United States v. Nishiie

• Decision Date: 12 May 2021
• Docket Number: No. 19-10405,19-10405
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. Duane NISHIIE, aka Suh Jae Hon, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

996 F.3d 1013

UNITED STATES of America, Plaintiff-Appellant,

v.Duane NISHIIE, aka Suh Jae Hon, Defendant-Appellee.

No. 19-10405

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 15, 2021 San Francisco, California

Filed May 12, 2021

Francesco Valentini (argued), Trial Attorney, Appellate Section; Robert A. Zink, Acting Deputy Assistant Attorney General; Brian C. Rabbit, Acting Assistant Attorney General; Richard B. Evans, Peter M. Nothstein, and Erica O'Brien Waymack, Trial Attorneys, Public Integrity Section; Criminal Division, United States Department of Justice, Washington, D.C.; for Plaintiff-Appellant.

De Anna S. Dotson (argued), Dana Point, California, for Defendant-Appellee.

Before: Mary M. Schroeder, Jay S. Bybee, and Ryan D. Nelson, Circuit Judges.

Concurrence by Judge Schroeder

R. NELSON, Circuit Judge:

This appeal raises a question of first impression: which of the three categories of offenses under the Wartime Suspension of Limitations Act ("WSLA"), 18 U.S.C. § 3287 —fraud, property, or contract—is modified by a clause requiring a nexus between the charged criminal conduct and a specific, ongoing war or congressional authorization of military force. If the WSLA's war nexus clause—"which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces"—applies, then the criminal charges against Duane Nishiie are time barred. The district court held the WSLA's war nexus clause modifies both the fraud and property offense categories, meaning the seven criminal counts against Nishiie were time barred. Based upon the WSLA's text, history, and context, however, we hold that the war nexus clause modifies only the third offense category—not at issue here. Accordingly, we reverse the district court's dismissal of Nishiie's seven criminal counts and remand for further proceedings.

I

Beginning around 2005, the governments of the United States and the Republic of Korea ("Korea") commenced a joint program to relocate and consolidate military bases and installations located in Korea. Between approximately 2006 and 2012, Duane Nishiie is alleged to have worked as a contracting officer in Korea for the United States Department of Defense ("DOD").

On September 21, 2017, a federal grand jury charged Nishiie in a nine-count indictment based on alleged conduct originating in Korea. According to the indictment, between 2008 and 2015, Nishiie engaged in a scheme seeking payments in exchange for steering the award of multi-million-dollar contracts for infrastructure, engineering, and construction projects in Korea. The indictment further alleged that around 2012 Company A employed Nishiie, after his resignation from the DOD, to lobby DOD to favor Company A for projects in Korea. To facilitate this, Nishiie allegedly accepted bribes, received kickbacks, laundered money, made false reporting disclosures, concealed evidence, and worked with a co-conspirator, among other conduct.

Nishiie was charged with conspiracy to commit bribery and honest-services fraud ( 18 U.S.C. § 371 ); bribery ( 18 U.S.C. §§ 2 ; 201(b)(2)); three counts of honest-service wire fraud ( 18 U.S.C. §§ 1343 ; 1346); conspiracy to commit money laundering ( 18 U.S.C. § 1956(h) ); and three counts of making a false statement ( 18 U.S.C. § 1001 ).¹ The seven non-conspiracy criminal counts at issue in this appeal were based on alleged activity that occurred prior to September 21, 2012, and therefore would have been time barred absent a suspension of the running of the applicable five-year statute of limitations pursuant to the WSLA. The United States also sought forfeiture of property under 18 U.S.C. §§ 981(a), 982(a), and 2461(c).

Nishiie moved to dismiss the indictment on the ground that the charges were barred by the applicable statute of limitations. See 18 U.S.C. § 3282(a). According to Nishiie, "[t]he completion dates, that initiated the running of the statute of limitations" of the following counts in the indictment are: "Count Two – May 2012, Count Three – September 18, 2008, Count Four – March 20, 2009, Count Five – April 6, 2010, Count Seven – February 9, 2010, Count Eight – January 18, 2011, Count Nine – January 13, 2012." Under the WSLA, certain charges suspend the running of any statute of limitations applicable to any offense: "involving fraud or attempted fraud against the United States ... whether by conspiracy or not" (fraud offense); or "committed in connection with the acquisition, care, handling, custody, control or disposition of any real or personal property of the United States" (property offense); or "committed in connection with the negotiation, procurement, award ... of any contract, subcontract, or purchase order which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces" (contract offense). 18 U.S.C. § 3287.

This restrictive relative clause (also called the limiting "which" clause)—"which is connected with or related to the prosecution of the war or directly connected with or related to the authorized use of the Armed Forces"—follows a series of three enumerated offense categories. The "which" clause undisputedly modifies the third category for contract offenses. Whether the "which" clause also modifies the remote fraud and property offense categories ultimately is dispositive of the question here. In short, if the limiting "which" clause modifies the fraud and property offense categories, the seven non-conspiracy counts against Nishiie are time barred. If the "which" clause does not modify the fraud and property offense categories, the running of any applicable statute of limitations has been suspended and the charges are not time barred. The relevant first sentence of the WSLA provides:

When the United States is at war or Congress has enacted a specific authorization for the use of the Armed Forces, as described in section 5(b) of the War Powers Resolution ( 50 U.S.C. 1544(b) ), 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, cancelation, 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 directly connected with or related to the authorized use of the Armed Forces, or with any disposition of termination inventory by any war contractor or Government agency, shall be suspended until 5 years after the termination of hostilities as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress.

18 U.S.C. § 3287.

Nishiie argues the suspension of the running of any statute of limitations applicable to either the fraud or property offense categories is not triggered because the "United States was not at war nor had a specific authorization for the use of armed forces been declared for South Korea during the time applicable to the facts of this case." According to Nishiie, a nexus to war is required to trigger the suspension of the running of any applicable statute of limitations under the WSLA's fraud and property offense categories, similar to the contract offense category. Consequently, Nishiie argues absent "war or authorized use of Armed Forces in any conflict in South Korea during the time Nishiie was working in South Korea," the statute of limitations for "Counts Two, Three, Four, Five, Seven, Eight, and Nine, all expired prior to the filing of the Indictment on September 21, 2017."

The United States argues the indictment is timely because the "WSLA has never contained a requirement that offenses falling under its first two categories be substantively related to the hostilities." It reads the WSLA's limiting "which" clause to only modify the contract offense category, and not the fraud and property offense categories. Under this interpretation, to trigger suspension of the running of any applicable statute of limitations, no substantive nexus is required between either fraud or property offense categories and the prosecution of war or authorization of military force.

The district court summarized the issue: if the limiting "which" clause "applies to all three categories" of offenses—fraud, property, and contract—then "at least some of the charges against Defendant Duane Nishiie may be time-barred. If, on the other hand, the modifier applies only to the closest category, the limitations periods applicable to the charges in this case are tolled, and all of the charges against Nishiie are timely."

The district court held that the "which" clause is a "modifier [that] applies to all three categories" based on the language of the statute, its legislative history, and the rule of lenity. Therefore, the district court held that the statute of limitations was not tolled as to the seven non-conspiracy criminal counts alleged in the indictment, as there was not a nexus between the war and the alleged crimes. On this basis, the district court dismissed Counts Two, Three, Four, Five, Seven, Eight, and Nine as untimely.² The district court noted the United States's "conten[tion] that Nishiie's alleged fraud with respect to steering military base contracts in Korea falls under the first offense category, which involves fraud-based crimes, rather than the more specific contract-based crimes in the third category." Consequently, according to the district court, the United States "will likely never characterize any offense it charges as falling under" the third offense category to "avoid the impact of the ‘which’ cl...