Court holds Application to Court for 18 USC 3292 Foreign Treaty Request Suspension Must be Made Within Statute of Limitations (2/11/12)

In United States v. Csolkovits, 2012 U.S. Dist. LEXIS 14314 (ED MI 2012), here, the defendant was charged with (1) sixteen counts of wire fraud in violation of 18 U.S.C. § 1343, (2) one count of engaging in a monetary transaction in criminally-derived property in violation of 26 U.S.C. § 1957(a), (3) one count of impeding the administration of the Internal Revenue Service ("IRS") laws in violation of 26 U.S.C. § 7212(a), and (4) one count of submitting false documents to the IRS in violation of 18 U.S.C. § 1001.

The indictment was brought more than five years after the underlying conduct for some of the counts alleging crimes with a five year statute of limitations.  The defendant raised a statute of limitations defense.   The defendant had entered a statute tolling agreement for some of the period, so that was not in issue.  What was in issue was whether the Government met the requirements for suspensions of the statutes of limitations in 18 U.S.C. § 3292 which provides for suspension in part here pertinent:

• There must be a grand jury investigation.
• Incident to the investigation, a request for information must be made to a foreign jurisdiction before the return of an indictment.
• That request to the foreign authority must be made within the otherwise applicable statute of limitations.
• The Government must apply to the district court.
• The tolling period is from the date of the request until the foreign government takes final action on the request.
• The tolling period cannot exceed the lesser of (i) three years or (ii) if the final action from the foreign authority is during the otherwise applicable statute of limitations, for more than six months.

The Government filed two requests to the Bahamian government under the Treaty on Mutual Assistance in Criminal Matters, U.S.-Bah., June 12-Aug. 18, 1987, S. Treaty Doc. No. 100-17.  The requests were for, inter alia, "bank records from the Roayl Bank of Scotland and the Royal Bank of Canada."

The key question was whether the Government must apply to the district court while the statute of limitations is otherwise open.   The Court noted that there is a conflict among the Circuits on this issue.  Some courts held that only the request must be made within the statute and that the application to the court need be made only before the indictment, even if the statute had otherwise run.  Other courts held, by statutory interpretation, that the court can suspend a statute that was still open and hence that the application to the court must be made while the statute is still open.  The Second Circuit so held in United States v. Kozeny, 541 F.3d 166, 174 (2nd Cir. 2008).  The Court in this case followed Kozeny.  The Court noted that, assuming the Government made the official request to the foreign country within the applicable statute of limitations, there was no reason that it could not have filed its application to the court in that same period.