Background
Michael and Tiffany Fullerton, along with two others, fraudulently obtained over three million dollars from the Paycheck Protection Program by submitting six fake loan applications using defunct shell companies and stolen identities. Michael Fullerton pleaded guilty to eleven counts of fraud and money laundering and received a sentence of two hundred eighty-six months. Tiffany Fullerton was convicted at trial of conspiracy to commit bank fraud and money laundering, receiving a sentence of one hundred eight months. Both defendants appealed various sentencing enhancements and procedural rulings.
The court’s reasoning
The Fifth Circuit reviewed the district court’s application of the Sentencing Guidelines de novo. For Michael Fullerton, the court found no clear error in applying enhancements for sophisticated means, sophisticated laundering, leadership role, and obstruction of justice, noting that the defendants used shell companies, forged documents, and layered transactions to conceal the fraud. The court held that Michael’s perjury at trial was willful and that Tiffany Fullerton suborned that perjury by coordinating with him and his attorneys to elicit false testimony. Regarding Tiffany’s appeal, the court found the district court did not abuse its discretion in denying a new trial based on newly discovered evidence, as the evidence was not material enough to likely produce an acquittal. The court also found no clear error in including the initial PPP loan in the intended loss calculation as relevant conduct. Finally, the court identified a clerical error in Tiffany’s judgment which incorrectly listed a wire fraud conviction she was acquitted of.
We AFFIRM the sentences and denial of the motion for a new trial and REMAND for correction of a clerical error in Tiffany’s judgment.
United States v. Fullerton, 24-50800 (5th Cir. July 21, 2026)
What it means going forward
The ruling reinforces the Fifth Circuit’s strict application of sentencing enhancements for complex fraud schemes involving shell companies and money laundering. It clarifies that subornation of perjury can be established through circumstantial evidence of coordination between a defendant and a witness, even without a direct command to lie. The decision also confirms that relevant conduct for loss calculations includes acts committed by co-conspirators before a defendant’s formal entry into the scheme if the defendant joined the conspiracy early enough.