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United States v. Smith

United States District Court, Ninth Circuit

October 16, 2013

United States of America, Plaintiff,
v.
Gordon Sloan Smith, Defendant.

ORDER

G. MURRAY SNOW, District Judge.

Pending before the Court is Defendant's Memorandum in Support of and Motion to Dismiss the Indictment. (Doc. 47.) For the reasons discussed below, Defendant's Motions is denied.

BACKGROUND

Gordon Sloan Smith filed for bankruptcy on May 17, 2004, and identified a gold mine as part of his bankruptcy estate. On July 12, 2007, Smith allegedly sold a partnership in the mine for $950, 000. The mine was still a part of the bankruptcy estate, and Smith did not report the sale to the bankruptcy trustee. On July 10, 2012, a grand jury indicted Smith on five counts related to fraud and bankruptcy. (Doc. 1.) On July 20, 2012, FBI agents arrested Smith. (Doc. 7.)

Smith now brings this Motion to Dismiss the Indictment arguing that his prosecution should be barred by laches or inexcusable delay, and that the indictment should be dismissed due to governmental misconduct in the arrest and interrogation. In support of his argument, Smith identifies eight "indispensable material witnesses" who have died during the alleged delay. (Doc. 47, at 2.)

ANALYSIS

1. Statute of Limitations, Laches , and Inexcusable Delay

Smith was indicted within the statute of limitations. As Smith concedes in his Reply, the general statute of limitations for federal crimes is five years. 18 U.S.C. ยง 3282(a) (2006). The allegedly fraudulent sale occurred on July 12, 2007. The indictment on July 10, 2012, was within five years of that date.

The equitable doctrine of laches does not apply to Smith's case. The Ninth Circuit recently noted that there are "no case[s] applying a laches defense in the criminal context." United States v. Batson, 608 F.3d 630, 633 (9th Cir. 2010) (quoting United States v. Milstein, 401 F.3d 53, 63 (2d Cir. 2005) (per curiam)). Smith cites several cases applying laches in bankruptcy cases, but the Court declines his invitation to expand the traditional reach of that discretionary, equitable doctrine into this criminal case.

Although not barred by the statute of limitations or laches, a prosecution can be prohibited by the related doctrine of pre-indictment delay.

"The Fifth Amendment guarantees that defendants will not be denied due process as a result of excessive pre-indictment delay." United States v. Sherlock, 962 F.2d 1349, 1353 (9th Cir. 1989). Generally, any delay between the commission of a crime and an indictment is limited by the statute of limitations. United States v. Huntley, 976 F.2d 1287, 1290 (9th Cir. 1992). In some circumstances, however, "the Due Process Clause requires dismissal of an indictment brought within the [statute of] limitations period." Id.

United States v. Corona-Verbera, 509 F.3d 1105, 1112 (9th Cir. 2007). The Ninth Circuit has established a two-part test for determining when an indictment must be dismissed for pre-indictment delay.

First, the defendant must prove "actual, non-speculative prejudice from the delay." Id. To satisfy this requirement, the defendant must provide "proof that demonstrates exactly how the loss of evidence or witnesses was prejudicial." United States v. Barken, 412 F.3d 1131, 1134 (9th Cir. 2005). "The defendant's burden to show actual prejudice is heavy and is rarely met." Id. "Courts apply the actual prejudice test stringently.'" United States v. Manning, 56 F.3d 1188, 1194 (9th Cir. 1995) (quoting United States v. Butz, 982 F.2d 1378, 1380 (9th Cir. 1993)).

For example, the court rejected the defendant's argument in Corona-Verbera that the death of witnesses and other lost evidence constituted actual prejudice. 509 F.3d at 1112-13. It noted that protection from lost testimony is usually provided by the statute of limitations. Id. Further, the defendant's argument was "based on generalized speculation as to what lost or deceased witnesses would have said." Id. The prejudice argument was "pure conjecture" because the defendant had not provided affidavits or any other non-speculative ...


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