     Case: 14-10119   Document: 00512861059      Page: 1   Date Filed: 12/08/2014




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT


                                  No. 14-10119                   United States Court of Appeals
                                                                          Fifth Circuit

                                                                        FILED
UNITED STATES OF AMERICA,                                        December 8, 2014
                                                                   Lyle W. Cayce
                                          Plaintiff - Appellee          Clerk
v.

DAVID KEVIN LEWIS, also known as David Shane Lewis, also known as
“DW”,

                                          Defendant - Appellant




                Appeal from the United States District Court
                     for the Northern District of Texas


Before KING, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:
      David Kevin Lewis challenges his convictions for one count of conspiracy
to commit securities fraud and twenty-three counts of securities fraud. For the
following reasons, we AFFIRM the convictions.
                             I.   BACKGROUND
      David Kevin Lewis was indicted alongside co-defendant Bruce Kyle
Griffith on one count of conspiracy in violation of 18 U.S.C. § 371 and twenty-
three counts of securities fraud and aiding and abetting in violation of 15
U.S.C. §§ 77q(a), 77x, and 18 U.S.C. § 2. Thomas Markham, another co-
defendant, was indicted on one count of conspiracy.
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      Lewis and Griffith co-founded Always Consulting, Inc. (“ACI”), after
meeting at a halfway house in 2003. Lewis had previously been convicted of
securities and mail fraud in connection with oil and gas offerings. Griffith had
several prior convictions, including convictions for bank robbery. Lewis served
as chairman and director of field operations of ACI, and testimony at trial
established that he was generally in charge of running the company. Although
Griffith served as President and CEO, Lewis hired and fired all personnel at
ACI. While Griffith was the signatory on all of ACI’s accounts, Lewis had to
approve all checks. Further, Lewis was responsible for training all of ACI’s
sales force. Markham was the chief—and only—geologist at ACI.
      ACI sold interests in the Rattlesnake Springs Drilling Program—an oil
and gas drilling project on the Osage Indian Reservation in Oklahoma—to
members of the public. ACI offered thirty-five units of interest in the program
at a cost of $100,285.71 per unit, for a total of $3,509,999.80. These interests
were sold to the public by two groups of salespeople: fronters and closers.
Fronters made the initial contact with investors through cold calls; closers
handled the later contacts to convince potential investors to buy an interest in
the project. Lewis wrote the scripts used by the fronters and closers. These
scripts contained several misrepresentations. For example, they stated that
there was already pipeline infrastructure for the Rattlesnake Springs Program
in place, when in reality such pipeline infrastructure was not in place. Lewis
also provided the ACI salespeople with “Do Not Call” lists containing the
names of suspected undercover regulators.       Furthermore, ACI falsely told
investors that investments would be used only for the Rattlesnake Springs
wells, and that ACI had special connections within the Osage Nation in
Oklahoma, where the mineral leases were supposed to be located.
      The case against Lewis was brought to trial in August 2013. Griffith,
who had previously agreed with the Government to testify against Lewis in
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exchange for the possibility of a reduced sentence, testified that Lewis
prepared the offering memorandum that became the center of the
Government’s case at trial. Markham provided additional support for this
assertion, testifying that Griffith lacked the knowledge of the oil and gas
industry to have prepared it. The offering memorandum was sent out to
investors, via interstate carriers. Griffith testified that it contained many
assertions that were false. For example, Griffith testified that the offering
memorandum falsely stated that he had been in the oil and gas industry since
1985, when he really had at most eight months of experience. The offering
memorandum also stated that ACI was profitable, when in reality, it was not.
Furthermore, the offering memorandum falsely stated that ACI had already
secured millions of dollars of funding for the project. Crucially, the offering
memorandum did not disclose Lewis’s, Griffith’s, or Markham’s prior criminal
convictions.
      The indictment contained twenty-three counts of fraud for twenty-three
individual investors; however, only five testified at trial.         The testifying
investors all stated that, had they known of Griffith’s lack of experience or
Lewis’s and Griffith’s criminal histories, they would not have invested with
ACI. For the non-testifying investors, the Government entered into evidence
each of their checks and the signature page of their participation agreements.
Lewis testified in his own defense, asserting that he was a mere employee and
that he resigned his management role within ACI in 2004 when he found out
that Griffith intended to sell interests in ACI’s oil and gas projects to the public.
Lewis also testified that he had no involvement with orchestrating the
Rattlesnake Springs Drilling Project. In rebuttal, the Government introduced
a document, identified as GX115, dated September 5, 2006. GX115 purported
to remind employees that Lewis was going to hold a meeting that Friday and


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                                    No. 14-10119
“every Friday going forward.”       The document indicates that Lewis had a
supervisory role over the salespeople at ACI.
      On September 4, 2013, the jury found Lewis guilty on all counts. The
district court denied Lewis’s motion for a judgment of acquittal and for a new
trial. Lewis timely appealed the denial of the motion for judgment of acquittal.
                              II.    DISCUSSION
A. Sufficiency of the Evidence
      Lewis challenges the sufficiency of the evidence presented at trial to
support his convictions for both conspiracy to commit securities fraud, in
violation of 18 U.S.C. § 371, and those counts of his substantive securities fraud
conviction for which the named victim did not testify, in violation of 15 U.S.C.
§§ 77q(a), 77(x).
      1. Standard of Review
      This court reviews “de novo the district court’s denial of a properly
preserved motion for judgment of acquittal.” United States v. Fuchs, 467 F.3d
889, 904 (5th Cir. 2006). We review a challenge to the sufficiency of the
evidence supporting a conviction by reviewing “all evidence in the light most
favorable to the verdict to determine whether a rational trier of fact could have
found that the evidence established the essential elements of the offense
beyond a reasonable doubt.” United States v. Harris, 740 F.3d 956, 962 (5th
Cir. 2014) (internal quotation marks omitted). In determining whether there
is sufficient evidence to support a verdict, “this court asks only whether the
jury’s decision was rational, not whether it was correct.” United States v.
Rodriguez, 553 F.3d 380, 389 (5th Cir. 2008). We must accept “all credibility
choices and reasonable inferences made by the trier of fact which tend to
support the verdict.” United States v. Moreno-Gonzalez, 662 F.3d 369, 372 (5th
Cir. 2011) (internal quotation marks omitted). “The evidence need not exclude
every reasonable hypothesis of innocence or be wholly inconsistent with every
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conclusion except that of guilt, and the jury is free to choose among reasonable
constructions of the evidence.” Fuchs, 467 F.3d at 904 (internal quotation
marks omitted).
      2. Securities fraud counts
      Lewis argues that there was insufficient evidence to convict him of
securities fraud on the counts for which the government did not call the victim-
investor: counts 3–4, 6, 8–15, 17–18, 20–22, and 24 (the “Challenged Counts”).
More specifically, he argues that there was insufficient evidence to prove that
he had any contact with the investors in those counts of the indictment. He
also argues that, because none of the investors in the Challenged Counts
testified, there was insufficient evidence to prove that the scheme to defraud
had an impact on those investors. As explained below, viewing the evidence in
the light most favorable to the guilty verdict, we find that there was sufficient
evidence for a “rational trier of fact [to] have found that the evidence
established the essential elements of the offense beyond a reasonable doubt.”
Harris, 740 F.3d at 962.
      In order to prove securities fraud, the Government must show: (1) the
offer or sale of securities; (2) “by the use of any means or instruments of
transportation or communication in interstate commerce or by use of the mails,
directly or indirectly,” and (3) one of the varieties of fraudulent conduct in the
statute. 1 15 U.S.C. § 77q. This court has previously established that “[s]pecific



      1   They are:

               (1) to employ any device, scheme, or artifice to defraud, or

               (2) to obtain money or property by means of any untrue statement of a
               material fact or any omission to state a material fact necessary in order
               to make the statements made, in light of the circumstances under which
               they were made, not misleading; or

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reliance by the investor” on the fraudulent scheme or fraudulent statements
need not be shown. United States v. Ashdown, 509 F.2d 793, 799 (5th Cir.
1975). Rather, the Government must show that the defendant’s scheme had
“some impact . . . on the investor and that the mails were used in those
instances where the impact occurred.” Id. (quoting United States v. Schaefer,
299 F.2d 625, 629–30 (7th Cir. 1962)). In Ashdown, we held that the mailing
of stock certificates or confirmations of purchase in the mail was sufficient
evidence to show an impact of the scheme on investors. Id. However, in
Ashdown, unlike here, each victim-investor testified that he or she was
“influenced either by the misleading shareholder literature, including the
annual report, or by [one of the co-defendant’s] representations.” Id.
      Lewis argues that there was insufficient evidence to prove that he had
ever promoted the Rattlesnake Springs offering to the non-testifying investors.
Accordingly, he asserts that the Government failed to prove that the scheme
to defraud had an impact on the investors in the Challenged Counts. He
explains that the decision to invest could have been prompted by ACI’s fronters
or closers, thus, indirectly arguing that the Government has failed to prove
that he was responsible for having an impact on the decision to invest by the
investors in the Challenged Counts. However, we have never held that the
testimony of all the investors is required to meet the “some impact” standard
set by Ashdown. For example, in a case involving the federal wire fraud
statute, we held that there was sufficient evidence to support a conviction
where the victim-investor did not testify. See United States v. Freeman, 434
F.3d 369, 377 (5th Cir. 2005). The investor’s testimony was held not to be



             (3) to engage in any transaction, practice, or course of business which
             operates or would operate as a fraud or deceit upon the purchaser.

      15 U.S.C. § 77q(a)(1)–(3).
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                                  No. 14-10119
necessary because the defendant typed the investor’s participation agreement,
the investor wired money that was not used for investments as promised, and
“lulling payments” were made to the investor. Id.
      In this case, there is sufficient evidence connecting Lewis to the investors
in the Challenged Counts from which the jury could reasonably have concluded
that Lewis’s fraudulent statements had “some impact” on the investors in the
Challenged Counts, even without their testimony. Griffith testified that Lewis
substantially authored the offering memorandum, which was sent to investors.
The offering memorandum contained many of the material omissions and
misrepresentations underlying the charges, including: Griffith’s inflated
experience in the oil and gas industry, the omission of Lewis’s, Griffith’s, and
Markham’s prior criminal convictions, the statement that ACI was profitable,
and the statements about SCI’s access to the money needed to drill oil wells.
Further, Griffith testified that Lewis wrote the scripts that the fronters and
closers used when calling all of the investors. These scripts also contained
material omissions and misrepresentations, including that there was already
pipeline infrastructure for the Rattlesnake Springs project in place.         This
evidence shows that Lewis had contact, albeit indirectly, with the investors in
the Challenged Counts and also supports a finding that he acted with intent
to defraud them. Given that the “jury retains the sole authority to weigh any
conflicting evidence and to evaluate the credibility of the witnesses,” United
States v. Grant, 683 F.3d 639, 642 (5th Cir. 2012) (internal quotation marks
omitted), it is not our role to credit Lewis’s testimony over Griffith’s testimony.
      Furthermore, a reasonable jury could infer that the misrepresentations
and material omissions contained in the offering memorandum, especially the
omission of Lewis’s conviction for securities fraud in connection with oil and
gas interests and Griffith’s conviction for bank robbery, had “some impact” on
the decision of the investors in the Challenged Counts to invest, even without
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their testimony at trial. This inference is bolstered by the testimony of the
investors that they would not have invested had they known about Lewis’s
securities fraud conviction and Griffith’s bank robbery conviction. Further,
although there is no direct evidence in the record that each of the investors in
the Challenged Counts received the offering memorandum, we are to “view all
evidence, whether circumstantial or direct, in the light most favorable to the
government.” Grant, 683 F.3d at 642 (internal quotation marks omitted). The
record reflects that there was evidence that the memorandum was sent to
investors generally. Moreover each of the testifying-investors testified that he
or she received the memorandum. Therefore, the jury could reasonably infer
that each of the investors in the Challenged Counts received the offering
memorandum and that its misrepresentations and omissions had “some
impact” on his or her decision to invest with ACI. Accordingly, we hold, after
accepting all “reasonable inferences made by the trier of fact which tend to
support the verdict,” Moreno-Gonzalez, 662 F.3d at 372, that there was
sufficient evidence to convict Lewis of the Challenged Counts.
      3. Conspiracy
      In order to prove conspiracy under 18 U.S.C. § 371, the Government must
prove: “(1) an agreement between two or more persons to pursue an unlawful
objective; (2) the defendant’s knowledge of the unlawful objective and
voluntary agreement to join the conspiracy; and (3) an overt act by one or more
of the members of the conspiracy in furtherance of the objective of the
conspiracy.” United States v. Coleman, 609 F.3d 699, 704 (5th Cir. 2010)
(internal quotation marks omitted). Lewis argues that there was conflicting
testimony as to who was in charge of ACI—Griffith or Lewis. Although Daisey
Hillenbrand, a Government witness, testified that Griffith was in charge of the
ACI office, other witnesses, including Griffith, Markham, and Toby Engleman,
testified that Lewis was in charge. Nevertheless, this argument is irrelevant
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because whether Lewis was in charge or not, he still “may be convicted of a
conspiracy even if he only played a minor role.” United States v. Daniels, 723
F.3d 562, 575 (5th Cir. 2013). Moreover, in a challenge to the sufficiency of the
evidence, this court accepts “all credibility choices . . . which tend to support
the verdict,” Moreno-Gonzalez, 662 F.3d at 372, and must view the evidence
“in the light most favorable to the verdict,” Fuchs, 467 F.3d at 904.        We
therefore hold that a rational jury could reject the testimony of Hillenbrand
and credit the testimony of Griffith, Markham, and Engleman.
      After reviewing the record, we find that there was sufficient evidence for
a rational jury to find that Lewis knowingly conspired with his co-defendants
to defraud the investors in the Challenged Counts. There is a multitude of
evidence to support the jury’s finding that Lewis had made an overt act in
furtherance of the conspiracy—particularly, Griffith’s testimony that Lewis
drafted the offering memorandum. Moreover, Lewis admits that the investors
who were called at trial by the Government testified to Lewis’s involvement in
the Rattlesnake Springs Project. Accordingly, we find that there was sufficient
evidence to convict Lewis of conspiracy to commit securities fraud.
B. Government’s Exhibit 115
      Lewis argues that his convictions should be reversed because the district
court abused its discretion by admitting Government’s Exhibit 115 (“GX115”)
under the business records exception to the hearsay rule. For the following
reasons, we conclude that the admission of GX115 was not reversible error.
      1. Standard of Review
      This court reviews evidentiary rulings for abuse of discretion. United
States v. Heard, 709 F.3d 413, 422 (5th Cir. 2013). A district court “abuses its
discretion when its ruling is based on an erroneous view of the law or a clearly
erroneous assessment of the evidence.” United States v. Soza, 513 F.3d 194,
200 (5th Cir. 2008). Error is not grounds for the reversal of a conviction unless
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                                  No. 14-10119
it affects the defendant’s “substantial rights.” Fed. R. Crim. P. 52(a). “An error
affects substantial rights if there is a reasonable probability that the
improperly admitted evidence contributed to the conviction.” Heard, 709 F.3d
at 422 (internal quotation marks omitted).
      2. Discussion
      Lewis argues that GX115 contains hearsay within hearsay, and no
exception was cited for the second level of hearsay. He further argues that
GX115 is so unreliable as to be unworthy of consideration by the jury. After
considering the record, we hold that, assuming without deciding that it was
error to admit GX115, Lewis’s substantial rights were not affected. GX115
appears to be an internal communication reminding ACI employees about a
weekly meeting that Lewis was going to hold. The Government explains in its
briefing that it offered GX115 to rebut Lewis’s testimony that while he was an
employee of ACI, he was not in charge of the company. However, there was
other documentary evidence that tended to rebut Lewis’s claim that after 2004
he was a mere employee. The Government introduced the minutes from a
meeting held on June 14, 2005, which state that Lewis and Griffith called the
meeting. Furthermore, Lewis’s signature is the first one on the last page of
these minutes. The Government also introduced the ACI Employee Handbook
(Revised February 10, 2006), which lists Lewis as Chairman of ACI. Further,
the Government introduced into evidence a resolution of the directors of ACI
adopted by unanimous consent and dated August 4, 2006, which Lewis signed
as a director. These pieces of evidence are highlighted to show that there was
already ample documentary evidence to establish that Lewis still played a
significant role in ACI after 2004. Since “[i]t is well established that error in
admitting evidence will be found harmless when . . . substantial evidence
supports the same facts and inferences as those in the erroneously admitted


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                                  No. 14-10119
evidence,” United States v. El-Mezain, 664 F.3d 467, 526 (5th Cir. 2011), the
evidence discussed above supports our conclusion that any error was harmless.
       Furthermore, it is difficult to see how GX115 was particularly
persuasive. It is unclear whether GX115 is a letter, memorandum, or email;
to whom it was sent; or if it was ever sent at all. Given the limited testimony
about the exhibit, and the limited information provided by the exhibit itself,
we conclude that there is not a reasonable probability that GX115 contributed
to Lewis’s conviction. Accordingly, any error in admitting GX115 was harmless
because Lewis’s substantial rights were not affected. See Heard, 709 F.3d at
422.
C. Statute of Limitations
       Lewis argues that 18 U.S.C. § 3301, which extended the applicable
statute of limitations from five years to six, is a violation of the Constitution’s
prohibition of ex post facto laws. U.S. Const. art I, § 9, cl. 3. He also indirectly
argues that the statute’s extension of the applicable statute of limitations
should not be applied retroactively because it lacks an explicit retroactivity
provision. We do not address these arguments because we hold that Lewis
waived his affirmative statute of limitations defense by not “asserting [it] at
trial.” United States v. Arky, 938 F.2d 579, 581 (5th Cir. 1991).
       Lewis raised his statute of limitations defense for the first time in his
post-conviction motion for acquittal. Although we have clearly held that a
defendant waives his statute of limitations defense if he raises it for the first
time on appeal, id., we have not squarely addressed whether a statute of
limitations defense can be asserted for the first time in a post-conviction
motion for judgment of acquittal. However, we have previously determined
that a statute of limitations defense is an affirmative defense that must be
“affirmatively assert[ed] . . . at trial to preserve it for appeal.” Id. at 582
(emphasis added). This is because defenses such as a statute of limitations
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defense will, in many cases, turn on disputed factual issues. If defendants were
allowed to raise a limitations defense after a conviction, the prosecution would
be prevented from introducing evidence to rebut the defense. Cf. United States
v. Cook, 84 U.S. 168, 179–80 (1872) (explaining that the rationale for requiring
the statute of limitations defense to be raised at trial is to allow the prosecutor
to present evidence in order to rebut the defense). By requiring a defendant to
“raise and develop” his statute of limitations defense at trial, United States v.
Solomon, 29 F.3d 961, 964 (5th Cir. 1994) (citing Arky, 938 F.3d at 581–82),
the prosecution will have a chance to rebut the defendant’s arguments with
evidence of its own.     Although the facts surrounding Lewis’s statute of
limitations defense are not in dispute, this does not change our conclusion that
a rule requiring all defendants to “affirmatively assert a limitations defense at
trial to preserve it for appeal,” Arky, 938 F.3d at 582, is preferable to a case-
by-case determination.      Such a case-by-case determination would leave
defendants without a clear rule as to when a statute of limitations defense
must be raised.
                           III.   CONCLUSION
      For the foregoing reasons, we AFFIRM the district court’s judgment.




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