United States v. Gibson, James R. ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-4327
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JAMES R. GIBSON,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 01 CR 30005—J. Phil Gilbert, Judge.
____________
ARGUED FEBRUARY 23, 20071—DECIDED JUNE 19, 2007
____________
Before POSNER, KANNE, and ROVNER, Circuit Judges.
KANNE, Circuit Judge. After a flight from justice and a
botched plea agreement, a jury convicted James Gibson of
one count of conspiracy to commit mail and wire fraud in
violation of 18 U.S.C. § 371, three counts of mail fraud in
violation of 18 U.S.C. § 1341, two counts of wire fraud in
violation of 18 U.S.C. § 1343, one count of conspiracy
to commit money laundering in violation of 18 U.S.C.
1
An opinion in this case was issued on March 16, 2007 and a
judgment was entered. The court, on its own motion, withdrew
the opinion and on March 19, 2007, the judgment was vacated
to allow time for supplemental briefing.
2 No. 05-4327
§ 1956(h), and one count setting forth forfeiture allega-
tions pursuant to 18 U.S.C. § 982. Gibson was sentenced
to 480 months’ imprisonment. Over Gibson’s arguments,
the district court determined that the statute of limita-
tions had not run on any of the charges against him due
to his flight from justice and the subsequent passage of
18 U.S.C. § 3296 allowing for the reinstatement of charges
dismissed pursuant to a plea agreement. We affirm.
I. BACKGROUND
Gibson was the owner and president of SBU, Inc. and
several other companies in and around St. Louis, Missouri.
SBU arranged tax-advantaged structured settlements
in personal injury cases. Gibson told his clients that their
structured settlements would be funded with United
States Treasury obligations, such as Treasury Bonds,
which would be transferred to a third-party trustee and
held in irrevocable and segregated trusts for each client’s
sole benefit. The clients would receive periodic payments
from the interest and proceeds from the redemption of
these Treasury obligations. SBU’s clients arranged for
their personal injury settlement funds to be sent directly
to Gibson personally.
After a period of legitimate operation, Gibson stopped
buying Treasury obligations with his clients’ settlement
funds. Instead he spent $16,856,000 of his clients’ money
on unauthorized business transactions, high risk invest-
ments, and purchases of real estate and luxury items for
his own use. Gibson then began redeeming the Treasury
obligations he had already purchased for his clients and
likewise spending the proceeds for himself. The total loss
to Gibson’s clients was $156,194,810.92, many of whom
needed the money to support themselves and fund neces-
sary medical treatment.
No. 05-4327 3
Gibson’s attorney informed him that he was under
investigation for his management of client funds. He and
his wife set sail to Belize and wired $3,478,352 of his
client’s trust funds to Belize bank accounts. They re-
turned briefly to the United States, but departed for Belize
again in July 1999.
On January 18, 2001, Gibson was charged in a sup-
pressed indictment with: one count of conspiracy to commit
mail and wire fraud in violation of 18 U.S.C. § 371, three
counts of mail fraud in violation of 18 U.S.C. § 1341, two
counts of wire fraud in violation of 18 U.S.C. § 1343, one
count of conspiracy to commit money laundering in
violation of 18 U.S.C. § 1956(h), and one count setting
forth forfeiture allegations in violation of 18 U.S.C. § 982.
Gibson was arrested in Belize on May 10, 2001 and
returned to the United States. The indictment was un-
sealed on May 10, 2001 as a result of Gibson’s arrest. A
superseding indictment was returned on October 18, 2001,
adding Gibson’s wife as a defendant.
On January 8, 2002, Gibson pled guilty to one count of
conspiracy to commit mail and wire fraud in violation of 18
U.S.C. § 371. Pursuant to a plea agreement, the govern-
ment dismissed the remaining seven counts and Gibson
was sentenced to 262 months’ imprisonment. Unfortu-
nately, this plea agreement was based on the erroneous
belief (by all involved) that the maximum statutory
sentence under § 371 was thirty years’ imprisonment. In
reality, the maximum sentence was just five years’ im-
prisonment. Gibson appealed, and this court vacated his
guilty plea, conviction, and sentence and remanded to the
district court for further proceedings. United States v.
Gibson, 356 F.3d 761, 767 (7th Cir. 2004) (Gibson I).
This court’s mandate was entered on February 26, 2004.
Under 18 U.S.C. § 3296, the government then had sixty
days to move to reinstate the counts of the indictment that
4 No. 05-4327
were dismissed pursuant to the plea agreement. The
government so moved on March 26, 2004 and the charges
were reinstated on July 14, 2005.2
Prior to trial, Gibson moved the district court to recon-
sider its ruling permitting the government to reinstate
all of the counts in the indictment that had been dismissed
pursuant to his plea agreement. He argued that the five
year statute of limitations had run on the allegations
contained in Counts two, three, and five of the indictment.
The earliest of the charged conduct, contained in Count
five, occurred on June 6, 1996. The district court held that
the statute of limitations was tolled during the twenty-two
months that Gibson was hiding in Belize, and that 18
U.S.C. § 3296 was passed before the newly calculated
limitations date, allowing for reinstatement of the charges.
Gibson was tried by a jury and convicted of all counts on
the indictment. He was sentenced to 480 months’ impris-
onment and three years’ supervised release, and was
ordered to pay a special assessment of $700 and restitu-
tion in the amount of $83,282,767.42.
II. ANALYSIS
Gibson raises two issues on appeal: (1) whether this
court had the authority to vacate his guilty plea on his
first direct appeal; and (2) whether Counts two, three, and
five of the indictment were properly reinstated.
2
Gibson’s case was originally assigned to Chief Judge Murphy
in the district court. Judge Murphy was forced to recuse himself
after Gibson made a credible threat that he would have Judge
Murphy killed. R. 382. Gibson also fired several appointed
counsel and eventually decided to proceed pro se. Judge Murphy’s
recusal, Gibson’s numerous counsel, and a variety of pretrial
motions delayed the reinstatement of the charges.
No. 05-4327 5
A. Authority to Vacate Guilty Plea
Gibson argues that on his original direct appeal from his
guilty plea, we should have vacated his sentence, but
upheld his guilty plea. This would limit Gibson’s sentence
to the five-year statutory maximum. We considered and
rejected this argument the first time Gibson raised it.
Gibson I, 356 F.3d at 765. Gibson’s guilty plea was entered
and accepted prior to the effective date of the 2002
amended FED. R. CRIM. P. 11 under subsection (e)(1)(C).3 In
Gibson I we stated: “[B]ecause the plea agreement en-
tered into by Gibson and the government contained explicit
provisions regarding the exact term of imprisonment,
Gibson can only attack the validity of the entire plea
agreement.” 356 F.3d at 765. We cannot preserve a plea
under Rule 11(e)(1)(C) but dispose of the sentence. Id. at
765 (citing United States v. Barnes, 83 F.3d 934, 931 (7th
Cir. 1996); United States v. Peterson, 268 F.3d 533, 534
(7th Cir. 2001)). Gibson alternatively requested that we
void the entire agreement and remand for further proceed-
ings. We did so, and Gibson has given us no reason to
reconsider that decision.
B. Reinstatement of Charges
Gibson next argues that Counts two, three, and five of
the indictment were improperly reinstated on July 14,
2005 because the five-year statute of limitations had
already run. We review the district court’s ruling regard-
ing the statute of limitations de novo. United States v.
Daniels, 387 F.3d 636, 641 (7th Cir. 2004); United States
v. Pearson, 340 F.3d 459, 464 (7th Cir. 2003), vacated on
other grounds, sub nom. Hawkins v. United States, 543
U.S. 1097 (2005).
3
Now embodied in FED. R. CRIM. P. 11(c)(1)(C).
6 No. 05-4327
The first step in our analysis is to calculate the bar date,
which requires us to determine whether any tolling
provisions apply. “No statute of limitations shall extend to
any person fleeing from justice.” 18 U.S.C. § 3290. The
statute of limitations and its tolling provisions are de-
signed to allow the government time to investigate crimes
while protecting individuals from defending against
charges for distant offenses. United States v. Marshall, 856
F.2d 896, 899-900 (7th Cir. 1988). Section 3290 “reflects
the congressional belief that where the defendant impedes
the discovery and prosecution of his criminal conduct by
‘fleeing from justice,’ his right to avoid prosecution for
distant offenses is diminished while the government’s need
for additional discovery time is strengthened.” Id. at 900.
In order for § 3290 to toll the statute of limitations
while the defendant has fled, the government must prove
by a preponderance of the evidence that the defendant
fled with the intent to avoid arrest or prosecution. Id.; see
also United States v. Elliot, 467 F.3d 688, 690 (7th Cir.
2006).
The government has more than met its burden on this
issue. Gibson admitted to federal agents that his attorney
informed him that he was under investigation prior to
his departure and indicated that he left in anticipation
of criminal charges. Gibson set up Belize corporations to
hide his assets and gave no legitimate purpose for doing
so. His wife testified that they had discussed the possibil-
ity of criminal liability for their use of the trust money
and that they were concerned that they may be arrested
upon their departure from the United States in July 1999.
Because the date of the earliest conduct charged in the
indictment was June 6, 1996, we will use that date to
illustrate the limitations analysis. Under 18 U.S.C. § 3282,
the statute of limitations for non-capital offenses is five
years. Accounting for the twenty-two months during which
the statute was tolled due to Gibson’s flight to Belize, the
No. 05-4327 7
new bar date was in April 2003. After this court vacated
Gibson’s guilty plea, the government did not move for
reinstatement of the charges against him until March 26,
2004. If this were the end of the story, the charges against
Gibson in Counts two, three, and five of the indictment
would not be timely. However, this is not the end of the
story.
The second step in our analysis is to determine whether
reinstatement of the charges was proper notwithstand-
ing the statute of limitations. On November 2, 2002, 18
U.S.C. § 3296 became effective, allowing for reinstate-
ment of the counts of an indictment when: “(1) the counts
sought to be reinstated were originally filed within the
applicable limitations period; (2) the counts were dis-
missed pursuant to a plea agreement approved by the
district court under which the defendant pled guilty to
other charges; (3) the guilty plea was subsequently vacated
on the motion of the defendant; and (4) the United States
moves to reinstate the dismissed counts within 60 days of
the date on which the order vacating the plea becomes
final.” 18 U.S.C. § 3296(a).
Gibson does not argue that any of § 3296’s require-
ments are not met, only that because the section was not
in place at the time he committed the crimes, its applica-
tion in this case would be impermissibly ex post facto. But
it is well settled law that applying procedural statutes
such as 18 U.S.C. § 3296, which effectively enlarges the
limitations period, does not violate the ex post facto clause
so long as the statute is passed before the given prosecu-
tion is barred. Stogner v. California, 539 U.S. 607, 618
(2003); United States v. Elrod, 682 F.2d 688, 689 (7th Cir.
1982). Section 3296 was passed in November 2002, at least
five months before the earliest bar date for any of Gibson’s
offenses after accounting for his flight from justice.
Application of 18 U.S.C. § 3296 was not ex post facto, and
counts two, three, and five of the indictment were thus
properly reinstated.
8 No. 05-4327
III. CONCLUSION
Gibson’s original guilty plea was properly vacated along
with his sentence in 2004. Through application of 18
U.S.C. §§ 3290 and 3296 to Gibson’s flight to Belize and
vacated guilty plea, the charges reinstated against him
in 2005 for the offenses he committed in 1996 were timely
notwithstanding the five-year statute of limitations. The
judgment of the district court is AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—6-19-07