07-3107-crTo Be Argued By:JONATHAN S. ABERNETHY

Pniteb States Court of kppealsFOR THE SECOND CIRCUIT

Docket No. 07-3107-cr

aa ...

UNITED STATES OF AMERICA,Appellant,

—v. —

FREDERIC BOURKE JR.,DAVID PINKERTON,

Defendants-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK

BRIEF FOR THE UNITED STATES OF AMERICA

MICHAEL J. GARCIA,United States Attorney for theSouthern District of New York,

JONATHAN S. ABERNETHY, Attorney for the United StatesJONATHAN S. KOLODNER, of America.

Assistant United States Attorneys,ROBERTSON PARK,Assistant Chief, Fraud Section,United States Department of Justice,

Of Counsel.

TABLE OF CONTENTSPAGE

Statement Of Subject Matter And AppellateJurisdiction 1

Statement Of Issue Presented 2

Statement Of The Case 2

Statement Of Facts 4

A. The Charged Conduct 4

1. The Roles Of Bourke And Pinkerton InThe Scheme 6

2. The Charges Against Bourke AndPinkerton 8

B. The Foreign Evidence Requests And TheSuspension Order Under 18 U.S.C. § 3292 ... 10

C. The Motions To Dismiss 12

D. The District Court’s June 21, 2007 OpinionAnd Order 15

Summary Of Argument 18

ARGUMENT:

The District Court Erroneously Held That ASuspension Of The Statute Of Limitations Under18 U.S.C. § 3292 Must Be Prospective 20

A. Applicable Legal Principles 20

1. Relevant Principles Of StatutoryConstruction 20

iiPAGE

2. Section 3292 22

a. The Legislative History Of Section

3292 23

b. Relevant Case Law 25

B. Discussion 29

1. The District Court Wrongly DisregardedKey Provisions Of Section 3292 29

2. The District Court’s StatutoryConstruction Contravenes The PolicyUnderlying Section 3292 34

3. The District Court’s Policy AndConstitutional Concerns WithRetrospective Application Of Section3292 Are Unfounded 36

CONCLUSION 40

TABLE OF AUTHORITIES

Cases:

Chase Securities Corp. v. Donaldson,325 U.S. 304 (1945) 38

Concrete Pipe & Products of Cal. v. ConstructionLaborers Pension Trust,

508 U.S. 602 (1993) 21

Connecticut National Bank v. Germain,503 U.S. 249 (1992) 21, 31

iiiPAGE

Duncan v. Walker,533 U.S. 167 (2001) 21, 30

In Re Grand Jury Investigation,3 F. Supp. 2d 82 (D. Mass. 1998) 37

Johnson v. United States,529 U.S. 694 (2000) 21

King v. St. Vincent’s Hospital,502 U.S. 215 (1991) 21, 31

Park 'N Fly v. Dollar Park and Fly, Inc.,469 U.S. 189 (1985) 20

Stogner v. California,539 U.S. 607 (2003) 38

United States v. Albertini,472 U.S. 675 (1985) 20

United States v. Anderson,15 F.3d 278 (2d Cir. 1994) 21, 30

United States v. Atiyeh,402 F.3d 354 (3d Cir. 2005) 27

United States v. Bischel,61 F.3d 1429 (9th Cir. 1995) passim

United States v. DeGeorge,219 F.3d 930 (9th Cir. 2000) 37

United States v. Fraser,834 F.2d 911 (11th Cir. 1987) 26

ivPAGE

United States v. Keller,58 F.3d 884 (2d Cir. 1995) 38

United States v. King,No. 98-CR-91A, 2000 WL 362026 (W.D.N.Y.March 24, 2000) 37, 38

United States v. Koh,199 F.3d 632 (2d Cir. 1999) 20

United States v. Kozeny,__ F. Supp. 2d __, 05 Cr. 518 2007 WL1821703 (June 21, 2007) 4

United States v. Menasche,348 U.S. 528 (1955) 21

United States v. Miller,830 F.2d 1073 (9th Cir. 1987) 27, 29, 30

United States v. Neill,940 F. Supp. 332 (D.D.C.1996) passim

United States v. Nordic Village, Inc.,503 U.S. 30 (1992) 21, 30

United States v. Pacheco,225 F.3d 148 (2d Cir. 2000) 22, 36

United States v. Ron Pair Enterprises, Inc.,489 U.S. 235 (1989) 20

United States v. Rood,281 F.3d 353 (2d Cir. 2002) 20

vPAGE

United States v. Trainor,277 F. Supp. 2d 1278 (S.D. Fla. 2003) 28, 30

United States v. Wilson,249 F.3d 366 (5th Cir. 2001) 37

Williams v. Taylor,529 U.S. 362 (2000) 21

Statutes, Rules & Other Authorities:

18 U.S.C. § 3292 passim

H.R. Rep. No. 98-907 (1984),reprinted in 1984U.S.C.C.A.N. 3578 23, 25, 35, 36, 37

Pnittb,$tatts Gurtof ^Xppwts

FOR THE SECOND CIRCUIT

Docket No. 07-3107-cr

UNITED STATES OF AMERICA,

Appellant,

-v.-

FREDERIC B OURKE JR., DAVID PINKERTON,

Defendants-Appellees.

BRIEF FOR THE UNITED STATES OF AMERICA

Statement Of Subject Matter And AppellateJurisdiction

The United States of America appeals from an Opinionand Order entered on June 21, 2007, by the HonorableShira A. Scheindlin, United States District Judge, dismiss-ing most of the counts of the Indictment against FredericBourke, Jr. and David Pinkerton as barred by the statute oflimitations.

The Government filed a timely notice of appeal on July19, 2007. The jurisdiction of this Court is invoked pursu-ant to Title 18, United States Code, Section 3731. The

2

Solicitor General of the United States has approved theprosecution of this appeal.

Statement Of Issue Presented

Whether the District Court erred in construing 18U.S.C. § 3292 — which allows the Government, uponapplication filed before the return of an indictment, toobtain a court-ordered suspension of the statute of limita-tions based on a pending request for foreign evidence —as also requiring that the Government apply for and obtainsuch a suspension order prior to the time the un-tolledlimitations period expires?

Statement Of The Case

Indictment 05 Cr. 518 (SAS) (the “Indictment”), whichwas filed on May 12, 2005 and unsealed on October 6,2005, charges Frederic Bourke, Jr., David Pinkerton, andViktor Kozeny in twenty-seven total counts. * Count Onecharges all three defendants with conspiracy to violate theForeign Corrupt Practices Act (“FCPA”) and the TravelAct, from in or about May 1997, up to and including in orabout 1999, in violation of Title 18, United States Code,

* Kozeny is a resident of The Bahamas. He is pres-ently appealing from an order issued by a BahamianMagistrate Judge on September 28, 2006, committing himto extradition to the United States to face certain chargesagainst him in the Indictment. Accordingly, he is not aparty to this appeal. As a practical matter, however, JudgeScheindlin’s June 21, 2007 Opinion and Order wouldresult in the dismissal of most of the counts in the Indict-ment against Kozeny as well.

3

Section 371. Counts Two through Thirteen charge substan-tive violations of the FCPA, on dates from July 1997 toSeptember 1998, in violation of Title 15, United StatesCode, Section 78dd-2 and Title 18, United States Code,Section 2. Bourke is alleged to have committed five ofthese FCPA violations, charged in Counts Four, Five, Ten,Eleven, and Twelve; Pinkerton is alleged to have commit-ted one of these FCPA violations, charged in Count Five.Counts Fourteen through Twenty charge substantiveviolations of the Travel Act, on dates from February 1998to July 1998, in violation of Title 18, United States Code,Sections 1952 and 2. Bourke is alleged to have committedtwo of these Travel Act violations, charged in CountsFifteen and Twenty; Pinkerton is also alleged to havecommitted two of these Travel Act violations, charged inCounts Eighteen and Nineteen. Count Twenty-Onecharges all three defendants with money launderingconspiracy, from in or about March 1998, up to andincluding in or about September 1998, in violation of Title18, United States Code, Section 1956(h). Counts Twenty-Two through Twenty-Five charge money laundering, ondates from March 1998 to July 1998, in violation of Title18, United States Code, Sections 1956(a)(2)(A) and 2.Bourke is alleged to have committed two of these moneylaundering violations, charged in Counts Twenty-Two andTwenty-Five; Pinkerton is alleged to have committed oneof these money laundering violations, charged in CountTwenty-Four. Count Twenty-Five charges Bourke withmaking false statements, between on or about April 26,2002, and on or about May 23, 2002, in violation of Title18, United States Code, Section 1001. Finally, CountTwenty-Seven charges Pinkerton with making false

4

statements, between on or about February 12, 2002, and onor about March 22, 2002, in violation of Title 18, UnitedStates Code, Section 1001.

On June 21, 2007, Judge Scheindlin issued an Opinionand Order dismissing all but the false statements countsagainst Bourke and Pinkerton as barred by the statute oflimitations. See United States v. Kozeny, __ F. Supp. 2d__, No. 05 Cr. 518 (SAS), 2007 WL 1821703 (June 21,2007). On July 16, 2007, on the Government’s motion forreconsideration, the District Court issued a MemorandumOpinion and Order reinstating the two conspiracy counts(Counts One and Twenty-One) and one of the FCPAsubstantive counts (Count Eleven).

Statement Of Facts

A. The Charged Conduct

The Indictment charges the defendants with participat-ing in a scheme to bribe senior government officials inAzerbaijan (the “Azeri Officials”) to ensure that thoseofficials would privatize the State Oil Company of theAzerbaijan Republic (“SOCAR”) (as well as other valu-able state assets) and allow the defendants and others toparticipate in that privatization and to reap substantialprofits from it.

As set forth in the Indictment, Azerbaijan is an oil-richformer Republic of the Soviet Union located on theCaspian Sea. (A. 21) * . In the mid-1990s, the Azeri govern

* “A.” refers to the Joint Appendix, and “SPA” refersto the Special Appendix containing the two Opinions and

5

ment instituted a program to privatize certain state-ownedcompanies. (A. 21-22). Under the privatization program,the Azeri government issued free vouchers to all Azericitizens, which allowed them to bid for shares of enter-prises to be privatized. (A. 22). Privatization voucherswere freely tradable and were bought and sold, typicallywith U.S. currency. (A. 22). Foreigners could also partici-pate in the privatization program, but only if they pur-chased government-issued “options” for each voucher theyheld. (A. 22). The Azeri government sold these options atan official price. (A. 22). Certain Azeri industries, such asthe oil industry, were deemed “strategic enterprises” andcould only be privatized if the Azeri president issued aspecial decree. (A. 22).

Beginning in the summer of 1997, Viktor Kozeny, aCzech national, directed others to purchase Azeri vouchersand options on behalf of two companies that Kozenycontrolled, Oily Rock Group Ltd. (“Oily Rock”) andMinaret Group Ltd. (“Minaret”). (A. 23, 33). In August1997, a courier working for Kozeny was arrested by Azeriauthorities while making a large purchase of vouchers andwhile in possession of $1 million USD and $1 millionworth of vouchers. (A. 34-35). Immediately following thatarrest, Kozeny had several meetings with the AzeriOfficials in which he agreed to transfer to them two-thirdsof Oily Rock’s vouchers and options and to give to themtwo-thirds of any profits Kozeny and his co-investors

Orders issued by Judge Scheindlin that are relevant to thisappeal.

6

realized from SOCAR’s privatization. * (A. 35). In returnfor this “two-thirds transfer,” the Azeri Officials agreed topermit Kozeny and his fellow investors to acquire acontrolling interest in SOCAR when it was privatized. (A.35). Months later, in June 1998, Oily Rock’s shareholdersapproved an increase in Oily Rock’s authorized sharecapital from $150 million to $450 million. (A. 44). Thepurpose of this “two-thirds share capital increase” was toprovide shares to the Azeri Officials who had been giftedan interest in Oily Rock pursuant to the “two-thirds trans-fer.” (A. 44).

In addition to these corrupt promises, the Indictmentcharges that several additional bribes — including sub-stantial cash payments; jewelry and luxury items; and freemedical treatment and related expenses — were paid toensure that Kozeny and his fellow foreign investors couldreap the benefits of a privatized SOCAR. (A. 45-48).

1. The Roles Of Bourke And Pinkerton InThe Scheme

Bourke was one of a number of individuals whoinvested in Oily Rock by purchasing shares of the com-pany. (A. 30). He made investments, on behalf of himself,family members, and friends, of approximately $7 millionin March 1998 and of approximately $1 million in July1998, through an investment vehicle he set up calledBlueport International Ltd. (A. 29, 57, 65). The Indictment

* Kozeny also agreed to purchase vouchers from arelative of one of the Azeri Officials, resulting in profitsand commissions for that official and his family. (A. 35).

7

alleges that Bourke made these investments based in parton his understanding that Kozeny had offered, paid,authorized the payment of, and would pay bribes to theAzeri Officials to ensure that those who invested withKozeny would be allowed to participate in the privatiza-tion of SOCAR. (A. 30-31). Bourke is also alleged, amongother things, to have assisted Kozeny in arranging formedical treatment for one of the Azeri Officials in NewYork City in March 1998, and for medical treatment foranother Azeri Official in New York City in May andSeptember 1998. (A. 47-48). These treatments and relatedtravel expenses were paid for by Oily Rock and Minaret.(A. 47-48).

Pinkerton, a Managing Director at American Interna-tional Group, Inc. (“AIG”), was responsible for supervis-ing AIG’s investment in Azeri privatization. (A. 28). AIGinvested approximately $15 million in June 1998 pursuantto a “co-investment agreement” with Oily Rock andMinaret in which the parties agreed to pursue a jointstrategy in acquiring, and exercising at auction, privatiza-tion vouchers and options to gain a controlling interest inSOCAR. (A. 24, 41-42). Pinkerton is alleged to havecaused AIG to make its investment based in part on hisunderstanding that Kozeny had offered, paid, authorizedthe payment of, and would pay bribes to the Azeri Offi-cials to ensure the investors’ participation in SOCAR’sprivatization. (A. 31). Specifically, the Indictment allegesthat Pinkerton learned of the corrupt nature of Kozeny’sdeal with the Azeri Officials from Clayton Lewis, a co-conspirator who has pleaded guilty pursuant to a coopera-tion agreement with the Government. Lewis, a formeremployee of the Wall Street hedge fund Omega Advisors,

8

Inc., learned in early 1998 that Kozeny had entered into acorrupt financial relationship with the Azeri Officials thatgave those officials a personal financial incentive topermit Kozeny’s successful participation in the privatiza-tion of SOCAR, and Lewis imparted this information toPinkerton shortly thereafter. (A. 3 8, 41).

2. The Charges Against Bourke AndPinkerton

As noted above, Bourke and Pinkerton are bothcharged in two conspiracy counts: (1) Count One, whichcharges a conspiracy to violate the FCPA and the TravelAct, from in or about May 1997 to in or about 1999; and(2) Count Twenty-One, which charges money launderingconspiracy, from in or about March 1998 to in or aboutSeptember 1998. Bourke and Pinkerton are also eachcharged in a number of substantive counts, as indicated inthe following chart:

9

Ct. Def.(s) Statute Alleged Bribe/Other Appx.Conduct Dates

4 Bourke FCPA Medical and other ex- Earlypenses March

1998

5 Bourke FCPA Commissions on Aug.

Pinkertonvoucher purchases 97-

July 98

10 Bourke FCPA Medical and other ex- Maypenses 24-28,

1998

11 Bourke FCPA Medical and other ex- Sept.penses 1998

12 Bourke FCPA Two-thirds share capi- June -tal increase July

1998

15 Bourke Travel Wire transfer of $7 m. MarchAct investment 2, 1998

18 Pinkerton Travel Travel to Egypt to MayAct meet with Oily Rock 15-17,

officer and investor re: 1998AIG’s investment

19 Pinkerton Travel Wire transfer of AIG’s June 8-Act $15 m. investment 11,

1998

20 Bourke Travel Wire transfer of $1 m. JulyAct investment 10,

1998

10

Ct. Def.(s) Statute Alleged Bribe/Other Appx.Conduct Dates

22 Bourke Money Wire transfer of $7 m. Marchlaund- investment 2, 1998ering

24 Pinkerton Money Wire transfer of AIG’s June 8-laund- $15 m. investment 11,ering 1998

25 Bourke Money Wire transfer of $1 m. Julylaund- investment 10,ering 1998

26 Bourke 18 False statements in Apr. -U.S.C. interviews with an FBI May§ 1001 agent 2002

27 Pinkerton 18 False statements in Feb. -U.S.C. interviews with an FBI Mar.§ 1001 agent 2002

B. The Foreign Evidence Requests And TheSuspension Order Under 18 U.S.C.§ 3292

During the investigation into this foreign briberyscheme, the Government submitted official requests,pursuant to treaties on Mutual Legal Assistance in Crimi-nal Matters (“MLATs”), to the Netherlands and Switzer-land. On October 29, 2002, the Department of Justice’sOffice of International Affairs (“OIA”) submitted anMLAT request to the Netherlands (the “NetherlandsMLAT”) seeking, among other things, bank accountrecords from Dutch banks that received wire transfers for

11

the benefit of third parties and on behalf of an Azerigovernment official. (A. 97). On January 13, 2003, OIAsubmitted an MLAT request to Switzerland (the “SwissMLAT”) requesting, among other things, (1) records ofbank accounts held by Oily Rock, Minaret, and certainAzeri officials; and (2) that a search be conducted of theSwiss law firm that represented Kozeny in the Azeriinvestment. (A. 98-99).

On July 21, 2003, the Government applied for an orderunder 18 U.S.C. § 3292 (“Section 3292”) suspending therunning of the statute of limitations based on these MLATrequests. (A. 84-101). As discussed in greater detail below,Section 3292 permits the United States, “before return ofan indictment,” to make an application to the district court“indicating that evidence of an offense is in a foreigncountry,” and to seek an order to “suspend the running ofthe statute of limitations for the offense.” 18 U.S.C.§ 3292(a). The district court from whom the order issought must “find[] by a preponderance of the evidencethat an official request has been made for such evidenceand that it reasonably appears, or reasonably appeared atthe time the request was made, that such evidence is, orwas, in such foreign country.” Id. The suspension begins“on the date on which the official request is made andend[s] on the date on which the foreign court or authoritytakes final action on the request,” 18 U.S.C. § 3292(b), butcannot exceed three years, 18 U.S.C. § 3292(c).

On July 22, 2003, the Honorable George B. Daniels,United States District Judge, granted the suspension order(the “July 22, 2003 Order”), finding, as the statute re-quires, that “[i]t reasonably appears, and reasonably

12

appeared at the time the official requests were made,that . . . evidence is, or was” in the Netherlands andSwitzerland. (A. 102). The July 22, 2003 Order thereforesuspended the statute of limitations for all offenses underinvestigation, including conspiracy, FCPA violations,Travel Act violations, and money laundering. (A. 103).The July 22, 2003 Order further specified that the periodsof suspension “shall begin on the dates on which theofficial requests were made” and end upon the earlier ofthe date the Netherlands and Switzerland took final actionon the requests, or three years. (A. 104).

Swiss authorities produced documents in response tothe Swiss MLAT on several occasions, the last of whichwas September 10, 2004. (SPA 8). Dutch authoritiesproduced documents responsive to the Netherlands MLATon November 8, 2005. (SPA 8).

C. The Motions To Dismiss

On October 20, 2006, Bourke and Pinkerton made anumber of pretrial motions, including a motion to dismissall but the false statements counts on statute of limitationsgrounds pursuant to Rule 12 of the Federal Rules ofCriminal Procedure. In their statute of limitations argu-ments, Bourke and Pinkerton claimed that Section 3292does not permit the revival of an already expired limita-tions period, and therefore that the counts for which thestatute had run by the time the Government applied for thesuspension order were out of time! They relied principally

* On this basis, Bourke argued for dismissal ofCounts 4, 5, 10, 12, 15, 20, 22, and 25, all of which

13

on the language of Section 3292 for their contentions (1)that only a court order, not the Government’s officialrequest for foreign evidence, can trigger a suspension ofthe statute of limitations; and (2) that a district courtcannot “suspend” a limitations period that has already run.In particular, they pointed to subsection (a)(1) of Section3292, which states that it is the district court that suspendsthe “running” of the statute, and argued that any suspen-sion must therefore occur while the statute is still running.They further argued that subsection (b) of Section 3292simply discusses the duration of the suspension assumingthe requirements of subsection (a)(1) are met. They alsoargued that the legislative history of Section 3292 sup-

charged substantive offenses alleging conduct that con-cluded by July 22, 1998, or more than five years prior tothe July 22, 2003 Order. Bourke did not move for dis-missal on this basis of the two conspiracy counts (CountsOne and Twenty-One), which are alleged to have contin-ued beyond July 1998, or of Count Eleven, a substantiveFCPA violation which is alleged to have occurred inSeptember 1998.

Pinkerton went one step further than Bourke, arguingthat the two conspiracy counts were also outside the statuteof limitations as to him — despite the fact that one ofthese conspiracies (charged in Count One) is alleged tohave ended in 1999 and the other (charged in CountTwenty-One) in September 1998 — because his allegedparticipation in the conspiracies ended with AIG’s wiringof its investment monies in June 1998. Pinkerton, how-ever, did not argue that he withdrew from the conspiracies.

14

ported their claims, and that the court was required toaccept their argument to avoid due process and ex postfacto problems with the application of Section 3292. *

On January 18, 2007, the Government opposed thedefendants’ motions. The Government argued, amongother things, that the statute of limitations was properlytolled for all of the non-false statements counts becauseSection 3292 expressly permitted the tolling of the statuteat any time after the foreign evidence had been sought, butprior to the return of an indictment. Accordingly, since theGovernment sought a Section 3292 order prior to thereturn of the Indictment, and since the Netherlands did notproduce documents until more than three years after theNetherlands MLAT was submitted, the Government wasentitled to the full three-year suspension of the limitationsperiod under Section 3292.

The Government maintained, in particular, that theonly two cases to have specifically addressed this issue,United States v. Bischel, 61 F.3d 1429 (9th Cir. 1995) andUnited States v. Neill, 940 F. Supp. 332 (D.D.C. 1996),fully supported the Government’s position. The Govern-

* In addition to their challenge to the retrospectiveapplication of Section 3292, both Bourke and Pinkertonraised other attacks on the validity of the suspension orderand its length, and on the Government’s refusal to producein discovery the Netherlands and Swiss MLATs on thegrounds that those MLATs revealed investigative workproduct. The District Court, however, either rejected or didnot reach these arguments (SPA 32-35), and therefore theyare not at issue in this appeal.

15

ment also pointed out that the cases holding that an officialrequest for evidence from a foreign country tolls thestatute of limitations were consistent with Congress’sintent in enacting Section 3292 — to allay the difficultiesprosecutors face in obtaining evidence overseas. TheGovernment further argued that the Ex Post Facto Clausewas not at issue, since that clause prohibits laws thatretrospectively disadvantage defendants, and Section 3292is not a new law, having been enacted in 1984. TheGovernment pointed out that the Due Process Clause wasinapplicable because it does not guarantee any specificstatute of limitations.

D. The District Court’s June 21, 2007Opinion And Order

On June 21, 2007, Judge Scheindlin issued an Opinionand Order (the “6/21/07 Order”) granting the defendants’motions to dismiss on statute of limitations grounds andfinding all but the false statements counts against them tobe time-barred. (SPA 1-44). The District Court held thatthe Government is not entitled to any suspension of thestatute of limitations under Section 3292 when the Gov-ernment obtains a Section 3292 order after the relevantlimitations period has already expired.*

* On July 5, 2007, the Government moved forreconsideration of the 6/21/07 Order with respect to threecounts for which the statute of limitations had not run bythe time of the July 22, 2003 Order and therefore shouldnot have been deemed untimely even under the DistrictCourt’s reading of Section 3292: (1) Count One, conspir-acy to violate the FCPA and the Travel Act, which alleges

16

Judge Scheindlin initially noted that she was “stronglyinclined to agree with defendants that the plain meaning ofthe statute’s provision that ‘the district court . . . shallsuspend the running of the statute of limitations’ isunambiguous and requires that the application to the courtbe made and the court’s order be issued before the statuteof limitations has run.” (SPA 25-26) (italics in original).However, Judge Scheindlin also observed — as theGovernment had argued — that the language in the statute“‘[u]pon application of the United States, filed beforereturn of an indictment’ . . . implies that the only timerestraint placed on the government’s application to thecourt is that it must be made before the grand jury returnsthe indictment.” (SPA 26) (quoting 18 U.S.C. §3292(a)(1)) (emphasis in original). Concluding that thetwo clauses, “suspend the running of the statute of limita-tions” and “before return of an indictment,” were “intension,” the District Court found that Section 3292 isambiguous and turned to the legislative history for guid-ance on its interpretation. (SPA 26).

In Judge Scheindlin’s view, the legislative history ofSection 3292, although “sparse,” supported the defen-

overt acts in the fall of 1998 and the early part of 1999; (2)Count Eleven, which alleges a substantive FCPA violationin September 1998; and (3) Count Twenty-One, whichcharges a money laundering conspiracy that is alleged tohave continued into September 1998. On July 16, 2007,the District Court issued a Memorandum Opinion andOrder agreeing with the Government and reinstating thesethree counts. (SPA 47-50).

17

dants’ arguments because it “twice refers to the authorityof the court to order the suspension” of the limitationsperiod. (SPA 26-27). These references, the District Courtconcluded, “reinforce[d] the principle that only courtaction will toll the statute of limitations.” (SPA 27). JudgeScheindlin went on to find that subsection (b) of Section3292, which provides that the toll shall begin on the datethe official request is made, simply addresses the calcula-tion of the tolling period but not the question of whetherthe Government can obtain a toll in the first place. (SPA27). In sum, Judge Scheindlin held that “the words of thestatute itself, another subsection of the statute and thelegislative history of the statute all confirm that section3292 only permits a court to suspend the running of thestatute of limitations when the Government applies for andobtains a suspension order prior to the expiration of thelimitations period.” (SPA 28).

Judge Scheindlin also concluded that the policy ofstatutes of limitations and the doctrine of constitutionalavoidance supported her reading of Section 3292. (SPA28-30). As to the former policy, Judge Scheindlin empha-sized that limitations periods encourage prompt investiga-tion of suspected criminal activity by law enforcement andensure the repose of society and the protection of putativedefendants. (SPA 28). As to the latter, the District Courtfound that reading the statute as the Government suggested“would permit section 3292 to be used as a tool to revivetime-barred offenses and would treat the legislatively-mandated court procedure as a post-hoc judicial rubber-stamp for prosecutorial actions.” (SPA 29). This, in turn,“would raise several serious constitutional questions ofDue Process and retroactivity under the Ex Post Facto

18

Clause.” (SPA 29). The District Court indicated that it wasavoiding these questions by adopting a construction ofSection 3292 that saved it from a “potentially meritoriousattack on constitutional grounds.” (SPA 29-30).

Finally, Judge Scheindlin acknowledged that two othercourts considering the same situation in Bischel and Neill

had reached the opposite conclusion, but stated that “acareful review of both decisions reveals that those courtsdid not engage in any meaningful analysis of the statute,nor did they engage in any review of the legislative his-tory.” (SPA 30). Judge Scheindlin criticized those cases asemploying “analyses [that] began and ended with arecitation of section 3292(b)’s decree that the period ofsuspension ‘shall begin on the date on which the officialrequest is made’ . . . [and that] either conflated sections3292(a)(1) and 3292(b) or ignored section 3292(a)(1)altogether to reach their result. ” (SPA 30). *

Summary Of Argument

The District Court erred in its analysis of Section 3292because the plain language of that provision only requiresthat an application by the Government to toll the statute oflimitations be filed before the return of an indictment. See

18 U.S.C. § 3292(a). The District Court’s statutory

* The District Court rejected the other argumentsraised in the defendants’ motions to dismiss, includingtheir contentions that the Indictment did not adequatelyplead FCPA and related violations and that the FCPAsubstantive counts did not plead the requisite mens rea.

(SPA 35-43).

19

construction thus reads this timing provision out of Section3292 and replaces it with a different limitation, notcontained in the plain language of the statute — that theGovernment must apply for a suspension before theexpiration of the un-tolled statute of limitations. Therefore,the District Court’s June 21, 2007 Order violates thecannons of statutory construction that every word of astatute is to be given operative effect, that no provisionshould be rendered superfluous, and that Congress ispresumed to have said what it meant in the language of astatute. The District Court’s statutory construction alsogives short shrift to another provision in Section 3292,which states that the court-ordered toll begins on the datethe Government makes its official request for foreignevidence. Thus, when Section 3292 is read as a whole, itis clear that the District Court wrongly dismissed numer-ous counts in the Indictment as untimely filed, because theGovernment was permitted to seek an order extending thelimitations period at any time before the Indictment wasreturned, and to have that extension apply retrospectivelyto the date the foreign evidence was first requested.

In addition to these errors, the District Court’s analysisfails to give effect to the clear policy behind Section 3292,as reflected in the legislative history, to aid prosecutors inovercoming the timing difficulties that arise in cases suchas this one with evidence held in foreign countries.Finally, the District Court improperly concluded thatretroactive application of a Section 3292 toll is bothinconsistent with the general policy of statutes of limita-tion and subject to meritorious constitutional attack.

20

A R G U M E N T

The District Court Erroneously Held That ASuspension Of The Statute Of Limitations

Under 18 U.S.C. § 3292 Must Be Prospective

The holding of the District Court that a Section 3292order can only operate prospectively — that is, before thestatute of limitations has expired — construes the languageof Section 3292 in an incomplete manner, is inconsistentwith Congress’s purpose in enacting Section 3292, andsquarely contradicts the only reported cases to address thisvery issue. Accordingly, the 6/21/07 Order should bereversed.

A. Applicable Legal Principles

1. Relevant Principles Of StatutoryConstruction

This Court reviews a district court’s statutory interpre-tation de novo. See United States v. Rood, 281 F.3d 353,355 (2d Cir. 2002) (issues of statutory interpretationreviewed de novo); United States v. Koh, 199 F.3d 632,636 (2d Cir. 1999) (same).

Generally, statutory construction “must begin with thelanguage employed by Congress and the assumption thatthe ordinary meaning of that language accurately expressesthe legislative purpose.” United States v. Albertini, 472U.S. 675, 680 (1985) (quoting Park ‘N Fly v. Dollar Parkand Fly, Inc., 469 U.S. 189, 194 (1985)). Where thestatute’s language is “plain, ‘the sole function of the courtsis to enforce it according to its terms.’” United States v.Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989)

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(quoting Caminetti v. United States, 242 U.S. 470, 485(1917)); see also Connecticut National Bank v. Germain,503 U.S. 249, 253-54 (1992) (“We have stated time andagain that courts must presume that a legislature says in astatute what it means and means in a statute what it saysthere.”).

Moreover, statutory enactments should be read so as“to give effect, if possible, to every clause and word of astatute.” Duncan v. Walker, 533 U.S. 167, 174 (2001)(quoting United States v. Menasche, 348 U.S. 528, 538-39(1955)); see also United States v. Nordic Village, Inc., 503U.S. 30, 36 (1992) (noting “settled rule that a statute must,if possible, be construed in such a fashion that every wordhas some operative effect”); United States v. Anderson, 15F.3d 278, 283 (2d Cir. 1994) (“[C]ourts will avoid statu-tory interpretations that render provisions superfluous.”)(citations omitted). The Supreme Court has described thisrule as a “cardinal principle of statutory construction.”Williams v. Taylor, 529 U.S. 362, 404 (2000). Finally, “astatute is to be read as a whole . . . since the meaning ofstatutory language, plain or not, depends on context.” Kingv. St. Vincent’s Hospital, 502 U.S. 215, 221 (1991).

However, where the text of the statute itself is notclear, a court should consult the legislative history, todiscern “the legislative purpose as revealed by the historyof the statute.” Concrete Pipe & Prods. of Cal. v. Constr.Laborers Pension Trust, 508 U.S. 602, 627 (1993). If thisexamination reveals that Congress’s intent is clear, a courtmust give effect to that intent, barring statutory languagethat prohibits that result. Johnson v. United States, 529U.S. 694, 710 n.10 (2000) (citations omitted). As a

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corollary to this rule, a statute that is part of a larger actshould be read in the context of the purpose behind the act.See United States v. Pacheco, 225 F.3d 148, 154 (2d Cir.2000) (“The ‘whole act’ rule of statutory constructionexhorts us to read a section of a statute ‘not in isolationfrom the context of the whole Act’ but to ‘look to theprovisions of the whole law, and to its object and pol-icy.’”) (quoting Richards v. United States, 369 U.S. 1, 11(1962)).

2. Section 3292

Section 3292 provides in pertinent part as follows:

(a)(1) Upon application of the UnitedStates, filed before return of an in-dictment, indicating that evidence ofan offense is in a foreign country, thedistrict court before which a grandjury is empaneled to investigate theoffense shall suspend the running ofthe statute of limitations for the of-fense if the court finds by a prepon-derance of the evidence that an offi-cial request has been made for suchevidence and that it reasonably ap-pears, or reasonably appeared at thetime the request was made, that suchevidence is, or was, in such foreigncountry.

* * *

(b) Except as provided in subsection (c)of this section, a period of suspen-

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sion under this section shall begin onthe date on which the official requestis made and end on the date onwhich the foreign court or authoritytakes final action on the request.

(c) The total of all periods of suspensionunder this section with respect to anoffense –

(1) shall not exceed three years . . . .

18 U.S.C. § 3292. “Official requests” include lettersrogatory, requests under treaties or conventions, or anyother request for evidence made by the Government “to acourt or other authority of a foreign country.” 18 U.S.C. §3292(d).

a. The Legislative History Of Section3292

Section 3292 was enacted as part of the Comprehen-sive Crime Control Act of 1984 (the “Act”). See H.R. Rep.No. 98-907 (1984), reprinted in 1984 U.S.C.C.A.N. 3578.The stated “Purpose” of the legislation in the House ofRepresentatives Report (the “House Report”) was, in part,to “extend statute of limitation . . . deadlines when evi-dence located in foreign countries must be obtained.” Id. at2. Another section of the House Report entitled “Back-ground and Need for the Legislation” further explained therationale behind Section 3292 as follows:

The use of offshore banks to launder theproceeds of criminal activities and to evade

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taxes has become an increasing problem forfederal prosecutors. . . .

Once funds are traced to offshore banks,federal prosecutors face serious difficultiesin obtaining records from those banks inboth the investigative and trial stages of aprosecution. These difficulties are multi-plied, of course, if banks in more than oneforeign country are involved.

The procedures that must be undertaken inother countries in order to obtain the recordsgenerally take a considerable period of timeto complete. Those procedures frequentlypermit the defendant to contest the UnitedStates prosecutors’ request for the records,and often involve several levels of re-view. . . .

Deputy Assistant Attorney General Mark M.Richard, in testimony before the Subcom-mittee on Criminal Justice, illustrated thedifficulties confronting federal prosecutors.He cited the example of a prosecution thatrequired records located in Switzerland andthree other countries. The procedures neces-sary to get records in Switzerland took some26 months to complete and included a for-mal request to the Swiss central authority,an appeal to the Swiss federal court, and anappeal to a special “consultative” commis-sion. . . .

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The delays attendant in obtaining recordsfrom other countries create . . . statute oflimitation . . . problems. If the records areessential to the bringing of charges, thedelay in getting the records might preventfiling an information or returning an indict-ment within the time period specified by therelevant statute of limitation.

Id. at 2-3.

The House Report additionally stated that “[s]ubsection(a)(1) [of Section 3292] . . . authorizes a federal court,upon application of a federal prosecutor that is madebefore the return of an indictment and that indicates thatevidence of an offense is located in a foreign country, tosuspend the running of the applicable statute of limita-tion.” Id. at 7. The Report also advises that “[s]ubsection(b) provides that any suspension of the statute of limita-tions ordered by the court begins on the date when theofficial request was made by the United States to theforeign country . . . .” Id.

b. Relevant Case Law

The only two reported decisions to have squarelyaddressed the issue presented by this appeal, in identicalfactual circumstances, have both agreed with the positiontaken by the Government in the District Court and in thisappeal — that the statute of limitations for offenses underinvestigation is tolled from the date of the Government’sofficial request for evidence from a foreign country, andnot from the date of the district court’s order granting a

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Section 3292 application. See United States v. Bischel, 61F.3d 1429 (9th Cir. 1995); United States v. Neill, 940 F.Supp. 332 (D.D.C. 1996), vacated in part on reconsidera-tion on other grounds, 952 F. Supp. 831 (D.D.C. 1996).See also United States v. Fraser, 834 F.2d 911, 914 n.4(11th Cir. 1987) (noting that in Section 3292, “Congressprovided that an official request for evidence located in aforeign country tolls the statute of limitations.”).

In Bischel, the defendant moved to dismiss the indict-ment, arguing, as the defendants do here, that a suspensionof the limitations period had to be marked from the datethe Section 3292 order was issued, not from the date of theofficial request to the foreign government. See 61 F.3d at1432, 1434. On appeal of the district court’s denial of thatmotion, the Ninth Circuit affirmed, holding that:

[A] § 3292 order suspending the running ofthe statute of limitations speaks as of thedate the official request is made, not whenthe order suspending the statute is entered,and that to begin the period of suspensionwhen the letters rogatory are issued does notrun afoul either of the Ex Post Facto Clauseor of Bischel’s right to due process.

Id. at 1431-32. Examining the language of Section 3292 asa whole, the Ninth Circuit observed that Section 3292(b)unambiguously states that the suspension period “shallbegin on the date on which the official request is made”;that Section 3292(a)(1) requires a district court “to findthat an official request ‘has been made’ before entering”a Section 3292 suspension order; and that, therefore, “the

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statute plainly contemplates that the starting point fortolling . . . is the official request for evidence, not the datethe § 3292 motion is made or granted.” Id. at 1434. TheBischel court also relied on United States v. Miller, 830F.2d 1073 (9th Cir. 1987), in support of its holding. InMiller, the Ninth Circuit observed that Section 3292“specifies the only relevant time the application [fortolling] must be made: ‘before return of an indictment.’”Id. at 1076 (quoting 18 U.S.C. § 3292(a)(1)); * accord

* In Miller, the Government applied for a Section3292 suspension order after it had received evidence fromthree different countries. See 830 F.3d at 1075. Thedefendant challenged the timing of the Government’sapplication, arguing that it must be made while the evi-dence is still abroad. Id. at 1076. The Ninth Circuit,however, soundly rejected this claim, holding that “[t]hestatute makes better sense if it is read as three districtjudges here have construed it to let the government file theapplication after it has sifted the foreign evidence sought.”Id.; but see United States v. Atiyeh, 402 F.3d 354, 362-63(3d Cir. 2005) (interpreting the first sentence of§ 3292(a)(1) and finding that because the Governmentmust indicate in its application that the evidence “is” in aforeign country, the Government must file its applicationwith the grand jury judge before “it has received allrequested foreign evidence from foreign authorities”). Inthis case, the Government’s application was made wellbefore the evidence sought from Switzerland and theNetherlands was produced, so the issue in Miller andAtiyeh is not presented here.

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United States v. Trainor, 277 F. Supp. 2d 1278, 1282(S.D. Fla. 2003) (“Aside from requiring an application ormotion to be filed prior to the return of the indictment, §3292 places no time limits on when the application ormotion must be submitted.”).

The Bischel court also rejected the defendant’s consti-tutional challenges to Section 3292. The Ninth Circuitfound Bischel’s Ex Post Facto challenge without merit;inasmuch as Section 3292 was enacted as part of theComprehensive Crime Control Act of 1984, there was nonew statute at issue which “purport[ed] to revive a limita-tions period after it ha[d] run.” Bischel, 61 F.3d at 1434.Rather, the court noted that “it isn’t a new statute that isthe culprit, but its judicial application.” Id. Bischel alsomade a Due Process argument, contending that Section3292 took away “his right to a fixed statute of limitationsand remove[d] the predictability of a specific time limitbeyond which he could not be prosecuted.” Id. The NinthCircuit turned aside this claim as well, observing thatBischel “fail[ed] to locate the source of any right to a fixedperiod of limitations.” Id. at 1434-35. In sum, the NinthCircuit in Bischel squarely rejected the argument that a “§3292 order cannot revive or extend an expired period oflimitations.” Id. at 1434.

The District Court in United States v. Neill followedthe holding of Bischel. There, the Government applied fora Section 3292 order after the un-tolled statute of limita-tions would have expired on four counts of the indictment,and the defendants moved to dismiss those four counts onthe grounds that Section 3292 could not revive an expired

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statute of limitations. Neill, 940 F. Supp. at 335-36. TheDistrict Court turned aside this argument, holding that “thestatutes of limitations were tolled by the official request toa foreign government, not by the government’s applicationto the Court.” Id. at 336. The Neill court relied not solelyon Bischel but also on (1) the language in Section 3292(a)that the Government need only apply for a toll “beforereturn of an indictment”; and (2) the holding in UnitedStates v. Miller, 830 F.2d at 1076, that this is the onlylanguage in the statute specifying when a Section 3292application must be made. See Neill, 940 F. Supp. at 336.

B. Discussion

Measured against the above principles of statutoryconstruction, the legislative history of Section 3292, andthe decisions of the only two courts to have considered thisexact issue, the District Court’s construction of Section3292 was erroneous. The 6/21/07 Order disregards keyprovisions of the statute, contravenes the policy underlyingSection 3292, and wrongly concludes that retrospectiveapplication of Section 3292 is inconsistent with thegeneral policy behind statutes of limitations and raisesconstitutional concerns.

1. The District Court WronglyDisregarded Key Provisions OfSection 3292

As an initial matter, the 6/21/07 Order effectivelyeviscerates key words and clauses from Section 3292, thusviolating the fundamental tenet of statutory constructionthat a court should strive to give every word operative

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effect. See Duncan, 533 U.S. at 174; Nordic Village, Inc.,503 U.S. at 36. Most notably, the District Court gives shortshrift to the first clause of Section 3292(a)(1) — “Uponapplication of the United States, filed before return of anindictment” — which is manifestly the only part of Section3292 to discuss the timing of the Government’s applica-tion for a toll of the limitations period. See Miller, 830F.2d at 1076; Trainor, 277 F. Supp. 2d at 1282. TheDistrict Court acknowledged that the statute implies “thatthe only time restraint placed on the government’s applica-tion . . . is that it must be made before the grand juryreturns the indictment,” (SPA 26), but then proceeded toignore this fact in focusing on an inference that it drewfrom the clause “suspend the running of the statute oflimitations.” (SPA 26-27).

The District Court’s analysis is wrong for at least tworeasons. First, the analysis renders superfluous the onlyrequirement in the statute concerning when a Section 3292application must be made. See Anderson, 15 F.3d at 283(courts should not interpret statutes in such a way thatrenders parts of them superfluous). Congress set forth thisdeadline prominently in the very first sentence of thestatute, and, significantly, did not provide any otherdeadline or limitation for the filing of a Section 3292application. As the Supreme Court emphasized inDuncan v. Walker, a court should be careful not to treat assurplusage a term that occupies a “pivotal place in [a]statutory scheme.” 533 U.S. at 174. By dismissing asinsignificant this first clause of Section 3292, JudgeScheindlin does just that.

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Judge Scheindlin’s statutory construction replaces“filed before return of an indictment” with “filed beforereturn of an indictment and before expiration of the un-tolled statute of limitations.” The District Court thuseffectively grafts new language onto the statute, therebyviolating the principle that “courts must presume that alegislature says in a statute what it means and means in astatute what it says there.” Connecticut National Bank, 503U.S. at 253-54. Had Congress intended to require theGovernment to file its application before the un-tolledlimitations period expired, it easily could have said so.Instead, by specifying that the Government must make itsapplication for a Section 3292 suspension prior to indict-ment, Congress implicitly found that there would be casesin which prosecutors would have to file their applicationafter the original statute of limitations had expired. Seealso Section 2, infra.

Second, there is nothing in the language of Section3292 or the structure of the statute to suggest that thedistrict court’s order suspending the running of the statuteof limitations cannot be retrospective. To the contrary,other parts of the statute, which the District Court’sanalysis completely ignores, further support the view thata court-ordered suspension of the limitations period is alook-back provision, rather than a prospective one. SeeKing v. St. Vincent’s Hospital, 502 U.S. at 221 (noting that“the meaning of statutory language, plain or not, dependson context”). As set forth in subsection (a)(1), a districtcourt must make a finding by a preponderance of theevidence “that an official request has been made for . . .evidence [of an offense] and that it reasonably appears, or

32

reasonably appeared at the time the request was made, thatsuch evidence is, or was, in such foreign country.” 18U.S.C. § 3292(a)(1) (emphases added). In addition, andcritically, subsection (b) contains the unambiguousstatement that “a period of suspension . . . shall begin onthe date on which the official request is made,” 18 U.S.C.§ 3292(b), which contemplates a district court retrospec-tively tolling based on a valid, then-pending MLATrequest. See Bischel, 61 F.3d at 1434 (“[T]he statuteplainly contemplates that the starting point for tolling thelimitations period is the official request for evidence, notthe date the § 3292 motion is made or granted.”). There isnothing in the language of subsection (b) to suggest thatsuch a toll cannot be effective even after the limitationsperiod has run.

Nevertheless, the 6/21/07 Order exalts above all elsethe clause “suspend the running of the statute of limita-tions.” The District Court found that this clause “impliesthat in order for there to be a suspension the statute oflimitations must still be running at the time that both theapplication is made and the court grants the application.”(SPA 26) (emphasis in original). At the outset, thelynchpin of the District Court’s decision is thus an infer-ence drawn from the language of the statute, as opposed tothe plain language of Section 3292 itself, which groundsthe decisions in Bischel and Neill (as well as the Govern-ment’s argument here). In any event, that the statute usesthe word “running” to refer to the statute of limitations —a generic usage at best — should not be interpreted tomean that the Government must apply for a Section 3292order by some defined cut-off date. In fact, contrary to the

33

District Court’s decision, other parts of the statute plainlycontemplate retroactive suspension, and, to the extentthere is ambiguity, the policy behind Section 3292 sup-ports retrospective application of the statute. See Section2, infra. Moreover, as discussed above, the District Court’sstatutory construction fails to give operative effect toperhaps the clearest clause in Section 3292 of all: that theGovernment apply for a toll before the indictment isreturned. See 18 U.S.C. § 3292(a)(1).

In sum, the better reading of Section 3292 is that itcontemplates a court looking back to the Government’srequest for foreign evidence as the date on which thetolling the of the statute of limitations begins, so long asthe order is sought before the indictment is returned. Thisreading not only makes sense in terms of the plain mean-ing of the statute but also is the reading adopted by theonly two published opinions to have previously examinedthis question, Bischel and Neill.*

* The 6/21/07 Order brushed aside Bischel and Neillas not having engaged in any meaningful analysis of thelanguage of Section 3292. (SPA 30). This is wrong — asimple reading of these cases demonstrates that the courtsexamined the relevant statutory language in reaching theirconclusions. See Bischel, 61 F.3d at 1434; Neill, 940 F.Supp. at 336.

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2. The District Court’s StatutoryConstruction Contravenes The PolicyUnderlying Section 3292

Retrospective tolling under Section 3292 is not onlyconsistent with the language of the statute, but it also isfully consistent with the policy behind the statute asreflected in its legislative history. As set forth above atpages 23 to 25, in enacting Section 3292, Congress wasconcerned with easing the burden on prosecutors whooften experience significant delays when they seek tosecure foreign evidence by way of MLATs or other means.In the 6/21/07 Order, Judge Scheindlin acknowledged that,given the tension between the “suspend the running of thestatute of limitations” clause and the “before return of anindictment” clause of Section 3292, it was necessary toconsult the legislative history. (SPA 26). However, theonly portion of the legislative history that the DistrictCourt consulted was the Section-by-Section analysis,which simply recounted the substance of the statutorylanguage of Section 3292 but did not provide any discus-sion of the underlying rationale behind that provision.(SPA 26-27) (quoting H.R. Rep. No. 98-907, at 7 (1984),reprinted in 1984 U.S.C.C.A.N. 3578, 3578)). Thatunderlying rationale — discussed in greater detail below— is fully consistent with the Government’s reading ofSection 3292 that it allows for court-ordered retrospectivetolling.

In particular, the following language in the “Back-ground and Need for the Legislation” section of the HouseReport supports retrospective application of Section 3292:

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The delays attendant in obtaining recordsfrom other countries create . . . statute oflimitation . . . problems. If the records areessential to the bringing of charges, thedelay in getting the records might preventfiling an information or returning an indict-ment within the time period specified by therelevant statute of limitation.

H.R. Rep. No. 98-907 at 2-3 (1984), reprinted in 1984U.S.C.C.A.N. 3578 (emphasis added). The italicizedportion quoted above demonstrates Congress’s concernthat a statute of limitations would have already run by thetime the Government obtained critical foreign evidence,thereby hampering the Government’s ability to prosecutecases involving offshore conduct.

Indeed, this language in the legislative history suggeststhat the tolling provisions of Section 3292 would apply toa situation such as the following: a prosecutor makes anMLAT request at a very early stage of an investigation butis unsure, at the time of the request, whether there will beany prosecution at all, much less who will be charged andwith what offense or offenses. The foreign records soughtby the prosecutor will be determinative in that regard, or“essential to the bringing of charges” as the House Reportphrases the issue. At the time the prosecutor makes theMLAT request, it is premature to seek a tolling underSection 3292 because it is unclear whether there will beany prosecution and what offenses need to be tolled. Theforeign government ultimately produces documents thatprove dispositive to the decision to prosecute. However,

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the foreign government produces the materials so late thatthe statute of limitations expires on some or all of theoffenses at issue. Put simply, under the District Court’sholding, such a prosecution could never be broughtbecause the Section 3292 application would be late and thetoll would be invalid. Such a result appears directly inconflict with Congress’s intent in enacting Section 3292and, in particular, not in keeping with Congress’s expressconcern that “the delay in getting the [foreign] recordsmight prevent filing an information or returning an indict-ment” within the limitations period. H.R. Rep. No. 98-907at 2-3.

Accordingly, the legislative history reflects Congress’srecognition of the difficulties facing prosecutors who needforeign evidence to make their cases and of the fact thatprosecutors would at times have to file their applicationfor a Section 3292 order after the original statute oflimitations had expired. The District Court’s failure toaddress or consider these aspects of the legislative historywas erroneous. See Pacheco, 225 F.3d at 154 (statutorysection must be read in the context of the whole act ofwhich it is a part, and the object and policy behind thatAct).

3. The District Court’s Policy AndConstitutional Concerns WithRetrospective Application Of Section3292 Are Unfounded

The District Court stated in the 6/21/07 Order that itsreading of Section 3292 was “in line with the generalpolicy underlying statutes of limitations,” namely, encour-

37

aging prompt investigation by law enforcement andprotecting the defendants’ right to a fair trial throughensuring a predictable point beyond which a defendant canknow that he will not be prosecuted. (SPA 28-29). Yetthere is nothing about retrospective tolling by a districtcourt that is inconsistent with encouraging prompt investi-gation by law enforcement. To the contrary, Congresspassed Section 3292 precisely because it was concernedthat investigations are often delayed, through no fault oflaw enforcement, when foreign records are involved,particularly in more than one country as was the case here.See H.R. Rep. No. 98-907 at 2-3 (1984), reprinted in 1984U.S.C.C.A.N. 3578. As to the defendant’s interests inpredictability, that interest is not affected by whether ornot a judge grants a Section 3292 tolling prospectively orretrospectively, for either way, the Section 3292 order isobtained on an ex parte basis without the defendantknowing of the order. United States v. Wilson, 249 F.3d366, 371 (5th Cir. 2001); United States v. DeGeorge, 219F.3d 930, 937 (9th Cir. 2000); United States v. King, No.98-CR-91A, 2000 WL 362026, at *20-21 (W.D.N.Y.March 24, 2000); but see In Re Grand Jury Investigation,3 F. Supp. 2d 82, 83 (D. Mass. 1998) (holding that theGovernment could not apply for a Section 3292 order onan ex parte basis). The District Court’s emphasis on thisfactor was therefore misplaced.

The 6/21/07 Order also wrongly concludes that theGovernment’s reading of Section 3292 would raise seriousconstitutional questions under the Due Process and ExPost Facto Clauses. (SPA 29). First, the Ex Post FactoClause prohibits laws that retrospectively disadvantage a

38

defendant. United States v. Keller, 58 F.3d 884, 889 (2dCir. 1995) (citations omitted). Here, there is no new law atissue. As described above, Section 3292 was enacted aspart of the 1984 Comprehensive Crime Control Act, andtherefore was in effect well before the alleged criminalconduct in the Indictment. See Bischel, 61 F.3d at 1434(rejecting ex post facto challenge to Section 3292).Because there is no new law at issue, the principal case onwhich the defendants relied below, Stogner v. California,539 U.S. 607 (2003), is inapposite. That case involved anex post facto challenge to a statute that created a newlimitations period, whereas here, there is no “new statutethat is the culprit, but its judicial application.” Bischel, 61F.3d at 1434.

The Due Process Clause, similarly, is inapplicablebecause that Clause does not “guarantee any specificstatute of limitations scheme as such specifics are withinthe discretion of the legislature.” United States v. King,2000 WL 362026, at *21 (citing, among other cases,Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314(1945), and turning aside a due process challenge toSection 3292); accord Bischel, 61 F.3d at 1434-35 (reject-ing a due process challenge to Section 3292 based on theargument that its application revived an expired limitationsperiod); see also Chase Securities Corp., 325 U.S. at 304(protection of statutes of limitations “has never beenregarded as what now is called a ‘fundamental’ right,” butis instead “good only by legislative grace and . . . subjectto a relatively large degree of legislative control”).

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Accordingly, the reading of Section 3292 advanced bythe Government, which is in keeping with the plainstatutory text and the policies behind the statute, raises noconstitutional concerns.

* * *

For all of the foregoing reasons, the District Courtwrongly construed Section 3292. It improperly disregardedthe only provisions in the statute setting forth when theGovernment must apply for a toll, and it failed to considerthat the statutory terms, read as a whole, contemplateretrospective tolling. The District Court’s analysis imposesa burden on prosecutors in cases involving foreign recordsthat the statute does not contemplate and that Congress, inenacting Section 3292, was actually concerned withavoiding. For all of these reasons, the 6/21/07 Order waserroneous and should be reversed.

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CONCLUSION

The District Court’s June 21, 2007 Opinionand Order dismissing most of the counts of theIndictment should be reversed.

Dated: New York, New YorkAugust 21, 2007

Respectfully submitted,

M ICHAEL J. GARCIA,

United States Attorney for theSouthern District of New York,Attorney for the United States

of America.

JONATHAN S. ABERNETHY,

JONATHAN S. KOLODNER,

Assistant United States Attorneys,ROBERTSON PARK,

Assistant Chief, Fraud Section,U.S. Department of Justice,

Of Counsel.

CERTIFICATE OF COMPLIANCE

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M ICHAEL J. GARCIA,

United States Attorney for theSouthern District of New York

By: JONATHAN S. KOLODNER,

Assistant United States Attorney

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Dated: August 21, 2007