F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
APR 1 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
No. 01-4147
v.
TERRENCE DUNNE,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Utah
(D.C. No. 98-CR-278-ST)
Stewart C. Walz, Assistant United States Attorney, (Paul M. Warner, United
States Attorney, Diana Hagen, Assistant United States Attorney, with him on the
brief), Salt Lake City, Utah, for Plaintiff-Appellant.
Donald D. Hackney, Hackney, Hamilton & Carroll, Spokane, Washington, for
Defendant-Appellee.
Before BRISCOE, Circuit Judge, BRORBY, Senior Circuit Judge, and
MURPHY, Circuit Judge.
MURPHY, Circuit Judge.
I. INTRODUCTION
The United States appeals from the district court’s dismissal of a
superseding indictment charging defendant Terrence Dunne (“Dunne”) with
making a false statement within the jurisdiction of the Securities and Exchange
Commission (“SEC”), in violation of 18 U.S.C. § 1001. The district court
dismissed the indictment for failure to charge within the applicable five-year
statute of limitations. This court exercises jurisdiction pursuant to 28 U.S.C. §
1291 and affirms, concluding that while a violation of 18 U.S.C. § 2(b) is
implicit in every charge, the charged offense is barred by the statute of
limitations. Moreover, this court concludes that a violation of 18 U.S.C. § 1001
is not a continuing violation for statute of limitations purposes.
II. BACKGROUND
Dunne was engaged by PanWorld Minerals International, Inc. (“PanWorld”)
to perform PanWorld’s financial audit for the calendar year 1993. On April 11,
1994, Dunne completed the audit of PanWorld, signed the audit report, and
mailed the audited financial statements and the audit report to PanWorld.
PanWorld mailed a Form 10-K Report, which included the audit report and
audited financial statements, to the SEC on April 29, 1994. The SEC received the
Form 10-K Report on May 4, 1994.
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On April 28, 1999, a Utah federal grand jury returned a superseding, five-
count indictment against Robert Weeks (“Weeks”), the president and principal
executive officer of PanWorld; David Hesterman (“Hesterman”), a PanWorld
consultant; and Dunne arising out of their activities in connection with PanWorld.
Counts I through III of the indictment involved only Weeks and Hesterman and
are not relevant to this appeal. Count IV of the indictment charged Weeks and
Hesterman with violations of the Securities Exchange Act by falsely stating in
PanWorld’s 1993 Annual Report filed with the SEC that the company had
acquired an interest in a project in Montana known as Washington Gulch Placer
Project.
Count V, the only count naming Dunne, began by “realleg[ing] and
incorporat[ing]” relevant factual allegations of Counts I, III, and IV. Count V
further alleged that
3. Defendant TERRENCE DUNNE audited the financial
statements included in PanWorld’s 1993 annual report. DUNNE
signed an audit opinion for the 1993 financial statements stating his
audit of PanWorld was done in accordance with generally accepted
auditing standards (GAAS) and the financial statements were
presented in accordance with generally accepted accounting
principles (GAAP). However, DUNNE knew from the terms of the
October 31, 1993 contract that PanWorld acquired no interest in
Washington Gulch, and therefore, knew that the financial statements
were not presented in accordance with GAAP. DUNNE took no steps
to satisfy the requirements of generally accepted auditing standards
to determine if the Washington Gulch interest was properly included
in the PanWorld financial statements, and the defendant DUNNE did
not acquire competent evidential matter as required by GAAS that
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showed the acquisition of the Washington Gulch interest by
PanWorld on October 31, 1993.
4. On or about May 4, 1994, in the Central Division of the
District of Utah, and elsewhere, TERRENCE DUNNE, in a matter
within the jurisdiction of the SEC, an independent agency of the
Executive Branch of the United States, did make a materially false,
fictitious, and fraudulent statement and representation in that the
defendant TERRENCE DUNNE did certify that the financial
statements for [PanWorld] for the year ending December 31, 1993
were presented in accordance with generally accepted accounting
principles (GAAP), and audited in accordance with Generally
Accepted Auditing Standards (GAAS), when, as the defendant then
and there well knew, such was not the case; all in violation of 18
U.S.C. § 1001.
Dunne moved to dismiss Count V of the superseding indictment on the
grounds that it was barred under the five-year statute of limitations. 18 U.S.C. §
3282 (establishing a five-year statute of limitations for noncapital offenses).
Dunne argued that the statute of limitations began to run when he mailed the audit
report to PanWorld on April 11, 1994 and thus expired before the April 28, 1999
indictment was filed. The government opposed Dunne’s motion, arguing that the
superseding indictment was timely because: (1) the charged crime was not
complete until the documents containing the false statements were actually
submitted to the SEC on April 29, 1994; and (2) the crime charged in the
indictment was the “republication” of the financial statements by PanWorld when
it submitted them to the SEC.
The district court referred the case to a magistrate judge pursuant to 28
U.S.C. § 636(b)(1)(B). In recommending that Dunne’s motion be denied, the
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magistrate judge agreed with the government that the charged crime was not
complete until the false statement was sent by PanWorld to the SEC. Focusing on
the elements of the charged offense, the magistrate judge noted there were two
elements relating to the time when the offense was committed. The magistrate
judge concluded that the first element, i.e., the making of a false statement,
occurred on April 11, 1994 when Dunne submitted the audit report and the
audited financial statements to PanWorld. As for the second temporal element,
i.e., that the false statement concern a matter within the jurisdiction of an agency
of the United States, the magistrate judge concluded that this occurred on April
29, 1994 when PanWorld mailed the Form 10-K Report, including Dunne’s false
statements, to the SEC. The magistrate judge concluded that because the
superseding indictment was returned on April 29, 1999, it was timely under 18
U.S.C. § 3282.
Dunne objected to the magistrate judge’s report and recommendation,
arguing that the SEC had jurisdiction over him when he signed and mailed the
audit report to PanWorld on April 11, 1994. Dunne also argued that when he was
engaged in March 1994 by PanWorld to perform the audit, the SEC obtained
jurisdiction over him.
The government responded to Dunne’s objections, arguing that the charged
crime was not completed upon Dunne’s signing and mailing the audit reports to
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PanWorld because, without submission to the SEC, there is no potential the false
statements could impede a governmental function. Further, the government
argued, merely because an agency may have jurisdiction over an individual who
appears before it, statements made by that individual do not automatically concern
matters within the jurisdiction of the agency for purposes of 18 U.S.C. § 1001.
In considering Dunne’s objections, the district court concluded the
controlling question was at what point in time did Dunne’s audit report and
audited financial statements “concern a matter within the jurisdiction of a federal
department or agency” under § 1001. The district court rejected the government’s
assertion that the false statements were not brought within the SEC’s jurisdiction
until PanWorld mailed the statements to the SEC because the government’s
argument ran counter to the principle that false statements need not be submitted
to the government agency before § 1001 is violated. The district court also
disagreed with the government’s assertion that Dunne submitted his audit report
to PanWorld pursuant only to a private contract. Relying on the Securities
Exchange Act and its implementing regulations, the district court concluded
that where, as here, a corporate entity retains the services of an
independent certified public accountant, as required by federal law,
for the preparation of financial statements required to be submitted to
the SEC, which financial statements require the certification of the
accountant, and the form, matter, and substance of which statements
is dictated by federal law and regulation, and the accountant prepares
such materials with the knowledge of the nature of the relationship
and does so with the belief that his or her work will ultimately be
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forwarded to the SEC, the accountant’s financial statements
“concern[] a matter with the jurisdiction of a federal department or
agency” when the statements are transmitted to the corporate entity.
The district court further rejected the government’s argument that Dunne’s
§ 1001 offense was committed when PanWorld submitted the Form 10-K because
it would result in the final element of the crime being committed by PanWorld.
The district court acknowledged that when a defendant is charged with aiding and
abetting, “the final commission of the ‘aiding and abetting’ crime may lie with a
third party,” but noted that, “for whatever reason, Dunne was not charged with
aiding and abetting and the government’s argument looking to PanWorld’s
conduct for a determination of when Dunne committed a substantive crime has no
application under aiding and abetting principles.” Based upon these conclusions,
the district court determined that the conduct criminalized by § 1001 was
completed when Dunne mailed the false audit report and audited financial
statements to PanWorld. The district court, therefore, granted Dunne’s motion to
dismiss Count V of the superseding indictment on the grounds that the five-year
statute of limitations had expired.
On appeal, the government has abandoned its primary argument asserted
before the district court, i.e., that the crime charged in Count V of the superseding
indictment was not complete until the false statements were actually submitted to
the SEC. Instead, the government offers two alternative reasons why Count V of
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the superseding indictment was timely. First, the government contends that Count
V implicitly alleged that Dunne caused PanWorld to submit the false audit report
to the SEC, thereby making him criminally liable under the federal aiding and
abetting statute, 18 U.S.C. § 2(b). The government then argues that because
PanWorld submitted the false audit report to the SEC within the statute of
limitations period, the statute of limitations had not expired on the implicitly
charged offense. 1 Second, the government contends that the making of a false
statement under 18 U.S.C. § 1001 should be treated as a continuing offense and,
thus, the statute of limitations did not begin to run until the time the Form 10-K
Report was forwarded by PanWorld to the SEC.
III. DISCUSSION
A. Application of 18 U.S.C. § 2(b)
The government argues that the district court erred in concluding that it
was required to expressly charge Dunne under 18 U.S.C. § 2(b) with causing
PanWorld to make a false statement to the SEC when it submitted the Form 10-K
Report. The government then argues that the implicit 18 U.S.C. § 2(b) charge
1
The government has failed to include in the record on appeal a copy of
the pleading in which this argument was first presented to the district court.
However, because the government raised this argument before the district court at
the hearing on Dunne’s motion to dismiss the superseding indictment and the
district court expressly ruled on the government’s argument, the government has
not waived this argument on appeal.
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was not barred by the five-year period of limitations. We review the
government’s arguments de novo. See United States v. Giles, 213 F.3d 1247,
1248-49 (10th Cir. 2000) (holding that issues concerning the sufficiency of an
indictment are reviewed de novo).
The aiding and abetting statute, 18 U.S.C. § 2, provides:
(a) Whoever commits an offense against the United States or aids,
abets, counsels, commands, induces or procures its commission, is
punishable as a principal.
(b) Whoever willfully causes an act to be done which if directly
performed by him or another would be an offense against the United
States, is punishable as a principal.
This statute does not create an independent or separate crime, but rather
simply “abolishes the common-law distinction between principal and accessory.”
United States v. Cook, 745 F.2d 1311, 1315 (10th Cir. 1984). Consistent with this
principle, “[w]e have held that [a] defendant can be convicted as an aider and
abettor even though he was indicted as a principal for commission of the
underlying offense and not as an aider and abettor.” United States v. Scroger, 98
F.3d 1256, 1262 (10th Cir. 1996) (quotation omitted); see Cook, 745 F.2d at 1315
(holding that “an individual may be indicted as a principal for commission of a
substantive crime and he/she may be convicted by proof showing him/her to be an
aider and abettor”). Consequently, the government need not expressly charge that
a defendant’s actions fall within the ambit of § 2(b) to convict the defendant
under that statute. See Evans v. United States, 240 F.2d 695, 695-96 (10th Cir.
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1957) (reasoning that, although the indictment did not expressly charge the
defendant with causing the transport of the stolen automobile, “the Government
must prove that the defendant transported or caused the automobile to be
transported in interstate commerce” to sustain a conviction (footnote omitted)).
Other circuits have similarly held or stated that the government may convict upon
a § 2(b) theory even though it was not alleged in the indictment. See, e.g., United
States v. Howick, 263 F.3d 1056, 1064 (9th Cir. 2001) (holding the failure of an
indictment to expressly charge “causing” “does not foreclose a subsequent
conviction on a causation theory”); United States v. Dodd, 43 F.3d 759, 762 n.5
(1st Cir. 1995) (stating “an aider and abettor charge [referring to subsections 2(a)
and 2(b)] is implicit in all indictments . . . so it need not be specifically pleaded”
(quotation omitted) (alteration in original)); United States v. Perry, 643 F.2d 38,
45 (2d Cir. 1981) (stating “the provisions of 18 U.S.C. § 2 can be read into an
indictment which specifically charges only a substantive offense”); United States
v. Lester, 363 F.2d 68, 72 (6th Cir. 1966) (holding “an indictment need not
specifically charge . . . ‘causing’ . . . in order to support a jury verdict”).
Therefore, the district court erred in concluding that the government was required
to expressly charge Dunne with “causing” the false statement to be made to the
SEC to sustain a conviction under 18 U.S.C. § 2(b).
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While the government need not expressly charge a defendant under § 2(b),
it must expressly charge the defendant with the underlying substantive offense.
See United States v. Willis, 102 F.3d 1078, 1081 (10th Cir. 1996) (noting that to
be sufficient, an indictment must “contain[] the elements of the offense charged,
provide[] the defendant with fair notice of what he must defend against, and
afford[] protection from double jeopardy”). The government argues that the
underlying substantive offense is the making of a false statement under 18 U.S.C.
§ 1001 by submitting the audit report and financial statement to the SEC. To
support its interpretation, the government notes the superseding indictment
alleged that the charged conduct occurred on May 4, 1994, the date the false
documents were received by the SEC. The superseding indictment, however, only
charged Dunne with the making of a false statement under 18 U.S.C. § 1001 by
certifying the audit report and financial statements. The references to May 4,
1994 and to the SEC in the superseding indictment are merely jurisdictional and
are not allegations pertinent to the charged substantive crime. The indictment
may only be read to also implicitly charge Dunne with either aiding and abetting
in or causing someone else to commit the charged crime, i.e., the certification of
the false documents. 2 Accordingly, the government’s argument that the statute of
2
The government’s brief on appeal supports the conclusion that the
submission of the false statements to the SEC and the certification of the false
statements are two separate crimes. Aplt. Br. p. 16 n.6 (stating “Dunne may have
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limitations did not expire because Count V implicitly alleged that Dunne caused
PanWorld to submit the false statements to the SEC is unavailing.
B. Continuing Offense Doctrine
The government also argues that the making of a false statement under 18
U.S.C. § 1001 should be treated as a continuing offense and the statute of
limitations should not begin running before the statement has the potential to
deceive and the government could reasonably discover the crime. Therefore, the
government argues the statute of limitations did not begin to run until the audit
report certified by Dunne was submitted to the SEC. Because the government did
not raise this argument in the district court, it is reviewed on appeal for plain
error. Cf. United States v. Ivy, 83 F.3d 1266, 1297 (10th Cir. 1996) (holding that
if the government fails to object to the presentence report, the district court’s
reliance on the report is reviewed for plain error).
“‘Continuing offense’ is a term of art that does not depend on everyday
notions or ordinary meaning.” United States v. Jaynes, 75 F.3d 1493, 1506 (10th
Cir. 1996) (quotations omitted). It “is not the same as a scheme or pattern of
illegal conduct.” Id. Rather, it “is, in general, [an offense] that involves a
directly violated Section 1001 when he signed the audit report on April 11, 1994,
and then caused a second violation of Section 1001 to occur on or about May 4,
1994, by delivering a false audit report to PanWorld with the understanding that it
would be provided to the SEC”).
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prolonged course of conduct,” and “its commission is not complete until the
conduct has run its course.” United States v. Rivera-Ventura, 72 F.3d 277, 281
(2d Cir. 1995); see also United States v. De La Mata, 266 F.3d 1275, 1288 (11th
Cir. 2001) (holding that “[a] continuing offense is one which is not complete
upon the first act, but instead continues to be perpetrated over time”), cert.
denied, 122 S. Ct. 1543 (2002).
In Toussie v. United States, the Supreme Court discussed the continuing
offense doctrine and outlined when an offense should be considered “continuing”
for statute of limitations purposes. 397 U.S. 112, 114-115 (1970). Because
“questions of limitations are fundamentally matters of legislative . . . decision,”
and because there is “tension between the purpose of a statute of limitations and
the continuing offense doctrine,” the Court held that “the doctrine . . . should be
applied in only limited circumstances.” Id. at 121, 115 (quotation omitted). More
specifically, the Court held that an offense should be considered a continuing one
for statute of limitations purposes only if (1) “the explicit language of the
substantive criminal statute compels such a conclusion,” or (2) “the nature of the
crime involved is such that Congress must assuredly have intended that it be
treated as a continuing one.” Id. at 115.
The first of these possibilities is clearly inapplicable here. Nothing in the
explicit language of § 1001 “compels” the conclusion that an offense committed
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thereunder is to be considered a continuing one. If Congress had intended that to
be the case, it could have clearly stated so. See e.g., 18 U.S.C. § 3284 (“The
concealment of assets of a debtor” in a Chapter 11 case “shall be deemed to be a
continuing offense” until the date of final bankruptcy discharge).
Nor does the nature of the crime involved indicate that Congress intended
that it be a continuing offense. Section 1001 was intended “to protect the
Government from the affirmative, aggressive and voluntary actions of persons
who take the initiative; and to protect the Government from being the victim of
some positive statement which has the tendency and effect of perverting normal
and proper governmental activities and functions.” Brogan v. United States, 522
U.S. 398, 413 (1998) (Ginsburg, J., concurring) (quotation omitted); see United
States v. Niven, 952 F.2d 289, 293 (9th Cir. 1991) (holding that, in determining
whether a crime is a continuing offense, the court must focus on “the nature of
the substantive offense, [and] not on the specific characteristics of the conduct in
the case at issue”). Consistent with this purpose, § 1001 makes it illegal for a
person
in any matter within the jurisdiction of any department or agency of
the United States [to] knowingly and willfully falsif[y], conceal[] or
cover[] up by any trick, scheme, or device a material fact, or make[]
any false, fictitious or fraudulent statements or representations, or
make[] or use[] any false writing or document knowing the same to
contain any false, fictitious or fraudulent statement or entry . . . .
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18 U.S.C. § 1001 (1994). 3
None of these criminalized acts, however, “clearly contemplate[] a prolonged
course of conduct.” Toussie, 397 U.S. at 120. Rather, the statute contemplates a
single act even though there may be continuing effects. The government appears
to be arguing that Dunne committed a crime which had continuing effects after its
completion. Such consequences, however, are not alone sufficient to warrant
classifying violations of § 1001 as continuing offenses. See United States v.
Bustamante, 45 F.3d 933, 942 (5th Cir. 1995) (holding that because the defendant
was “not accused of committing a crime that has continuing effects after its
completion,” but rather “was charged with accepting illegal gratuities over an
extended period of time,” he was “therefore charged with continuing criminal
behavior”).
The government suggests that Congress did not intend the statute of
limitations to run before the offense could reasonably have been discovered. The
ability of the government, however, to learn of a particular offense is not a
relevant factor under the Toussie analysis. The crime at issue in Toussie, failing
to register for the draft, was arguably more difficult for the government to detect
than the crime at issue here.
3
This provision was amended in 1996 after the completion of the alleged
crime.
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A few courts, however, have explicitly or implicitly described § 1001 as a
continuing offense statute for purposes of 18 U.S.C. § 3237(a), which establishes
venue in any district in which an offense was “begun, continued or completed.”
United States v. Candella, 487 F.2d 1223, 1227-28 (2d Cir. 1973) (concluding
that venue for a § 1001 violation existed in the district where the falsified
documents were delivered to public officials and in the district it was
contemplated that the documents would eventually be transferred); United States
v. Bin Laden, 146 F. Supp. 2d 373, 376 (S.D.N.Y. 2001) (discussing cases in
which a court concluded the § 1001 violation to be continuing for § 3237(a)
purposes and noting that in each “the shared factual characteristic [wa]s . . . a
geographic discontinuity between the defendant * s physical making of the disputed
statement, whether oral or written, and the actual receipt of that statement by the
relevant federal authority”); United States v. Kouzmine, 921 F. Supp. 1131, 1136
(S.D.N.Y. 1996) (concluding that “[v]iolations of Section 1001 are continuing
offenses for which venue is proper in any district in which the offense began,
continued, or was completed”). Although issues of venue are obviously different
from issues involving statutes of limitations, the two concepts are clearly related.
See United States v. Hernandez, 189 F.3d 785, 790 (9th Cir. 1999) (noting that
“the act that triggers when a [statutory] violation is committed[,] . . . also
provide[s] a limit on where venue may lie,” since “[n]either the Constitution nor
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[the criminal statute at issue] permits venue in a location in which the defendant
happens to be after the crime was completed, unless the defendant began,
continued or completed his crime in that venue”). Thus, these cases cannot be
entirely ignored.
Nevertheless, we note that none of the cases involving issues of venue cited
by the government applied the Toussie analysis in determining whether § 1001
offenses should be deemed continuing offenses. Instead, the cases focused almost
exclusively on geographic factors, i.e., where the false statement was made and
where it was received by the federal government. When the cases are closely
examined, it is questionable whether they are defining § 1001 as a “continuing
offense” crime as that term is defined in Toussie. Rather, when addressing venue,
these cases use the phrase “continuing offense” to anticipate that § 1001 offenses
can begin, continue, and be completed in more than one geographic location, and
not that § 1001 offenses typically continue over a prolonged period of time.
When viewed in this manner, these cases can be reconciled with the conclusion
that § 1001 offenses are not continuing offenses for statute of limitations
purposes. While § 1001 offenses do not typically involve a prolonged course of
conduct, and thus do not fall within the continuing offense doctrine, they can
begin, continue, and end in different geographic locations, depending largely on
when and where the relevant federal agency assumes jurisdiction over the false
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statement at issue. For these reasons, we conclude that § 1001 offenses, such as
the one that Dunne was charged with committing, should not be deemed
continuing offenses for statute of limitations purposes. Therefore, the district
court’s conclusion that the statute of limitations had expired on the superseding
indictment was not plain error.
IV. CONCLUSION
For the reasons stated above, the judgment of the district court is
AFFIRMED.
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