In recent years, US prosecutors have increasingly pushed the envelope in bringing criminal charges against non-US professionals who live and work abroad and who may have never set foot in the United States, including for alleged violations of the Foreign Corrupt Practices Act, trade sanctions, the antitrust laws, and other statutes and regulations with extraterritorial implications.
Typically, pursuant to the fugitive disentitlement doctrine, these non-US citizens have not been allowed to challenge such charges unless and until they physically surrender to authorities in the US.
In August 2021, the Second Circuit issued a significant decision in United States v. Bescond that may substantially affect a foreign-based criminal defendant’s ability to challenge the merits of her case without having to subject herself physically to the jurisdiction of United States courts. In this case, the Second Circuit held that defendant Muriel Bescond, a French citizen and resident who “allegedly committed the charged offense entirely from abroad” and who remained at home in France throughout the period when the alleged crimes occurred, was not a “fugitive” and that the district court abused its discretion by applying the fugitive disentitlement doctrine. United States v. Bescond, No. 19-1698, 2021 WL 3412115 (2d Cir. Aug. 5, 2021) (2-1). The decision gives new hope to non-US defendants who have potentially meritorious arguments but have been faced with the Hobson’s Choice of having to surrender to the US – and potentially be detained or limited to bail within the US (ie, not the country in which they live, work, and have family) – in order to advance those arguments.
Muriel Bescond, the defendant, is a French citizen and resident. She was indicted in 2017 by federal prosecutors in the Eastern District of New York for conduct that occurred entirely in France. In particular, she worked as the head of the Paris treasury desk at a global bank headquartered in France, and she was indicted for violating the Commodity Exchange Act (CEA) in connection with allegedly transmitting false reports related to the United States Dollar London Interbank Offered Rate (USD LIBOR) scheme. During all relevant times, she remained in France, where she worked at a legitimate job and supported her family.
In deciding that Bescond was not a fugitive, and that the district court thus abused its discretion by applying the fugitive disentitlement doctrine, the Court created a split among Circuit courts over whether fugitive disentitlement orders involving a foreign citizen located abroad are immediately appealable.
Until the Second Circuit’s decision in Bescond, there was only one other Court of Appeals that upheld a defendant’s ability to challenge the merits of her case without first having to appear in the United States, thereby subjecting herself to potential pre-trial detention and related consequences, such as the inability to return home, sustain a career, earn an income, or support a family. See In re Hijazi, 589 F.3d 401, 411 (7th Cir. 2009) (holding that a writ of mandamus ordering the district court to rule on the merits of a motion to dismiss an indictment was appropriate when the foreign defendant “raise[d] serious questions about the reach of U.S. law,” and “there [was] reason to believe that [the] case raise[d] delicate foreign relations issues.”).
The Hijazi decision is not precisely on point, however, because in that case the district court and the Seventh Circuit both held that the fugitive disentitlement doctrine did not apply. These courts explained that Hijazi “never set foot in the country” and therefore by definition “did not flee from the jurisdiction” – that is, he was not a fugitive – and had in fact surrendered to the authorities in his home country (which refused to extradite him). 589 F.3d at 412. Nonetheless, the district court refused to adjudicate the motion, citing some of the rationales underlying the disentitlement doctrine. While the reasoning differed somewhat from that in Bescond, the crux of the Seventh Circuit’s ruling was that Hijazi was in fact entitled to “a pre-appearance adjudication of the question whether the statutes in question apply extraterritorially to his situation [and] whether his actions were enough to draw him within the personal jurisdiction of the court.” 589 F.3d at 408.
In contrast, at least two other Circuits have ruled that fugitive disentitlement orders involving a foreign citizen located abroad are not immediately appealable because they do not fall within the limited scope of the collateral order doctrine. See United States v. Shalhoub, 855 F.3d 1255 (11th Cir. 2017) (the defendant “enjoys a right to appear in court, to defend himself against indictment, and to clear his name if he prevails”); United States v. Martirossian, 917 F.3d 883 (6th Cir. 2019) (“If [defendant] needs the district court to decide his motion, this international businessman holds the key to unlock his dilemma: travel to Ohio and answer the charges or at least commit to accept the consequences, good or bad, of the ruling”).
District Court’s decision
Without physically appearing in the United States, Bescond moved to dismiss the charges, claiming that the indictment “impermissibly charged her with extraterritorial violations of the CEA,” the prosecution violated her Fifth Amendment right to due process, the statute of limitations had run, and the government was selectively prosecuting women participants in the alleged scheme.
The district court held that Bescond was a “fugitive” and then made the discretionary ruling that disentitlement was warranted. It therefore denied the motion to dismiss without reaching the merits of Bescond’s arguments (although it went on to render an alternative ruling on the merits of some of Bescond’s arguments).
Second Circuit’s decision
In reversing the district court’s order denying the motion based on disentitlement, the Second Circuit confronted the elephant in the room: that Bescond quite clearly did not meet any common sense or common law definition of a “fugitive.” As the Court noted, “fugitivity implies some action by Bescond to distance herself from the United States or frustrate arrest,” and “Bescond took no such action.” Most obviously, Bescond did not flee the jurisdiction when she got wind of potential criminal charges – she was never in the jurisdiction in the first place (“Bescond was never here”).
The Court explained that Bescond was not a fugitive under either of the two categories recognized at common law, “traditional fugitives” or “constructive-flight fugitives,” because she did not flee or conceal herself and she was not in the United States while allegedly committing the charged conduct. The Court stressed that a “different result may obtain if a person’s presence abroad is in any part covert or suspect,” involving “concealment or evasion.”
Having found that Bescond was not a fugitive, the Court went on to hold that even if she were, the district court had abused its discretion by taking the next step and relying on disentitlement. The Court held that “disentitlement is a disproportionately severe response” to Bescond’s absence because (1) Bescond did not flee the Court’s jurisdiction; (2) Bescond had no reason to travel to the United States; (3) Bescond was not exhibiting disrespect for United States law by remaining in France; (4) the adjudication of Bescond’s motions would not inspire others to evade the Court’s jurisdiction; and (5) Bescond would be prejudiced by being coerced to appear in court, imposing “financial, reputational, and family hardship regardless of her guilt or innocence, and regardless of whether the indictment charges violations of a statute that applies extraterritorially.”
Significantly, in holding that Bescond was not a fugitive, the Second Circuit found it “telling” that she “raises a nonfrivolous extraterritoriality claim,” asking: “[I]f our law does not reach Bescond or her conduct, can it be said that she is in flight from it?” That such claims have been made with increasing frequency in recent years and with some success underscores the potential significance of the Bescond decision – see our reporting on earlier cases:
This decision is a potential game changer for foreign-based defendants. For one, this ruling will allow foreign citizens facing criminal charges in the United States under certain circumstances to challenge an indictment without having to appear in the United States. Foreign-based defendants may now have an opportunity for courts to hear those challenges before arraignment and without risking their liberty or their ability to stay in their home countries earning a living while asserting certain legal challenges to their cases.
Moreover, the Second Circuit’s decision narrows the definition of fugitives to those who have fled or otherwise taken affirmative steps to avoid facing charges in the United States. It explicitly excludes individuals like Bescond, who merely remain in their home countries. The decision also requires a court considering disentitlement claims to give weight to the foreign defendant’s interest in avoiding the stigma of indictment.
Overall, this decision may result in limiting the application of the disentitlement doctrine. At the same time, however, domestic prosecutors continue to expansively assert charges based solely on extraterritorial conduct, suggesting that this issue may arise more often.
For now, with Bescond, the Second Circuit splits from the Sixth and Eleventh Circuits on whether a defendant can appeal a district court’s reliance on the fugitive disentitlement doctrine. Like the Second Circuit’s dissent, the Sixth Circuit’s and Eleventh Circuit’s decisions both held that the Court of Appeals lacked jurisdiction to hear interlocutory appeals from rulings that disentitled fugitives. The Second Circuit’s dissent notes that the majority’s holding creates a new class of interlocutory appeals that will “greatly disserve the interests of justice” and result in “delay and outright frustration of the adjudicative process” in criminal cases involving foreign-based defendants.
It remains to be seen whether other Circuits will follow Bescond or whether federal prosecutors may ultimately, in some cases, refrain from charging foreign defendants whose conduct occurred entirely outside of the United States and who remain citizens and residents of their home countries during the relevant periods. Back in Hijazi v. United States, the Supreme Court chose to deny certiorari, but given the growing Circuit split on this significant procedural issue, the Court may ultimately intervene.
Find out more about the implications of US v. Bescond by contacting any of the authors.