Appeals from the United States District Court for the
Northern District of Texas
DAVIS, JONES, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, CIRCUIT JUDGE.
Lyman Spalding convinced about a hundred people-neighbors,
strangers, and even his jeweler-to lend his companies
millions of dollars. As Spalding put it, his ventures were
poised to strike pay dirt; all they needed was a bit more
cash. He obtained loans by promising rapid repayment and
stock options, and by assuring that he would use the money
for the business. In fact, Spalding spent much of it on
himself. Eventually, an investor tipped the FBI, a grand jury
indicted, and a petit one convicted. Spalding now appeals his
convictions and sentences for various fraud and perjury
charges. We affirm.
about 2004 to 2010, Spalding founded and ran several
companies, including Wind Plus Inc. and Wind Plus Holdings,
Inc. (collectively, Wind Plus). Spalding billed these
businesses to investors as seeking to sell energy projects,
wind power, and wind-farm sites.
pitch was simple: Wind Plus was about to go public and
presented guaranteed returns. In exchange for loans, Spalding
offered short-term promissory notes and potential stock
options in the soon-to-be-public corporation. He also erected
a pyramid scheme, pledging extra options to lenders who
convinced others to chip in. Making overtures to some
noteholders, Spalding falsely promised to use "a hundred
percent" of their loans on Wind Plus's projects and
legal fees. To others, he fabricated the scope of Wind
Plus's designs and prospects.
also sent updates that swayed some backers to double down. He
issued fake newsletters about Wind Plus's financing
opportunities and third-party offers. He claimed to have
entered valuable agreements that didn't exist. And he
falsely described Wind Plus as shouldering only a "small
amount of outstanding debt." Nevertheless, said
Spalding, the company was "burn[ing] through cash"
and required more capital to "cover legal and outside
consulting expenses, secur[e] additional leases, and build
painted a more sobering portrait. Wind Plus lacked a business
plan and financial oversight. Burdened by scores of unpaid
notes, the company swiftly incurred new expenses without
compensating workers. At one point, Wind Plus Inc. failed to
pay taxes and its corporate status lapsed. At another, Wind
Plus saw its bank accounts dwindle to $4, 000. Even its one
success-a $2.3 million return on the sale of a project
site-occurred despite Spalding's refusing to pay for
proper wind data.
the firm floundered, its founder flourished. Wind Plus
occasionally "advanced" Spalding sums ranging from
$10, 000 to $50, 000 at a time. Spalding obtained $1, 638,
170 through wires and cashiers' checks, and another $485,
525 in cash withdrawals. All told, he pilfered $2, 123, 695
from company coffers.
in fact, had no personal bank accounts; he just tapped Wind
Plus's. In the year he informed investors that Wind Plus
was "burn[ing] through cash," for example, his
personal expenses comprised over one third of the
company's expenditures. And Spalding masked his actions
by transferring funds from Wind Plus's main account to a
shell account, which he then used to replenish the main one
after his assorted purchases.
did he buy? A forensic accountant traced how investor funds
covered Spalding's rent, utilities, homeowners' dues,
taxes, groceries, dating services, and membership in a
singles' vacation club. Spalding's more lavish spends
included a home, Mercedes-Benz, yacht consultant, Caribbean
vacation, $76, 000 engagement ring,  six-figure wedding, and
of Spalding's "grandiose" but empty promises of
repayment, one suspicious noteholder contacted the FBI.
Others sued. Spalding then personally filed for Chapter 13
bankruptcy and sought to reorganize the Wind Plus companies
under Chapter 11.
Plus's Chapter 11 filings drew skepticism. Spalding
produced no financial records besides bank statements. And
the records he did provide failed to blunt concerns. They
"showed really unusual expenses" that, according to
the Chapter 11 trustee, "weren't reflected in any .
. . bankruptcy paperwork."
Wind Plus's proceedings converted from Chapter 11 to
Chapter 7- from reorganization to liquidation. Yet, when the
Chapter 7 trustee asked for financial documents besides bank
statements, Spalding provided none. (The trustee later
learned that Spalding used Wind Plus's bank accounts
instead of keeping his own.) Also odd was Spalding's
claim that during his tenure he had pocketed only one
year's salary, worth $42, 000. Some amended filings
further disclosed that Wind Plus had transferred-outside the
course of ordinary business-Harry Winston jewelry and
Ritz-Carlton sundries to Spalding's wife.
bankruptcy proceedings proved pivotal not just for what
Spalding put on paper, but also for what he said aloud.
Spalding allegedly perjured himself during a creditors'
meeting when asked to describe Wind Plus's noteholders.
lender lawsuits and Wind Plus's bankruptcy, Spalding kept
collecting new noteholders for yet another entity, Baseload
Energy, LLC. He secured those loans through the familiar
gambit. He promised to use the funds on things like the
company's attorney's fees, confirmed that he would
not take any salary until he got the latest project funded,
and falsely claimed that he had secured a bank's
"commitment to purchase 100 percent" of a venture.
Spalding's speeches said nothing of bankruptcy, or
lawsuits, or tax troubles, or his intent to use the loans to
bankroll his personal life. Thus he continued to pocket the
upshot: ninety-seven people gave Spalding $3, 755, 521. And
instead of receiving quick and full repayment as promised,
the few noteholders who recouped anything got pennies on the
final superseding indictment, a federal grand jury charged
Spalding with seven offenses: two counts of wire fraud
(Counts One and Three), one count of mail fraud (Count Two),
counts of false testimony under oath (Counts Four and Five),
two counts of bankruptcy fraud by false statement (Counts Six
and Seven). Spalding successfully moved to dismiss
Count Seven on multiplicity grounds. He unsuccessfully moved
to suppress statements he gave during a deposition in an
investor's civil suit. That motion relied on the Fifth
Amendment's privilege against self-incrimination, but the
government disclaimed plans to introduce the deposition and
the district court ruled the prior testimony fair game for
trial lasted seven days. Included on the government's
witness list were some spurned investors, a forensic
accountant, the bankruptcy trustees, and former Wind Plus
workers. The investors described Spalding's
representations, omissions, and failures to repay, and
underscored that they would not have invested had Spalding
been forthcoming about his past and plans. The forensic
accountant traced activity on Wind Plus's six bank
accounts to show how Spalding diverted company funds for
personal expenses. The trustees testified about the
bankruptcy proceedings and confirmed that Spalding's
filings reflected his penchant for transferring Wind Plus
funds outside the enterprise's "ordinary course of
business." And the Wind Plus workers explained how
Spalding controlled the company but balked at spending money
for business purposes. One Wind Plus consultant recalled how
Spalding admitted his intent not to repay noteholders.
Spalding did not testify, he mounted a vigorous defense. His
trial counsel cast him as an unwary and failed businessman
who otherwise paid legitimate expenses. Several defense
witnesses, however, belied that narrative. Wind Plus's
former corporate counsel, for example, verified that Spalding
"us[ed] funds that were invested in Wind Plus in part to
pay personal living expenses." (Spalding waived whatever
attorney-client privilege he may have enjoyed with Wind
Plus's counsel.) Another former officer testified that
Spalding "misled" him, and that the company's
brass and investors alike "fell in the same trap."
This witness also recounted how the board of directors
eventually ousted Spalding, only to discover
"nothing" to build on besides "[h]ot
air." Another former colleague attested that Spalding
hid company financials not just from investors, but from
corporate officers, too.
jury convicted on all six counts and the district court
imposed a variant, below-Guidelines term of 180 months in
prison. The sentence required Spalding to pay
restitution for $3, 391, 146.80 and to forfeit his
house. Spalding timely appealed.
start with Spalding's sufficiency challenges. We give the
evidence a de novo look, probing "whether, considering
the evidence and all reasonable inferences in the light most
favorable to the prosecution, any rational trier of fact
could have found the essential elements of the crime beyond a
reasonable doubt." United States v. Gibson, 875
F.3d 179, 185 (5th Cir. 2017) (quoting United States v.
Vargas-Ocampo, 747 F.3d 299, 303 (5th Cir. 2014) (en
banc)). This is a "highly deferential" task, one
requiring us to accept all credibility choices and reasonable
inferences the jury made to support its verdict. United
States v. Chon, 713 F.3d 812, 818 (5th Cir.
2013). Spalding targets four of his six
are the mail- and wire-fraud counts. The evidence sufficed to
fraud comprises three elements: "(1) a scheme to
defraud; (2) the use of, or causing the use of, wire
communications in furtherance of the scheme; and (3) a
specific intent to defraud." United States v.
Harris, 821 F.3d 589, 598 (5th Cir. 2016);
accord 18 U.S.C. § 1343. The same is true for
mail fraud, except the second element involves "use of
the mails," not wires, "to execute [the]
scheme." United States v. Lucas, 516 F.3d 316,
339 (5th Cir. 2008) (quoting United States v.
Dotson, 407 F.3d 387, 391-92 (5th Cir. 2005));
accord 18 U.S.C. § 1341. For both crimes,
showing a "scheme to defraud" requires proof that
Spalding "made some kind of a false or fraudulent
material misrepresentation." Harris, 821 F.3d
at 598 (quoting United States v. Curtis, 635 F.3d
704, 718 (5th Cir. 2011)).
issue are the first and third elements: fraudulent scheme and
specific intent. The government failed to show both, Spalding
maintains, because Wind Plus did some legitimate business. He
highlights "change[s] in market conditions" and his
lack of "experience or discipline to run such a large
operation." Spalding thus suggests that bad luck, not
bad faith, explain the unpaid notes.
rational jury could disagree. Regarding the fraudulent
scheme, the evidence detailed a years-long con comprising
patently fraudulent, material misrepresentations. Both
government and defense witnesses confirmed
Spalding's scheme to induce investments through
deception. And no doubt Spalding's misrepresentations
were material, for the victims consistently testified that
they would not have cut Spalding checks had he been honest.
As for his mental state, Spalding's concerted efforts to
mask the ruse expose his specific intent to defraud.
Consider, for instance, his fake updates, his reluctance to
pay for business expenses, or his emails about Wind
Plus's "cash burn" during his personal spending
spree. Recall also that Spalding promised to take no salary
and to use the victims' money on the business, but then
funneled funds to himself. Or take the Wind Plus consultant
(and defense witness) at his word: Spalding admitted his
intention not to repay.
that sustains the jury verdict on the mail- and wire-fraud
evidence similarly supported Spalding's conviction on
Count Four- giving false testimony during a bankruptcy
law prohibits persons from "knowingly and fraudulently
mak[ing] a false oath or account in or in relation to any
case under title 11" of the Bankruptcy Code. 18 U.S.C.
§ 152(2). This crime has five elements: (1) a bankruptcy
proceeding; (2) a statement made under penalty of perjury in
that proceeding; (3) the statement concerned a material fact;
(4) the statement was false; and (5) the defendant made it
knowingly and fraudulently. United States v.
Grant, 850 F.3d 209, 214 (5th Cir.), cert.
denied, 138 S.Ct. 257 (2017); accord United
States v. Marston, 694 F.3d 131, 133 (1st Cir. 2012).
asked in a creditors' meeting to "describe the
noteholders and their relationship with the two Wind
entities," Spalding said under oath:
They signed promissory notes with the Wind Plus entity, the
corporate parent in Canada, not the Wind Plus subsidiaries
that we have shown are in Chapter 7 bankruptcy. A substantial
amount of the notes, promissory notes were repaid. There was
approximately 20 plus individuals that loaned money to the
company. But those notes were back in 2004, 2005.
indictment alleged that in those four sentences Spalding
managed three falsehoods: (1) there were then over seventy
individual noteholders, not "approximately 20
plus"; (2) only nine, not "a substantial
amount" of those notes were repaid; and (3) the notes
were not limited to 2004 and 2005.
insists that his statements were either opinions or literally
true, and that therefore the government failed to prove
falsity and criminal intent. He chiefly relies on
Bronston v. United States, where the Supreme Court
held that perjury statutes do not punish "an answer,
under oath, that is literally true but not responsive to the
question asked and arguably misleading by negative
implication." 409 U.S. 352, 352-53, 362 (1973);
cf. 18 U.S.C. § 1621.
appeal is not the first time Spalding leveled his falsity and
intent arguments; the jury heard and rejected them as well.
We see no reason to disturb that sound judgment. Rational
jurors could have found beyond a reasonable doubt that
Spalding knowingly lied about the lenders' number, their
repayments, and the relevant timeframe to "deceive or
cheat [a] creditor [or] trustee." 5th Cir. Pattern Jury
Instructions (Criminal) § 2.08(B) (2015). And the jury
reasonably rejected Spalding's position that his answer
was literally true or expressed no facts. See United
States v. Nixon, 816 F.2d 1022, 1030 (5th Cir. ...