Suborning Perjury Enhancement Applies When a Defendant Procures False Testimony by Inducing Counsel to Elicit Known Lies

Case: United States v. Fullerton (Nos. 24-50800 & 24-50829, consolidated)
Court: Court of Appeals for the Fifth Circuit
Date: July 21, 2026

I. Introduction

United States v. Fullerton arises from a COVID-era Paycheck Protection Program (“PPP”) fraud and money-laundering scheme that generated $3,027,526.11 through five funded fraudulent PPP loans (out of six applications). The principal actors were Michael Fullerton and Tiffany Fullerton, joined by business partner Scott Starkes, employee Joseph Robles, and (as relevant to sentencing) Georgetown employee Tori Gaines. Michael pleaded guilty to eleven counts spanning conspiracy, bank fraud, wire fraud, money laundering, and identity theft, and received a 286-month sentence. Tiffany went to trial and was convicted of conspiracy to commit bank fraud and conspiracy to commit money laundering (and acquitted of conspiracy to commit wire fraud), receiving a 108-month sentence.

On appeal, Michael challenged multiple Guidelines enhancements (sophisticated means, sophisticated laundering, leadership role, and obstruction by perjury). Tiffany challenged (i) denial of a new trial based on newly discovered evidence, (ii) an obstruction enhancement for suborning perjury, and (iii) the intended-loss calculation, including whether the first loan (the “Starx” loan) could be counted. The Fifth Circuit affirmed all rulings, remanding only to correct a clerical error in Tiffany’s written judgment.

II. Summary of the Opinion

  • Michael Fullerton: The Fifth Circuit affirmed all four sentencing enhancements:
    • Sophisticated means under U.S.S.G. § 2B1.1(b)(10)(C) based on shell entities, forged records, identity theft, and other concealment tactics.
    • Sophisticated laundering under U.S.S.G. § 2S1.1(b)(3) based on multi-layer cashier’s-check/credit transactions and casino-related layering, without impermissible double counting.
    • Leadership role under U.S.S.G. § 3B1.1(a), finding five or more participants, including Gaines as a knowing participant.
    • Obstruction by perjury under U.S.S.G. § 3C1.1 based on materially false trial testimony designed to exculpate Tiffany.
  • Tiffany Fullerton: The Fifth Circuit affirmed:
    • Denial of a new trial: the “new” evidence about Michael’s alleged 1990s conduct with an ex-wife was unlikely to produce an acquittal and failed other Berry factors.
    • An obstruction enhancement for suborning perjury: the record supported that Tiffany “procured” Michael’s perjury through coordinated preparation and eliciting questions.
    • Intended loss: plain-error review applied, and Tiffany failed to show clear or obvious error in counting the Starx loan as relevant conduct given the PSR’s findings and lack of rebuttal.
  • Limited remand: The court remanded under Rule 36 to correct a clerical error because Tiffany’s judgment incorrectly referenced conspiracy to commit wire fraud despite her acquittal.

III. Analysis

A. Precedents Cited

1. Standards of review and deference

  • United States v. Lopez set the review framework: Guidelines interpretation de novo, factual findings for clear error. This structure governed every enhancement challenge.
  • United States v. Clements and United States v. Fullwood supplied the Fifth Circuit’s articulation of clear error (“definite and firm conviction” / “plausible in light of the record as a whole”), reinforcing the court’s unwillingness to reweigh evidence when the district court’s inferences were plausible.

2. Sophisticated means (fraud)

  • United States v. Miller supported the principle that sophisticated means may exist “somewhere in the overall scheme” even if parts are simple—important in PPP fraud where some steps (e.g., spending proceeds) are ordinary but the application-and-documentation mechanics are complex.
  • United States v. Valdez was Michael’s principal comparator (mere transfers between personal accounts were insufficient there), but the panel used Valdez’s own language against him: sophisticated means exists when conduct “made it more difficult for the offense to be detected.”
  • Clements mattered again by rejecting the notion that offshore accounts are required; the panel relied on it to affirm sophisticated-means findings without exotic international concealment.

3. Sophisticated laundering (money laundering)

  • United States v. Hagen provided the non–double counting rule: conduct supporting sophisticated laundering cannot be the same conduct supporting a different enhancement for the underlying offense. The district court’s reliance on distinct conduct (transaction layering, cashier’s checks, casino activity) was framed to satisfy Hagen.
  • United States v. Charon and United States v. Miles anchored the “layering” concept: two or more levels of transactions strongly indicate sophistication; Miles specifically endorsed cashier’s checks and casino usage as markers of sophisticated laundering—facts mirrored in this record.

4. Leadership/organizer enhancement and “participants”

  • United States v. Boutte and United States v. Alfaro set the comparatively low bar to qualify as a “participant”: not charged/convicted, not required to commit every element, but must knowingly participate in some part that brings about the charged offense. These cases were decisive in treating Gaines’s protracted falsification of payroll/tax inputs as knowing participation.

5. Obstruction—perjury findings for Michael

  • United States v. Smith and United States v. Dunnigan supplied the perjury definition (material false testimony, willful intent, not confusion/mistake).
  • United States v. Storm and United States v. Laury controlled the required specificity of district court findings: while separate element-by-element findings are “preferable,” findings are sufficient if they encompass the factual predicates for perjury. This allowed affirmance despite Michael’s complaint that the court did not enumerate each lie formally.

6. New trial motions (Berry factors) and admissibility constraints

  • United States v. Piazza set both the “disfavored” posture toward new trials and the five “Berry factors.”
  • Baisden v. I'm Ready Prods., Inc. supplied the abuse-of-discretion review standard (cited by the panel in this criminal context for the review principle).
  • United States v. Peña and United States v. Shugart drove the “probably produce an acquittal” requirement and the limitation that evidence that merely bolsters a trial theory is inadequate absent a genuinely new, outcome-changing theory.
  • United States v. Wall supported the conclusion that overwhelming independent evidence defeats the likelihood-of-acquittal showing, and that inadmissible evidence cannot support a new trial.
  • United States v. Sullivan and United States v. Time were used to deny relief on diligence: if the defendant knew enough to investigate and had the chance to do so, failure is lack of due diligence.
  • United States v. Pompa reinforced waiver principles for inadequately raised arguments (here, Tiffany’s failure to contest the Rule 403 basis for inadmissibility).

7. Subornation of perjury (Tiffany) and what “procure” means

  • United States v. Johnson supplied the statutory definition of subornation via 18 U.S.C. § 1622 (“procures another to commit any perjury”) and clarified that something more than mere knowledge is required.
  • United States v. Kilgarlin and United States v. Lowder were pivotal in expanding “procurement” beyond explicit coaching: insinuation can suffice (Kilgarlin), and a defendant can suborn perjury by “induc[ing] his lawyer to call” a witness he knows will lie (Lowder). Fullerton operationalizes these principles in the common trial-preparation setting.
  • United States v. Graves supplied the deference rationale: the district court’s “superior knowledge of the witnesses and proceedings” permits drawing inferences from circumstantial evidence to find procurement by a preponderance.
  • United States v. Guzman-Rendon was invoked to show harmlessness in the alternative: even if the enhancement were erroneous, the sentence would stand when the court says it would impose the same sentence under either Guidelines range.

8. Intended loss, preservation, and PSR reliance

  • United States v. Harris supported the intended-loss concept in fraud sentencing.
  • United States v. Neal established that new appellate rationales not presented below trigger plain-error review because the trial court was denied a chance to correct.
  • United States v. Brooks supplied the modern plain-error test (error, clear/obvious, affects substantial rights, plus discretionary correction standard).
  • United States v. Scher controlled PSR reliance: a court may adopt PSR facts with “indicia of reliability” absent rebuttal evidence.

9. Clerical error remand

  • United States v. Cooper supported remand under Rule 36 to correct clerical errors in the written judgment inconsistent with the actual verdict.

B. Legal Reasoning

1. Sophisticated means: concealment is the throughline

The panel treated “sophisticated means” as a functional inquiry: did the scheme include methods that impeded detection? Applying the Guidelines commentary (fictitious entities, corporate shells), the court emphasized the overall architecture: defunct/shell companies (Fullerton Consulting, FCG, MTF), fabricated W-2/W-3 and tax filings, identity theft (CPA, father-in-law, Robles), and a fictional “F. William Johnson” attorney. Under United States v. Miller, sophistication in parts suffices; under United States v. Valdez, the question is not whether the defendant used dramatic concealment like offshore accounts, but whether his methods made detection harder.

2. Sophisticated laundering: distinct “layering” avoids double counting

The sophisticated-laundering enhancement turned on transaction structure rather than the fraud mechanics. The court credited evidence of multi-step transfers and conversions (personal account → new business account → other business account; cashier’s check exchanges into cash/credits and back again; casino usage), expressly aligning with United States v. Miles. To address United States v. Hagen, the court accepted the Government’s sentencing explanation that the laundering enhancement rested on layering and cashier’s-check/credit choreography—conduct separable from the fraud’s “sophisticated means” (shells, forged records, identity theft).

3. Leadership enhancement: “participant” status may be inferred from knowing falsification

The leadership issue was numerosity: whether there were five or more “participants.” Michael conceded leadership but disputed Gaines’s “knowing” culpability. Relying on United States v. Boutte and United States v. Alfaro, the panel held the district court could plausibly infer knowledge where Gaines spent weeks “rebuilding” software inputs with “false and fraudulent information” to generate fake tax and employment documents. The opinion underscores that participant status often turns on circumstantial inference about knowledge, not direct proof of intent.

4. Perjury obstruction (Michael): findings need not be formulaic

Michael argued the district court failed to specify “points of perjury.” Using United States v. Storm and United States v. Laury, the panel held the findings were adequate because they identified (i) demonstrably false testimony, (ii) materiality (elements of the offense), and (iii) willfulness (a plan to “take the fall”), even without a line-by-line catalog. The practical message is that appellate courts will uphold obstruction findings where the record and the court’s explanation collectively establish the Dunnigan elements.

5. New trial (Tiffany): “probably produce an acquittal” is a steep hill

Tiffany’s newly discovered evidence (Michael’s 1990s use of an ex-wife allegedly without her knowledge) failed primarily on outcome-likelihood. Under United States v. Peña and United States v. Shugart, evidence that only “bolsters” an existing defense theory is insufficient, especially against “considerable evidence” of guilt, as in United States v. Wall. The panel also endorsed the district court’s diligence and admissibility rulings: Tiffany had avenues to learn the information earlier (United States v. Sullivan; United States v. Time), and she waived meaningful challenge to the Rule 403 inadmissibility rationale (United States v. Pompa).

6. Suborning perjury (Tiffany): procurement can be inferred from coordinated elicitation

The opinion’s most consequential doctrinal clarification concerns when trial conduct becomes “procurement” of perjury under U.S.S.G. § 3C1.1. Acknowledging United States v. Johnson that mere knowledge is insufficient, the court nevertheless held that explicit instructions to lie are not required. Instead, procurement may be inferred where a defendant coordinates and induces presentation of known false testimony—consistent with United States v. Kilgarlin (insinuation) and especially United States v. Lowder (inducing counsel to call a witness known to lie). Here, the district court could infer procurement from: Michael’s prior promise to “take the fall,” extensive pre-testimony conversations with Tiffany and counsel, and the deliberate questioning designed to elicit exonerating falsehoods. United States v. Graves supplied the deference rationale for these inferences.

7. Intended loss (Tiffany): preservation matters; PSRs matter

The panel enforced issue-preservation rigor. Tiffany objected below that the Starx loan was uncharged and not illegal; on appeal she pivoted to relevant-conduct timing. Under United States v. Neal, that shift triggered plain-error review (United States v. Brooks). On the merits, the court emphasized the sentencing court’s authority to rely on unrebutted PSR facts (United States v. Scher): the PSR stated Tiffany joined “[b]eginning in April 2020,” and Tiffany offered no rebuttal evidence demonstrating inaccuracy. Thus, she failed to show “clear or obvious” error.

C. Impact

  • Subornation of perjury in the sentencing context: Fullerton reinforces (and concretizes) that “procurement” under U.S.S.G. § 3C1.1 can be established by circumstantial proof of coordinated trial preparation and strategic elicitation of testimony the defendant knows to be false—without proof the defendant explicitly instructed the witness to lie. This is likely to broaden the practical availability of the enhancement in cases featuring “take-the-fall” defense witnesses.
  • PPP fraud sentencing: The decision fits PPP-era prosecutions by affirming sophisticated-means and sophisticated-laundering enhancements where defendants use shells, forged employment records, identity theft, and layered cashier’s-check/casino techniques—signals to district courts that “ordinary” banking instruments can still be “sophisticated” when deployed to conceal source and ownership.
  • Preservation discipline on relevant conduct: The plain-error holding encourages defendants to squarely meet “relevant conduct” arguments at sentencing; failing to do so risks near-certain affirmance on appeal absent an obvious error.
  • Reliance on PSR facts: Fullerton reiterates that unrebutted PSR findings can carry the day. Practically, sentencing litigation will turn heavily on whether defense counsel produces affirmative rebuttal evidence rather than argument alone.
  • Post-verdict accuracy: The Rule 36 remand underscores the importance of aligning the written judgment with acquittals; clerical misstatements about the offense of conviction remain correctable even when the sentence is affirmed.

IV. Complex Concepts Simplified

  • “Sophisticated means” (U.S.S.G. § 2B1.1): Not “genius-level” fraud. It is fraud carried out (or concealed) in a way that makes detection harder—often through shells, forged records, stolen identities, or similar concealment tools.
  • “Sophisticated laundering” (U.S.S.G. § 2S1.1): Money laundering that uses layering—multiple steps (transfers, cashier’s checks, credits, casino transactions) to make dirty money look legitimate or to obscure its origin.
  • “Double counting” concern: Courts may not punish the same conduct twice via two different enhancements when the Guidelines prohibit it. Fullerton upheld both enhancements because different conduct supported each.
  • “Participant” (U.S.S.G. § 3B1.1): Someone who is criminally responsible, even if never charged or convicted. The person must knowingly play some role that helps bring about the crime.
  • “Perjury” (for obstruction): Willfully lying under oath about something important to the case—not confusion or mistake.
  • “Suborning perjury” / “procurement”: Causing or inducing someone else to commit perjury. Fullerton emphasizes it can be shown through coordinated conduct (including inducing counsel to call and question a witness) designed to present known false testimony.
  • “New trial” and the Berry factors: A strict five-part test for newly discovered evidence; the key is whether the new evidence would probably change the verdict, not merely help a bit.
  • “Relevant conduct” and “intended loss”: Sentencing can include losses from related acts within the same scheme that were foreseeable and within its scope once the defendant joined. The court may rely on PSR facts if reliable and unrebutted.
  • Rule 36 clerical correction: A mechanism to fix paperwork mistakes in judgments (e.g., listing an offense of which the defendant was acquitted) without reopening the merits.

V. Conclusion

United States v. Fullerton is a wide-ranging Fifth Circuit sentencing decision arising from a multimillion-dollar PPP fraud scheme. Doctrinally, it most notably strengthens the Government’s ability to prove “suborning perjury” for obstruction under U.S.S.G. § 3C1.1 through circumstantial evidence of procurement—where a defendant orchestrates the presentation of testimony she knows to be false, including by inducing counsel to call and question a witness to elicit exculpatory lies. At the same time, the opinion reaffirms the Fifth Circuit’s deferential clear-error posture toward fact-bound sentencing findings, the high bar for new trials under the Berry factors, the centrality of rebutting PSR assertions with evidence, and the availability of Rule 36 to correct clerical inaccuracies in judgments.