Challenging Indictments Without Appearing in the United States

General Practice in Indicting Foreign Individuals
When the DOJ believes that a company is or was engaged in wrongdoing, the DOJ’s practice is to prosecute both the company and the individuals who were involved in the illegal activities. In such cases, a felony indictment will be returned or a criminal complaint filed against the employee or former employee who was involved in the allegedly illegal activities, and a warrant may be issued for the arrest of the individual under Rule 4 of the Federal Rules of Criminal Procedure. Where the individual is outside the country, the DOJ often relies on a sealed indictment and will place the accused on a border watch list to facilitate service of an arrest warrant.

The prosecutor also may contact the individual’s defense counsel and/or the company and request facilitating the voluntary appearance of the defendant at arraignment. In several recent cases involving an auto-parts-cartel probe, many non-U.S. foreign individuals have chosen to surrender to the United States, cooperate with the DOJ, and serve a number of years in a U.S. prison. While this approach has been more or less the norm in recent years, defendants are starting to consider a variety of options to fight the DOJ’s allegations without travelling to the United States.

In two recent cases, non-U.S. foreign individual defendants challenged criminal indictments as defective under Fed. R. Crim. P. 12(b) and raised arguments that the indictments failed to properly invoke the court's jurisdiction. See, e.g., United States v. Hijazi, 845 F. Supp. 2d 874, 913–14 (C.D. Ill. 2011) (foreign defendant filed a motion to dismiss for lack of jurisdiction over a foreign national being prosecuted by the U.S. government based on extraterritorial conduct, and later for failure to abide by the speedy trial rules); see also United States v. Yeh, 3:10-cr-00231 (N.D. Cal 2013) (foreign defendant filed a motion to dismiss the DOJ’s indictment for violations of section 1 of the Sherman Act on the ground that the applicable statute of limitations had run). In such circumstances, courts have the discretion to dismiss an indictment prior to the arraignment of the defendant, but must also weigh other considerations that may limit or prevent the court’s discretion to rule on a motion filed by a non-U.S. foreign individual defendant; the fugitive disentitlement doctrine—a doctrine that permits the court to refuse to rule on a motion by the defendant until he has surrendered to the United States—for example. Whether the court will hear the motion to dismiss without an appearance by the defendant first will depend on the underlying basis for the motion, and on whether the court views the defendant as a fugitive.

United States v. Hijazi
Ali Hijazi, a Lebanese citizen and resident of Kuwait, was indicted in 2005 in the Central District of Illinois for violations of the Major Fraud Act and the Wire Fraud Act for alleged acts in Kuwait. The indictment alleged that Hijazi and a codefendant defrauded the U.S. government by submitting inflated invoices to the U.S. Army under a contract for fuel tankers and related services. Hijazi, who was in Kuwait at the time of the indictment, turned himself in to Kuwaiti authorities. Because the United States and Kuwait do not have an extradition treaty, Kuwait was not under a treaty obligation to surrender Hijazi.

With the assistance of U.S. counsel, Hijazi sought to dismiss the indictment on the grounds that the U.S. district court lacked jurisdiction because the charging statutes did not apply to the extraterritorial conduct of non-U.S. foreign individuals. He further argued that not hearing Hijazi’s motion to dismiss would violate principles of international law and due process. The district court held the motion in abeyance, until Hijazi himself travelled to the United States for arraignment. After additional motions to dismiss were filed and a petition for a writ of mandamus, the Seventh Circuit directed the district court to hear Hijazi’s motions to dismiss. In re Ali Hijazi, 589 F.3d 401 (7th Cir. 2008). Importantly, the court also noted that the fugitive disentitlement doctrine could not be applied to Hijazi, a non-fugitive foreign defendant, on the basis of mutuality.

The court found that the doctrine did not apply because Hijazi could not have fled from the United States, a country he had not visited (with the exception of one unrelated visit over a decade earlier) nor where he owned property. The court further noted that requiring Hijazi to appear, and otherwise finding him a fugitive, would severely limit Hijazi’s freedom to travel outside of Kuwait to visit his family in Lebanon, or for any other reason, because he would risk apprehension and extradition. Relying on Degen v. United States, 517 U.S. 820 (1996), which curbed the extent of the fugitive disentitlement doctrine, the Seventh Circuit foundthat the doctrine could not be applied to non-fugitive defendants on the basis of “a perceived lack of mutuality.” In re Ali Hijazi, 589 F.3d at 414. On that basis, the district court subsequently heard Hijazi’s motions to dismiss without Hijazi appearing, and denied them.

Hijazi then filed for a writ of mandamus to the Seventh Circuit and a notice of appeal with the Central District of Illinois. The government moved to dismiss the charges against Hijazi because it decided that termination of the matter would best serve the interests of justice given that Hijazi had refused and would likely continue to refuse to travel to the United States to be prosecuted. Given the circumstances that Hijazi’s case would have lingered in the U.S. judicial system and absorbed scarce prosecutorial resources with no likelihood of a resolution, the government decided that the interests of judicial economy and the efficient use of limited prosecutorial resources supported the dismissal of the indictment against Hijazi with prejudice.

In this instance, vigorously challenging a criminal indictment from afar proved worthwhile for a non-U.S. foreign individual defendant. The court’s sympathetic description of Hijazi as a non-fugitive foreign defendant might lead other non-U.S. foreign individual defendants to consider motions to challenge criminal indictments. However, United States v. Yeh in the Northern District of California recently questioned this reasoning.

United States v. Yeh
Chung Cheng Yeh, a former Chunghwa Picture Tubes Ltd. executive, was charged with participating in a conspiracy to suppress and eliminate competition in restraint of trade in violation of section 1 of the Sherman Act. The criminal indictment alleged a conspiracy to suppress and eliminate competition in the market for specialized cathode ray tubes used in computer monitors and similar electronic products. Yeh lived in and is a citizen of Taiwan, and had never traveled to the United States. His U.S. counsel sought to dismiss the indictment on the basis that Yeh was not in the United States during the period alleged in the indictment, as well as that the statute of limitations had run, claiming that Yeh had withdrawn from the alleged conspiracy after resigning from the company.

The government responded by claiming that the fugitive disentitlement doctrine barred the court from hearing the defendant’s motion to dismiss because Yeh had refused to submit to the court’s jurisdiction. The Northern District of California recognized that application of the doctrine was discretionary based on a number of potential rationales including (i) denying those who have fled jurisdiction any benefits of the court system; (ii) avoiding making decisions that could not be enforced; (iii) deterring flight; (iv) assuring an effective adversary process; and (v) serving the interest in “efficient, dignified appellate practice.”

Without explicitly applying the fugitive disentitlement doctrine to Yeh, the court declined to reach the merits of the defendant’s motion to dismiss because this would “give [the] defendant an advisory opinion on whether a statute of limitations defense would fly.” The court distinguished Hijazi, in finding that Yeh’s motion to dismiss based on the statute of limitations relied heavily on factual developments rather than legal issues regarding the extraterritorial application of a statute. The court explained that until Yeh submitted to the court’s jurisdiction by appearing in person, he could not be allowed to use the court to seek findings on isolated issues or to obtain discovery. “It would be a waste of resources to adjudicate advisory opinions at his behest.”

Conclusion
While the decision in Yeh will likely be appealed, the court’s discretionary treatment of Yeh’s motion to dismiss is notable and may have future implications for non-U.S. foreign individuals charged with violating U.S. laws who hope to remain free to travel outside their home countries. The court’s recent ruling in Yeh, which arguably steps on the heels of Ali Hijazi’s victory, continues to beg the question of whether non-U.S. foreign individual defendants can successfully defend criminal allegations against them without ever appearing in the United States. Viewed together, the Yeh and Hijazi decisions seem to suggest that non-U.S. foreign individuals may have avenues to defend from afar, but must carefully consider the scope of their arguments. It remains uncertain whether such avenues will be successful for non-U.S. foreign individual defendants; however, it seems clear that more non-U.S. foreign individual defendants will continue to raise similar defenses before surrendering to U.S. jurisdiction while this uncertainty remains.

Keywords: criminal litigation, criminal indictment, foreign individuals, dismissals, appearances

Kimberly Murphy is an associate with Baker Botts LLP in Washington, D.C.

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