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August 2016: Criminal Law Victory

August 2016

The firm won a complete dismissal of a federal money laundering indictment in Houston, persuading the court that the DOJ’s interpretation of the criminal statute of limitations was fatally flawed.

The general statute of limitations for most federal crimes is “5 years”: “[N]o person shall be prosecuted … unless the indictment is found or the information is instituted within five years next after such offense shall have been committed.” 18 U.S.C. § 3282. The Fifth Amendment to the U.S. Constitution requires a grand jury indictment in felony cases. But can the Department of Justice meet that deadline by filing a “Criminal Information” within 5 years followed by an “Indictment” shortly after the 5-year deadline? Quinn Emanuel moved to dismiss such an indictment, and the federal court in Houston ruled that the Indictment itself must be filed before limitations expires. The case is United States v. Sharma, No. 4:14-cr-00061 (S.D. Tex.) and was handled by the firm’s Houston office.

The issue had never arisen in the Fifth Circuit, but the government found support in a Seventh Circuit case, which itself had been strongly criticized by district courts. Judge Kenneth Hoyt in Houston decided to “part company with the Seventh Circuit where it appears to suggest that the government can ‘willy-nilly’ file an Information at the end of the limitations period as a means of extending it.” Instead, unless the defendant waives indictment pursuant to the Federal Rules of Criminal Procedure, the government may not institute a felony case by filing an Information.

This decision caps a remarkable six-month period for Quinn Emanuel’s White Collar group in Houston. First, the firm represented Khosrow Afghahi, who received a Presidential Pardon in January 2016 as part of a U.S.-Iran prisoner “swap” during negotiations over American sanctions. All charges were dismissed as a result of the pardon. Second, Quinn Emanuel led the defense of Bob Kaluza, the BP engineer accused of causing the Deepwater Horizon blow out, leading to federal criminal charges of “negligent manslaughter,” “reckless manslaughter,” and “negligent oil pollution.” Over a multi-year battle, all 22 manslaughter charges were dismissed, leaving the oil pollution case for trial. At that trial last February, the jury acquitted the firm’s client shortly after closing argument, the final step in his complete exoneration in the case. And third, the firm's victory in Sharma was announced on May 19, 2016.