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United States of America v. Dominick P. Carollo

October 20, 2011


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge:


Before the Court is the Government's "Motion to Clarify or Reconsider the Applicability of Section 3293's Ten-Year Statute of Limitations to Counts Four and Five." On August 25, 2011, I dismissed Count Seven of the Superseding Indictment filed on May 31, 2011 (the "Indictment") holding that the ten-year statute of limitations provided by 18 U.S.C. § 3293(2) for offenses that affect financial institutions was inapplicable in the absence of any actual loss or a non-de minimis risk of loss by a financial institution. On September 1, 2011 the Government filed the present motion asking the Court to clarify that its Order does not preclude the Government from (i) offering evidence at trial that Financial Institution A suffered an actual loss of $160 million that it paid in penalties, disgorgement, and restitution for its knowing participation in the conspiracies alleged in Counts Four and Five, and (ii) obtaining a jury instruction on § 3293 with respect to Counts Four and Five if the evidence establishes a factual basis for the requisite effect on a financial institution. Alternatively, the Government asks this Court to reconsider its decision in light of the actual loss incurred by Financial Institution A in this case and allow the Government to show the actual effect at trial. For the following reasons the Government's motion is denied.


On July 1, 2011, Dominick Carollo, Steven Goldberg and Peter Grimm ("Defendants") filed a Motion to Dismiss the Indictment as barred by the statute of limitations and a Motion to Compel a Detailed Bill of Particulars. Additionally, Defendant Goldberg, joined by Defendant Carollo, filed a Motion to Dismiss several counts as multiplicitous. The Government opposed the motions and with respect to the statute of limitations issue argued that Counts Four, Five and Seven were subject to the ten-year statute of limitations provided by 18 U.S.C. § 3293(2) because the alleged offenses affected a financial institution. The Government focused on the legal applicability of § 3293 to this case and argued that it is not required to prove its case in advance of trial. Apart from § 3293, the Government also argued that the conspiracies alleged in Counts One through Six fell within the five-year statute of limitations period because the alleged conspirators committed overt acts in furtherance of the conspiracies (the payments at suppressed rates) within that period. Defendants argued that the Government had not sufficiently alleged any direct affect on any financial institution and that the payments did not qualify as overt acts.

I granted the motions in part and denied them in part. I agreed with the Government that the payments constitute overt acts in furtherance of the conspiracies and therefore ordered the six conspiracy counts to proceed to trial. I also concluded that the wire fraud scheme alleged in Count Seven was time-barred because the financial institutions had suffered no actual loss but only, at most, a de minimis risk of loss. Finally, I denied the Motion to Compel a Detailed Bill of Particulars and Motion to Dismiss several counts as multiplicitous. The Government's present motion concerns my decision that § 3293 is inapplicable to Counts Four and Five.


A.Motion to Clarify

My ruling that § 3293 could not be used to save Count Seven was applicable as well to Counts Four and Five. In my August 25 Opinion, my discussion of the applicability of § 3293 was limited to Count Seven because it was not necessary to discuss the issue in the context of Counts Four and Five since with respect to Counts One through Six the Government alleged that the Defendants received payments at suppressed rates, and I held that those payments constituted overt acts that took place within the applicable five-year statute of limitations period. The requirements for § 3293 to be applicable to Count Seven apply with equal force to Counts Four and Five, and the Government has offered nothing to suggest otherwise.

B.Motion for Reconsideration

Although neither the Federal Rules of Criminal Procedure nor the Local Criminal Rules of this Court address the proper standard for a motion for reconsideration in criminal cases, courts in this district have applied the standard of Local Rule 6.3. See, e.g., United States v. Kerik, 615 F. Supp. 2d 256, 276 n.27 (S.D.N.Y. 2009); United States v. Leaver, 358 F. Supp. 2d 273, 277 n.14 (S.D.N.Y. 2005). Motions for reconsideration are strictly evaluated and "generally are 'denied unless the moving party can point to controlling decisions or data that the court overlooked-matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.'" Women's Integrated Network, Inc. v. U.S. Specialty Ins. Co., No. 8 Civ. 10518, 2011 WL 1347001, at *1 (S.D.N.Y. April 4, 2011) (quoting Shrader v. CSX Transp., 70 F.3d 255, 257 (2d Cir. 1995)). It is beyond peradventure that a party may not re-litigate an issue already decided by the Court simply because of a disagreement with the Court's determination. The grounds justifying reconsideration are an intervening change of controlling law, the availability of new evidence not previously available, or the need to correct a clear error or prevent manifest injustice. Women's Integrated Network, Inc., 2011 WL 1347001, at *1 (S.D.N.Y. April 4, 2011) (citing Virgin Atl. Airways Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)); In re Zyprexa Products Liab. Litig., 653 F. Supp. 2d 181, 182 (E.D.N.Y. 2009) (citing Doe v. N.Y.C. Dep't of Soc. Servs., 709 F.2d 782, 789 (2d Cir. 1983)); Nnebe v. Daus, No. 06 Civ. 4991, 2006 WL 2309588, at *1 (S.D.N.Y. Aug. 7, 2006). As the Government has not shown that the Court overlooked any controlling law or new evidence not available to it at the time of my decision, nor that reconsideration is necessary to prevent manifest injustice, it has failed to sustain its burden on this motion.

1.It was permissible to rule on the statute of limitations issue pretrial.

The Government contends that the Court ought not to have ruled on the Defendants' statute of limitations defense at the motion to dismiss stage, again a little late and a little wrong. "A party may raise by pretrial motion any defense, objection, or request that the court can determine without a trial of the general issue." Fed. R. Crim. P. 12(b)(2). As the Second Circuit has explained, "[t]he general issue in a criminal trial is, of course, whether the defendant is guilty of the offense charged." United States v. Doe, 63 F.3d 121, 125 (2d Cir. 1995). Therefore, ordinarily a defendant may not raise in a pretrial motion a defense to liability; however, resolution of a statute of limitations issue pretrial does not go to the general issue of liability and "protects the defendant from having to defend against stale charges." Kerik, 615 F. Supp. 2d at 268 n.14.

The Government argues that an indictment is sufficient if it alleges the offense's elements, fairly informs a defendant of the charge, and enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense. 09/01/2011 Gov.'s Mem. in Supp. of Mot. to Clarify or Reconsider ("Gov.'s Mem.") at 5 (citing United States v. Stavroulakis, 952 F.2d 686, 693 (2d Cir. 1992)). The Government, relying principally on a Supreme Court case from shortly after the Civil War, argues that the Court should reserve decision on the statute of limitations issue until trial because an indictment need not negate an affirmative defense based on the statute of limitations. Gov.'s Mem. at 5-6 (citing United States v. Cook,84 U.S. 168,178-80 (1872)). However, the Government's reliance on Cook is misplaced. The Cook Court stated that courts "will not quash an indictment because it appears upon its face that it was not found within the period prescribed in the limitation, as such a proceeding would deprive the prosecutor of the right to reply or give evidence ... that the defendant fled from justice and was within the exception." 84 U.S. at 179-80. Here, the Government had the opportunity to provide evidence, or at least allege facts sufficient to withstand the statute of limitations defense but elected not to do so.

Indeed, courts in this Circuit have dismissed indictments pre-trial on the basis that the government has failed to overcome a statute of limitations defense. See, e.g., Kerik, 615 F. Supp. 2d at 277.*fn1 In Kerik, this Court rejected the government's argument that consideration of the issue pre-trial was premature and dismissed a wire fraud count as barred by the statute of limitations. Id. at 268 n.14, 277. The Court further explained that where the government was on notice that the defendant moved to dismiss various counts on statute of limitations grounds and had ample opportunity to proffer any evidence to defeat the defense, the government's assertion ...

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