For what appears to be the first time anywhere in the U.S., federal prosecutors in the District of Massachusetts have successfully argued that the statute of limitations for criminal fraud against the federal government should be tolled under the Wartime Suspension of Limitations Act (“Suspension Act”) because of the wars in Afghanistan and Iraq. The August 29, 2008 district court decision in United States v. Prosperi, et al., could prompt prosecutors elsewhere to adopt this approach and pursue criminal or civil cases that would otherwise be time-barred.
In 2006, the U.S. Attorney’s Office indicted six former employees of Aggregate Industries, N.E., which had been a major concrete supplier to the Central Artery Tunnel Project, known as “the Big Dig.” The government alleged that some of this concrete had been stale and adulterated and that the defendants concealed its deficiencies by submitting false paperwork. The defendants were charged with one count of conspiracy to commit highway project fraud and mail fraud; one count of conspiracy to defraud the government; 83 counts of highway project fraud; and 39 counts of mail fraud. The defendants moved to dismiss 85 of the substantive counts on the grounds that they involved acts committed prior to May 2001 and, therefore, were barred by the five-year statute of limitations. The government countered that the statute of limitations had been tolled by operation of the Suspension Act from September 18, 2001, when Congress authorized the use of military force in Afghanistan, or from October 10, 2002, when Congress authorized the use of military force in Iraq, up to and including the present. (The Suspension Act was first enacted in 1921 as a temporary measure during World War I. It was re-enacted in 1942 after the country’s entry into World War II and a 1948 codification made it applicable to “when[ever] the United States is at war.”)
In denying the defendants’ motion to dismiss, the district court cited Supreme Court precedent holding that the Suspension Act applies where the fraud against the government is “pecuniary in nature” and need not be related to the war effort. The judge also rejected the defendants’ contention that there must be a congressional declaration in order for the country to be “at war” for purposes of the Act, noting that none of the wars since World War II (and a number of them preceding that global conflict) had been accompanied by such a declaration. (In so ruling, the district court disagreed with United States v. Shelton, 816 F. Supp. 1132 (W.D. Tex. 1993), which rejected the government’s invocation of the Suspension Act based on the first Gulf War.)
Judge Richard Stearns identified four criteria for deciding whether the country was “at war” for purposes of the Suspension Act:
(1) the extent of the authorization given by Congress to the President to act; (2) whether the conflict is deemed a “war” under accepted definitions of the term and the rules of international law; (3) the size and scope of the conflict (including the cost of the related procurement effort); and (4) the diversion of resources that might have been expended on investigating frauds against the government.
After analyzing these criteria, Judge Stearns found that the country had indeed been at war in Afghanistan and Iraq. While acknowledging that the continuing loss of life and other expenditures in these theaters presented “a strong case . . . that the United States remains at war,” the court found that the war in Afghanistan had ended on December 22, 2001, when the United States formally recognized and extended diplomatic relations to the new government of Hamid Karzai. It also found that the war in Iraq had ended on May 1, 2003, when President Bush proclaimed from on board an aircraft carrier that “[m]ajor combat operations in Iraq have ended;” that “the United States and our allies have prevailed;” and that “our coalition is engaged in securing and reconstructing that country.” Since the Suspension Act tolls statutes of limitations until three years after the country is “at war”, the court found that the limitations period for the defendants’ alleged offenses had been tolled from September 18, 2001 until May 1, 2006.
Time will tell if other federal prosecutors will raise this same argument and if the First Circuit Court of Appeals will affirm Judge Stearns’ decision, the full text of which can be found at 2008 U.S. Dist. LEXIS 66470.