Criminal- District court did not err when it joined fraud counts

Where a defendant argued the district court improperly tried his Paycheck Protection Program fraud count with the fraud claims arising from a paycard scheme, this argument was rejected. Both involved his company as a vehicle for misappropriating funds, both employed the same methods to hide how he used those funds and his paycard fraud precipitated his PPP fraud.

Background

Following a five-day trial, a jury convicted Derickson Lawrence of 11 counts of wire and mail fraud. Lawrence argues that (1) there was insufficient evidence of his intent to commit fraud, (2) the district court erred in applying the sophisticated-means enhancement to his sentence and (3) the district court erred in denying his motion to sever the PPP fraud count.

Intent

Lawrence claims that he lacked the specific intent to defraud because he never “intended for the cardholders to lose their money” and later made efforts to “right the ship.” But he did not need to intend to “leave the victim[s] economically worse off” in order to intend to defraud them. It is sufficient that he lied to “obtain . . . money or property.” And there was evidence from which a jury could have reasonably concluded that here.

Enhancement

The Sentencing Guidelines “direct[] the sentencing court to increase the offense level by two levels if ‘the offense otherwise involved sophisticated means.’” For years, Lawrence used multiple accounts to conceal his transactions, charged inactivity fees retroactively to hide the extent of the shortfall and hid account balances from his client under the guise of legal requirements. Accordingly, the district court did not clearly err in finding that Lawrence used sophisticated means to commit fraud.

Joinder/severance

Lawrence claims the schemes were not of a similar character because they differed in nature, scope and time. To be sure, the schemes themselves were distinct. But they overlapped in material ways: Both involved MarketView as a vehicle for misappropriating funds, and both employed the same methods to hide how Lawrence used those funds.

These similarities meant some witnesses and proof overlapped. And his paycard fraud precipitated his PPP fraud: When the paycard scheme collapsed, Lawrence needed cash, so he turned to PPP. So this court agrees with the district court that the two frauds were sufficiently connected to make the initial joinder proper.

Mindful of the deference owed to the district court, this court finds that Lawrence’s two claims of prejudice do not require severance. Lawrence’s first argument is that joinder posed a risk of the jury drawing a propensity inference. That is, once he effectively conceded that the evidence supported finding him guilty of PPP fraud, the jury might conclude that he likely defrauded Golden Corral and its employees too.

But two countervailing factors minimized the risk of propensity prejudice in this case. First, the government presented “substantial, direct evidence of guilt.” Second, the district court gave an appropriate curative instruction to the jury.

Lawrence’s second argument is that joinder impaired his defense. He wanted to testify about the paycard scheme, but not the PPP-fraud count, and feared the adverse inference that choice might invite. Even though “[p]rejudice may develop when an accused wishes to testify on one [count] but not the other,” severance is not required merely because he alleges that he wishes to offer limited testimony.

Rather, the defendant must make a convincing and particularized showing that he has (1) “important testimony to give concerning one count” and (2) “a strong need to refrain from testifying on the other.” Here, Lawrence did not provide any information about the testimony he wished to present and thus failed to demonstrate that his choice not to testify created “[the] strong showing of prejudice” that could demand separate trials. Lawrence also failed to particularly demonstrate a strong need to refrain from testifying on the PPP-fraud count.

Lawrence expressed both a desire to “remain silent as to [the PPP-fraud count], allowing his lawyer to construct a defense through the extensive documentary record,” and a concern that the jury might draw an adverse inference from his decision to only testify about the paycard scheme. But this generic, broadly stated concern does not constitute a strong reason to stay silent. The district court therefore acted within its discretionary authority in denying his severance motion.

Affirmed.

United States v. Lawrence, Case No. 24-4596, April 14, 2026. 4th Cir. (Richardson), from EDVA at Norfolk (Gibney Jr.). Patrick L. Bryant for Appellant. Anthony Comer Mozzi for Appellee. VLW 026-2-131. 11 pp.

Full-Text Opinion

VLW 026-2-131
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