U.S. v. Trainor

• Citation: 376 F.3d 1325
• Decision Date: 19 July 2004
• Docket Number: No. 03-12665.,03-12665.
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. William P. TRAINOR, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1325

376 F.3d 1325

UNITED STATES of America, Plaintiff-Appellant, v. William P. TRAINOR, Defendant-Appellee.

No. 03-12665.

United States Court of Appeals, Eleventh Circuit.

July 19, 2004.

COPYRIGHT MATERIAL OMITTED

Ellen R. Meltzer, Washington, DC, for Plaintiff-Appellant.

Kathleen M. Williams and Michael Caruso, Fed. Pub. Defenders, Miami, FL, for Defendant-Appellee.

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

Before BLACK, BARKETT and MAGILL^*, Circuit Judges.

BLACK, Circuit Judge:

This appeal arises from Defendant-Appellee William P. Trainor's motion to dismiss 19 counts of the superseding indictment charging him with wire fraud, money laundering, and tax evasion. The district court granted the motion to dismiss, finding the challenged counts barred by the applicable statute of limitations. The primary issue on appeal is whether the Government satisfied the requirements of 18 U.S.C. § 3292(a)(1), under which "the government may apply, ex parte, for suspension of the statute of limitations when it seeks evidence located in a foreign country." United States v. Torres, 318 F.3d 1058, 1061 (11th Cir.), cert. denied, ___ U.S. ___, 124 S.Ct. 50, 157 L.Ed.2d 51 (2003). Specifically, we must determine whether an unsworn application, accompanied by only a copy of an evidentiary request sent to a foreign government, satisfies § 3292's requirement that the Government demonstrate, by a preponderance of the evidence, that evidence concerning the charged offense reasonably appears to be located in the foreign country. We conclude that such a submission does not satisfy § 3292 and affirm the dismissal order.

I. BACKGROUND

A. The Office of International Affairs Request

Trainor has been the subject of investigations by both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) for several years. On October 17, 2000, the Criminal Division of DOJ's Office of International Affairs (OIA) sent a transmittal letter (hereinafter, the OIA request) to the Ministry of Justice in Switzerland, seeking evidence relating to (1) an SEC complaint against Trainor and others (including New England Diagnostics, Inc., and Novatek International, Inc.) for violation of federal securities laws, and (2) a DOJ investigation into the possibility that Trainor had committed securities fraud, mail fraud, wire fraud, and money laundering.

The OIA request described an alleged fraudulent scheme in which Novatek, a publicly traded company incorporated in Colorado and operated in Florida, acquired an exclusive license to distribute certain medical products purportedly manufactured by Universal HealthWatch, Inc., through a series of sham transactions involving several entities either owned or controlled by Trainor and Vincent D. Celentano. Among the fraudulent activities was the public sale of securities in HealthCare, Ltd., a purported Russian company that was, in fact, owned by New England Diagnostics (NED). Allegedly, Trainor and Celentano represented Schweitzer as NED's owner. In reality, NED was controlled by Trainor and operated by his daughter in Massachusetts.

The OIA request identified Schweitzer as a Swiss citizen with the following address: Seestrosso No. 1, Cham 6330, Switzerland. The OIA asked the Swiss authorities to obtain various documents in Schweitzer's possession relating to Trainor, NED, and Novatek, and to secure Schweitzer's sworn testimony concerning his involvement with these individuals and companies.

On March 30, 2001, the Swiss Ministry of Justice informed DOJ that it had been unable to locate Schweitzer at the address provided, or the firm Kenk & Schweitzer identified in the OIA request, and requested additional information. Three days later, the OIA provided Swiss authorities with an alternate address for Schweitzer. In June of 2001, the Swiss police located Schweitzer at the second address, and the OIA submitted follow-up inquiries to the Swiss authorities which ultimately resulted in Schweitzer's agreement to testify in Switzerland in late 2002.

B. The Tolling Request

Meanwhile, on April 6, 2001, the Government filed, ex parte, a sealed motion in the district court to suspend the statute of limitations pursuant to 18 U.S.C. § 3292. Section 3292 allows for the tolling of the statute of limitations in a criminal case upon application of the Government if the judge to whom the application is presented "finds by a preponderance of the evidence" that (1) the Government has made an official request for evidence located in a foreign country, and (2) "it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country." 18 U.S.C. § 3292(a)(1).

The caption of the Government's motion listed Novatek as the subject of the grand jury investigation. The clerk's office informed the Government that the caption could not contain the name of a subject of a grand jury investigation and that, whereas the proposed order accompanying the motion provided a signature line for a magistrate judge, tolling orders could only be signed by a district judge. The Government filed a corrected motion on April 10, 2001.

The Government's motion sought to toll the limitations period from October 17, 2000 — the date the OIA request for assistance was transmitted to Switzerland — to the date on which the Swiss authorities would take final action on the request. In the memorandum accompanying its motion, the Government described the grand jury investigation concerning Trainor and the alleged securities fraud, summarized OIA request, and explained why the issue concerning ownership and control of NED was important to the investigation. The Government contended the attached OIA request for assistance satisfied § 3292's first requirement — i.e., it showed the Government made an official request. Apparently to satisfy the second requirement, the Government also provided in its memorandum the following summary of the evidence in its possession:

Documents obtained by the grand jury have identified Schweitzer as the holder of bearer stock of NED, as a Swiss resident, and have identified his business address as being in Switzerland. Agreements pertinent to NED and Schweitzer have identified Schweitzer's address in Switzerland. Witnesses interviewed by the Federal Bureau of Investigation have also stated that Trainor and Celentano represented to them that Schweitzer was the owner of NED and have identified Schweitzer as a Swiss resident.

Significantly, none of the referenced documents were attached to the motion and neither the memorandum, nor the attached OIA request, were sworn or verified.

On May 10, 2001, the district court signed a sealed order granting the Government's ex parte motion to toll the statute of limitations under § 3292 from October 17, 2000, until the date Switzerland took final action on the OIA request for assistance, but in any case not longer than three years.

C. Post-Indictment Proceedings

A grand jury returned an indictment against Trainor on September 20, 2001, charging him with eleven counts of wire fraud in violation of 18 U.S.C. § 1343 (Counts 1-11), two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i) (Counts 12-13), two counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i) (Counts 14-15), six counts of engaging in monetary transactions in property derived from specified unlawful activity in violation of 18 U.S.C. § 1957 (Counts 16-21), and seeking forfeiture under 18 U.S.C. § 982 and 21 U.S.C. § 853(p). A superseding indictment was returned on June 13, 2002, adding three counts of tax evasion in violation of 26 U.S.C. § 7201.

After the return of the indictment, the case was assigned to a different district judge than the one who had granted the § 3292 motion. In October 2002, Trainor filed a motion to dismiss counts 1-10, 12-14, and 16-21 as barred by the catchall five-year statute of limitations for noncapital offenses, 18 U.S.C. § 3282.¹ Among the arguments put forth in the motion, Trainor asserted there could be no valid tolling because the Government did not present the district court with any evidence to satisfy the preponderance of the evidence standard set out in 18 U.S.C. § 3292. The district court granted Trainor's motion to dismiss on this basis and this appeal followed.

II. STANDARD OF REVIEW

The district court's findings of fact are reviewed for clear error. United States v. Puche, 350 F.3d 1137, 1153 (11th Cir.2003). The proper interpretation of a statute, however, is a question of law that we review de novo. Dysert v. United States Sec'y of Labor, 105 F.3d 607, 609 (11th Cir.1997); see also Atl. Land & Improvement Co. v. United States, 790 F.2d 853, 857 (11th Cir.1986) (application of statute of limitations is question of law reviewed de novo).

III. DISCUSSION

Absent tolling of the statute of limitations under § 3292, 19 of the 24 counts of the superseding indictment are time barred under the five-year statute of limitations set out in 18 U.S.C. § 3282. Thus, as the district court observed, the outcome of this case turns on the meaning of § 3292's preponderance of the evidence standard, and whether the Government satisfied that standard.

A. The Statutory Language

Where there is a question of statutory interpretation, "we begin by examining the text of the statute to determine whether its meaning is clear." Harry v. Marchant, 291 F.3d 767, 770 (11th Cir.2002) (en banc). Indeed, "`[i]n construing a statute we must begin, and often should end as well, with the language of the statute itself.'" United States v. Steele, 147 F.3d 1316, 1318 (11th Cir.1998) (en banc) (quoting Merritt v. Dillard Paper Co., 120 F.3d 1181, 1185 (11th Cir.1997)); see also Harry, 291 F.3d at 772 ("Where the language of a statute is unambiguous, as it is here, we need not, and ought not, consider legislative history.").

Section 3292(a)(1) provides:

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