U.S. v. Sharpe ( 1993 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________________
No. 92-7158
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
LARA SHARPE, MIKE GILLICH, JR.,
KIRKSEY MCCORD NIX, JR., JOHN
RANSOM,
Defendants-Appellants.
_________________________________________________
Appeals from the United States District Court
for the Southern District of Mississippi
_________________________________________________
(June 25, 1993)
( , 1993)
BEFORE SMITH, DUHÉ and WIENER, Circuit Judges.
PER CURIAM:
In this criminal appeal, Defendants-Appellants LaRa Sharpe,
Mike Gillich, Jr., Kirksey McCord Nix, and John Ransom appeal their
convictions under 18 U.S.C. § 371 for conspiracy to violate the
fraud-by-wire statute1 and the murder-for-hire statute,2 and for
substantive wire fraud violations. Nix and Gillich also appeal
their convictions for substantive violation of the murder-for-hire
statute. Although the Appellants raise a number of issues on
appeal, we address only one: whether the sealed indictment tolled
1
18 U.S.C. § 1343.
2
18 U.S.C. § 1958.
the statute of limitations. We conclude that a properly sealed
indictment does indeed toll the statute of limitations, absent a
showing of substantive and actual prejudice. As no such showing
has been made in the instant case, there was no error, and we
affirm. Having heard the arguments of counsel, studied their
appellate briefs, and reviewed the record and the pertinent case
law on all remaining issues, and having found no reversible error,
we also affirm as to each of them, albeit without discussion.
I
FACTS AND PROCEEDINGS
The underlying conspiracy in this case was masterminded by
Kirksey M. Nix while serving a life sentence in the state prison at
Angola, Louisiana. Nix orchestrated a scam operation to defraud
homosexuals of money, using both telephone and telegraph services,
in hopes of obtaining funds sufficient to buy his way out of
prison. The scam involved the placement of magazine advertisements
seeking homosexual liaisons. When an interested person would
respond, Nix or one of his associates would pretend to be in
financial difficulties. The victim would be asked to wire money to
one of Nix's associates in order to relieve the financial
difficulties. Afterwards, then, the liaison could take place.
In perpetrating this scam, Nix enlisted the aid of several
individuals outside the confines of prison. These supporting
players included: (1) Mike Gillich, Jr., owner and operator of the
Golden Nugget, a night club and strip joint in Biloxi, Mississippi;
(2) John Ransom, a parolee from a Georgia prison; (3) LaRa Sharpe,
2
Nix's girlfriend and a paralegal; (4) Peter Halat, mayor of Biloxi
and an attorney (also the employer of Sharpe and former law partner
of Vincent Sherry), who acted as a trustee for a firm trust account
maintained by Nix; (5) Arthur Mitchell and Robert Hallal, former
prisonmates of Nix in Angola and participants in the scam
(presented as government witnesses); and (6) various other
participants in the scam, most notably Kellye Dawn Nix (Nix's
stepdaughter and wife) and Juanda Jones, Sharpe's mother (who also
testified for the government).
Sometime in 1986, Nix discovered (or thought he discovered)
that $200,000 of the money he had entrusted to Gillich and Halat in
Biloxi was missing. Nix apparently suspected Mississippi state
judge Vincent Sherry, former law partner to Halat. Judge Sherry
purportedly was aware of Halat's involvement with Gillich.
Moreover, Judge Sherry's wife, Margaret, a reform mayoral
candidate, was also aware of the connection and had promised to
shut down Gillich's Golden Nugget night club, the place to which
Nix's funds were sent. The government alleged at trial that Nix,
with the assistance of various scam participants, including Sharpe
and her mother who travelled to Jackson to meet Ransom, hired him
to kill the Sherrys. On September 14, 1987, the Sherrys were
killed in their home.
On May 15, 1991, the grand jury issued the following sealed
indictments: (1) Count I charged all four defendants with
conspiracy under 18 U.S.C. § 371 to violate the wire fraud statute
(18 U.S.C. § 1343) and the murder-for-hire statute (18 U.S.C. §
3
1958(a)); (2) Count II charged all four defendants with a
substantive violation of wire fraud; (3) Nix, Gillich, and Ransom
were charged in Count III violating the murder-for-hire statute,
including aiding and abetting, by travelling from Louisiana to
Mississippi to arrange the murder; (4) Count IV charged Nix,
Gillich, and Ransom with a violation of the murder-for-hire
statute, based on Ransom's interstate travel from Georgia to
Mississippi. The indictments were returned within the five year
statute of limitations (measured from the day of the last overt act
of the conspiracy), but were not unsealed until May 21, 1991, five
years and five days after the last overt act.
The defendants made numerous pre-trial motions, including one
for dismissal based on a statute of limitations violation. The
court denied that motion, finding no statute of limitation problem.
At the conclusion of the trial the jury returned a verdict of
guilty for all four defendants on Counts I and II. Nix and Gillich
were found guilty on the Count III, travel in aid of murder-for-
hire, but Ransom was acquitted. Additionally, Nix, Gillich, and
Ransom were acquitted on the Count IV murder-for-hire charge.
II
DISCUSSION
The only issue requiring discussion in this case is whether
the statute of limitations ran on the mail fraud count because the
indictment, although returned within the limitations period, was
not unsealed until five days after the limitations period had
expired. Although this issue is res nova in our circuit, we are
4
guided by the decisions of the First, Second, Fourth, Eighth,
Ninth, and Eleventh Circuits, which are in agreement on the rule.
As discussed below, we adopt the constant jurisprudence of these
circuits and conclude that the application of their holdings
mandates an affirmance of the district court's decision.
The other circuits are uniform in holding that "when a sealed
indictment is not opened until after the expiration of the statute
of limitation, the statute ordinarily is not a bar to prosecution
if the indictment was timely filed."3 The case law also contains
a uniform exception to this rule. A sealed indictment will not
relate back to the time of its filing for limitations purposes if
the defendant can demonstrate that substantial actual prejudice
occurred between the sealing and the unsealing.4
Nix, Gillich, and Sharpe do not assert that they have suffered
any substantial actual prejudice, as the indictments were sealed
for a mere six daysSQone before the limitation period expired and
five thereafter.5 Instead, they insist that the indictments were
3
United States v. Shell, 961 F.2d 138, 141 (9th Cir. 1992);
see United States v. Richard, 943 F.2d 115, 118 (1st Cir. 1991);
United States v. Lakin, 875 F.2d 168, 169 (8th Cir. 1989); United
States v. Ramey, 791 F.2d 317, 320 (4th Cir. 1986); United States
v. Edwards, 777 F.2d 644, 647 (11th Cir. 1985), cert. denied, 475
U.S. 1123 (1986); United States v. Muse, 633 F.2d 1041, 1041 (2d
Cir. 1980)(en banc), cert. denied, 450 U.S. 984 (1981).
4
United States v. Srulowitz, 819 F.2d 37, 40 (2d Cir.
1987).
5
In addition to these requirements, two circuits, the
Second and Ninth, have held that "[a]n indictment may remain
sealed beyond the limitation period but only for a reasonable
time." Shell, 961 F.2d at 142; see United States v. Watson, 599
F.2d 1149, 1155 (2d Cir. 1979), modified sub nom. United States
v. Muse, 633 F.2d at 1041. Watson, later vacated and modified by
5
sealed for improper purposes and that the government has the burden
of establishing the reason for sealing the indictment. Again, the
consistent and persuasive reasoning of the other circuits
undermines these assertions.
A judicial officer may seal an indictment under FED.R.CRIM.P
6(e)(4), which provides:
The federal magistrate to whom an indictment is returned
may direct that the indictment be kept secret until the
defendant is in custody or has been released pending
trial. Thereupon the clerk shall seal the indictment and
no person shall disclose the return of the indictment
except when necessary for the issuance and execution of
a warrant or summons.
An indictment is properly sealed when the government requests that
the magistrate judge seal the indictment "for any legitimate
prosecutorial objective or where the public interest otherwise
requires it."6 Thus, "the discretion of the district judge or
magistrate to seal an indictment is broader than merely the need to
take the defendant into custody."7
the en banc court, raises the possibility that an unreasonable
delay coupled with bad faith by the government could constitute a
due process violation. In Muse, however, the en banc court held
that the sixteen month delay was simply a factor in determining
actual substantial prejudice. In Shell, the Ninth Circuit
followed this approach, holding that, although the six-year delay
was unreasonable, there was no actual prejudice. In so holding,
the court rejected the district court's conclusion that such an
unreasonable delay established a presumption of prejudice.
Shell, 961 F.2d at 142-43. As the indictments were sealed for
such a short period of time, we need not reach this issue, but
note that the government's ability to toll the statute of
limitations by sealing and indictment is not unlimited.
6
Richard, 943 F.2d at 118; Lakin, 875 F.2d at 170-71.
7
Ramey, 791 F.2d at 320-21; see Edwards, 777 F.2d at 647-
49; United States v. Mitchell, 769 F.2d 1544, 1547-48 (11th Cir.
1985); United States v. Southland Corp., 760 F.2d 1366, 1379-80
6
In addition, the magistrate judge is not required to make a
contemporaneous record of the reasons for sealing the indictment,
"[as] sealing in the first instance is but a ministerial act, and
it is wholly within the discretion of the Magistrate whether to
require the prosecutor to justify a request to seal."8 Moreover,
development of such a record would increase the chances of
disclosure.9 If challenged, the government must explain and
support the legitimacy of its reasons for sealing the indictment.
The government only does so, however, at a hearing after the
indictment is unsealed.10 And, the magistrate judge's initial
decision to seal the indictment is given great deference.11
In a hearing held after the instant indictment was unsealed,
the prosecutor testified that the indictment was sealed: (1) in an
effort to accommodate counsel for Gillich; (2) in order to locate
Sharpe; and (3) out of concern for pre-trial publicity before all
the defendants would be notified. The district court found that
these reasons constituted a legitimate prosecutorial purpose.
Particularly when we consider the deference accorded the magistrate
judge in such determinations, we find we are in full agreement with
the district court.
(2d Cir. 1985).
8
Srulowitz, 819 F.2d at 41.
9
Id.
10
Shell, 961 F.2d at 141-42; Lakin, 875 F.2d at 171;
Srulowitz, 819 F.2d at 41.
11
Lakin, 875 F.2d at 172; Srulowitz, 819 F.2d at 41; Ramey,
791 F.2d at 321; Edwards, 777 F.2d at 648.
7
III
CONCLUSION
Again, the sole issue we discuss today is one that is res nova
in this circuit: whether an indictment sealed within the statutory
period of limitations but unsealed after that time period has
expired tolls the statute of limitations. We adopt the reasoning
of the other circuits on this issue, holding that a timely filed
indictment does not bar prosecution absent a showing of actual
substantial prejudice. As the Appellants have failed to
demonstrate any such prejudice, the prosecution was not barred.
For the foregoing reasons, the opinion of the district court
is
AFFIRMED.
8