Opinion ID: 164300
Heading Depth: 2
Heading Rank: 2

Heading: A Continued Execution

Text: 19 In the alternative, the government acknowledges that the Companies first executed their scheme when they submitted their allegedly false claim, but it argues the offense continued into the limitation period to include the June 28, 1995 meeting. In other words, the government argues the execution of a scheme to defraud is a continuing offense. Under this analysis, the government believes the indictment was timely filed because the statute of limitations did not begin to run until the objective of the fraud [was] accomplished or the fraud [was] discovered. According to the government, it did not discover the fraud (and therefore the statute of limitations did not begin running) until sometime after the June 28, 1995 meeting. We disagree with the government's argument. 20 The term `[c]ontinuing offense' is a term of art that does not depend on everyday notions or ordinary meaning. United States v. Jaynes, 75 F.3d 1493, 1506 (10th Cir.1996) (quotation marks and citation omitted). It is not the same as a scheme or pattern of illegal conduct. Id. Separate offenses may be part of a common scheme without being `continuing' for limitations purposes. Id. at 1506 n. 12. Rather, [a] continuing offense is one which is not complete upon the first act, but instead continues to be perpetuated over time. De La Mata, 266 F.3d at 1288. [T]he continuing offense doctrine applies only where it is contended that the actual conduct of the defendant ended but the crime continued past that time, not where ... the charged criminal conduct itself extends over a period of time. Jaynes, 75 F.3d at 1507 (quotation marks and citation omitted). 21 The Supreme Court discussed when a court should consider an offense continuing for statute of limitations purposes in Toussie v. United States, 397 U.S. 112, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970). The Court stated criminal limitations statutes are to be liberally interpreted in favor of repose and [s]tatutes of limitations normally begin to run when the crime is complete. Id. at 115, 90 S.Ct. 858 (quotation marks and citations omitted). The Court instructed that the doctrine of continuing offenses should be applied in only limited circumstances since ... [t]he tension between the purpose of a statute of limitations and the continuing offense doctrine is apparent. Id. (quotation marks and citation omitted). The former fixes a time limit by which the government must prosecute an individual following the occurrence of a criminal act, and the latter, for all practical purposes, extends [this time limit] beyond [the statutory] term. Id. As a result, the Supreme Court held a court should not construe an offense as a continuing offense unless (1) the explicit language of the substantive criminal statute compels such a conclusion; or (2) the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one. Id. 22 No circuit court has addressed whether the execution of a scheme to defraud or obtain money is a continuing offense for statute of limitations purposes under the Major Fraud Act; however, the Ninth Circuit addressed this question under the bank fraud statute. United States v. Najjor, 255 F.3d 979, 983-84 (9th Cir.2001), cert. denied, 536 U.S. 961, 122 S.Ct. 2667, 153 L.Ed.2d 841 (2002). The court in Najjor held that the execution of a scheme to defraud or obtain money is a continuing offense for statute of limitations purposes; therefore, the statute of limitations on bank fraud begins to run when the last act in furtherance of the scheme is committed. Id. at 983. The Najjor holding was based on a previous Ninth Circuit case, United States v. Nash, 115 F.3d 1431 (9th Cir.1997), cert. denied, 522 U.S. 1117, 118 S.Ct. 1054, 140 L.Ed.2d 117 (1998), which held bank fraud was a continuing offense for ex post facto purposes because the language of the statute so suggested by punishing the execution of the overall scheme rather than each individual act. Id. at 1441. 11 23 We are not persuaded by the Ninth Circuit's reasoning. Following the Supreme Court's analysis in Toussie, we hold the execution of a scheme under the Major Fraud Act is not a continuing offense for statute of limitations purposes. Nothing in the explicit language of the Act compels the conclusion that the offense is continuing. Toussie, 397 U.S. at 115, 90 S.Ct. 858. If Congress intended the execution of a scheme to be a continuing offense, it could have clearly stated so. United States v. Dunne, 324 F.3d 1158, 1164 (10th Cir.2003). See, e.g., 50 U.S.C. § 856 (Failure to file a registration statement ... is a continuing offense for as long as such failure exists, notwithstanding any statute of limitation or other statute to the contrary.). 24 Furthermore, the nature of a Major Fraud Act violation does not assuredly indicate Congress intended it to be a continuing offense. Toussie, 397 U.S. at 115, 90 S.Ct. 858. In making this determination, it is helpful to consider whether the offense is discrete in nature. Compare United States v. Bailey, 444 U.S. 394, 413, 100 S.Ct. 624, 62 L.Ed.2d 575 (1980) (holding Congress intended the crime of escape from federal custody to be a continuing offense because of the continuing threat to society posed by an escaped prisoner) with Toussie, 397 U.S. at 116-22, 90 S.Ct. 858 (holding Congress did not intend the crime of failing to register for the draft to be a continuing offense because the crime was complete when a male failed to register during the five-day registration period). If a crime is discrete, it is less likely Congress assuredly intended the crime to be a continuing offense. See Toussie, 397 U.S. at 122-23, 90 S.Ct. 858; Nash, 115 F.3d at 1441. As we have already determined, the Major Fraud Act criminalizes each discrete execution of a scheme rather than the scheme in its entirety. Once an execution is complete, the crime has ended, and additional acts do not violate the statute unless they independently constitute a separate execution or attempted execution of a scheme. See id. at 1290. The discrete nature of a Major Fraud Act violation makes it unlikely Congress intended it to be a continuing offense for statute of limitations purposes. 25 The government argues a Major Fraud Act violation is a continuing offense because the threat to the government posed by an execution of a scheme to defraud ... continues during the entire period the fraud is perpetrated. In support of this argument, the government notes it continu[es] to rely on the fraudulent representations until [it] succumbs to the object of the fraud, i.e., it pays the money that is the object of the fraud. We reject this argument because it conflicts with the plain language of the Major Fraud Act. The Act punishes each execution or attempted execution of a scheme rather than the scheme in its entirety or each act in furtherance of a scheme. See 18 U.S.C. § 1031(a). Although conduct in furtherance of a scheme may perpetuate a fraud, the Act does not punish the conduct unless it constitutes an execution or attempted execution of a scheme. Id. We will not extend the Act to punish conduct not expressly covered by the Act. Once the scheme is executed, the crime has ended, and additional conduct in furtherance of the scheme does not extend the statute of limitations for that particular execution. 12 26 The government points to cases in other circuits holding violations of the wire fraud, bank fraud, and mail fraud statutes are continuing for venue purposes. See United States v. Pace, 314 F.3d 344, 350 (9th Cir.2002); United States v. Scott, 270 F.3d 30, 34-36 (1st Cir.2001), cert. denied, 535 U.S. 1007, 122 S.Ct. 1583, 152 L.Ed.2d 501 (2002); United States v. Loe, 248 F.3d 449, 465 (5th Cir.), cert. denied, 534 U.S. 974, 122 S.Ct. 397, 151 L.Ed.2d 301 (2001). We are not persuaded for two reasons. First, Congress specifically stated any offense involving the use of the mails ... is a continuing offense for venue purposes. 18 U.S.C. § 3237(a). Second, and more importantly, the continuing offense analysis for venue purposes is obviously different from the continuing offense analysis for statute of limitations. Dunne, 324 F.3d at 1166. See also Toussie, 397 U.S. at 121 n. 16, 90 S.Ct. 858. None of the cases cited by the government apply the Toussie analysis. Instead, consistent with the general venue statute, 13 these cases focus on geographic factors, i.e., whether the defendant began, continued, or completed the offense in more than one geographic location. See Pace, 314 F.3d at 350-51; Scott, 270 F.3d at 36; Loe, 248 F.3d at 465. An offense may begin, continue, or end in different locations without qualifying as a continuing offense for statute of limitations purposes. See, e.g., Dunne, 324 F.3d at 1166 (concluding a violation of the Securities Exchange Act, 18 U.S.C. § 1001, is not a continuing offense for statute of limitations purposes even though it may be continuing for venue purposes). Even assuming these circuits reached the correct result, 14 we conclude the analysis in these particular cases is not dispositive because of the discrete nature of an offense under the Major Fraud Act. Cf. id. 15 27 The government also argues the restraint called for in Toussie is inapplicable here. The government claims there is no tension between the purposes of the limitation period and application of the continuing-offense doctrine because Congress specifically intended to toll the limitations period during a period of fraudulent concealment. The government points to a portion of the Act's legislative history in support of its argument. 16 See S.Rep. No. 100-503, at 14 (1988), reprinted in 1988 U.S.C.C.A.N. 5969, 5978. Even assuming the government correctly discerns Congress's intent, such a rule would toll the limitations period only during periods of fraudulent concealment and not upon every act in furtherance of a scheme. Therefore, the tension between the limitations period and the doctrine of continuing offenses still exists. Furthermore, if, as the government argues, there is solid evidence indicating Congress' intent as to what circumstances toll the limitations period, we believe the absence of evidence that Congress intended courts to consider the offense a continuing offense, or at least that every act in furtherance of a scheme tolls the limitations period, lends support to our conclusion that a violation of the Major Fraud Act is not a continuing offense. In any event, we are convinced the language of the Major Fraud Act dictates our conclusion in this case. 28 We therefore conclude an execution of a scheme to defraud or obtain money is not a continuing offense for statute of limitations purposes. 17 Under the facts of this case, the statute of limitations began running when the Companies executed their scheme on May 16, 1994. The Companies' subsequent meeting with the Corps in 1995 was not a continuation of their execution; the execution was already committed or complete once the Companies filed their claim. The 1995 meeting was merely an act in furtherance of the scheme which did not extend the limitations period. Although the scheme may have continued, the Act does not punish the scheme but only the execution. 29