Second Circuit Rules That A Foreign Defendant Who Lives Abroad And Is Charged With Having Committed Crimes From Her Home Country Is Not Subject To Fugitive Disentitlement

• Published date: 18 August 2021
• Subject Matter: Litigation, Mediation & Arbitration, Criminal Law, Trials & Appeals & Compensation, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Kramer Levin Naftalis & Frankel LLP
• Author: Mr Alan Friedman, Darren LaVerne, Michael Martinez, Gary P Naftalis, Paul H. Schoeman, Steven Sparling, Robin Wilcox, David S. Frankel and Aaron L. Webman

In a significant decision, a panel of the Second Circuit recently held that a French citizen who was charged with violating the Commodity Exchange Act (CEA) in connection with the LIBOR scandal, but who lives in France and has remained there, is not a fugitive and that the trial court abused its discretion in applying the fugitive disentitlement doctrine to her. That doctrine, which "disentitles" a defendant from advancing merits arguments while a fugitive, would have prevented the district court from hearing her jurisdictional and other challenges to that indictment. United States v. Bescond, No. 19-1698, 2021 WL 3412115 (2d Cir. Aug. 5, 2021). This decision may now provide certain criminal defendants with an avenue to challenge aggressive extraterritorial applications of U.S. law without putting their liberty at risk by being forced to appear first in person in U.S. courts.

Muriel Bescond, a French citizen who lived and worked in France, was the head of the Paris treasury desk at Société Générale. Id. at *1. An indictment against her in the Eastern District of New York charged that, between May 2010 and October 2011, she participated in a scheme, from her office in Paris, to manipulate the United States Dollar London Interbank Offered Rate in violation of the CEA. Id. Bescond has remained in France - the French government, which does not extradite its own citizens, will not extradite her - and has not submitted to the court's jurisdiction. Id. at *2. Bescond moved to dismiss the indictment on several grounds, including a challenge to the extraterritorial application of the CEA, but District Judge Joanna Seybert ruled that she was a fugitive and declined, in an exercise of the court's discretion under the fugitive disentitlement doctrine, to decide her motion on the merits. Id. at 3. A split panel of the Second Circuit reversed.¹

The majority held that Bescond was neither a "traditional fugitive," because she had not fled the country, nor a "constructive-flight fugitive" (i.e., a person who commits a crime within the jurisdiction, leaves for innocent reasons and then stays abroad to avoid prosecution), because she was outside the United States at the time of the alleged crimes. Id. at *8. Her "presence abroad," the court explained, "is unrelated to the American prosecution." Id. at *10. Instead, she is abroad because "[s]he is a French citizen, living in France, where she supports a family, and is employed in a legitimate line of work." Id.

Though the...