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United States v. Finlay

 

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Defendant Gordon Finlay owned Finlay Testing Laboratories, Inc. (FTL), an industrial testing company operating out of Oahu, Hawaii that used portable devices emitting gamma radiation from a small pellet of nuclear material to create images of metal objects. The Nuclear Regulatory Commission (NRC) licensed FTL to use the radioactive materials and also required FTL to comply with NRC regulations that prohibit the transportation of the devices on aircraft carrying passengers.

In the early months of 1987, Finlay violated FTL’s NRC license by covertly transporting devices himself, and by ordering employees to transport the devices between the islands via passenger aircraft. Once NRC became aware of the violations, it suspended FTL’s license. In August 1992, in an effort to foster negotiations with the government, Finlay’s attorney (without objection from Finlay) executed waivers of the statute of limitations on behalf of Finlay and FTL for any failure of the United States to prosecute prior to April 1992. A month later, when Finlay objected to the waivers on the grounds that his attorney had no authority to execute them, both Finlay and FTL were indicted for conspiracy to transport nuclear materials and falsifying records to the NRC, and for conspiracy to defraud the United States by obtaining a reinstatement of an NRC license.

Finlay argued for the first time on appeal to the Ninth Circuit that the fact the same attorney represented his interests and the corporation FTL’s interests at the time the waivers were executed and at trial violated his Sixth Amendment right to counsel. The Ninth Circuit found that although the district court did not properly observe Federal Rule of Civil Procedure 44(c), which requires the district court to hold a hearing to ensure proper representation of joint defendants represented by single counsel, such error was harmless. Moreover, the court found that Finlay did not meet the burden of showing that an actual conflict of interest resulted at trial from a single attorney representing both his interests and the corporation’s interests because Finlay and FTL had the same interest in being exonerated. The court also rejected Finlay’s argument that the statute of limitations waivers should be nullified on Sixth Amendment grounds because Finlay’s attorney signed the waivers outside of court and thus, the Sixth Amendment was not implicated.

Finlay also argued that Grunewald v. United States[1] prohibits the government from charging him for his request to reinstate his license as an overt act of the conspiracy because this act arguably operated as concealment of the main conspiracy, and as such cannot be charged as part of the conspiracy. The court found that Finlay’s misrepresentation to NRC to get his license reissued was an essential part of the main conspiracy and not just an attempt to cover up for the crime, therefore prosecution was not barred by the statute of limitations. The court found it unnecessary to determine whether the waivers signed only by Finlay’s attorney operated to extend the statute of limitations because the issue was rendered moot by the court’s finding that Finlay’s license reinstatement request could be charged as part of the main conspiracy.


[1]353 U.S. 391, 403-04 (1957). Without the Grunewald rule, the court notes, the statute of limitations on conspiracies could be virtually eliminated by always charging a cover-up as part of the conspiracy.

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