The Second Circuit Court Of Appeals Finds That French Banker Need Not Travel To The United States To Seek Dismissal Of Her Indictment

• Published date: 18 August 2021
• Subject Matter: Government, Public Sector, Criminal Law, Government Contracts, Procurement & PPP, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Sheppard Mullin Richter & Hampton
• Author: Mr Michael J. Gilbert and Shin Y. Hahn

On August 5, 2021, the U.S. Court of Appeals for the Second Circuit ruled that a French banker may seek dismissal of an indictment without having to physically appear in the United States. The decision limits the application of the "fugitive disentitlement" doctrine - which has long prevented foreign nationals from challenging criminal prosecutions without appearing in the United States to do so.

Muriel Bescond, a former Societe General ("SocGen") banker, was charged by the U.S. Attorney's Office for the Eastern District of New York with transmitting false, misleading, and knowingly inaccurate commodities reports, and conspiracy, in violation of the U.S. Commodity Exchange Act ("CEA"). Prosecutors allege that Ms. Bescond participated in the United States Dollar London Interbank Offered Rate ("USD LIBOR") benchmark interest rate calculation process from Paris, which ultimately impacted the pricing of futures contracts traded on the Chicago Mercantile Exchange. Ms. Bescond allegedly instructed SocGen's LIBOR "setters" to prepare false USD LIBOR submissions that were lower than SocGen's actual borrowing rates. According to the prosecutors, SocGen's false submissions artificially lowered the USD LIBOR fix, affecting financial transactions that referenced USD LIBOR.

Ms. Bescond - who lives in Paris and was in France at all times during the alleged criminal activity - asked, through her U.S. counsel, to dismiss the indictment. Ms. Bescond argued that the indictment violated her Fifth Amendment right to due process because it failed to allege a sufficient nexus with the United States, and that the statute of limitations had run. Ms. Bescond further argued that the government was selectively prosecuting women participants in the alleged scheme, while declining to prosecute men who were similarly situated.

The United States District Court for the Eastern District of New York held that Ms. Bescond was a fugitive. Accordingly, the District Court exercised discretion to apply the fugitive disentitlement doctrine, declining to decide the merits of the motion to dismiss the indictment. This meant that Ms. Bescond could not seek dismissal of the indictment unless she appeared in the United States in person, where she would likely have been detained pending trial or, at the least, subject to stringent bail conditions.

Ms. Bescond appealed the District Court's order, and the U.S. Court of Appeals for the Second Circuit determined to exercise jurisdiction over the District...