Life, Liberty and the Pursuit of Fraud: Using Wartime Powers to Extinguish Statutes of Limitations

Sun Tzu declared in The Art of War that "there is no instance of a nation benefitting from prolonged warfare." Sun Tzu, however, did not consider the vast power that springs from US Congressional actions made during times of crisis. The US Department of Justice has lately taken an expansive view of a World War II-era law tolling the statute of limitations to pursue civil fraud cases that would long have been extinguished but for the United States' "prolonged warfare" against terror. Given today's reality, companies must consider the possibility that the government has license to investigate and prosecute claims of fraud — potentially including claims brought under 19 U.S.C. § 1592, the civil penalty statute enforced by US Customs and Border Protection — that were committed many years ago, and that its ability to do so may be practically unlimited.

The Wartime Suspension of Limitations Act (WSLA) under 18 U.S.C. § 3287 tolls the statute of limitations applicable to any offense involving, among others, "fraud or attempted fraud against the United States or any agency thereof in any manner, whether by conspiracy or not." The tolling begins when the United States is at war or Congress has enacted a specific authorization for the use of military force, and it ends five years after the termination of hostilities "as proclaimed by a Presidential proclamation, with notice to Congress, or by a concurrent resolution of Congress."

Please see full advisory below for more information.

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Topics:  Civil Monetary Penalty, Customs and Border Protection, Fraud, Statute of Limitations, War Time Tolling, WSLA

Published In: Business Torts Updates, Civil Procedure Updates, International Trade Updates, Military Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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