Second Circuit Reverses Convictions In Municipal Bonds Cartel Case

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Court’s application of statute of limitations will likely guide future conspiracy prosecutions.

On December 9, 2013, the Second Circuit Court of Appeals issued a 2-1 opinion reversing the conviction of three defendants in United States v. Grimm, a case involving alleged bid rigging in the market for municipal bond investment contracts. The court ruled that interest payments made by unnamed co-conspirators pursuant to allegedly rigged contracts did not constitute overt acts in furtherance of the conspiracy sufficient to bring the charges within the statute of limitations. Grimm clarifies the way that courts should apply statutes of limitation in conspiracy cases, and the Second Circuit’s holding will likely have important ramifications for both general conspiracy and antitrust conspiracy prosecutions in the future.

Lower Court Proceedings -

On July 27, 2010, a federal grand jury in the Southern District of New York returned a 12 count indictment against the three defendants. A superseding indictment filed on May 31, 2011 charged the defendants with six counts of conspiracy in violation of 18 U.S.C. § 371 and one count of wire fraud in violation of 18 U.S.C. § 1343.

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