United States v. $6,976,934.65, Plus Interest Deposited Into Royal Bank of Scotland International, Account No. 2029-56141070, Held in the Name of Soulbury Ltd. , 554 F.3d 123 ( 2009 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 20, 2008 Decided January 27, 2009
No. 07-5383
UNITED STATES OF AMERICA,
APPELLEE
v.
$6,976,934.65, PLUS INTEREST DEPOSITED INTO ROYAL BANK
OF SCOTLAND INTERNATIONAL, ACCOUNT NUMBER
2029-56141070, HELD IN THE NAME OF SOULBURY LIMITED,
AND PROPERTY TRACEABLE THERETO,
APPELLEE
SOULBURY LIMITED,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 03cv02540)
Juan Chardiet argued the cause for appellant. With him
on the briefs was Daniel M. Press.
Robert Stapleton, Attorney, U.S. Department of Justice,
argued the cause for appellee. With him on the brief was A. J.
de Kluiver, Attorney.
2
Before: GRIFFITH, Circuit Judge, and EDWARDS and
WILLIAMS, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge GRIFFITH.
GRIFFITH, Circuit Judge: This case is an appeal of an in
rem action brought by the United States seeking the civil
forfeiture of $6,976,934.65 plus interest on the ground that it
was involved in or is traceable to a scheme to launder money
earned through an unlawful offshore Internet gambling
enterprise. The district court invoked the fugitive
disentitlement statute, 28 U.S.C. § 2466 (Supp. V 2005), to
grant summary judgment to the government against a claim to
the money filed by appellant Soulbury Limited, a British
Virgin Islands corporation. The court determined that the
company’s majority shareholder, William Scott, was evading
prosecution in two criminal cases related to the civil forfeiture
action by remaining outside the United States. Because we
conclude there is a genuine issue of fact whether the
disentitlement statute applies to Scott, we reverse.
I.
William Scott is a former U.S. citizen currently living
abroad. According to the government, beginning in 1997 and
continuing through 2002, Scott and an associate named
Jessica Davis operated a network of offshore Internet
gambling sites from the Caribbean that catered primarily to
U.S. residents. Hundreds of millions of dollars in bets placed
on sporting events flowed from the United States to the
Caribbean through these sites.
In March 1998, the United States filed a criminal
complaint in the Southern District of New York charging
Scott and Davis with conspiracy to violate the Wire Act, 18
3
U.S.C. § 1084 (2000), by soliciting and accepting sports
wagers from U.S. gamblers through the Internet. The court
issued a warrant for Scott’s arrest, but he was not in the
country. Although living abroad, Scott was aware of the
criminal proceedings. He appeared in an episode of the
Canadian television newsmagazine the fifth estate, broadcast
in 2001, about the rise of Internet gambling. The report
featured Scott’s operation of several gambling websites and
mentioned the pending criminal charges against him. When
the reporter interviewing him stated that there was a warrant
out for his arrest, Scott responded, “No, . . . no . . . well you
can call it warrant. There is a criminal complaint. Complaint.
I have not been indicted. It’s a complaint. Which means, yes,
if I would go to the U.S., I would probably be arrested.” the
fifth estate: The Big Gamble (CBC television broadcast Oct.
31, 2001).
While Scott and Davis remained abroad, the conspiracy
complaint grew stale, but the United States continued its
pursuit of the two. The government contends that Scott
funneled the proceeds of his unlawful gambling enterprise
from Caribbean bank accounts through American bank
accounts and into an account at the Royal Bank of Scotland
International (RBSI) opened by Scott and held in the name of
Soulbury. At Scott’s direction, RBSI later transferred
$10,000,000 from the account to an investment company
controlled by the bank, which invested the money in bonds,
insurance funds, and mutual funds held for the benefit of
Soulbury in the name of Rock Nominees Limited, Account
No. A92.
On December 15, 2003, the government filed this in rem
action in the United States District Court for the District of
Columbia, seeking civil forfeiture of $6,976,934.65 plus
interest. The complaint alleged that the res was subject to
4
forfeiture under 18 U.S.C. § 981(a)(1)(A) as property
involved in or traceable to money laundering transactions.
The district court issued a warrant for in rem arrest of the
funds. Although the forfeitable funds were being held in the
Rock Nominees account in the Bailiwick of Guernsey, an
island dependency of the United Kingdom located off the
coast of France, seizure was possible under 18 U.S.C.
§ 981(k). That statute provides that forfeitable funds on
deposit at a foreign financial institution that has an eligible
interbank account in the United States “shall be deemed to
have been deposited into the interbank account in the United
States, and any . . . arrest warrant in rem regarding the funds
may be served on the covered financial institution, and funds
in the interbank account . . . may be restrained, seized, or
arrested.” Id. On December 17, 2003, the United States served
the arrest warrant on Harris Bank International in New York
and seized the funds from RBSI’s interbank account with that
institution.
Soulbury filed a claim in this action on March 1, 2004,
asserting an interest and right in the seized funds and
demanding restitution from the government. As required by
18 U.S.C. § 983(a)(4)(B), Soulbury also filed an answer to the
government’s complaint, denying that the funds were linked
to any illegal activity or to Scott and asserting twelve
affirmative defenses, including improper venue and failure to
state a claim upon which relief can be granted. On the
government’s motion and over Soulbury’s opposition, the
district court stayed the forfeiture action on May 28, 2004, in
light of ongoing related grand jury investigations in the
District of Columbia. Those investigations led to a federal
indictment of Scott, Davis, and Soulbury on money-
laundering and other charges related to Internet gambling
operations. The district court also issued a warrant for Scott’s
arrest. Although the indictment and warrant issued on April 7,
5
2005, the district court kept them under seal for over a year
based on the government’s belief that Davis might enter the
country voluntarily. When it became apparent that Davis
would not, the government asked the court to unseal the
indictment and lift the stay in the civil forfeiture case. The
court lifted the stay on March 24, 2006, and unsealed the
indictment on May 16, 2006.
Soulbury then filed a motion to dismiss the forfeiture
case, again asserting improper venue and failure to state a
claim upon which relief can be granted. On the same day, the
government moved to strike Soulbury’s claim and answer
based on 28 U.S.C. § 2466, the fugitive disentitlement statute.
The district court denied both motions but instructed the
parties to conduct limited discovery into whether Scott owned
or controlled Soulbury. Only then could the court determine
whether Soulbury’s claim could be barred by the fugitive
disentitlement statute.
Soulbury initially refused to respond to the government’s
discovery requests but ultimately stipulated that Scott is its
majority shareholder. The United States then filed a motion
for summary judgment. Soulbury opposed the motion, again
making its arguments in favor of dismissal and also arguing
that the fugitive disentitlement statute violates due process.
In an opinion issued on November 8, 2007, the district
court concluded that the requirements of § 2466 were met and
that Soulbury could not press its claim to the seized funds.
The court determined that applying the statute in this case was
a proper exercise of its discretion. It rejected Soulbury’s due
process argument, noting that Soulbury would be free to
assert a claim to the funds if Scott submitted to the criminal
jurisdiction of the federal courts. The court also rejected
Soulbury’s argument that it must rule first on the affirmative
6
defenses, holding that the disentitlement statute barred
Soulbury from asserting any challenge to the seizure. The
court dismissed Soulbury’s claim, granted summary judgment
in favor of the United States, and ordered that the funds be
condemned as forfeited.
Soulbury appeals. We review the district court’s grant of
summary judgment de novo, applying the same standard as
the district court. See Judicial Watch, Inc. v. Dep’t of Justice,
432 F.3d 366, 369 (D.C. Cir. 2005).
II.
Although the fugitive disentitlement statute is relatively
new, it codifies and extends a well-established common law
doctrine. Fugitive disentitlement first developed as a way for
courts to dismiss appeals in criminal cases by defendants who
had escaped custody after filing the appeal and were evading
the jurisdiction of the court. Dismissal was an exercise of the
court’s inherent power “to refuse to hear a criminal case in
error, unless the convicted party . . . is where he can be made
to respond to any judgment [the court] may render.” Smith v.
United States, 94 U.S. 97, 97 (1876); see also Molinaro v.
New Jersey, 396 U.S. 365 (1970).
Some courts extended the doctrine to civil cases,
including civil forfeiture actions. Unlike its original
application in which the prosecution being evaded and the
appeal being dismissed were part of the same case, in the civil
context courts could dismiss a claim based on the fugitive’s
evasion of a related, but separate, criminal proceeding. See,
e.g., United States v. $45,940, 739 F.2d 792, 798 (2d Cir.
1984) (affirming dismissal of claim to funds forfeited under
customs statute by Canadian citizen who refused to face
related U.S. criminal charges); Doyle v. U.S. Dep’t of Justice,
7
668 F.2d 1365, 1366 (D.C. Cir. 1981) (affirming dismissal of
FOIA request related to criminal sentence that appellant was
evading by remaining in Panama). Other courts refused to
extend the disentitlement doctrine beyond its original
application. See, e.g., United States v. $40,877.59, 32 F.3d
1151, 1155 (7th Cir. 1994) (finding that there would be a
“real injustice” in permitting the government to confiscate
property “[b]y simply alleging in the complaint that the
claimant is a fugitive and the property is related to the alleged
crime from which he has fled”).
The Supreme Court resolved the circuit split in Degen v.
United States, 517 U.S. 820 (1996). The Court explained that,
as an exercise of courts’ “inherent authority to protect their
proceedings and judgments,” id. at 823, disentitlement must
be “a reasonable response to the problems and needs that
provoke it,” id. at 823–24. The Court held that disentitlement
of claims in civil forfeiture actions was a disproportionate
response to the problem of permitting a fugitive from criminal
justice to litigate a related civil proceeding. None of the
government’s asserted concerns—risk of delay, inability to
enforce the forfeiture judgment, use of civil discovery to gain
an improper advantage in the criminal matter, preserving the
dignity of the court, and deterring flight from criminal
prosecution—provided sufficient justification for the
extraordinary remedy of dismissing an otherwise valid claim.
See id. at 828. As a court-made rule, fugitive disentitlement
could not be applied in civil cases. The Court noted, however,
that it “need not, and d[id] not, intimate a view on whether
enforcement of a disentitlement rule under proper authority
would violate due process.” Id.Congress seized this opening when it enacted the Civil
Asset Forfeiture Reform Act of 2000 (CAFRA), Pub. L. No.
106-185, 114 Stat. 202 (2001). Section 14 of CAFRA created
8
the fugitive disentitlement statute, which provides, as
amended:
(a) A judicial officer may disallow a person from using
the resources of the courts of the United States in
furtherance of a claim in any related civil forfeiture
action or a claim in third party proceedings in any related
criminal forfeiture action upon a finding that such
person—
(1) after notice or knowledge of the fact that a
warrant or process has been issued for his apprehension,
in order to avoid criminal prosecution—
(A) purposely leaves the jurisdiction of the
United States;
(B) declines to enter or reenter the United States
to submit to its jurisdiction; or
(C) otherwise evades the jurisdiction of the court
in which a criminal case is pending against the person;
and
(2) is not confined or held in custody in any other
jurisdiction for commission of criminal conduct in that
jurisdiction.
(b) Subsection (a) may be applied to a claim filed by a
corporation if any majority shareholder, or individual
filing the claim on behalf of the corporation is a person to
whom subsection (a) applies.
28 U.S.C. § 2466.
Only one court of appeals thus far has reviewed a district
court’s application of § 2466. In Collazos v. United States,
368 F.3d 190 (2d Cir. 2004), the Second Circuit distilled the
statutory requirements for disentitlement into a five-element
test: (1) a warrant or similar process has issued in a criminal
9
case for the claimant’s apprehension; (2) the claimant had
notice or knowledge of the warrant or process; (3) the
criminal case is related to the forfeiture action; (4) the
claimant is not confined or otherwise held in custody in
another jurisdiction; and (5) the claimant has deliberately
avoided criminal prosecution by leaving the United States,
declining to enter or reenter the country, or otherwise evading
the criminal court’s jurisdiction. See id. at 198. These five
elements track the statutory requirements, and we adopt the
same test.
Because Soulbury does not dispute that Scott is its
majority shareholder, the district court correctly asked
whether Scott “is a person to whom [§ 2466(a)] applies,” as
§ 2466(b) requires. Furthermore, Soulbury admits that the
first and fourth elements of the Collazos test are satisfied: a
warrant has issued for Scott’s arrest and Scott is not confined
in another jurisdiction. But Soulbury argues that the district
court incorrectly granted summary judgment as to the other
three elements. The question, therefore, is whether Soulbury
raised a genuine issue of material fact as to any of those three
elements. We address each element in turn.
A.
Section 2466(a) requires not only that a warrant or
similar process have issued, but also that the alleged fugitive
have “notice or knowledge” of that fact. 28 U.S.C.
§ 2466(a)(1). The district court concluded that this
requirement was satisfied because “either Mr. Scott or his
agents had actual knowledge that he was subject to arrest in
the United States.” United States v. $6,976,934.65, 520 F.
Supp. 2d 188, 192 n.4 (D.D.C. 2007).
10
The district court based this conclusion in part on the fact
that Soulbury’s attorneys, who had represented that they were
able to convey messages to Scott, necessarily knew about
both outstanding warrants—one issued in New York in 1998
and one in D.C. in 2005—by virtue of their litigation of the
civil forfeiture action. (The forfeiture complaint described
both warrants.) The court appears to have relied on the well-
established principle that a person is “considered to have
‘notice of all facts, notice of which can be charged upon the
attorney.’” Link v. Wabash R.R. Co., 370 U.S. 626, 634
(1962) (quoting Smith v. Ayer, 101 U.S. 320, 326 (1879)). But
Soulbury’s attorneys did not represent Scott; indeed, they
expressly disavowed representation of Scott to the
government. Scott therefore cannot be charged with notice
through them.
The district court relied heavily on the fact that Scott is
the majority shareholder of Soulbury, explaining that it was
therefore appropriate to “impute Soulbury’s knowledge of the
outstanding warrants to Mr. Scott.” $6,976,934.65, 520 F.
Supp. 2d at 192 n.4. But Scott’s status as majority shareholder
does not necessarily make him a client of the corporation’s
attorneys. Shareholders, even majority shareholders, are not
ordinarily deemed the “clients” of the corporation’s lawyers.
See Goldstein v. SEC, 451 F.3d 873, 881 (D.C. Cir. 2006); see
also D.C. RULES OF PROF’L CONDUCT § 1.13, cmts. 1–2
(explaining that although an organization can act only through
its constituents, “that does not mean . . . that constituents of an
organizational client are the clients of the lawyer”);
RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS
§ 96 cmt. b (2000) (“By representing the organization, a
lawyer does not thereby also form a client-lawyer relationship
with all or any individuals . . . who have an ownership or
other beneficial interest in it . . . .”). Although the particular
facts of a case may suggest that attribution of a lawyer-client
11
relationship with a majority shareholder is appropriate, see
RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS,
supra, § 14 cmt. f, the district court made no such factual
finding in this case, and we see nothing in the record to
support that conclusion.
Nor can Soulbury’s knowledge be imputed to Scott on
the principle that notice to an agent is imputed to the
principal. See RESTATEMENT (THIRD) OF AGENCY § 5.03
(2006). Soulbury is not an agent of Scott unless the law of the
British Virgin Islands, under which Soulbury is incorporated,
so dictates. See id. § 3.05 cmt. b (corporation’s capacity to act
as agent “is a function of the law through which the
[corporation] has legal personality”). Neither the parties nor
the district court has offered any reason to think that, under
British Virgin Islands law, Soulbury is acting as an agent of
Scott. And although Scott, as majority shareholder, may in
some circumstances be an agent of Soulbury, “[n]otice of
facts that a principal knows . . . is not imputed downward to
an agent.” Id. § 5.03 cmt. g. In short, we can discern no basis
for the district court’s imputation of Soulbury’s notice of the
outstanding warrants to Scott.
The evidence of Scott’s notice or knowledge of the
warrants includes the media coverage cited by the district
court and Scott’s acknowledgement during his televised
interview in 2001 that “if I would go to the U.S., I would
probably be arrested.” the fifth estate: The Big Gamble, supra.
The government argues that this evidence shows notice of the
warrants based on the “totality of the circumstances.” Br. of
Appellee at 13. Soulbury argues that such “constructive
notice” is insufficient, and that the disentitlement statute
requires that an alleged fugitive have “actual knowledge” that
a warrant has issued. Br. of Appellant at 19.
12
Soulbury is wrong that only actual knowledge will
suffice. Section 2466(a)(1) requires “notice or knowledge,”
and we cannot read the words “notice or” out of the statute.
To the extent that Soulbury is arguing that “actual notice” or
“actual knowledge” is required, we will not supply the word
“actual” where Congress did not.1 All the statute requires is
knowledge of an arrest warrant’s issuance or notice—that is,
reason to know—of that fact. See BLACK’S LAW DICTIONARY
1090 (8th ed. 2004) (defining “notice” as “knowledge of” a
fact or “reason to know about it”). The district court therefore
correctly explained the statutory requirement: “the claimant in
the forfeiture case must know or have reason to know that he
is subject to arrest in the United States.” United States v.
$6,976,934.65, 478 F. Supp. 2d 30, 39 (D.D.C. 2007). Under
this standard, Scott undoubtedly had sufficient notice of the
1998 warrant. During his televised interview, Scott
acknowledged that a criminal complaint had been filed
against him and that he would likely be arrested if he entered
the United States. Soulbury offered nothing to cast doubt on
this evidence that Scott knew or had reason to know he was
subject to arrest.
Scott’s 2001 statement tells us nothing, however, about
his notice or knowledge of the 2005 warrant issued by the
D.C. district court. The only evidence offered by the
government to show Scott was on notice is an Antiguan
newspaper article from 2006 citing the recently unsealed D.C.
indictment of Scott, Davis, and Soulbury. The district court
relied on this article as evidence that news of the criminal
charges had reached the government of Antigua, the nation
1
This conclusion is reinforced by the existence of statutes
demonstrating that when Congress means to require “actual notice
or knowledge,” it makes that requirement explicit. See 7 U.S.C.
§ 2567 (2000); 26 U.S.C. §§ 3505, 6323, 6332 (2000).
13
where Scott resides. But the article does not show that this
news had reached Scott and, by itself, it is insufficient to
satisfy the government’s burden to show that there is no
dispute that Scott was on notice of the 2005 warrant for his
arrest.
Nonetheless, as the district court noted, § 2466 requires
only that a fugitive “have notice that he is subject to arrest in
the United States. He need not have notice of all warrants for
his arrest.” $6,976,934.65, 478 F. Supp. 2d at 39 n.7. Scott’s
notice of the 1998 warrant’s issuance satisfies the second
element of the Collazos test.2
B.
The third element of the Collazos test asks whether the
civil forfeiture action is “related” to the criminal prosecution
being evaded. See 28 U.S.C. § 2466(a). To determine whether
the 1998 and 2005 prosecutions are related to this forfeiture
action, the district court applied a standard found in 18 U.S.C.
§ 981(g)(4). Section 981(g) permits a court to stay a civil
forfeiture proceeding when “civil discovery will adversely
affect . . . the prosecution of a related criminal case.” Id.§ 981(g)(1). The statute defines the term “related criminal
case” for the purpose of deciding whether a stay is necessary.
It instructs a court making that decision to “consider the
degree of similarity between the parties, witnesses, facts, and
circumstances involved in the two proceedings.” Id.
2
As discussed in Part II.C, infra, Scott may no longer be subject to
prosecution on the 1998 criminal complaint because the statute of
limitations has run, and there is a genuine question whether that
statute is tolled. But the statute of limitations does not apply to the
warrant, and we have no other reason to think the warrant is no
longer valid. Because Scott has notice of an outstanding warrant for
his arrest, this element of § 2466 is satisfied.
14
§ 981(g)(4). Applying this standard, the district court
concluded that both the 1998 and 2005 prosecutions were
“related” to the civil forfeiture action.
Neither the district court nor the parties considered that
this standard may not apply to the disentitlement statute. But
subsection (g)(4) states that its definition applies only “[i]n
this subsection.” Id. It does not offer a generally applicable
definition of “relation” between criminal and civil forfeiture
cases. Moreover, the elements of § 981(g)(4)’s definition—
similarity of parties, witnesses, facts, and circumstances—are
tailored to suit the specific discovery concerns addressed by
that provision. Although the effect of civil discovery on a
related criminal prosecution is a concern that informs fugitive
disentitlement, see Degen, 517 U.S. at 826, the statute
addresses other concerns as well.
We think a better standard to govern the “related”
element of § 2466 is found in the statute that provides for civil
forfeiture of property related to a criminal prosecution. That
statute, 18 U.S.C. § 981(a)(1), specifies the circumstances in
which the government may bring a civil forfeiture action to
recover property related to a crime. The natural reading of
“related” in the fugitive disentitlement statute is that the civil
forfeiture action must be one in which the government is
proceeding under § 981(a)(1) to recover property “involved
in,” “derived from,” “traceable to,” “obtained []by,” or “used
to facilitate” a crime for which the defendant is evading
prosecution. Id. In other words, the question is whether the
facts that underlie the prosecution being evaded also form the
basis for the forfeiture action.
Applying that test, both the 1998 and 2005 prosecutions
of Scott are unquestionably “related” to this forfeiture action.
The 1998 criminal complaint charged Scott with conspiracy to
15
violate the Wire Act by “us[ing] a wire communication
facility for the transmission in interstate and foreign
commerce of bets and wagers on sporting events and contests,
and for the transmission of a wire communication which
entitled the recipient to receive money and credit as a result of
bets and wagers.” J.A. at 119. The charge was based on
Scott’s operation of an Internet sports betting service called
World Wide Tele-Sports from 1997 to 1998. The 2005
indictment included the same charge against Scott and the
other defendants, and also charged them with international
money laundering. The civil forfeiture complaint, brought
pursuant to § 981(a)(1)(A), is based on, inter alia, charges of
international money laundering with intent to promote a
specified unlawful activity. The “specified unlawful activity”
being promoted is the Wire Act violation alleged in the 1998
criminal complaint.
Soulbury has not raised a genuine issue of material fact
as to the relation between the two criminal prosecutions and
this civil forfeiture case. Thus, although the district court
applied the wrong standard in making its determination, it
correctly granted summary judgment as to this element of the
Collazos test. See Washburn v. Lavoie, 437 F.3d 84, 89 (D.C.
Cir. 2006) (noting that “an appellate court may affirm a grant
of summary judgment on a ground not relied upon by the
lower court”).
C.
The fifth and final question under the Collazos test is
whether Scott remains outside the United States “in order to
avoid criminal prosecution.” 28 U.S.C. § 2466(a)(1). The
disentitlement statute sets out three specific ways in which
this inquiry can be satisfied: if the claimant “purposely leaves
the jurisdiction of the United States”; “declines to enter or
16
reenter the United States to submit to its jurisdiction”; or
“otherwise evades the jurisdiction of the court in which a
criminal case is pending against the person.” Id.§ 2466(a)(1)(A)–(C). The district court determined that
Scott’s “constructive flight”—that is, his failure to reenter the
United States to face the pending criminal charges—brought
him within the second prong of this element. Alternatively,
the court found the third prong satisfied because Scott has
“otherwise evaded” the criminal jurisdiction of the United
States by renouncing his U.S. citizenship and adopting
Antiguan citizenship in what the court speculated was an
attempt to avoid extradition.
As Soulbury argues, however, the district court erred in
concluding that the statute does not require the government to
show “that avoiding prosecution is the reason Scott has failed
to enter the United States and has otherwise evaded its
jurisdiction,” $6,976,934.65, 478 F. Supp. 2d at 41. The plain
language of § 2466 mandates this showing by requiring that,
under any of the three ways in which the government can
prove evasion of jurisdiction, that evasion must have been “in
order to avoid criminal prosecution.” 28 U.S.C. § 2466(a)(1)
(emphasis added). Thus, under the second prong, mere notice
or knowledge of an outstanding warrant, coupled with a
refusal to enter the United States, does not satisfy the statute.3
The alleged fugitive must have “declined to enter or reenter”
the country in order to avoid prosecution. Id. § 2466(a)(1)(B).
Likewise, under the third prong, Scott’s renunciation of his
U.S. citizenship is insufficient without some evidence that he
took this action to avoid extradition.
3
Although it did not directly address the question, the Second
Circuit appears to have reached this conclusion as well, noting that
disentitlement is proper for fugitives who “learned that their arrests
were sought and who then refused to return to the United States in
order to avoid prosecution.” Collazos, 368 F.3d at 199.
17
Soulbury alleges, and the government does not dispute,
that Scott voluntarily left the United States in 1992, long
before either the 1998 or the 2005 criminal prosecution. The
government has not satisfied its burden on summary judgment
to show that Scott remains outside the United States in order
to avoid the pending criminal charges. The only evidence that
speaks to Scott’s intent is the video of his 2001 appearance on
the fifth estate. In that video, Scott acknowledges the pending
criminal complaint and that he would likely be arrested if he
returned to the United States. But as Soulbury points out, the
video also suggests that Scott did not wish to reenter the
United States regardless of any pending criminal charges.
Scott told the reporter interviewing him: “I don’t mind not
going back to the States. There are a few of us that are . . . that
are under the same restrictions that would like to go back to
the States. Myself, that’s fine.” the fifth estate: The Big
Gamble, supra. The district court made no finding as to what,
if anything, this comment reveals about Scott’s reasons for
remaining outside the United States. But a court considering
summary judgment must draw “all reasonable evidentiary
inferences” in favor of the nonmoving party. Toney v.
Bergland, 645 F.2d 1063, 1066 (D.C. Cir. 1981). Under this
standard, Scott’s statement is sufficient to raise a genuine
issue of fact whether he declined to reenter the country in
order to avoid criminal prosecution under the 1998 or 2005
charges.
This is particularly so with regard to the 1998 charges,
because it is not clear that Scott could still be indicted based
on the complaint filed in the Southern District of New York.
Under 18 U.S.C. § 3282(a), “no person shall be
prosecuted . . . for any [noncapital] offense . . . unless the
indictment is found or the information is instituted within five
years next [sic] after such offense shall have been
18
committed.” The complaint charged Scott with criminal
conduct continuing through March 18, 1998. No indictment
issued on the complaint by March 18, 2003, nor has any
indictment issued since. Despite the five-year statute of
limitations, Scott might still be subject to prosecution on the
1998 charges. Another statute provides that “[n]o statute of
limitations shall extend to any person fleeing from justice.” 18
U.S.C. § 3290. But Second Circuit law, which applies to the
complaint, requires a showing of intent to prove flight from
justice under § 3290. See Jhirad v. Ferrandina, 486 F.2d 442,
444 (2d Cir. 1973) (holding that “the government must show
an intent to flee from prosecution or arrest before the statute
of limitations is tolled”). Scott’s 2001 statements to the fifth
estate reporter are the only evidence of his intent, and there is
a genuine dispute as to the conclusions to be drawn from
them.
Moreover, as discussed in Part II.A, supra, the
government has not yet shown that Scott had notice of the
2005 warrant. Without notice of that warrant or the attendant
criminal proceedings, it is difficult to say that Scott’s purpose
for remaining outside the country was to avoid criminal
prosecution in the D.C. court.
In light of the factual dispute regarding Scott’s intent to
avoid criminal prosecution, the district court erred in granting
summary judgment on the applicability of the fugitive
disentitlement statute to Soulbury through Scott.
III.
For the foregoing reasons, we reverse the district court’s
grant of summary judgment in favor of the government.
Under the correct interpretation of the fugitive disentitlement
statute, there is a genuine issue of material fact whether Scott
19
is a person to whom the statute applies and therefore whether
Soulbury’s claim can be dismissed under the statute. Because
we reverse on this ground, we need not consider Soulbury’s
alternative arguments that the district court should have
considered its affirmative defenses of improper venue and
failure to state a claim before dismissing on disentitlement
grounds, or that the application of the disentitlement statute to
Soulbury violates due process.4 We remand for further
proceedings consistent with this opinion.
So ordered.
4
Nor need we address the challenge to the statute’s
constitutionality under the Excessive Fines Clause of the Eighth
Amendment, which Soulbury waived by failing to raise it in its
opening brief. See Bd. of Regents of Univ. of Wash. v. EPA, 86 F.3d
1214, 1221 (D.C. Cir. 1996) (holding that “issues not raised until
the reply brief are waived”).