United States v. Grimm
2013 U.S. App. LEXIS 24392
| 2d Cir. | 2013Background
- Three GE employees (Goldberg, Grimm, Carollo) conspired with brokers to rig competitive bids for guaranteed investment contracts (GICs), resulting in below‑market interest rates paid to municipal issuers and lost tax revenue to the Treasury.
- The government charged multiple conspiracies under 18 U.S.C. § 371 and related wire‑fraud counts; a superseding indictment narrowed the counts.
- The only alleged overt acts within the limitations window were post‑2004 periodic interest payments made by the (unindicted) provider firms pursuant to the GICs.
- Defendants moved to dismiss on statute‑of‑limitations grounds; the district court denied dismissal, treating the ongoing interest payments as overt acts that extended the conspiracy.
- The Second Circuit majority reversed, holding the scheduled, unilateral, long‑term GIC interest payments are not overt acts in furtherance of the conspiracy and therefore the indictment was time‑barred.
- Judge Kearse dissented, arguing the providers were alleged coconspirators and their continuing payments were foreseeable, attributable overt acts that kept the conspiracy alive through the payments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the indictment is time‑barred under the statute of limitations for general conspiracy (5 yrs) and tax‑fraud conspiracy (6 yrs) | Gov: post‑2004/2005 interest payments by providers are overt acts that restart the limitations period | Defs: scheduled GIC interest payments are routine, unilateral results of a completed conspiracy and cannot serve as overt acts | Held: Time barred — interest payments are not overt acts; convictions reversed and indictment dismissed |
| Whether routine, long‑term GIC interest payments constitute overt acts in furtherance of an economic conspiracy | Gov: each payment is a receipt of anticipated profit and thus an overt act in furtherance (citing economic‑benefit line of cases) | Defs: payments are ordinary commercial acts, unilateral and indefinite, not concerted activity; conspiracy ended once corrupt bidding concluded | Held: Payments are ordinary, indefinite, unilateral acts and do not show continued concerted activity; not overt acts |
| Whether the existence/duration of the conspiracy is measured by the defendants’ receipt of economic benefits | Gov: continued economic benefit can extend conspiracy duration | Defs: where payoff is a prolonged series of ordinary acts, conspiracy ends; receipt alone doesn’t continue conspiracy indefinitely | Held: Receipt over a prolonged, indefinite stream (here, GIC payments) does not alone prolong conspiracy; Salmonese/Doherty framework supports that conclusion here |
| Effect of unindicted corporate coconspirators’ conduct (providers making payments) on overt‑act attribution | Gov: foreseeable acts by coconspirators can be attributed and may be overt acts | Defs: even if provider acts are attributed, payments remain routine unilateral acts not demonstrating ongoing conspiracy | Held: Majority treated payments themselves as non‑concerted and therefore not overt acts; dissent viewed provider payments as attributable overt acts and would have upheld convictions |
Key Cases Cited
- United States v. Salmonese, 352 F.3d 608 (2d Cir. 2003) (economic‑benefit rule and limits on when payoffs count as overt acts)
- United States v. Doherty, 867 F.2d 47 (1st Cir. 1989) (salary receipts after completion of covert act do not necessarily restart limitations)
- Grunewald v. United States, 353 U.S. 391 (1957) (scope of conspiratorial agreement determines duration and overt act analysis)
- Fiswick v. United States, 329 U.S. 211 (1946) (conspiracy continues only with continuity of action or continuous cooperation)
- Pinkerton v. United States, 328 U.S. 640 (1946) (foreseeable acts by coconspirators are attributable)
- United States v. Mennuti, 679 F.2d 1032 (2d Cir. 1982) (conspiracy to obtain economic benefit continues through receipt of anticipated profits)