U.S. v. Sharpe

• Court: Court of Appeals for the Fifth Circuit
• Decided: June 24, 1993
• Docket: 92-7158
• Status: Published

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________________

No. 92-7158 _____________________________

UNITED STATES OF AMERICA, Plaintiff-Appellee,

versus

LARA SHARPE, MIKE GILLICH, JR., KIRKSEY MCCORD NIX, JR., JOHN RANSOM, Defendants-Appellants. _________________________________________________

Appeals from the United States District Court for the Southern District of Mississippi

_________________________________________________ (June 25, 1993) ( , 1993)

BEFORE SMITH, DUHÉ and WIENER, Circuit Judges.

PER CURIAM:

In this criminal appeal, Defendants-Appellants LaRa Sharpe,

Mike Gillich, Jr., Kirksey McCord Nix, and John Ransom appeal their

convictions under 18 U.S.C. § 371 for conspiracy to violate the

fraud-by-wire statute1 and the murder-for-hire statute,2 and for

substantive wire fraud violations. Nix and Gillich also appeal

their convictions for substantive violation of the murder-for-hire

statute. Although the Appellants raise a number of issues on

appeal, we address only one: whether the sealed indictment tolled

1 18 U.S.C. § 1343. 2 18 U.S.C. § 1958. the statute of limitations. We conclude that a properly sealed

indictment does indeed toll the statute of limitations, absent a

showing of substantive and actual prejudice. As no such showing

has been made in the instant case, there was no error, and we

affirm. Having heard the arguments of counsel, studied their

appellate briefs, and reviewed the record and the pertinent case

law on all remaining issues, and having found no reversible error,

we also affirm as to each of them, albeit without discussion.

I

FACTS AND PROCEEDINGS

The underlying conspiracy in this case was masterminded by

Kirksey M. Nix while serving a life sentence in the state prison at

Angola, Louisiana. Nix orchestrated a scam operation to defraud

homosexuals of money, using both telephone and telegraph services,

in hopes of obtaining funds sufficient to buy his way out of

prison. The scam involved the placement of magazine advertisements

seeking homosexual liaisons. When an interested person would

respond, Nix or one of his associates would pretend to be in

financial difficulties. The victim would be asked to wire money to

one of Nix's associates in order to relieve the financial

difficulties. Afterwards, then, the liaison could take place.

In perpetrating this scam, Nix enlisted the aid of several

individuals outside the confines of prison. These supporting

players included: (1) Mike Gillich, Jr., owner and operator of the

Golden Nugget, a night club and strip joint in Biloxi, Mississippi;

(2) John Ransom, a parolee from a Georgia prison; (3) LaRa Sharpe,

2 Nix's girlfriend and a paralegal; (4) Peter Halat, mayor of Biloxi

and an attorney (also the employer of Sharpe and former law partner

of Vincent Sherry), who acted as a trustee for a firm trust account

maintained by Nix; (5) Arthur Mitchell and Robert Hallal, former

prisonmates of Nix in Angola and participants in the scam

(presented as government witnesses); and (6) various other

participants in the scam, most notably Kellye Dawn Nix (Nix's

stepdaughter and wife) and Juanda Jones, Sharpe's mother (who also

testified for the government).

Sometime in 1986, Nix discovered (or thought he discovered)

that $200,000 of the money he had entrusted to Gillich and Halat in

Biloxi was missing. Nix apparently suspected Mississippi state

judge Vincent Sherry, former law partner to Halat. Judge Sherry

purportedly was aware of Halat's involvement with Gillich.

Moreover, Judge Sherry's wife, Margaret, a reform mayoral

candidate, was also aware of the connection and had promised to

shut down Gillich's Golden Nugget night club, the place to which

Nix's funds were sent. The government alleged at trial that Nix,

with the assistance of various scam participants, including Sharpe

and her mother who travelled to Jackson to meet Ransom, hired him

to kill the Sherrys. On September 14, 1987, the Sherrys were

killed in their home.

On May 15, 1991, the grand jury issued the following sealed

indictments: (1) Count I charged all four defendants with

conspiracy under 18 U.S.C. § 371 to violate the wire fraud statute

(18 U.S.C. § 1343) and the murder-for-hire statute (18 U.S.C. §

3 1958(a)); (2) Count II charged all four defendants with a

substantive violation of wire fraud; (3) Nix, Gillich, and Ransom

were charged in Count III violating the murder-for-hire statute,

including aiding and abetting, by travelling from Louisiana to

Mississippi to arrange the murder; (4) Count IV charged Nix,

Gillich, and Ransom with a violation of the murder-for-hire

statute, based on Ransom's interstate travel from Georgia to

Mississippi. The indictments were returned within the five year

statute of limitations (measured from the day of the last overt act

of the conspiracy), but were not unsealed until May 21, 1991, five

years and five days after the last overt act.

The defendants made numerous pre-trial motions, including one

for dismissal based on a statute of limitations violation. The

court denied that motion, finding no statute of limitation problem.

At the conclusion of the trial the jury returned a verdict of

guilty for all four defendants on Counts I and II. Nix and Gillich

were found guilty on the Count III, travel in aid of murder-for-

hire, but Ransom was acquitted. Additionally, Nix, Gillich, and

Ransom were acquitted on the Count IV murder-for-hire charge.

II

DISCUSSION

The only issue requiring discussion in this case is whether

the statute of limitations ran on the mail fraud count because the

indictment, although returned within the limitations period, was

not unsealed until five days after the limitations period had

expired. Although this issue is res nova in our circuit, we are

4 guided by the decisions of the First, Second, Fourth, Eighth,

Ninth, and Eleventh Circuits, which are in agreement on the rule.

As discussed below, we adopt the constant jurisprudence of these

circuits and conclude that the application of their holdings

mandates an affirmance of the district court's decision.

The other circuits are uniform in holding that "when a sealed

indictment is not opened until after the expiration of the statute

of limitation, the statute ordinarily is not a bar to prosecution

if the indictment was timely filed."3 The case law also contains

a uniform exception to this rule. A sealed indictment will not

relate back to the time of its filing for limitations purposes if

the defendant can demonstrate that substantial actual prejudice

occurred between the sealing and the unsealing.4

Nix, Gillich, and Sharpe do not assert that they have suffered

any substantial actual prejudice, as the indictments were sealed

for a mere six daysSQone before the limitation period expired and

five thereafter.5 Instead, they insist that the indictments were

3 United States v. Shell, 961 F.2d 138, 141 (9th Cir. 1992); see United States v. Richard, 943 F.2d 115, 118 (1st Cir. 1991); United States v. Lakin, 875 F.2d 168, 169 (8th Cir. 1989); United States v. Ramey, 791 F.2d 317, 320 (4th Cir. 1986); United States v. Edwards, 777 F.2d 644, 647 (11th Cir. 1985), cert. denied, 475 U.S. 1123 (1986); United States v. Muse, 633 F.2d 1041, 1041 (2d Cir. 1980)(en banc), cert. denied, 450 U.S. 984 (1981). 4 United States v. Srulowitz, 819 F.2d 37, 40 (2d Cir. 1987). 5 In addition to these requirements, two circuits, the Second and Ninth, have held that "[a]n indictment may remain sealed beyond the limitation period but only for a reasonable time." Shell, 961 F.2d at 142; see United States v. Watson, 599 F.2d 1149, 1155 (2d Cir. 1979), modified sub nom. United States v. Muse, 633 F.2d at 1041. Watson, later vacated and modified by

5 sealed for improper purposes and that the government has the burden

of establishing the reason for sealing the indictment. Again, the

consistent and persuasive reasoning of the other circuits

undermines these assertions.

A judicial officer may seal an indictment under FED.R.CRIM.P

6(e)(4), which provides:

The federal magistrate to whom an indictment is returned may direct that the indictment be kept secret until the defendant is in custody or has been released pending trial. Thereupon the clerk shall seal the indictment and no person shall disclose the return of the indictment except when necessary for the issuance and execution of a warrant or summons.

An indictment is properly sealed when the government requests that

the magistrate judge seal the indictment "for any legitimate

prosecutorial objective or where the public interest otherwise

requires it."6 Thus, "the discretion of the district judge or

magistrate to seal an indictment is broader than merely the need to

take the defendant into custody."7

the en banc court, raises the possibility that an unreasonable delay coupled with bad faith by the government could constitute a due process violation. In Muse, however, the en banc court held that the sixteen month delay was simply a factor in determining actual substantial prejudice. In Shell, the Ninth Circuit followed this approach, holding that, although the six-year delay was unreasonable, there was no actual prejudice. In so holding, the court rejected the district court's conclusion that such an unreasonable delay established a presumption of prejudice. Shell, 961 F.2d at 142-43. As the indictments were sealed for such a short period of time, we need not reach this issue, but note that the government's ability to toll the statute of limitations by sealing and indictment is not unlimited. 6 Richard, 943 F.2d at 118; Lakin, 875 F.2d at 170-71. 7 Ramey, 791 F.2d at 320-21; see Edwards, 777 F.2d at 647- 49; United States v. Mitchell, 769 F.2d 1544, 1547-48 (11th Cir. 1985); United States v. Southland Corp., 760 F.2d 1366, 1379-80

6 In addition, the magistrate judge is not required to make a

contemporaneous record of the reasons for sealing the indictment,

"[as] sealing in the first instance is but a ministerial act, and

it is wholly within the discretion of the Magistrate whether to

require the prosecutor to justify a request to seal."8 Moreover,

development of such a record would increase the chances of

disclosure.9 If challenged, the government must explain and

support the legitimacy of its reasons for sealing the indictment.

The government only does so, however, at a hearing after the

indictment is unsealed.10 And, the magistrate judge's initial

decision to seal the indictment is given great deference.11

In a hearing held after the instant indictment was unsealed,

the prosecutor testified that the indictment was sealed: (1) in an

effort to accommodate counsel for Gillich; (2) in order to locate

Sharpe; and (3) out of concern for pre-trial publicity before all

the defendants would be notified. The district court found that

these reasons constituted a legitimate prosecutorial purpose.

Particularly when we consider the deference accorded the magistrate

judge in such determinations, we find we are in full agreement with

the district court.

(2d Cir. 1985). 8 Srulowitz, 819 F.2d at 41. 9 Id. 10 Shell, 961 F.2d at 141-42; Lakin, 875 F.2d at 171; Srulowitz, 819 F.2d at 41. 11 Lakin, 875 F.2d at 172; Srulowitz, 819 F.2d at 41; Ramey, 791 F.2d at 321; Edwards, 777 F.2d at 648.

7 III

CONCLUSION

Again, the sole issue we discuss today is one that is res nova

in this circuit: whether an indictment sealed within the statutory

period of limitations but unsealed after that time period has

expired tolls the statute of limitations. We adopt the reasoning

of the other circuits on this issue, holding that a timely filed

indictment does not bar prosecution absent a showing of actual

substantial prejudice. As the Appellants have failed to

demonstrate any such prejudice, the prosecution was not barred.

For the foregoing reasons, the opinion of the district court

is

AFFIRMED.