Vera M. Kachnowski and Peter J. Sluka

Prosecutions of foreign nationals often raise difficult questions of extraterritoriality and due process. Defendants living abroad at the time of their indictment also face the dilemma of whether to appear in the United States to mount a defense or remain abroad with the pending charges affecting their reputation, business, and ability to travel internationally. This dilemma is particularly acute for defendants who, based upon a lack of nexus to the United States, might have a compelling challenge to their charges. Recently, some defendants have tried to raise those extraterritoriality challenges from abroad, but they have faced a roadblock: Although they never fled from the United States, their “fugitive” status prevents them from accessing the courts.

Fugitive Disentitlement Doctrine

Fugitive disentitlement is a discretionary judicial doctrine that allows a court to disallow or hold in abeyance any application of an absent criminal defendant until that defendant submits to the jurisdiction of the court. “[O]riginally developed by courts to support dismissal of direct appeals by escaped criminal defendants,” Collazos v. United States, 368 F.3d 190, 197 (2d Cir. 2004), the doctrine is grounded in the idea that one who seeks to benefit from the court system must also submit to its burdens. Following extension of the doctrine into civil matters, Congress explicitly granted courts the authority to disentitle certain categories of fugitives from challenging civil forfeitures of their funds. See Civil Asset Forfeiture Reform Act of 2000 (CAFRA), 28 U.S.C. §2466.

The doctrine first requires a court to determine whether the person seeking relief is a “fugitive” before assessing discretionary factors in deciding whether to consider the defendant's application. In the civil forfeiture context, the term “fugitive” includes both “common-law fugitives”—who fled beyond the reach of the courts or refused to return to the jurisdiction—and others who never fled at all. Specifically, CAFRA permits courts to disallow civil forfeiture challenges from “persons who may never previously have been in the United States but who know that they are subject to arrest in this country and who, therefore, refuse to enter its jurisdiction in order to avoid prosecution.” Collazos, 368 F.3d at 197. In two recent cases, courts were called to consider whether this broader definition of fugitive also disallows foreign defendants who have refused to enter the US from challenging their indictments from afar.

Bescond

In United States v. Sindzingre et al., 17 CR 464 (E.D.N.Y.), the government charged two French executives from Société Générale with various violations of the Commodities Exchange Act for allegedly conspiring to transmit, and transmitting, false commodities reports. The government contends that the defendants coordinated with others to make submissions for the daily LIBOR calculation that positively impacted the bank's reputation by suggesting that it could borrow funds at a more favorable rate than it could actually obtain.

One of the defendants, Muriel Bescond, filed through counsel various pre-arraignment motions to dismiss the indictment, including based on due process grounds and an impermissible extraterritorial application of U.S. law. Bescond, a French citizen who has never resided in the United States, maintains that the government has not established a sufficient nexus between her conduct and the United States. The government argued that the court should not reach the merits of Bescond's arguments due to the fugitive disentitlement doctrine, while she argued that she was not fugitive—she never fled from the United States.

The court observed that Bescond's fugitive status was a “thorny” question, in part due to the “anomaly” of declaring a defendant with “neither the capacity nor the incentive to flee the United States” a fugitive. United States v. Sindzingre, 2019 WL 2290494, at *5-6 (E.D.N.Y. May 29, 2019). Ultimately, however, the court held that Bescond's remaining in France could trigger application of the fugitive disentitlement doctrine: “Bescond allegedly violated United States law; a warrant for Bescond's arrest was issued by Magistrate Judge Reyes; Bescond would be arrested if she entered the United States (or if she left France); and Bescond has avoided arrest by remaining in France. That Bescond did not flee the United States should not preclude her from being labeled a fugitive as a matter of law.” Id. at *7 (alterations omitted) (quoting United States v. Hayes, 118 F. Supp. 3d 620 (S.D.N.Y. 2015)).

The court further concluded that each of the four purposes of the doctrine supported its application to Bescond: ensuring “mutuality” of litigation by requiring parties to be subject to both favorable and unfavorable court rulings; penalizing those who flout the judicial process; discouraging flights from justice; and avoiding prejudice to the other side. Id. at *8 (citation omitted). The court also denied her extraterritoriality and due process challenges on the merits in an alternate ruling.

Appellate Rights

Although Bescond intends to appeal the ruling against her, defendants face difficulty appealing application of the fugitive disentitlement doctrine. Several federal appeals courts have held that a district court's decision to apply the fugitive disentitlement doctrine is neither a “final order” triggering appellate jurisdiction, 28 U.S.C. §1291, nor a properly petitionable matter for mandamus relief, 28 U.S.C. § 1651(a). United States v. Martirossian, 917 F.3d 883, 890 (6th Cir. 2019); United States v. Shalhoub, 855 F.3d 1255, 1261 (11th Cir.), cert. denied, 138 S. Ct. 381 (2017); United States v. Hayes, No. 15-2597 (2d Cir. March 15, 2016).

In Martirossian, for example, the defendant—an Armenian citizen living in China—was indicted for his alleged participation in a scheme to bribe a Kazakh official for the benefit of a British company. 917 F.3d at 886. Martirossian moved to dismiss the indictment because its money laundering charges could not reach his extraterritorial conduct. Applying the fugitive disentitlement doctrine, the district court declined to consider Martirossian's motion and held it in indefinite abeyance until Martirossian appeared. But like Bescond, Martirossian never fled his charges; he was residing his home country of China when his indictment was issued.

This March, the Sixth Circuit declined to hear Martirossian's appeal or otherwise instruct the district court to rule on his motion. Although the district court's application of the fugitive disentitlement doctrine practically ended Martirossian's challenge to his indictment, the Sixth Circuit held that the district court had not entered a final order triggering appellate jurisdiction. 917 F.3d at 887. The Sixth Circuit was also unwilling to extend the collateral order doctrine to fugitive disentitlement decisions or entertain Martirossian's petition for mandamus relief because, it held, Martirossian has a readily available means of obtaining a ruling on his motion: place himself before the Court. Id. at 889.

Discussion

Both the Sindzingre court and the Sixth Circuit in Martirossian relied on the notion that if the defendants were truly interested in having their motions heard, they alone held the keys to their own dilemma: They could show up and submit to the jurisdiction of the court. Other courts have offered defendants similar consolations, with one even remarking on the price of airfare from the defendant's home country to its judicial district. See In re Kashamu, 769 F.3d 490, 493-94 (7th Cir. 2014). Similarly, the only federal appeals case that has required the district court to rule on an absent defendant's motion to dismiss, relied in part on affirmative steps the defendant took to address the charges by surrendering himself to Kuwaiti authorities. In re Hijazi, 589 F.3d 401, 412 (7th Cir. 2009). One can imagine, though, why submitting to a U.S. court's jurisdiction is particularly unappealing for defendants who never fled: Perversely, it may require the defendant to leave her home country and risk detention and potential incarceration in the United States, all to challenge her indictment based on its lack of a connection to the United States.

Will we see a case where a court accepts that such a gamble is too steep a price to for a defendant to pay before being able to assert due process rights? Free Enterprise Fund v. Public Co. Accounting Oversight Board, 561 U.S. 477 (2010) (holding that plaintiffs need not undertake a similar gamble to challenge the constitutionality of a statute: “We normally do not require plaintiffs to 'bet the farm' … and we do not consider this a 'meaningful' avenue of relief.”). Alternatively, might the burden of being labelled a fugitive grow so onerous that due process is required before a foreign defendant is assigned that label? Wisconsin v. Constantineau, 400 U.S. 433, 437 (1971) (“Where a person's good name … is at stake because of what the government is doing to him, notice and an opportunity to be heard are essential.”). Although the Eleventh Circuit rejected this argument when made by the defendant in Shalhoub, 855 F.3d at 1261-62, it remains untested in other jurisdictions. In short, it remains to be seen whether courts will accept such arguments or otherwise permit remote challenges to indictments of “fugitive” foreign defendants.

Vera M. Kachnowski is of counsel and Peter J. Sluka is an associate at Schlam Stone & Dolan, where they specialize in white-collar defense and complex civil litigation.