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On August 5, 2021, the U.S. Court of Appeals for the Second Circuit ruled that a French banker may seek dismissal of an indictment without having to physically appear in the United States. The decision limits the application of the fugitive disentitlement doctrine which has long prevented foreign nationals from challenging criminal prosecutions without appearing in the United States to do so.

Muriel Bescond, a former Societe General (SocGen) banker, was charged by the U.S. Attorneys Office for the Eastern District of New York with transmitting false, misleading, and knowingly inaccurate commodities reports, and conspiracy, in violation of the U.S. Commodity Exchange Act (CEA). Prosecutors allege that Ms. Bescond participated in the United States Dollar London Interbank Offered Rate (USD LIBOR) benchmark interest rate calculation process from Paris, which ultimately impacted the pricing of futures contracts traded on the Chicago Mercantile Exchange. Ms. Bescond allegedly instructed SocGens LIBOR setters to prepare false USD LIBOR submissions that were lower than SocGens actual borrowing rates. According to the prosecutors, SocGens false submissions artificially lowered the USD LIBOR fix, affecting financial transactions that referenced USD LIBOR.

Ms. Bescond who lives in Paris and was in France at all times during the alleged criminal activity asked, through her U.S. counsel, to dismiss the indictment. Ms. Bescond argued that the indictment violated her Fifth Amendment right to due process because it failed to allege a sufficient nexus with the United States, and that the statute of limitations had run. Ms. Bescond further argued that the government was selectively prosecuting women participants in the alleged scheme, while declining to prosecute men who were similarly situated.

The United States District Court for the Eastern District of New York held that Ms. Bescond was a fugitive. Accordingly, the District Court exercised discretion to apply the fugitive disentitlement doctrine, declining to decide the merits of the motion to dismiss the indictment. This meant that Ms. Bescond could not seek dismissal of the indictment unless she appeared in the United States in person, where she would likely have been detained pending trial or, at the least, subject to stringent bail conditions.

Ms. Bescond appealed the District Courts order, and the U.S. Court of Appeals for the Second Circuit determined to exercise jurisdiction over the District Courts disentitlement ruling under the collateral order doctrine. U.S. v. Bescond, __F.4th __, 2021 WL 3412115 at *8 (2d Cir. 2021). The Second Circuit found that Ms. Bescond was not a fugitive, and that, even if she were, the District Court abused its discretion in concluding that disentitlement was justified. Id. The Second Circuit considered that (i) Ms. Bescond did not flee the United States to conceal herself, (ii) she was not in the United States while allegedly committing the charged conduct, and (iii) she was not avoiding prosecution. Id. Because she was simply remaining home as her home country permits her to do, the Second Circuit did not find her to qualify as a fugitive. Id. The Court went on to hold that if the fugitive disentitlement doctrine were to reach someone such as Ms. Bescond, who stays at home abroad, without concealment or evasion, Congress, not the courts, should weigh the competing issues and values and determine whether such an expansion [of the fugitive disentitlement doctrine] is warranted. Id. at *10.

But even if Ms. Bescond qualified as a fugitive, the Second Circuit found that disentitlement was too blunt an instrument for a foreign defendant in Ms. Besconds circumstances since there was no finding that Ms. Bescond was exhibiting disrespect for U.S. law. Id. at *10. Given Besconds innocent residence as a foreign citizen abroad, given the nature of the charged offense and her remoteness from the alleged harm that it caused, given her line of work, and given her nonfrivolous challenge to the extraterritoriality of the criminal statute, the exercise of discretion to disentitle her was an abuse. Id. at *11. The Second Circuit sent the case back to the District Court with instructions to rule on the merits of Ms. Besconds motion to dismiss.

Chief Judge Debra Livingston of the Second Circuit dissented, arguing that the Second Circuit lacked appellate jurisdiction to consider fugitive disentitlement orders because the District Courts order did not constitute a final order. The dissent agreed with the Sixth and Eleventh Circuit Court of Appeals decisions, which held that the Court of Appeals lacked jurisdiction to hear interlocutory appeals from rulings that disentitled fugitives. See U.S. v. Shalhoub, 855 F.3d 1255 (11th Cir. 2017); see also U.S. v. Martirossian, 917 F.3d 883 (6th Cir. 2019). By providing a new exception to the final judgment rule for fugitive disentitlement orders, the dissent argued that the majoritys holding will cause significant delays in criminal cases involving foreign-based defendants, which was precisely the consequence Congress sought to avert with the final judgment rule.

The Second Circuits decision certainly will be welcomed by foreign nationals facing criminal charges in the United States in white collar criminal cases, since it permits them, under certain circumstances, to challenge an indictment without having to appear in the United States where they often face lengthy, pre-trial detention.

See the original post:
The Second Circuit Court of Appeals Finds That French Banker Need Not Travel to the United States to Seek Dismissal of Her Indictment - JD Supra