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United States of America v. Melvin Ray Lyttle

February 1, 2012; as amended February 6, 2012

UNITED STATES OF AMERICA, APPELLEE,
v.
MELVIN RAY LYTTLE, DEFENDANT, PAUL E. KNIGHT, VIOLETTE GAIL ELDRIDGE, JOHN L. MONTANA, JR., DEFENDANTS-APPELLANTS.



Appeal from the judgment of the United States District Court for the 31 Western District of New York (Charles J. Siragusa, Judge), sentencing 32 defendant-appellant Violette Gail Eldridge to a term of imprisonment of 240 33 months after her conviction for mail fraud in violation of 18 U.S.C. § 1341, wire 34 fraud in violation of 18 U.S.C. § 1343, conspiracy to commit mail and wire fraud 35 in violation of 18 U.S.C. § 371, money laundering in violation of 18 U.S.C. 36 § 1956(a)(1)(A)(i), and conspiracy to launder money in violation of 18 U.S.C. 37 § 1956(h).

The opinion of the court was delivered by: Livingston, Circuit Judge:

Argued: September 27, 2011

Before: WALKER, STRAUB, and LIVINGSTON, Circuit Judges.

Before Eldridge was indicted, the district court (Michael A. Telesca, 38 Judge) issued an order pursuant to 18 U.S.C. § 3292 suspending the running of 1 the statute of limitations prescribed by 18 U.S.C. § 3282 while the government 2 sought evidence in a foreign country. We hold that sufficient evidence supported 3 the district court's ex parte order to suspend the running of the statute of 4 limitations. We affirm.

23 This appeal requires us to construe 18 U.S.C. § 3292. In specified 24 circumstances, this provision requires a district court, before which a grand jury 25 is empaneled to investigate an offense, to toll the statute of limitations for that 26 offense while the government pursues evidence located in a foreign country. 18 27 U.S.C. § 3292.*fn1

1 Violette Gail Eldridge ("Eldridge") was convicted of numerous offenses 2 relating to her involvement in a fraudulent "high-yield investment program." 3 Before she was indicted and before the applicable statute of limitations had run, 4 the district court granted a government application to suspend the statute of 5 limitations pursuant to 18 U.S.C. § 3292 while the government sought the 6 assistance of the Hungarian government in recovering records relating to 7 transfers of the scheme's proceeds into Hungarian bank accounts. Eldridge was 8 subsequently indicted after the statute of limitations would normally have run.

1 On appeal, Eldridge argues that the indictment should have been 2 dismissed because insufficient evidence supported the district court's order to 3 suspend the running of the statute of limitations. She further argues that the 4 district court should not have suspended the statute of limitations because the 5 government already had sufficient evidence to present an indictment to the 6 grand jury before the statute of limitations ran, and because copies of the foreign 7 bank's records could have been obtained pursuant to a subpoena duces tecum 8 served on a source within the United States. Finally, she contends that the 9 district court's use of an ex parte proceeding when issuing the § 3292 order was 10 improper and that she was entitled to notice and a hearing before the tolling 11 order issued.*fn2

12 We reject each of these contentions. For the reasons that follow, we hold 13 (1) that the evidence in this case was sufficient to support the district court's 14 order; (2) that § 3292 does not require that the foreign evidence sought be 15 necessary for an indictment, nor that it be obtainable only through an official 16 request to a foreign government; and (3) that district courts may rely on ex parte 17 proceedings when deciding to issue § 3292 orders.

BACKGROUND

In a sealed indictment returned on August 18, 2005, defendant-appellant 3 Violette Gail Eldridge was charged with one count of conspiracy to commit mail 4 and wire fraud in violation of 18 U.S.C. § 371, five counts of mail fraud in 5 violation of 18 U.S.C. § 1341, three counts of wire fraud in violation of 18 U.S.C. 6 § 1343, one count of conspiracy to commit money laundering in violation of 18 7 U.S.C. § 1956(h), and three counts of money laundering in violation of 18 U.S.C. 8 § 1956(a)(1)(A)(i). All of the charges related to an alleged scheme to defraud 9 investors by offering them the opportunity to invest in a private, secret "high- 10 yield investment program" that did not, in fact, exist.

11 Eldridge argues, and the government does not contest, that her last 12 alleged act in furtherance of this conspiracy occurred in June 2000. Normally 13 this would mean that the five-year statute of limitations imposed by 18 U.S.C. 14 § 3282 would have expired in June 2005, two months before the grand jury 15 returned its indictment on August 18, 2005.

16 In this case, however, upon application by the government, the United 17 States District Court for the Western District of New York (Michael A. Telesca, 18 Judge) issued a sealed ex parte order on September 15, 2004, suspending the 19 statute of limitations while the government sought foreign evidence pursuant to 20 18 U.S.C. § 3292. Based on the affidavit of a Special Agent of the Federal 1 Bureau of Investigation ("FBI") documenting wire transfers between the United 2 States and Hungary, as well as the grand jury testimony of a victim of the 3 alleged fraudulent scheme, the district court found by a preponderance of the 4 evidence that the fraudulent scheme existed, and that "funds received through 5 the fraudulent scheme were transferred to and through financial institutions 6 located in Hungary." Moreover, the court found that information concerning 7 these transactions constituted evidence of potential federal criminal offenses 8 that was "material to the investigation in determining the identity of the 9 individuals associated with the criminal activity." Finally, after examining a 10 copy of the official request, the court found that on August 26, 2004, relying on 11 its Mutual Legal Assistance Treaty with Hungary, the United States had 12 officially asked Hungary to seek evidence relating to the ownership, control, and 13 use of the relevant Hungarian bank accounts and funds, and to forward any such 14 evidence to the United States. The court accordingly ordered that the statute of 15 limitations be suspended from the date the United States filed its official request 16 with Hungary until the date that Hungary either provided the evidence or 17 notified the United States that no foreign evidence existed. If Hungary did not 18 respond, the suspension order stated that the statute of limitations would 19 automatically begin running again after three years.

1 On February 16, 2006, after the indictment had been filed, Hungary 2 responded by furnishing documents relating to the accounts and wire transfers 3 and by explaining that other files were missing and appeared to have been 4 destroyed.

5 Eldridge moved to dismiss the indictment on February 20, 2007, arguing 6 in part that it was barred by the statute of limitations. She claimed that the 7 government had not satisfied the requirements of 18 U.S.C. ยง 3292, that the 8 Hungarian records were not material, and that she was "entitled to review due 9 to the ex parte nature of the Government's actions." The district court (Charles 10 J. Siragusa, Judge) denied the motion. See Minute Entry, United States v. 11 Eldridge (W.D.N.Y. Sept. 12, 2008) (No. ...


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