Limits to Tolling the Statute of Limitations
1. Mutual Legal Assistance Treaties (MLATs)
Investigating criminal activity with transnational dimensions requires cross-border cooperation. To solicit foreign partners’ cooperation, US law enforcement authorities commonly rely on Mutual Legal Assistance Treaties (MLATs), a formal legal mechanism that allows for government-to-government evidence requests and exchanges.
The United States has entered into more than 70 MLATs, including with every European Union nation.[1] Common across all US-executed MLATs is that corresponding requests—be it for incoming or outgoing evidence—are processed by the same authority, the Department of Justice's (DOJ) Office of International Affairs.[2] The scope of the mutual assistance obligations stated within the treaty varies greatly, but MLATs that the United States has signed typically provide, at a minimum, that law enforcement officials should receive assistance with locating or identifying persons or evidence, taking testimony abroad, requesting searches and seizures, identifying and tracing the proceeds of the crime, and executing asset freezes and seizures.[3] Moreover, MLATs tend to include certain stipulations that protect their utility; for example, they are typically written to waive a dual criminality requirement, which means that US enforcement officials can seek from a foreign government evidence of an activity that may not be considered a crime in that country.[4]
While MLATs can provide the US access to crucial evidence abroad, one common critique is with their handling speed. Because obtaining evidence through MLAT requests is a formal legal process that requires the cooperation of at least two governments, there are several causes for delay, including administrative, resource, and international communications-based constraints (e.g., language barriers that may cause confusion regarding what is being requested).[5] In many instances, MLAT requests have taken years to be fulfilled.[6] In order to protect against the possibility that the statute of limitations period for an offense under investigation may expire prior to fulfillment of the MLAT request, law enforcement officials may file an ex parte application, pursuant to 18 U.S.C. § 3292,[7] in federal court to toll the statute of limitations while an MLAT request remains outstanding.[8] For an application to be granted, the court must conclude by a preponderance of the evidence that “it reasonably appears” as though the evidence is located in the foreign country.[9] If the application is granted, tolling goes into effect immediately and can suspend the statute of limitations for as much as six months or three years, depending on when the foreign country takes final action on the MLAT request.[10]
2. United States v. De Leon-Perez
Recently, a court held that the government cannot use MLATs as a strategy to artificially toll the statute of limitations.[11] In US v. De Leon-Perez, No. 4.17-CR-00514, slip op. (S.D. Tex., July 11, 2022), the government alleged that defendant Jorge Da Costa Casqueiro Murta laundered bribery proceeds in violation of the Money Laundering Control Act (MLCA) and the FCPA. In April 2019, DOJ indicted Murta for that seven-year-old conduct. Murta filed a motion to dismiss, claiming that the charges needed to be brought earlier given the five-year statute of limitations period for the alleged crimes. After examining facts surrounding the MLATs the government was using to attempt to toll the statute of limitations, the court agreed with Murta and granted the motion to dismiss.
In 2012, the Department of Homeland Security began investigating the business dealings of Petroleos de Venezuela, S.A. (PDVSA), a Venezuelan state-owned/state-controlled oil company responsible for the exportation, production, transportation, and trade of energy resources throughout the word on behalf of the Venezuelan government.[12] By the next year, the investigation had purportedly uncovered that PDVSA employees had received millions of dollars in bribery/kickback proceeds from PDVSA-related contracts, and the employees had used those proceeds to open bank accounts in Switzerland and other countries.[13]
On December 15, 2014, the US issued an MLAT (2014 MLAT) to Swiss authorities seeking bank records from several Swiss banks. Nine months later, DOJ secured a court order that tolled the statute of limitations due to the Swiss authorities’ delayed response to the MLAT.[14] In late 2015 and early 2016, DOJ charged six individuals with violations of the FCPA, MLCA, and other offenses.[15]
In November 2016, the government issued a second MLAT (2016 MLAT) to Swiss authorities, which the government claimed sought “supplemental and additional evidence.”[16] In January 2017, the government secured another tolling order based on the 2016 MLAT, and several other defendants were indicted in August 2017.[17] Then, in March 2018, the government issued another MLAT (2018 MLAT), this one to Portuguese authorities, seeking interviews of Murta among other individuals, as well as documents involving Murta from 2012.[18] Authorities interviewed Murta on March 20, 2018, about a year before his indictment.
In granting Murta’s motion to dismiss, the court found that the government could not stack tolling periods on top of each other by issuing multiple MLATs seeking similar evidence. At issue were the tolling orders granted based on the 2014 and 2016 MLATs. The court held that while the statute of limitations was properly tolled when the 2014 MLAT was issued, the 2016 MLAT could not support a new tolling order because the 2014 MLAT and 2016 MLAT involved the same subject matter. Additionally, there was no evidence of the need for the 2016 MLAT as a “supplement” to the 2014 MLAT because there was nothing indicating (1) confusion from Swiss authorities relating to the nature or scope of the 2016 MLAT, or (2) the grand jury needing the documents sought in the 2016 MLAT to clarify evidence obtained pursuant to the 2014 MLAT.[19] Accordingly, the court found that the second tolling order was “improvidently issued.”[20]
The court noted that “nothing in the statute permits the government to issue multiple MLATs simply as a tool to extend tolling or as a discovery stratagem” and that “the policy behind section 3292 cannot be shaded to favor the government anymore than to disfavor an accused.”[21] The court also stated that “Section 3292 is offense-specific, not person-specific,” and therefore, the statutory purpose for tolling was exhausted by the 2015 indictment of the two PDVSA employees.[22] Thus, the court found that the April 2019 indictment against Murta was brought outside of the statute of limitations.[23]
3. Take-Aways
Based on the precedent set forth in US v. De Leon-Perez, defendants should explore two potential arguments to determine whether courts properly tolled the statute of limitations based on MLAT tolling orders.
First, defendants should consider whether the statute of limitations has expired based on the timing in which the MLAT tolling order had expired due to foreign authorities providing the materials and/or information requested in the MLAT. Pursuant to Section 3292, the statute of limitation can be tolled for as much as six months or three years, depending on when the foreign government takes final action on the request. The tolling period begins when the court issues the tolling order, and the tolling period ends once the government has received the requested materials from the foreign authorities. The period may be extended based on a supplemental MLAT seeking similar evidence from the same authorities only if foreign authorities express confusion about the nature or the scope of the MLAT or the grand jury requests clarification regarding the materials obtained from the MLAT.
Second, the defendant may be able to argue that there can be no additional tolling of the statute of limitations once the first MLAT request is completed because the purpose for tolling—gathering evidence related to a specific offense, rather than a specific person—has been satisfied. When other individuals have been indicted based on materials received in response to an MLAT, the purpose for tolling the statute of limitations has been exhausted. Whether the defendant was a target or subject of the initial investigation is immaterial because the purpose of the MLAT is to gather evidence related to the alleged criminal activity, not to gather evidence specific to one person. Therefore, the statutory purpose for tolling would be exhausted by the indictment of other individuals alleged to be involved in the same criminal scheme.
US v. De Leon-Perez has set limits to the federal government’s ability to use MLATs to toll the statute of limitations, ensuring that the government does not use MLATs as a tool to game the system and artificially extend the statute of limitations.
Footnotes
[1] Evan Norris & Morgan J. Cohen, How US Authorities Obtain Foreign Evidence in Cross-Border Investigations, 7 (Ams. Investigations Rev. 2021), available at https://www.cravath.com/a/web/sApH26A3coWayrrDtrsV9E/YNVSf/cross-border-overview-how-enforcement-authorities-interact.pdf.
[2] Id.
[3] Id.
[4] Id.
[5] T. Markus Funk, Mutual Legal Assistance Treaties and Letters Rogatory: A Guide for Judges, 14 (Fed. Judicial Ctr. Int’l Litig. Guide 2014) available at https://op.bna.com/bar.nsf/r?Open=jtin-9tpr4h; see also ADB-OECD, Mutual Legal Assistance in Asia and the Pacific: Experiences in 31 Jurisdictions, 14, 16 (2017), available at https://www.oecd.org/corruption/ADB-OECD-Mutual-Legal-Assistance-Corruption-2017.pdf.
[6] Id.
[7] Section 3292(a)(1) provides: Upon application of the United States, filed before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court before which a grand jury is impaneled to investigate the offense shall suspend the running of the statute of limitations for the offense if the court finds by a preponderance of the evidence that an official request has been made for such evidence and that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in a foreign county.
[8] Funk, Mutual Legal Assistance Treaties and Letter Rogatory, at 15-16 (citing cases and explaining that, while ex parte applications made pursuant to section 3292 need only meet a low evidentiary threshold, law enforcement officials do, at a minimum, have to produce some documentary evidence that the request letter was sent; conversely, officials do not have to make any showing that the formal MLAT request is the only way they could obtain the evidence).
[9] Id.; see, e.g., United States v. Trainor, 376 F.3d 1325, 1336 (11th Cir. 2004) (“[T]he Government must present some evidence—something of evidentiary value—that it reasonably appears the requested evidence is in a foreign country.”); United States v. Lyttle, 667 F.3d 220, 224 (2d Cir. 2012) (finding a district court must “suspend the running of a statute of limitations upon an appropriate application showing: (1) that evidence of an offense being investigated by a grand jury is in a foreign country; and (2) that such evidence has been officially requested. According to the statute, the preponderance-of-the-evidence standard applies when determining whether the United States has made an official request. When deciding whether the evidence is in a foreign country, however, a lower standard applies: a court must find by a preponderance of the evidence . . . that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in a foreign country.”).
[10] 18 U.S.C. § 3292(a)(1), (b), (c)(1).
[11] Wifredo Ferrer and Gary Klubok, Federal Judge Sets Important Limit to Tolling a Statute of Limitations in FCPA Case, (FCPA Blog), available at https://fcpablog.com/2022/08/29/federal-judge-sets-important-limit-to-tolling-a-statute-of-limitations-in-fcpa-case/.
[12] U.S. v. De Leon-Perez, No. 4.17-CR-00514, slip op. at 4 (S.D. Tex., July 11, 2022).
[13] Id. at 11.
[14] Id. at 11–12.
[15] Id.
[16] Id. at 13.
[17] Id.
[18] Id.
[19] Id. at 17.
[20] Id. at 17–18.
[21] Id.
[22] Id. at 18.
[23] Id. at 18–19.