1): Extra steps that make a fraud harder to detect (e.g., shell/defunct companies, fake tax records, identity theft, fictitious professionals). It does not require offshore accounts.
  • “Sophisticated laundering” (§2S1.1): Complex laundering—often “layering”—where dirty money is moved through multiple transactions/accounts/instruments (like cashier’s checks and credits) to look legitimate.
  • “Double counting”: Using the same conduct to justify two different sentencing enhancements is sometimes barred. Here, the court found different conduct supported sophisticated means versus sophisticated laundering.
  • “Participant” and “leader” (§3B1.1): A “participant” is someone criminally responsible (even if never charged). A leader enhancement can apply if the criminal activity involved five or more participants and the defendant organized/led it.
  • Perjury (for §3C1.1): Knowingly lying under oath about something important to the case (material), not a mistake or confusion.
  • “Suborning/procuring perjury”: Causing someone else to commit perjury. It can be shown by circumstantial evidence—e.g., orchestrating a witness’s appearance and coordinating questions designed to elicit lies.
  • “Relevant conduct” (Guidelines §1B1.3): For sentencing, a defendant can be held accountable for certain acts within the scope of jointly undertaken criminal activity that were reasonably foreseeable and occurred after the defendant joined.
  • “Plain error” review: A tougher appellate standard applied when an argument was not properly preserved below; the error must be clear/obvious and affect substantial rights.
  • Berry factors (new trial): A five-part test requiring diligence, materiality, and—critically—a showing that the new evidence would probably lead to acquittal.
  • Rule 403: Even relevant evidence can be excluded if its unfair prejudice, confusion, or waste of time substantially outweighs its value.
  • Rule 36 clerical correction: Courts can fix purely clerical mistakes in a judgment (e.g., listing an offense the jury did not convict on).

V. Conclusion

United States v. Fullerton affirms expansive sentencing consequences for PPP-era fraud and laundering and clarifies (in application and emphasis) that §3C1.1 “procurement” of perjury can be established through coordinated elicitation of false exonerating testimony, not only through explicit instructions to lie. The opinion also reinforces practical sentencing realities: concealment need not be international to be “sophisticated,” layering supports sophisticated laundering, PSR findings stand absent rebuttal evidence, and appellate review can turn on whether objections were properly preserved. The only relief granted was a narrow remand to correct a clerical misstatement in Tiffany Fullerton’s judgment.