United States v. Bescond

• Citation: 24 F.4th 759
• Decision Date: 05 August 2021
• Docket Number: August Term 2020,No. 19-1698,19-1698
• Parties: UNITED STATES of America, Appellee, v. Muriel BESCOND, Defendant-Appellant, Danielle Sindzingre, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

24 F.4th 759

UNITED STATES of America, Appellee,

v.Muriel BESCOND, Defendant-Appellant,Danielle Sindzingre, Defendant.

No. 19-1698

August Term 2020

United States Court of Appeals, Second Circuit.

Argued: September 3, 2020

Decided: August 5, 2021

Amended: February 3, 2022

JEREMY R. SANDERS, Appellate Counsel (David C. James, Alixandra Smith, Andrey Spektor, Assistant United States Attorneys, for JACQUELYN M. KASULIS, Acting United States Attorney for the Eastern District of New York; Carol L. Sipperly, Senior Litigation Counsel; Timothy A. Duree, Trial Attorney; Brian A. Benczkowski, Assistant Attorney General; John P. Cronan, Deputy Assistant Attorney General; on the brief), Washington, DC and Brooklyn, NY, for Appellee United States of America.

LAURENCE S. SHTASEL, Blank Rome LLP, New York, NY, for Defendant-Appellant Muriel Bescond.

Before: Livingston, Chief Judge, Walker, Jacobs, Circuit Judges.^*

Chief Judge Livingston dissents in a separate opinion.

Dennis Jacobs, Circuit Judge:

Muriel Bescond, a French banker, is charged with transmitting false, misleading, and knowingly inaccurate commodities reports, and with conspiracy to do the same, in violation of the Commodity Exchange Act ("CEA"). A citizen and resident of France, she allegedly participated in the LIBOR benchmark interest rate calculation process from her office in Paris. It is alleged that, by causing an artificial reduction in LIBOR rates, she affected the pricing of futures contracts traded on the Chicago Mercantile Exchange. Bescond remains in France today and has not submitted to the district court's jurisdiction.

Through counsel, Bescond moved to dismiss the indictment on the grounds that (1) it impermissibly charged her with extraterritorial violations of the CEA, (2) the prosecution violated her Fifth Amendment due process rights, (3) the government selectively prosecuted her because she is a woman, and (4) the statute of limitations had run. The United States District Court for the Eastern District of New York (Seybert, J. ) concluded that Bescond was a fugitive, exercised discretion to apply the fugitive disentitlement doctrine, and declined to decide the merits of her motions. Under the doctrine of fugitive disentitlement, a court may decline to entertain the claims of a defendant who is a fugitive from justice. Molinaro v. New Jersey, 396 U.S. 365, 366, 90 S.Ct. 498, 24 L.Ed.2d 586 (1970) (per curiam); Nen Di Wu v. Holder, 646 F.3d 133, 135 & n.2 (2d Cir. 2011).

In the alternative, the district court rejected the extraterritoriality and due process challenges on the merits. Since additional briefing would have been needed to decide the claims of selective prosecution and statute of limitations, the court did not reach them, even hypothetically.

Because Bescond appeals from a memorandum and order issued pre-trial, we must first ascertain appellate jurisdiction. Bescond contends (i) that the collateral order doctrine affords jurisdiction to entertain the challenge to her designation as a fugitive and the exercise of discretion to disentitle her, and (ii) that there is pendent appellate jurisdiction to decide whether the indictment impermissibly charges extraterritorial violations of the CEA and whether the prosecution violates her due process rights. We conclude that we have jurisdiction to review the order disentitling Bescond, which we reverse, and we remand for further proceedings to consider or reconsider the merits of her motions to dismiss. However, we conclude that we lack jurisdiction to review the merits of the extraterritoriality and due process challenges and dismiss the appeal to that extent.

BACKGROUND

Muriel Bescond is a French citizen living in France who worked as the head of the Paris treasury desk at Société Générale ("SocGen"), a global bank headquartered in France. The indictment charges that, between May 2010 and October 2011, she participated in a scheme to manipulate the United States Dollar London Interbank Offered Rate ("USD LIBOR").

LIBOR is a benchmark interest rate, calculated for various currencies and borrowing periods, that averages the rates at which certain banks borrow unsecured funds. At the time of the alleged scheme, the USD LIBOR calculation process began with sixteen "Contributor Panel" banks submitting estimates of the rates at which they could borrow funds. SocGen, one of the sixteen, employed "submitters" or "setters" to prepare these estimates and transmit them to Thomson Reuters in London. Thomson Reuters set aside the four highest estimates and the four lowest, and averaged the eight estimates in the middle to arrive at the final USD LIBOR, or the "fix." The final rate was transmitted to three data centers for worldwide publication, including one center in Hauppauge, New York.

The prices of certain financial instruments depend on USD LIBOR. One such instrument is the Eurodollar futures contract, the price of which reflects the predicted USD LIBOR at the end of a fixed period. Investors trade Eurodollar futures contracts as a commodity on the Chicago Mercantile Exchange.¹

In Paris, Bescond supervised SocGen's setters. At the direction of the bank's Global Head of Treasury Danielle Sindzingre, Bescond instructed the setters to prepare false USD LIBOR submissions that were lower than SocGen's actual borrowing rates. The object was to protect SocGen's reputation as a sound financial institution by understating the rates at which SocGen could borrow money. The setters transmitted the false USD LIBOR submissions to a SocGen manager in London, who transmitted them in turn to Thomson Reuters. SocGen's false submissions artificially lowered the USD LIBOR fix, affecting financial transactions that referenced USD LIBOR.

The indictment filed in the Eastern District of New York charged Bescond with four substantive counts of transmitting false, misleading, and knowingly inaccurate commodities reports in violation of the Commodity Exchange Act ("CEA"), 7 U.S.C. § 13(a)(2), and one count of conspiracy to do the same. Bescond remains in France and has not submitted to the district court's jurisdiction. France will not extradite her.

Through counsel, Bescond moved to dismiss the indictment. Her first motion argued that the indictment violated the Fifth Amendment right to due process because it failed to allege a sufficient nexus with the United States, and that the statute of limitations had run. Her second motion argued that the government was selectively prosecuting women participants in the alleged scheme, while declining to prosecute men who were similarly situated. At the district court's request, Bescond filed an additional brief arguing that the indictment charged an impermissible extraterritorial application of the CEA. Bescond also argued that, as an alternative to dismissal on grounds of selective prosecution and statute of limitations, the court should order discovery and additional briefing from the government on those issues.

The district court concluded that Bescond was a fugitive and made the discretionary ruling that disentitlement was warranted. Accordingly, the court declined to reach the merits of Bescond's motions. The court then issued an alternative ruling on the merits, in order "to provide the Second Circuit with a complete record on review." United States v. Sindzingre, No. 17-CR-0464(JS), 2019 WL 2290494, at *9 (E.D.N.Y. May 29, 2019). It concluded that the indictment properly charged domestic violations of the CEA and that the prosecution did not violate Bescond's due process rights. The court declined to make an alternative ruling on selective prosecution and the statute of limitations because "additional briefing and information" would be needed to resolve those issues. Id. Bescond's motions to dismiss were denied in a memorandum and order.

Bescond has appealed. The government moved to dismiss the appeal on the ground that we lack jurisdiction for want of a final judgment. A motions panel of this Court denied the motion, citing the collateral order doctrine.

On appeal, Bescond argues that, as the motions panel concluded, there is appellate jurisdiction to review the disentitlement ruling under the collateral order doctrine; and that we should exercise pendent appellate jurisdiction to review the alternative rulings on the merits of extraterritoriality and due process (Point I below). She argues that the district court erred in designating her a fugitive and in exercising discretion to disentitle her (Point II). Finally, she argues that the indictment charges an impermissible extraterritorial application of the CEA and violates her due process rights (which we cannot decide for lack of jurisdiction).

DISCUSSION

I

Courts of appeals "have jurisdiction of appeals from all final decisions of the district courts of the United States." 28 U.S.C. § 1291. Known as the "final judgment rule," section 1291 "requires ‘that a party must ordinarily raise all claims of error in a single appeal following final judgment on the merits.’ " Flanagan v. United States, 465 U.S. 259, 263, 104 S.Ct. 1051, 79 L.Ed.2d 288 (1984) (quoting Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981) ). In a criminal case, the final judgment rule "prohibits appellate review until conviction and imposition of sentence." Id. (citing Berman v. United States, 302 U.S. 211, 212, 58 S.Ct. 164, 82 L.Ed. 204 (1937) ). The rule "minimiz[es] appellate-court interference with the numerous decisions [trial judges] must make in the pre-judgment stages of litigation[,] ... reduces the ability of litigants to harass opponents and to clog the courts through a succession of costly and time-consuming appeals[, and] is crucial to the efficient administration of justice." Id. at 263–64, 104 S.Ct. 1051 (citing Firestone Tire, 449 U.S. at 374, 101 S.Ct. 669 ). Because these interests "are ‘especially compelling in the administration of criminal justice,’ " the policy underlying the final judgment rule "is at its...