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United States v. Baxt

October 26, 1999

UNITED STATES OF AMERICA HON. STEPHEN M. ORLOFSKY
V.
PAUL BAXT



The opinion of the court was delivered by: Orlofsky, District Judge:

FOR PUBLICATION

OPINION

This case presents the vexatious and troublesome question of when and under what circumstances an indictment must be dismissed for "preindictment delay." On February 19, 1999, Defendant, Paul Baxt ("Baxt"), was indicted for misrepresenting his financial assets on loan applications submitted to Summit Trust Company ("Summit Trust") in violation of 18 U.S.C. §§ 1014 and 2. *fn1 See Indictment (filed Feb. 19, 1999). The last of the activities for which Baxt was indicted occurred in May, 1989, nearly ten years before the indictment was finally obtained on February 19, 1999. See id. Baxt now brings a motion to dismiss this indictment for preindictment delay. See Def.'s Mot. to Dismiss for Pre-Indictment Delay (filed Apr. 17, 1999).

For the reasons set forth below, I shall deny Baxt's motion to dismiss for preindictment delay because he has failed to demonstrate both that: (1) the delay was intentional; and (2) he has suffered actual prejudice as a result of the delay.

I. Factual Background

On February 22, 1989, Baxt submitted a letter to Summit Trust attaching a copy of Schedule B of his 1987 federal income tax return. See Aff. Dr. Michael Peter Weissberg, Ex. 25 (filed Apr. 27, 1999). Baxt tendered this tax information apparently in the hope that Summit Trust would issue a loan that could be used by a partnership (of which Baxt was a member) to renovate the Grove Mercantile office building located in Jersey City, New Jersey. See id., Exs. 6, 16. Baxt was to be the guarantor of the applied-for loan. See id., Ex. 6. The tax form indicated that that Baxt had received $301,678 in income from an account with Charles Schwab & Co. in 1987 See id., Ex. 25.

The Government alleges, however, that Baxt earned only $678 from his Charles Schwab brokerage account that year. See Indictment at 2. Moreover, the Government claims that Baxt "altered" Charles Schwab statements in May, 1989, further misrepresenting his financial assets. See Aff. Dr. Michael Peter Weissberg, Ex. 6. Baxt does not deny that he submitted financial statements over-valuing his financial assets. See id., Ex. 16. He argues instead that he did not have the requisite mens rea to support a conviction for filing false loan applications. See id. Specifically, he contends that in March and May, 1989, he suffered from organic brain disease, bipolar disorder, and Multiple Sclerosis -- a cocktail of brain dysfunctions that resulted in his making grandiose representations about his financial worth. See Aff. Dr. Michael Peter Weissberg ¶ 3, Exs. 2-5, 16. There is also evidence of cocaine and alcohol abuse on the part of Baxt at that time. See id., Exs. 2-4.

The focus of Baxt's current motion centers on the events that transpired between May, 1989, and the filing of the indictment against him approximately ten years later. The investigation that initially uncovered Baxt's alleged wrongdoing was conducted by the Federal Bureau of Investigation in 1991. See id., Exs. 17-18. Baxt retained Mr. Voorhees ("Voorhees"), the attorney who currently represents him, in February, 1992. See id., Ex. 19.

The following year-and-a-half was marked by regular exchanges between Voorhees and Mark R. Winston, Esq., ("Winston") counsel for the United States. During this time the Government requested and received Baxt's medical records, concluded on the basis of those records that it did not need to obtain an independent medical examination of Baxt, invited Baxt to plead guilty, and made several representations that an indictment would be sought sometime in early 1993. See id., Exs. 7, 11- 14, 20-22, 24. Baxt, while initially resistant to pleading guilty, ultimately offered to negotiate a plea and to surrender voluntarily if negotiations failed and an indictment was filed. See id., Exs. 13, 20.

Surmising that an indictment was imminent, Voorhees sent a letter to Winston on April 8, 1993, requesting that Baxt be permitted to make a statement to the Grand Jury. See id., Ex. 22. Winston responded in a letter dated April 14, 1993, that Baxt would be permitted to testify before the Grand Jury if he waived his Fifth Amendment privilege against self-incrimination and answered questions put to him by the Government. See id., Ex. 14. Moreover, he would be allowed to make a statement to the Grand Jury, but the contents of that statement would have to be reviewed and approved by the Government prior to his appearance. See id. Baxt and the Government could not agree on what terms would govern Baxt's appearance before the Grand Jury, and the matter was ultimately brought before the Honorable John W. Bissell of the District of New Jersey, who issued an order permitting Baxt to testify. See Order (dated July 13, 1993). Baxt's local counsel, Thomas G. Roth, Esq., wrote a letter, dated June 22, 1993, to Winston to coordinate the arrangements for Baxt to appear before the Grand Jury. See Aff. Dr. Michael Peter Weissberg, Ex. 28.

That was the last word in this case until October 29, 1997, over four years later, when the Government contacted Voorhees to make arrangements for Baxt to appear before the Grand Jury. See id., Ex 16. Voorhees claims that at the time he received the Government's telephone call, he had not spoken to his client in over four years, had to search to find him. He subsequently discovered that Baxt was bankrupt, divorced, settled into a forced retirement because of his mental infirmities, dependant on a fixed income, and living in the Carribean. See id. The Government claims that four-year hiatus in this case from July, 1993, to October, 1997, resulted from the large caseload at the United States Attorney's Office in this District, the greater priority given other cases, and multiple reassignments of this case among various Assistant United States Attorneys. See Affirmation of Mark R. Winston ¶¶ 4-9, 11, 19-21 (filed May 17, 1999).

On four occasions between December 5, 1997, and October 9, 1998, Baxt signed affidavits tolling the ten-year statute of limitations to allow for further investigation by the Government into Baxt's claimed medical condition and to prevail upon the Government to refrain from seeking an indictment. See Aff. Dr. Michael Peter Weissberg, Exs. 6, 16; Letter of John Voorhees, Esq. (dated Mar. 2, 1998) (appended to Government's Resp. to Def.'s Pre-Trial Mots. (dated May 14, 1999)). The Government obtained the indictment against Baxt on February 19, 1999, after Baxt refused to agree to toll the statute of limitations for a fifth time. See id., Ex. 16; Indictment. It seems that Baxt ultimately decided not to appear before the Grand Jury on the medical advice of his physicians. See id. ¶ 6; Government's Resp. to Def.'s Pre-Trial Mots. at 3.

On April 17, 1999, Baxt filed a motion to dismiss the indictment against him for preindictment delay. See Def.'s Mot. to Dismiss for Pre-Indictment ...


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