United States v. Rothenberg

554 F.Supp.3d 1039

UNITED STATES of America, Plaintiff,

v.Michael Brent ROTHENBERG, Defendant.

Case No. 20-cr-00266-JST-1

United States District Court, N.D. California.

Signed August 13, 2021

Nicholas Joseph Walsh, Assistant US Attorney, Kyle F. Waldinger, Office of the United States Attorney, Criminal Division, San Francisco, CA, for Plaintiff.

Hanni Fakhoury, Moeel Lah Fakhoury, Oakland, CA, for Defendant.

Michael Brent Rothenberg, San Francisco, CA, Pro Se.

ORDER DENYING MOTION TO DISMISS COUNTS 16, 17, AND 18

Re: ECF No. 52

JON S. TIGAR, United States District Judge

Defendant Michael Brent Rothenberg has filed a motion to dismiss counts 16, 17, and 18 of the indictment as time barred. ECF No. 52. The Court held a hearing on June 11, 2021 and will now deny the motion.

The parties agree that the only issue to be decided is whether the information filed on June 26, 2020 tolled the statute of limitations for counts 16 and 17 despite Rothenberg not waiving his right to a grand jury. There is no binding Ninth Circuit authority on this question. However, an unpublished Ninth Circuit opinion held that a waiverless information tolled the statute of limitations because it provided the defendant with sufficient notice to "prepare a defense." U.S. v. Avery , 747 Fed. Appx. 482, 484 (9th Cir. 2018). In addition, several district courts and one court of appeals have explicitly addressed the question of whether a waiverless information can toll the statute of limitations,¹ and the majority of courts have favored the Government's position. See, e.g. , United States v. Burdix-Dana , 149 F.3d 741, 743 (7th Cir. 1998) ; United States v. Holmes , No. 18-cr-00258-EJD, 2020 WL 6047232, at *9-10 (N.D. Cal. Oct. 13, 2020) ; United States v. Stewart , 425 F. Supp 2d 727, 731-35 (E.D. Va. 2006) ; United States v. Hsin-Yung , 97 F. Supp. 2d 24, 28 (D.D.C. 2000) ; United States v. Watson , 941 F. Supp. 601, 603 (N.D. W. Va. 1996) ; but see United States v. Sharma , No. 4:14-CR-61, 2016 WL 2926365, at *4 (S.D. Tex. 2016) ("To be clear, a criminal information is not a ‘charging’ instrument upon which the government can automatically proceed to prosecution after the statute of limitations has run its course."); United States v. Machado , No. CRIM.A.04-10232-RWZ, 2005 WL 2886213, at *1 (D. Mass. Nov. 3, 2005) ("[I]t defies logic and reason that the court may accept an information without waiver for the purpose of applying the statute of limitations."). For the reasons discussed below, the Court concludes that the waiverless information here tolled the statute of limitations and denies Rothenberg's motion to dismiss.

I. BACKGROUND

Rothenberg has been charged with 23 counts of criminal conduct stemming from his alleged fraudulent activities as founder of Rothenberg Ventures Management Company, LLC.² ECF No. 15 ¶ 25.³ Among other charges, Rothenberg is accused of misrepresenting his investment activities to and misusing funds provided by his investors. Id. On April 2, 2020, the Government and Rothenberg entered an agreement to toll the statute of limitations from April 2, 2020 to June 30, 2020 for any criminal offenses related to Rothenberg's "employment at and management of" Rothenberg Ventures Management Company. ECF No. 52-1. The Government filed a criminal complaint alleging wire fraud on June 25, 2020. ECF No. 1. A 23 count waiverless information and grand jury indictment followed on June 26, 2020 and August 20, 2020 respectively.⁴ ECF Nos. 2, 15.

Counts 16, 17, and 18 of the indictment charge Rothenberg with wire fraud in violation of 18 U.S.C. § 1343. ECF No. 15 ¶¶ 46-49. These wire fraud charges are subject to a five-year statute of limitations. See 18 U.S.C. § 3282(a). The statute of limitations expired on July 5, 2020 for count 16; July 27, 2020 for count 17; and October 29, 2020 for count 18. ECF No. 54 at 2; ECF No. 55 at 4 n.1.

On May 7, 2021, Rothenberg filed the instant motion to dismiss counts 16, 17, and 18, on the grounds that a waiverless information cannot toll the statute of limitations and therefore the claims were untimely. ECF No. 52. The Government filed an opposition, ECF No. 54, and Rothenberg replied, ECF No. 55. In their opposition brief, the Government agrees that the criminal complaint did not toll the statute of limitations, ECF No. 54 at 3 n.2, and does not argue that the circumstances surrounding the Covid-19 pandemic made the filing of an information without Rothenberg's waiver of his right to a grand jury necessary, id. at 11. Rothenberg concedes in his reply brief that count 18 is timely due to the tolling agreement. ECF No. 55 at 4 n.1. Therefore, whether the information filed on June 26, 2020 tolled the statute of limitations for counts 16 and 17 is the only issue before the Court.

II. DISCUSSION

The Fifth Amendment guarantees a defendant the right to be tried only upon "a presentment or indictment of a Grand Jury." U.S. Const. amend. V. A felony such as the alleged wire fraud at issue here "must be prosecuted by indictment if it is punishable ... by imprisonment for more than one year," Fed. R. Crim. P. 7(a)(1), and "may be prosecuted by information [only] if the defendant – in open court and after being advised of the nature of the charge and of the defendant's rights – waives prosecution by indictment," Fed. R. Crim. P. 7(b). Rothenberg did not waive his right to be charged by grand jury indictment. The Government maintains, however, that under 18 U.S.C. Section 3282(a), an information tolls the statute of limitations even when a defendant has not waived his right to a grand jury. 18 U.S.C. § 3282(a) states in relevant part that "no person shall be prosecuted, tried, or punished for any offense, not capital, unless the indictment is found or the information is instituted within five years next after such offense shall have been committed," (emphasis added).

A. Interpreting Section 3282(a)

"A fundamental canon of statutory construction is that, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." United States v. Maciel-Alcala , 612 F.3d 1092, 1096 (9th Cir. 2010). The Court's interpretation therefore necessarily begins with the statutory language of 18 U.S.C. § 3282(a). The Court also considers Section 3282(a) ’s statutory context because the "[i]nterpretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis." Dolan v. U.S. Postal Serv. , 546 U.S. 481, 486, 126 S.Ct. 1252, 163 L.Ed.2d 1079 (2006).

1. Defining "Institute"

The ability of a waiverless information to toll a statute of limitations hinges on the meaning of "institut[ing]" an information under Section 3282(a). The Government argues that according to the "ordinary and natural meaning" of the word, to "institute" an information "means no more than to ‘start’ or ‘commence’ the information by filing it with the Clerk of the Court." ECF No. 54 at 5. The Government emphasizes the difference between instituting an "information" and an "entire criminal prosecution" and asserts that an information can be filed – i.e. "instituted" – even if the government cannot yet proceed with prosecution because the defendant has not waived their right to an indictment. Id. at 5-6.

The Government finds support for its interpretation of Section 3282(a) in United States v. Burdix-Dana , in which the Seventh Circuit emphasized the difference between instituting an information and instituting a prosecution. 149 F.3d at 743. That court explained that "[t]here is nothing in the statutory language of 18 U.S.C. § 3282 that suggests a prosecution [as opposed to an information ] must be instituted before the expiration of the five year period." Id. In United States v. Holmes , another court in this district subscribed to the Seventh Circuit's reading of Section 3282(a), noting that while a waiver is required to advance an information to prosecution, one "is not required for an information to come into being." 2020 WL 6047232, at *8-10 (holding that "the filing of an information without an accompanying waiver is sufficient to toll the statute of limitations – even though it may not be effective for other purposes.").

Rothenberg argues that the filing of an information does not "institute" it because an information can only be "instituted" if it allows the government to advance the prosecution of a defendant. ECF No. 52 at 10-11. Because Rothenberg "did not waive prosecution by indictment," he argues, "the Information was null and void and could not have tolled the statute of limitations." Id. at 11.

Rothenberg relies on the Supreme Court's decision in Jaben v. United States – which considered 26 U.S.C. § 6531 – to support his interpretation of the word "institute." 381 U.S. 214, 85 S.Ct. 1365, 14 L.Ed.2d 345 (1965). Section 6531 enumerates the statute of limitations for various tax-related offenses and permits a nine-month extension to the statute of limitations following the "institut[ing]" of a complaint.⁵ 26 U.S.C. § 6531. Under Section 6531 and a then-active version of Federal Rule of Criminal Procedure 3, the commissioner (now magistrate) was required to make a determination of probable cause as part of the process of instituting the complaint. Jaben , 381 U.S. at 218, 85 S.Ct. 1365. The Supreme Court rejected the government's argument that filing a complaint was sufficient to "institute" the complaint under Section 6531 because that interpretation would reduce the role of the commissioner to merely "rubberstamp[ing] the [government's] complaint." Id. Jaben held that the purpose of Section 6531 was not to "grant the Government greater time in which to make its case (a result which could have been accomplished simply by making the normal period of limitation six years and nine months)," but instead to "deal with the situation in which the Government has its case made within the normal...