U.S. v. Prosperi, Criminal No. 06-10116-RGS.

• Decision Date: 29 August 2008
• Docket Number: Criminal No. 06-10116-RGS.
• Citation: 573 F.Supp.2d 436
• Parties: UNITED STATES of America v. Robert PROSPERI, Gregory Stevenson, Gerard McNally, Marc J. Blais, John J. Farrar, and Keith Thomas.
• Court: U.S. District Court — District of Massachusetts

573 F.Supp.2d 436

UNITED STATES of America v. Robert PROSPERI, Gregory Stevenson, Gerard McNally, Marc J. Blais, John J. Farrar, and Keith Thomas.

Criminal No. 06-10116-RGS.

United States District Court, D. Massachusetts.

August 29, 2008.

COPYRIGHT MATERIAL OMITTED

Eugenia M. Carris, Jeffrey Mark Cohen, Anthony E. Fuller, Fred M. Wyshak, Jr., United States Attorney's Office, Boston, MA, for United States of America.

Patricia A. DeJuneas, Richard M. Egbert, Law Office of Richard Egbert, E. Peter Parker, Law Office of E. Peter Parker, Boston, MA, for Robert Prosperi.

MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS CERTAIN COUNTS OF THE SUPERSEDING INDICTMENT AS TIME-BARRED

STEARNS, District Judge.

In this case, the court is asked to determine whether the United States is presently at war, and if so, with whom. Defendants are charged with conspiracy, mail fraud, and the making of false statements in connection with the federally-financed Central Artery Tunnel Project (CA/T). Defendants' criminal acts are alleged to have begun in 1999. The indictment was returned on May 3, 2006, and superseded on June 28, 2006.¹ On June 29, 2007, defendants moved to dismiss the majority of the counts of the indictment as time-barred.² Hearings on this and a number of related motions, including evidentiary motions to suppress, were held over the fall of 2007. This is the last of the court's decisions in anticipation of trial.

BACKGROUND

The CA/T project, colloquially known as the "Big Dig," is a multi-billion dollar interstate highway construction project. The CA/T involves the building or reconstruction of nearly eight miles of highway bisecting the City of Boston, almost half of it underground. The underground segment of the project requires the construction of tunnel walls, base slabs, and roof slabs made in whole or in part from concrete. The project specifications prohibit the addition of water to the concrete after it is mixed or "batched." The specifications also require that the concrete be installed within ninety minutes of batching. To enforce compliance with the ninety-minute rule, contractors are required to submit batch reports for each truckload of delivered concrete. The reports include the date and time of the batching. Contractors are warned that knowingly submitting false reports may be punished by criminal sanctions.

Defendants are former employees of Aggregate Industries, N.E. (Aggregate), a major concrete supplier to the CA/T. Defendants are accused of recycling stale and adulterated concrete, and submitting false batch reports to conceal their fraud. Approximately 5,000 of the 500,000 concrete loads that Aggregate delivered to the CA/T are alleged to have failed to conform to contract specifications.³

DISCUSSION

Defendants contend that the acts of highway project fraud and mail fraud alleged to have been committed prior to May 3, 2001 (eighty-five counts in total), are barred by the five-year federal statute of limitations.⁴ The government, for its part, maintains that these counts are saved by the Wartime Suspension of Limitations Act (Suspension Act), 18 U.S.C. § 3287. The government argues that the Suspension Act tolled the running of the statute of limitations as of September 18, 2001, the date on which Congress authorized the use of military force against the Taliban government of Afghanistan; or alternatively, as of October 10, 2002, the date of the authorization of the use of military force in Iraq.⁵ The Suspension Act provides (with appropriate emphasis) as follows.

When the United States is at war the running of any statute of limitations applicable to any offense (1) involving fraud or attempted fraud against the United States or any agency thereof in any manner, whether by conspiracy or not, or (2) committed in connection with the acquisition, care, handling, custody, control or disposition of any real or personal property of the United States, or (3) committed in connection with the negotiation, procurement, award, performance, payment for, interim financing, cancellation, or other termination or settlement, of any contract, subcontract, or purchase order which is connected with or related to the prosecution of the war, or with any disposition of termination inventory by any war contractor or Government agency, shall be suspended until three years after the termination of hostilities as proclaimed by the President or by a concurrent resolution of Congress.

18 U.S.C. § 3287. Defendants, for their part, argue that the Suspension Act does not apply because: (1) the United States is not currently "at war" within the meaning of the Act; and even if it were, (2) the mail fraud and false statement charges do not fall within the scope of the Act because the alleged criminal acts were not related to military procurement.⁶

Neither 18 U.S.C. § 1020, nor 18 U.S.C. § 1341, contain an offense-specific statute of limitations. Consequently, the default five-year limitations period for federal criminal offenses applies. See 18 U.S.C. § 3282. The limitations period begins to run when each of the elements of an alleged offense has been satisfied. See Toussie v. United States, 397 U.S. 112, 115, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970); United States v. Walsh, 928 F.2d 7, 11 (1 st Cir.1991); United States v. Mubayyid, 567 F.Supp.2d 223, 2008 WL 2856415 (D.Mass. July 24, 2008). For false statements under § 1020, the offense is complete when a defendant presents the false statement to the government.⁷ For the crime of mail fraud under § 1341, the limitations period begins to run once the offending article—in this case, an invoice—is placed in the United States mails.⁸ Each offense under § 1020 and § 1341 is distinct. Thus, the limitations period for each offense runs separately.

Any Offense Involving Fraud Against the United States

In their initial volley, defendants contend that the Suspension Act is limited to wartime frauds and "offenses in which defrauding or attempting to defraud the United States is an essential ingredient of the offense charged." Bridges v. United States, 346 U.S. 209, 221, 73 S.Ct. 1055, 97 L.Ed. 1557 (1953). An insurmountable obstacle, however, is United States v. Grainger, 346 U.S. 235, 73 S.Ct. 1069, 97 L.Ed. 1575 (1953), holding that the Suspension Act tolled the limitations period on a decidedly unmilitary World War IIera conspiracy to defraud the Commodity Credit Corporation (CCC). The United States owned shares in the CCC, a privately-run enterprise incorporated in Delaware. The indictment alleged that defendants attempted to finagle payments for imaginary or inflated purchases of wool in a scheme that had no discernible connection to the war effort. To that fact the Supreme Court gave short shrift, focusing instead on the "pecuniary nature" of the alleged fraud—a term to which it gave special interpretive significance. The Court found that the false statements—inducing or attempting to induce payments from the government—involved "the element of deceit that is the earmark of fraud," and were thus "pecuniary in nature." Grainger, 346 U.S. at 243, 73 S.Ct. 1069. The Court distinguished Bridges, supra (the case on which defendants rely), noting that the false statements at issue in Bridges—denials under oath of membership in the Communist Party—did not include the pecuniary element the Suspension Act requires. Grainger, 346 U.S. at 242-243, 73 S.Ct. 1069.⁹ See Bridges, 346 U.S. at 222, 73 S.Ct. 1055 (the purpose of the Suspension Act "is not that of generally suspending the three-year statute, e.g., in cases of perjury, larceny and like crimes. It seeks to suspend the running of it only where the fraud against the Government is an essential ingredient of the crime."). Here, defendants' alleged fraud was indisputably "pecuniary in nature"—creating false batch reports in order to procure payments from the government. Therefore, the Bridges "non-pecuniary" exception to the Suspension Act does not apply.¹⁰

In light of Grainger, it makes no difference that the fraud in this case involved a construction project unrelated to the Iraqi or Afghani conflicts. In the few cases since Grainger in which the government has successfully invoked the Suspension Act, the absence of a connection between the fraud and wartime procurement has played no part. See United States v. Lurie, 222 F.2d 11, 15 (7th Cir.1955) (conspiracy to defraud the United States in connection with the liquidation of surplus war property); United States v. Salvatore, 140 F.Supp. 470, 473 (E.D.Pa.1956) (false lumber invoices); United States v. Strange Bros. Hide Co., 123 F.Supp. 177, 184 (N.D.Iowa 1954) (false wool invoices to the CCC).

At War

Defendants next argue that the United States is not "at war" within the meaning of the Suspension Act. As the parties recognize, Congress has not exercised its power under Article I, Section 8, clause 11 of the United States Constitution to "declare war."¹¹ Aside from a formal declaration of war, the Suspension Act gives no explicit indication of the type of military action that Congress intended to trigger a tolling of a limitations period under the Act. As a result, this case requires the court to make the determination of what it means for the United States to be "at war" within the meaning of the Act.

The judicial branch has a constitutionally-based policy of abstaining when "a question [is] too fraught with gravity even to be adequately formulated when not compelled." Ludecke v. Watkins, 335 U.S. 160, 169, 68 S.Ct. 1429, 92 L.Ed. 1881 (1948). The reluctance to assay into "political thickets," see Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962), is rooted in the case or controversy requirement of Article III and the Court's original understanding that the Constitution does not authorize it to render advisory opinions, even when requested to do so by the political branches. 1 Lawrence H. Tribe, American Constitutional Law, 313 (3d ed.2000). See Marbury...