Opposition Brief — Miller v. United States

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No. 87-1040

In the Supreme Court of the Bnited

OCTOBER TERM, 1987

MICHAEL C. MILLER, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

CHARLES FRIED

Solicitor General

JOHN C. KEENEY

Acting Assistant Attorney General

JOSEPH C. WYDERKO

Attorney

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTIONS PRESENTED

1. Whether the district court properly applied 18

U.S.C. (Supp. IV) 3292 to suspend the statute of limita-

tions when the underlying criminal conduct took place

before Section 3292 became effective.

2. Whether 18 U.S.C. (Supp. I'V) 3505, which permits

the authenticity and reliability of foreign business records

to be established through a certification completed by the

foreign recordkeeper and executed under penalty of per-

jury, violates the Confrontation Clause of the Sixth

Amendment.

(I)

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

Bourjaily v. United States, No. 85-6725 (June 23, 1987) .. 9

Bradley v. Richmond School Bd., 416 U.S. 696 (1974)... 4, 5,

7s

Clements v. United States, 266 F.2d 397 (9th Cir.), cert.

I Re ccc ecu ccssecenees 6

Dutton v. Evans, 400 U.S. 74 (1970) .................. 9

Falter v. United States, 23 F.2d 420 (2d Cir.), cert. denied,

I 6

Ohio v. Roberts, 448 U.S. 56 (1980) ................... 9

Toussie v. United States, 397 U.S. 112 (1970) ........... 6

United States v. Davis, 767 F.2d 1025 (2d Cir. 1985) ..... 10

United States v. Leal, 509 F.2d 122 (9th Cir. 1975) ...... 10

United States v. Richardson, 393 F. Supp. 83 (W.D. Pa.

1974), aff'd, 512 F.2d 105 (3d Cir. 1975) ............. 7-8

United States ex rel. Massarella v. Elrod, 682 F.2d 688

(7th Cir. 1982), cert. denied, 460 U.S. 1037 (1983) ..... 6

Constitution, statutes and rules:

U.S. Const.:

Art. I, § 9, Cl. 3 (Ex Post Facto Clause) ........... 6,7

Amend. VI (Confrontation Clause) .......... 4. 5, ¢, 9, 0

Comprehensive Crime Control Act of 1984:

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18 U.S.C. (Supp. IV) 3292 note ....... Oe Pe 4

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IV

Statutes and rules — Continued:

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OLE Font Si A ae See aren ry crt rat yer.

§0 U.S.C. App. 462(d) ... 2... cee cece ee eee eee e eens

Fed. R. Crim. P.:

Cee ee er ee rere er re oe fe C.

oy) nn re re ere

Fed. R. Evid. GORG) .. 1... ec cece cece ee esowece

Miscellaneous:

H.R. Rep. 98-907, 98th Cong., 2d ae) ee

Jn the Supreme Court of the United States

OCTOBER TERM, 1987 “

No. 87-1040

MICHAEL C. MILLER, PETITIONER

VY.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. Al-A10)

is reported at 830 F.2d 1073.

JURISDICTION

The judgment of the court of appeals was entered on

October 22, 1987. The petition for a writ of certiorari was

filed on December 21, 1987. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

STATEMENT

On April 3, 1986, petitioner was indicted by a grand

jury sitting in the Central District of California. The in-

dictment alleged that petitioner obtained $1,135,533 by

fraud and that he laundered the money through banks in

the United States, the Cayman Islands, Austria, and Swit-

zerland. He was charged with wire fraud (18 U.S.C. 1343),

(1)

2

two counts of mail fraud (18 U.S.C. 1341), and transpor-

tation in foreign commerce of property taken by fraud (18

U.S.C. 2314). On a conditional plea of guilty, petitioner

was convicted of wire fraud. He was sentenced to two

years’ imprisonment and was ordered to pay restitution of

$1,135,533. The court of appeals affirmed (Pet. App.

Al-A10).

1. In 1978, petitioner befriended John Louis Paanak-

ker, a 21-year old man who had recently moved from Ger-

many to California. Paanakker was about to receive a

large inheritance in stocks, and petitioner persuaded him

to invest the inheritance in the Cayman Islands. In July

1980, petitioner traveled to the Cayman Islands and set up

a company called Humberstone, Hatfield & Co., Inc. He

also opened a company account at the Bank of Nova

Scotia over which both he and Paanakker would have

authority. Petitioner told Paanakker, however, that

Paanakker would be the only person authorized to

withdraw money from the account. Pet. App. A3.

In September 1980, Paanakker sold his inherited stock

and received $1,135,533 for it. Paanakker than gave peti-

tioner a check in that amount drawn in favor of the

Humberstone company. Petitioner later assured Paanak-

ker that he had wired the money to the Humberstone bank

account, and he represented that bearer bonds had been

purchased with the money. In fact, no bearer bonds were

purchased, and Paanakker’s money was never deposited in

the company account. Instead, in early October 1980, peti-

tioner sent a cable to Barclays Bank International in the

Cayman Islands transmitting the $1,135,533 to his own ac-

count. He then instructed Barclays Bank to transfer the

money to his personal account at a bank in Austria. At

petitioner’s direction, the money was then transferred

again to his accounts at two different banks in Switzer-

land. In December 1980, petitioner told Paanakker that he

3

had received the bearer bonds, but that the bonds had

been stolen when his house was burglarized. As a result,

petitioner said, Paanakker had lost his inheritance. Pet.

App. A4.

2. After Paanakker reported his suspicions to the FBI

in 1982, a grand jury began investigating the transactions.

On September 9, 1983, the government made an official

request for the records of the Bank of Nova Scotia and

Barclays Bank International in the Cayman Islands. That

request was granted five months later on February 13,

1984. Based on information revealed by those records, the

government then asked for the records of the Austrian

bank on July 25, 1984. That request was granted four

months later on November 28, 1984, and the records were

received on December 26, 1984. Based on the information

in those records, the government requested the records of

the Swiss bank on February 25, 1985. Six months later, on

August 26, 1985, that request was granted. Pet. App. A4.

On the government’s application, the district court

entered an order on July 17, 1985, suspending the statute

of limitations under 18 U.S.C. (Supp. IV) 3292 for the

nine-month period during which the official requests for

the bank records in the Cayman Islands and Austria had

been pending. On November 20, 1985, the district court

granted the government’s application for another suspen-

sion of the statute of limitations for the six-month period

during which the request for the bank records in Switzer-

land had been pending. The grand jury returned its indict-

ment less than five months later on April 3, 1986. Pet.

App. A4-AS5.

3. After petitioner was indicted, the government

notified him that it intended to offer the foreign business

records in evidence at trial pursuant to 18 U.S.C. (Supp.

IV) 3505. Petitioner moved to exclude that evidence and to

dismiss the indictment on the ground that it was barred by

4

the five-year statute of limitations, 18 U.S.C. 3282. When

the district court denied both motions, petitioner entered

his conditional guilty plea, reserving the right to challenge

the district court’s rulings. Pet. App. AS.

4. The court of appeals affirmed (Pet. App. Al-A10).

The court first rejected (id. at AS-A6) petitioner’s argu-

ment that the district court improperly suspended the

statute of limitations by applying 18 U.S.C. (Supp. IV)

3292 retroactively. It observed (Pet. App. A5) that Section

3292 was enacted as part of the Comprehensive Crime

Control Act of 1984 and became effective on November

12, 1984. See 18 U.S.C. (Supp. IV) 3292 note. The court

then determined that the tolling provision of the statute

“was not applied * * * retroactively,” because Section

3292 “was in effect when the district court orders were

- entered suspending the statute of limitations” (Pet. App.

A5-A6). Relying on Bradley v. Richmond School Bd., 416

U.S. 696 (1974), the court of appeals explained that “[t}he

district court simply applied the law in force” (Pet. App.

A6).

The court of appeals also rejected (Pet. App. A7-A10)

petitioner’s Confrontation Clause attack on the constitu-

tionality of 18 U.S.C. (Supp. IV) 3505, which provides

that foreign business records shall not be excluded as

evidence by the hearsay rule if_the records are accom-

panied by a specified foreign certification. The court

observed (Pet. App. A9) that the Confrontation Clause

does not require the exclusion of hearsay of an unavailable

declarant if the hearsay bears “indicia of reliability.” The

court also noted (Pet. App. A9-A10) that all the foreign

bank records at issue were accompanied by statements and

attestations from bank employees sufficient to indicate

their reliability. The court further observed (id. at A10)

that the admission of business records is one of the firmly

———

5

rooted exceptions to the hearsay rule that does not offend

the Confrontation Clause.

The court of appeals pointed out (Pet. App. A10) that

“(t]he novelty of [Section 3505] is to admit the records

without confrontation by the defendant with the record-

keepers.” It noted (ibid.) that “[nJo motive is suggested

that would lead bank officials to change, distort, or

manipulate the records at issue here.” The court went on

to conclude (ibid.) that the application of Section 3505 to

the bank records in this case would not run afoul of the

Confrontation Clause because “[t]he recordkeepers have,

under criminal penalties in their own countries, asserted

that the records are records kept in the course of business”

and, “[iJf the records were in fact inaccurate, it was within

[petitioner’s] power to depose the recordkeepers and

challenge the records.”

ARGUMENT

1. Petitioner first renews his contention (Pet. 7-15)

that the district court erred by applying 18 U.S.C. (Supp.

1V) 3292 to suspend the five-year statute of limitations set

forth in 18 U.S.C. 3282. The court of appeals correctly re-

jected that contention, and its decision does not conflict

with any decision of this Court or another court of ap-

peals.

There is no merit to petitioner’s argument that the

suspension provisions of 18 U.S.C. (Supp. IV) 3292 do not

apply if the underlying criminal acts took place before the

effective date of Section 3292. In Bradley v. Richmond

School Bd., 416 U.S. 696 (1974), the Court reaffirmed the

long-standing principle “that a court is to apply the law in

effect at the time it renders its decision, unless doing so

would result in manifest injustice or there is a statutory

direction or legislative history to the contrary” (id. at 711).

6

As the court of appeals observed, that is what the district

court did when it applied Section 3292 to suspend the

statute of limitations in this case: it “simply applied the

law in force” (Pet. App. A6). It did not apply Section 3292

“retroactively” (id. at AS). ;

Petitioner mistakenly relies (Pet. 7-8, 9) on the general

“policy of repose” reflected in the statute of limitations to

override the elementary principle that a new law is fully

applicable after its effective date in the absence of

legislative direction to the contrary. To be sure, the func-

tion of a statute of limitations “is to limit [an individual’s]

exposure to criminal prosecution to a certain fixed period

of time following the occurrence of those acts the

legislature has decided to punish by criminal sanctions.”

Toussie v. United States, 397 U.S. 112, 114 (1970). It is

well established, however, that Congress may modify or

extend a statute of limitations without violating the Ex

Post Facto Clause, because changes in a statute of limita-

tions are mere procedural changes. See United States ex

rel. Massarellav. Elrod, 682 F.2d 688, 689 (7th Cir. 1982),

cert. denied, 460 U.S. 1037 (1983); Clements v. United

States, 266 F.2d 397, 399 (9th Cir.), cert. denied, 359 U.S.

985 (1959); Falter v. United States, 23 F.2d 420, 425-426

(2d Cir.) (Learned Hand, J.), cert. denied, 277 U.S. 590

(1928).' Likewise, Congress can enact legislation that

' For example, in Clements v. United States, supra, the court re-

jected the notion that the application of a new statute of limitations to

past offenses is, in all instances, a retroactive application of the law.

The court held that there was no Ex Post Facto Clause violation

because the “amendment was not retroactive in substance or effect”

when applied to crimes that were not already time-barred when the

law went into effect. 266 F.2d at 399. The court reasoned that because

an indictment could have been validly returned at the time the amend-

ment was passed, an extension of the limitations period for the same

offense could not be deemed a retroactive law (ibid.).

allows a court to suspend a statute of limitations for both

pending and future cases. That is what Congress did here.

Petitioner mistakenly contends (Pet. 10, 13) that Section

3292 may not be applied to pending cases involving

criminal conduct occurring before that section’s effective

date, in the absence of an expression of congressional in-

tent that it be so applied.? To the contrary, this Court’s

decision in Bradley soundly “reject[ed] the contention that

a change in the law is to be given effect in a pending case

only where that is the clear and stated intention of the

legislature” (416 U.S. at 715 (footnote omitted)). Indeed,

the Court made it plain that the rule is just the opposite: “a

court is to apply the law in effect at the time it renders its

decision, unless * * * there is statutory direction or

legislative history to the contrary” (id. at 711). And as

petitioner concedes (Pet. 10), the legislative history does

not in any way indicate that Congress intended Section

3292 to be inapplicable to cases involving criminal conduct

occurring before the date of its enactment.

Petitioner suggests (Pet. 13-15) that the court of ap-

peals’ decision conflicts with United States v. Richardson,

2? Petitioner has never claimed that the suspension provision of Sec-

tion 3292 violates the Ex Post Facto Clause. Indeed, he conceded

before the court of appeals that the issue here is purely a matter of

statutory construction: whether Congress intended that Section 3292

be applied in cases where the criminal conduct occurred before the sec-

tion’s effective date. Appellant C.A. Br. 14; Appellant C.A. Reply Br.

4 n.2.

3 Accordingly, the court of appeals’ observation that Section 3292

“was in effect” when the suspension orders were entered does not beg

the question, as petitioner argues (Pet. 11). To be sure, the ultimate

issue is whether Congress intended Section 3292 to apply in all cases

after the effective date of the section. But as the Court made clear in

Bradley, a statute is to be applied in all such cases unless Congress

manifest a contrary intention.

8

393 F. Supp. 83 (W.D. Pa. 1974), aff'd, 512 F.2d 105 (3d

Cir. 1975). There is, in fact, no direct conflict. In Richard-

son, the Third Circuit affirmed the district court’s conclu-

sion that a new law changing the commencement date of

the statute of limitations for failing to register with the

Selective Service System (50 U.S.C. App. 462(d)), was not

intended to be applied to offenses committed before the

law’s effective date. The question decided in the Richard-

son case involved a different statute and thus is only in-

directly relevant to the proper interpretation of 18 U.S.C.

(Supp. IV) 3292. In any event, Richardson’s reasoning is at

odds with the principles recognized by this Court in

Bradley. In Richardson, the Third Circuit relied on Con-

gress’s silence to create a presumption that Congress did

not intend the new law to apply when the offense occurred

before the Act’s effective date (512 F.2d at 106). The court

neither mentioned nor attempted to reconcile that conclu-

sion with Bradley. Instead, the court simply relied on the

general proposition that a law is presumed to operate pros-

pectively unless there is a clear indication to the contrary

(ibid.), without explaining how the application of a rew

statute of limitations to a pending case —a prospective ap-

plication of the law—runs afoul of that proposition.

2. Petitioner also renews his contention (Pet. 15-24)

that 18 U.S.C. (Supp. IV) 3505 violates the Confrontation

Clause because the custodian who provides the certifica-

tion for foreign business records is not subject to cross-

examination. That con‘ention is meritless.

Section 3505 was enacted in response to the difficulties

encountered by the government in securing the admission

of foreign business records at trial. Because the custodians

of such records generally are not subject to subpoena,

prosecutors cannot compel their presence at trial to

authenticate and provide foundational testimony for the

admission of foreign records. See Fed. R. Crim. P.

9

17(e)(2). Prior to the enactment of Section 3505, prose-

cutors were thus forced to take the depositions of foreign

custodians under Fed. R. Crim. P. 15 to authenticate

foreign records. The deposition procedure, which is de-

pendent upon the consent of the foreign government, was

time-consuming and very costly.

Contrary to petitioner’s contention (Pet. 21-23), Con-

gress’s elimination in Section 3505 of a face-to-face con-

frontation with the custodian of the records due to a

perceived need to reduce costs and minimize inconven-

ience does not render Section 3505 constitutionally infirm.

It is well established that the admission at trial of hearsay

statements of an unavailable declarant does not offend the

Confrontation Clause if the out-of-court statements bear

sufficient “indicia of reliability” to assure an adequate

basis for evaluating the truth of the declaration. Bourjaily

v. United States, No. 85-6725 (June 23, 1987), slip op. 10;

Ohio v. Roberts, 448 U.S. 56, 65-66 (1980); Dutton v.

Evans, 400 U.S. 74, 83-90 (1970). In enacting Section

3505, Congress carefully protected the rights of criminal

defendants under the Confrontation Clause by imposing

requirements to ensure the admission of only demon-

strably reliable evidence. See H.R. Rep. 98-907, 98th

Cong., 2d Sess. 3-4 (1984).

As the court of appeals correctly concluded (Pet. App.

A7-A10), the custodian’s certification under 18 U.S.C.

(Supp. IV) 3505 for the admission of foreign business

records is sufficiently reliable to pass constitutional

muster. Section 3505 requires that foreign business records

be authenticated by a custodian of the records or other

qualified person. The certification must be executed under

circumstances that would expose the maker to criminal

penalties if it were falsely made. The certification must

also establish that the records are originals or duplicates of

original records, and it must establish that the records are

10

business records within the meaning of Fed. R. Evid.

803(6). Finally, Section 3505 provides that the certified

records are not admissible if the source of information or

the method or circumstances of their preparation indicate

a lack of trustworthiness. And, as the court of appeals

pointed out (Pet. App. A10), it is within a defendant’s

power to depose the recordkeeper to challenge the ac-

curacy of the records. Accordingly, the custodian’s cer-

tification under Section 3505 provides sufficient guaran-

tees of reliability to satisfy the Confrontation Clause. Cf.

United States v. Davis, 767 F.2d 1025, 1031-1032 (2d Cir.

1985); United States v. Leal, 509 F.2d 122, 127 (9th Cir.

1975).

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

CHARLES FRIED

Solicitor General

JOHN C. KEENEY

Acting Assistant Attorney General

JOSEPH C. WYDERKO

Altorney

APRIL 1988

-: US. GOVERNMENT PRINTING OFFICE: 1988—202-037/60381