The federal law permitting the government to seek a tolling of criminal statutes of limitations while it collects evidence in a foreign country cannot save a prosecution if the limitations period has already expired. That was the ruling of the Second Circuit Court of Appeals on August 29, 2008, when it affirmed the dismissal of most of the charges relating to a defendant’s alleged scheme to bribe senior government officials in Azerbaijan.
Between the late 1990s and May of 2002, the individual defendant engaged in activities in Europe which the government later claimed violated the Foreign Corrupt Practices Act, the Travel Act, and the laws prohibiting money laundering and making false statements to federal agents. In late 2002 and early 2003, the government made formal requests to the Swiss and Dutch governments for the collection of evidence relating to its investigation. However, the statute of limitations applicable to most of the defendant’s conduct expired in early July 2003 in accordance with the general five-year limitations period governing many federal offenses.
On July 21, 2003, after the limitations period had expired, federal prosecutors applied to a judge in the Southern District of New York for an order suspending the running of the statute of limitations under 18 U.S.C. § 3292(a)(1). That law provides:
Upon application of the United States, filed before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court... shall suspend the running of the statute of limitations for the offense if the court finds by a preponderance of the evidence that an official request has been made for such evidence and that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country.
The statute also provides that such a suspension of the limitations period will begin on the date on which the official request is made to a foreign government and will end when a foreign authority takes final action on the request, for a period not to exceed three years (or six months if all foreign requests are acted upon before the normal limitations expiration date).
The government’s ex parte application for a suspension order was granted and the government filed a sealed indictment against the defendant in May 2005, after the Swiss authorities had turned over evidence they had collected, but before the Dutch authorities had done so. Eventually, the indictment was unsealed and, in 2006, the defendant moved to dismiss most of the counts against him, contending that the suspension order had been ineffective because the limitations period had expired before the government had applied for the order.
The government argued that the only time limit explicitly articulated by the statute is the requirement that the application for a suspension order be “filed before the return of the indictment.” However, the Court reasoned that the “plain language” of the statute permits an application “to suspend” or to stop the “running” of a statute of limitations and “a statute of limitations cannot be ‘running’ if it has already ‘run,’ i.e., if it has expired at the end of the prescribed period.” Logically, therefore, a district court could suspend the running of a limitations period only if that period had not already expired. Once the limitations period applicable to most of the defendant’s conduct had already expired, it was too late for the government to seek to delay its expiration. The Second Circuit found “no basis upon which to read the word ‘suspend’ in section 3292 to include the distinct concept of revival.”
In reaching its decision, the Second Circuit created a split in the circuits, since the Ninth Circuit had reached a different result in United States v. Bischel, 61 F.3d 1429 (9th Cir. 1995). The Second Circuit’s decision can be found at United States v. Kozeny, No. 07-3107, U.S. App. LEXIS 18534 (2d Cir. August 29, 2008).