USA. v. Hitt

• Decision Date: 08 May 2001
• Docket Number: No. 00-3083,00-3083
• Parties: (D.C. Cir. 2001) United States of America, Appellant v. Robert Hitt, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1010

249 F.3d 1010 (D.C. Cir. 2001)

United States of America, Appellant v. Robert Hitt, Appellee

No. 00-3083

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 22, 2001

Decided May 8, 2001

Appeal from the United States District Court for the District of Columbia (No. 99cr00353-09) [Copyrighted Material Omitted] Chrisellen R. Kolb, Assistant U.S. Attorney, argued the cause for appellant. With her on the briefs were Wilma A. Lewis, U.S. Attorney, at the time the brief was filed, John R. Fisher, Roy W. McLeese, III and Steven J. Durham, Assistant U.S. Attorneys.

Andrew L. Frey argued the cause for appellee. On the brief were Dan Marmalefsky and Eric M. Acker.

Before: Williams and Rogers, Circuit Judges, and Silberman, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Rogers.

Dissenting opinion filed by Circuit Judge Williams.

Rogers, Circuit Judge:

On October 19, 1999, the Grand Jury returned a sixteen-count indictment for alleged fraudulent misrepresentations made to the United States Department of Commerce in connection with the sale by the McDonnell Douglas Corporation to the People's Republic of China of machinery that was subject to export controls. Count One of the indictment charged Robert Hitt, the Director of the China Program Office at Douglas Aircraft Company, a wholly-owned subsidiary of McDonnell Douglas, along with other defendants, with conspiring to violate the laws of the United States, in violation of 18 U.S.C. 371 (2000), by deceiving the United States government in the process of completing the sale of the equipment. The district court ruled that the conspiracy alleged in Count One ended on September 14, 1994, when the Department of Commerce issued the export licenses required to sell the machinery, and that the prosecution of Hitt was therefore barred by the five-year statute of limitations. See United States v. Hitt, 107 F. Supp. 2d 29, 30 (D.D.C. 2000); see also 18 U.S.C. 3282 (2000). The government appeals. We affirm.

I.

The indictment states that in the early 1990s, McDonnell Douglas closed a manufacturing plant located in Columbus, Ohio that had produced military aircraft for the United States. See Count One pp 18-19. After closing this facility, McDonnell Douglas and Douglas Aircraft Company (jointly, "MDC") began negotiations with the China National AeroTechnology Import and Export Corporation ("CATIC") and some of its subsidiaries¹ for the sale of various pieces of equipment from the plant. See Count One pp 21-39. Among the equipment in which CATIC expressed an interest were several "machining tools"--"large sophisticated pieces of equipment used in the production of aircraft parts." Count One p 19. These tools were subject to export controls and required export licenses from the United States Department of Commerce. See Export Administration Act of 1979, 50 U.S.C. app. §§ 2401-2420 (1991); Export Administration Regulations, 15 C.F.R. §§ 768-99 (2001).² Upon learning that the Department of Commerce strongly discouraged MDC's sale of the equipment, see Count One p 26, MDC, through its legal department, informed CATIC that the requisite export licenses "would not be obtainable." Count One p 28. CATIC, in turn, sought assistance from Robert Hitt "in resolving the export license problem related to the sale of the [machine tools]." Count One p 29. As Director of the China Program Office, Hitt was responsible for implementing the "trunkline program,"³ a $1 billion contract between MDC and CATIC for the manufacture of commercial aircraft in China. See Count One p 35. This contract gave MDC and Hitt a vested financial interest in maintaining a favorable business relationship with CATIC and the Chinese government. See Count One pp 35-36. When CATIC encountered difficulties in its negotiations with MDC for the Columbus equipment, CATIC alluded to the trunkline contract. See Count One p 35. MDC reacted to this pressure from CATIC, at one point admitting "that negotiations with CATIC were being conducted due to the pending $1 billion trunkliner program. If not for the trunkliner, the slow paced negotiations ... would be broken off in favor of auctioning equipment." Count One p 38.

On February 15, 1994, MDC and CATIC entered into a Purchase Agreement, under which MDC would sell to CATIC various pieces of equipment from the Columbus plant, including the machine tools that were subject to export controls, for $5.4 million. See Count One p 39. Under the Agreement, MDC was responsible for applying for and obtaining export licenses where necessary, and CATIC was responsible for shipping and exporting all machine tools that required an export license. See Count One p 39. In addition, the contract specified that title to the equipment would pass from MDC to CATIC by July 5, 1994, "[u]pon completion of removal from the Columbus, Ohio facility, and receipt by MDC of the final thirty-five percent (35%) payment required." The contract also provided that the equipment must be removed from the Columbus plant by July 5, 1994, or MDC was required to pay for storage of the equipment at another location. See Count One p 39(2).

On or about May 26, 1994, MDC and CATIC representatives submitted ten export license applications to the Department of Commerce. See Count One p 41. Each application included (1) an application form, in which MDC represented that the end-user for the equipment was the CATIC Machining Company in Beijing; (2) an "Export Justification" statement, indicating that the machine tools would be "used in the trunkline program in conjunction with the production of 40 commercial aircraft in [China]," Count One p 41(b); and (3) an "end-user and end-use statement," prepared by CATIC representatives, stating that the equipment would be used to produce parts for the trunkline program. Count One p 41(d). Based on the information submitted by MDC and CATIC, the Department of Commerce granted the export licenses on or about September 14, 1994. See Count One p 42. The licenses authorized the export of the equipment for use at the CATIC Machining Center in Beijing for purposes of the trunkline program. The licenses also required MDC to verify the equipment's location and usage by performing quarterly inspections of the CATIC facility and submitting quarterly reports to the United States Government for a two-year period.

After MDC and CATIC obtained the licenses, CATIC arranged, on or about November 7, 1994, to ship the machine tools to two separate points in China (contrary to the terms of the export license), and ultimately to ship the equipment to a factory in Nanchang, China that is allegedly involved in the manufacture of military equipment. See Count One at WW 44, 47(l)-(n), 49, 51(21)-(24). On April 4, 1995, shortly after MDC's required quarterly inspection of the CATIC facility, MDC reported to the Department of Commerce that the machine tools had been diverted to four different locations, including the Nanchang facility. The government initiated an investigation, which culminated in the indictment returned on October 19, 1999.

The indictment charged one conspiracy Count and fifteen substantive Counts.⁴ Hitt was charged only in Count One, which charged him, MDC, CATIC, and two CATIC employees with conspiring to violate the laws of the United States, in violation of 18 U.S.C. 371, and with aiding and abetting such a conspiracy, in violation of 18 U.S.C. 2. Counts Two through Fifteen charged the corporate defendants--MDC, CATIC, and their affiliates--with statutory violations in connection with the allegedly fraudulent acquisition of the export licenses: Count Two charged false statements by the CATIC defendants; Counts Three, Fourteen, and Fifteen charged false statements by MDC in connection with the applications for the export licenses; and Counts Four through Thirteen charged all corporate defendants with false statements and violations of various export statutes. Count Sixteen charged the CATIC defendants with making false and misleading statements to the Department of Commerce after the export licenses were issued.

Hitt moved to dismiss the charges against him on the grounds that the conspiracy alleged in Count One extended only to the United States' September 14, 1994, issuance of the export licenses and was therefore time barred. The government opposed the motion, arguing that the conspiracy continued until the machine tools were shipped to China in or about March 1995. The district court ruled as a matter of law that the conspiracy alleged in the indictment ended when the United States issued the export licenses, and that prosecution of Hitt was therefore barred by the five-year statute of limitations for conspiracy. See Hitt, 107 F. Supp. 2d at 30; 18 U.S.C. 3282. The government appeals pursuant to 18 U.S.C. 3731 (2000).

II.

"A conspiracy is a partnership in criminal purposes." United States v. Kissel, 218 U.S. 601, 608 (1910). The general federal conspiracy statute prohibits conspiracies "to commit any offense against the United States" or "to defraud the United States ... in any manner or for any purpose."⁵ 18 U.S.C. 371. To prosecute a defendant under 371, "the government must prove beyond a reasonable doubt that: (1) two or more persons formed an agreement either to commit an offense against or defraud the United States; (2) the defendant knowingly participated in the conspiracy with the intent to commit at least one of the offenses charged or to defraud the United States; and (3) at least one overt act was committed in furtherance of the common scheme." United States v. Treadwell, 760 F.2d 327, 333 (D.C. Cir. 1985); see also United States v. Wilson, 160 F.3d 732, 737 (D.C. Cir. 1998); United States v. Gatling, 96 F.3d 1511, 1518 (D.C. Cir. 1996). The five-year statute of limitations for a 371 prosecution, see 18 U.S.C. 3282, begins running "from the last overt act during the existence of the conspiracy." Fiswick...