U.S. v. Bischel

• Citation: 61 F.3d 1429
• Decision Date: 04 August 1995
• Docket Number: No. 94-50328,94-50328
• Parties: 95 Cal. Daily Op. Serv. 6172, 95 Daily Journal D.A.R. 10,555 UNITED STATES of America, Plaintiff-Appellee, v. Stephen William BISCHEL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1429

61 F.3d 1429

95 Cal. Daily Op. Serv. 6172, 95 Daily Journal

D.A.R. 10,555

UNITED STATES of America, Plaintiff-Appellee, v. Stephen William BISCHEL, Defendant-Appellant.

No. 94-50328.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 6, 19

95.

Decided Aug. 4, 1995.

Michael J. McCabe, San Diego, CA, for defendant-appellant.

Stephen W. Peterson, Asst. U.S. Atty., San Diego, CA, for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of California.

Before: WALLACE, Chief Judge, KOZINSKI and RYMER, Circuit Judges.

RYMER, Circuit Judge:

This appeal requires us to decide when there has been "final action" on an official request for evidence in a foreign country, where the court has suspended the running of the statute of limitations pursuant to 18 U.S.C. Sec. 3292. ¹

Stephen Bischel was convicted of numerous offenses arising out of "broker's crosses" on investments sold by La Jolla Trading Group, which he owned. Because these transactions involved British commodity brokers, the government requested assistance of United Kingdom authorities through letters rogatory and obtained a court order under Sec. 3292(a)(1) to suspend the running of the statute of limitations pending "final action" on the request.

Records were received pursuant to the official request at a time when the statute of limitations would normally have run on many of the offenses charged in the indictment; a Certificate of Authenticity that was also requested had not yet been received when the indictment was returned. We hold that "final action on the request" for purposes of Sec. 3292 includes all of the items requested in the letters rogatory. Since the certification had been requested but had not yet been received, the district court did not clearly err in finding that "final action" had not been taken. The statute of limitations, therefore, continued to be suspended so that none of the counts now at issue was time barred. We also conclude that a Sec. 3292 order suspending the running of the statute of limitations speaks as of the date the official request is made, not when the order suspending the statute is entered, and that to begin the period of suspension when the letters rogatory are issued does not run afoul either of the Ex Post Facto Clause or of Bischel's rights to due process.

As none of the other issues Bischel raises requires reversal, we affirm.

I

Bischel formed La Jolla Trading Group (LJTG) with codefendants Andrew Vento and Wayne Richdale in 1983. LJTG sold leveraged investments in precious metals by cold-calling prospective clients. Bischel caused most of the investors' funds to be transferred to Midelton James and C. Sturge, commodity brokers in the United Kingdom, where he also maintained secret accounts for his own benefit.

Bischel engaged in "broker's crosses" by instructing the brokers to make offsetting trades in a particular precious metal, then to unwind the trades when the market had moved a specified amount. Although the net profit or loss on the entire position was zero, the losing trade would be posted to LJTG's account at the brokerages (thus inuring to the detriment of the firm's clients), and the profitable trade would be posted to Bischel's secret accounts. Proceeds from Bischel's British accounts were funneled back to him in California in the form of cash. Bischel sold his interest in LJTG in July 1985.

After the IRS Civil Division referred tax fraud allegations to the Criminal Investigation Division in 1988, the government applied for an order issuing letters rogatory, which was granted on July 27, 1989. The request sought bank records, records of precious metals trading activity, and certification of the authenticity of the records by an English court. On motion by the government, the district court suspended the statute of limitations on November 20, 1989, pursuant to 18 U.S.C. Sec. 3292, effective as of the date the letters rogatory had been issued. The government received the requested records sometime in October, 1991, but no certification.

A 112-count indictment was returned on July 30, 1992. ² Bischel moved to dismiss on the ground that any statutes of limitations could only be suspended prospectively from the date of the Sec. 3292 order, and that in any event the limitations periods started to run again under Sec. 3292(c)(2) six months after October of 1991 when "final action"--producing the records (without certification)--was taken. Bischel's motion was also based on prejudicial preindictment delay. The district court denied the motion. The jury returned a guilty verdict on nearly all counts.

Bischel then moved for a new trial in light of newly discovered evidence that the government had been unable to verify from bank records that Bischel's girlfriend had used safety deposit boxes as she testified, and suborned perjury by putting her on the stand. The motion was denied. Bischel was sentenced to 20 years in custody, and was fined $25,000 on each count of conviction for a total of $2,350,000.

He appeals both from conviction and sentence.

II

A

Bischel first argues that the period of suspension ended six months after the government received the bank and brokerage records in October, 1991, which he asserts was "final action" pursuant to Sec. 3292(c)(2); and that the statute of limitations accordingly ran on 56 counts prior to his being indicted on July 30, 1992. Subsection (c)(2) limits the period of suspension to six months if final action is taken before the statute of limitations would otherwise expire. As Bischel sees it, the total period of suspension was at most thirty three months and three days (if counted from the date on which the letters rogatory were issued rather than the date the order suspending the statute was entered, as he prefers), thereby barring prosecution of any offense committed before October 27, 1984. The government contends that no "final action" had been taken, and the statute remained in suspense, because the certification had not been received.

Although Bischel's argument assumes that (c)(2) applies and that it has the effect of tacking six months onto the period of suspension that ends with "final action," we read the statute differently. It seems to us that by its plain language, (c)(2) applies only when "final action" is taken before the statute of limitations--untolled by a Sec. 3292 suspension order--has run. Subsection (c)(2) thus limits the time of tolling to six months when both the official request and the "final action" occur within the normal period of limitations. Here, all of the disputed counts have a five year limitations period and none of the offenses was committed after 1985. The limitations period calculated "without regard to this section," as (c)(2) provides, thus expired no later than 1990. Therefore, even if "final action" occurred when records (without certification) were received in October 1991, it did not occur before the untolled statute of limitations had run. Subsection (c)(2) is not triggered, leaving only Sec. 3292(b), which terminates a period of suspension when final action is taken, and (c)(1), which caps all periods of suspension at three years.

Bischel does not explicitly argue that the indictment fails under these provisions as well as (c)(2), but if he is correct that "final action" was taken in October 1991, the actual time of suspension would necessarily be even less than under his (c)(2) analysis, which adds six months to the Sec. 3292(b) period of suspension and assumes that the suspension remained in effect through April 30, 1992. We therefore turn to the question on which the parties focus: Whether "final action" had been taken when the records were received without certification, in October 1991, or had not been taken at all because no certification had been received when the indictment was returned in July, 1992.

"Final action" is not defined in the text of the statute. However, construing the concept of "final action" to include a dispositive response to each item set out in the official request, including a request for certification, is consistent with the statutory structure and legislative history. It also makes practical sense.

Section 3292(b) hinges the end of the period of suspension on final action by foreign authorities on "the request." The "request" referred to is the official request for "evidence of an offense" that is in a foreign country. 18 U.S.C. Sec. 3292(a)(1). "Evidence of an offense" is essentially worthless unless admissible. Admissibility turns in part on authenticity. Fed.R.Evid. 902(3). ³ Thus, certifying that primary evidence is what it purports to be is inevitably part of the "evidence of an offense" within the meaning of Sec. 3292(a)(1). We also look at legislative history here because the statutory words "final action" do not unambiguously resolve the interpretational task we face. Our construction comports with the legislative history indicating that Sec. 3292, which was passed as part of the Comprehensive Crime Control Act of 1984, P.L. 98-473, was prompted by concern both for the difficulty of obtaining records in other countries, and of admitting them into evidence. ⁴ See H.Rep. No. 98-907 98th Cong., 2d Sess. at pp. 3-4 (1984), reprinted in 1984 U.S.C.C.A.N. at pp. 3182, 3578, 3580. Finally, the interests of certainty counsel against the construction Bischel suggests. He would have us hold that "final action" takes place when the last of the records requested has been received. However, there is no ready way of knowing when the last of anything has happened. Instead, pegging "final action" to disposition, up or down, of each of the items in the official request provides a more certain benchmark by which to measure whether the action that has been taken is "final" or not.

We therefore conclude that "final action" for purposes of Sec. 3292 means a dispositive response by the foreign sovereign to both...