In United States v. Hoffecker, No. 06-3190, (3d Cir. June 16, 2008), the Third Circuit issued a 103- page opinion primarily to address two issues: Did the District Court err in admitting the testimony of defendant’s former attorney and (2) was the prosecution time-barred?
Hoffecker and a co-defendant set up an investment company located in the Bahamas purportedly to sell commodities. The opinion details the elaborate telemarketing investment scam.
The Government employed Jack Field, Hoffecker’s one-time lawyer and friend, as an informant. Hoffecker argued this was so outrageous that it violated Due Process.
The opinion explains at length that the two had been out of contact for 3 years. When they met again, Field clearly and repeatedly stated he would not act as lawyer in this new deal and that he no longer practiced law. There was no retainer, and no legal fees were charged. During the course of the investigation, the Government, which was aware of the potential attorney-client relationship problem, instructed Field to advise Hoffecker clearly and repeatedly that he was not serving as legal counsel. Investigators ensured that Field’s prior legal work would not be implicated by not inquiring about any previous privileged communications between Field and Hoffecker and by instructing Field not to divulge any such communications. Further, the Government employed a "taint team" to review all of the recorded conversations between Field and Hoffecker.
The Court rejected the Due Process claim, noting "Surely there is a delicious irony in the circumstance that . . . the Government conned the con man. . . . To call the evidence supporting Hoffecker’s claim "thin" would be generous as "microscopic" would be the more appropriate word.
The Court next reached the statute of limitations issue, which it viewed as the most potentially precedentially significant matter. Although the Court deemed the statute of limitations issue waived because the defendant failed to raise it in the lower court, it alternatively rejected it on its merits.
The statute of limitations requires that indictments for mail fraud and for conspiracy to commit mail and wire fraud must be "found" within five years of the commission of the offenses. "An indictment is found when it is returned by a grand jury and filed." The statute begins to run for mail fraud when a defendant "places, deposits, causes to be deposited, takes, or receives mail, or knowingly causes mail to be delivered, as part of the execution of a scheme to defraud," and for conspiracy when the conspirators commit the last overt act in furtherance of the conspiracy.
In play here was another statute - 18 U.S.C. § 3292 - which provides, a district court before which a grand jury is impaneled shall suspend the running of the statute of limitations upon application of the government "filed before return of an indictment, indicating that evidence of an offense is in a foreign country," "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 such foreign country. . . ."
Because the Government applied to suspend the statute of limitations before it received all of the evidence from the Bahamas, the Third Circuit ruled that it would not dismiss on statute of limitations grounds even if Hoffecker had preserved the issue for appeal. The Court also observes that it is irrelevant whether the Government receives any additional materials after it makes its request.
Additionally, appellant argued that the Government’s suspension application was improper because it was filed after the statute of limitations already had expired. The Court deemed this issue waived because it was not raised in the opening brief. A 28(J) letter is not sufficient to preserve an issue for appellate review when the issue was not included in the opening brief.
Hoffecker also maintained (1) Count One’s conspiracy charge was untimely because the indictment was found more than five years after the final overt act of the conspiracy and (2) the ex parte nature of the Government’s § 3292 tolling application was improper.
The Government maintained these claims were waived because, although Hoffecker raised them before the District Court by motion in the first trial and also raised them in his opening brief on appeal, he did not renew them in the District Court before the second trial.
The Court rejected this waiver argument, distinguishing a motion to dismiss indictment on statute of limitations grounds from a motion to dismiss based on evidentiary grounds. Requiring Hoffecker to reraise those issues before the retrial would have been "an exercise in wasteful formality."
Next, the Court rejected Hoffecker’s contention that the Government’s section 3292 suspension application was improper because the proceeding before the grand jury judge who granted the suspension order was ex parte. First, the statute itself does not provide that the party whose statute of limitation is being suspended is entitled to notice or a hearing. To interpret section 3292 to require notice or a hearing for a defendant "would be to ignore the traditionally
non-adversarial and secret nature of grand jury investigations." Further, to impose a notice requirement would undermine the confidentiality of a grand jury’s inquiry and give a potential defendant the opportunity to flee or destroy evidence.
After addressing the remaining eight issues, the court affirmed the judgment.