This month, we discuss United States v. Grimm,1 in which the U.S. Court of Appeals for the Second Circuit considered whether routine payments by unindicted co-conspirators pursuant to guaranteed investment contracts (GICs) constituted overt acts in furtherance of a conspiracy for purposes of the statutes of limitations. In an opinion by Judge Dennis Jacobs, joined by Judge Chester J. Straub, the court held that such payments did not constitute overt acts and that the indictment was time-barred.
Relying on reasoning discussed but not adopted in a prior Second Circuit opinion, United States v. Salmonese,2 and expressly adopting the reasoning contained in a First Circuit opinion, United States v. Doherty,3 the court determined that the payments in question did not constitute overt acts because they were non-criminal, ordinary commercial obligations made pursuant to a common form of commercial agreement, and were paid over an indefinite period of time. In addition, there was no evidence that the payments were themselves the type of activity posing the special societal dangers attendant to a conspiracy. The court reached this conclusion even though it acknowledged that the GICs were tainted by the conspiracy designed to fix below-market rates on interest paid to municipalities.
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