United States District Court, W.D. Virginia, Danville Division
December 14, 2016
UNITED STATES OF AMERICA,
WILLIAM R. WHYTE, Defendant.
JACKSON L. KISER SENIOR UNITED STATES DISTRICT JUDGE.
matter is before the Court of Defendant William Whyte's
Motion to Dismiss the Indictment. Defendant Whyte filed his
Motion on October 20, 2016 [ECF No. 21]. The United States
responded on November 17 [ECF No. 40], and Whyte replied on
November 29 [ECF No. 44]. I heard oral arguments on the
Motion on December 1. The matter is now ripe for disposition.
For the reasons stated herein, I will deny Defendant
Whyte's Motion to Dismiss.
STATEMENT OF FACTS AND PROCEDURAL
William R. Whyte (“Whyte”), along with Defendant
Armet Armored Vehicles, Inc. (“Armet”), was
indicted on July 19, 2012, with three counts of major fraud
against the United States, in violation of 18 U.S.C. §
1031; six counts of wire fraud, in violation of 18 U.S.C.
§ 1343; and three counts of false, fictitious, and
fraudulent claims, in violation of 18 U.S.C. § 287.
(See generally Indictment ¶¶ 28-47 [ECF
is a business “that manufactures and supplies armored
vehicles for government and commercial customers.”
(Id. ¶ 1.) Whyte is Armet's owner and CEO,
and he personally manages and supervises all of the
operations at Armet. (Id. ¶ 2.) The Indictment
stems from contracts Armet secured to provide the government
with armored vehicles for use in Iraq. Contract 0028
concerned 24 armored gun trucks for a total sales price of
$4, 779, 693.36 (id. ¶ 6); contract 0047
concerned eight additional armored gun trucks for an
additional $1, 593, 231.10 (id. ¶ 90). Both
contracts specified that each armored gun truck have armor
protection of a standard “at which armor-piercing
bullets of a given caliber and velocity [would] not penetrate
the armor.” (Id. ¶ 11.) Further,
“the undercarriage of each armored gun truck [was to]
have armored mine plating protection and . . . ‘[a]t a
minimum, the protection level acceptable shall withstand
blast underneath the vehicle from grenades and/or blasts of
whatever nature equivalent to the strength of two DM51 German
ordinance.'” (Id. ¶ 12.)
being awarded the contracts, the government contends that
Armet failed to deliver any vehicles by the delivery date.
(Id. ¶ 14). The government also maintains that,
when delivered, the vehicles failed to meet the contract
specifications with regard to the armor protection.
(Id. ¶ 21-22.) The government asserts that
Armet's invoices and request for a progress payment were
“false and fraudulent because the armored gun trucks
that [it] shipped did not comply with the ballistic and blast
protection requirements of the Contracts and did not have
run-flat tires.” (Id. ¶ 25.)
October 16, 2012, Frank Skinner (“Skinner”),
Armet's former President, filed a qui tam action
against Whyte and Armet alleging violations of the Federal
False Claims Act, 31 U.S.C. § 3732. The government chose
not to exercise its right to intervene in the civil case.
See 31 U.S.C. § 3730(c)(2)-(3). Skinner's
Complaint alleged twenty-five separate counts of fraud or
fraud-related activities arising from the 0028 and 0047
contracts. At trial, the jury returned a verdict for Whyte
and Armet on all counts, finding that neither Whyte nor Armet
“knowingly presented, or caused to be presented, false
or fraudulent claims for payment for . . . armored vehicles
that it fabricated.” (Jury Verdict, U.S. ex rel.
Skinner v. Armet Armored Vehicles, Inc., and William R.
Whyte, 4:12-cv-45, June 4, 2015 [ECF No. 166].)
was eventually extradited to the United States on or about
September 23, 2016.On October 20, 2016, Whyte filed the
present Motion to Dismiss the Indictment, alleging that
collateral estoppel barred all charges against him. At its
core, Whyte alleges that the civil jury's verdict in
U.S. ex rel. Skinner v. Armet conclusively
established that no fraud was committed, and thus the
ultimate question underlying the criminal charges has been
fully prosecuted by the government. As such, he contends the
criminal case must be dismissed. He also contends that
several counts of the Indictment are barred by the applicable
statute of limitations.
STANDARD OF REVIEW
estoppel insures that ‘when an issue of ultimate fact
has once been determined by a valid and final judgment, the
issue cannot again be relitigated between the same parties in
any future lawsuit.'” United States v.
McClung, No. Crim. A. 97-0031-II, 1997 WL 671602, at *1
(W.D. Va. Sept. 23, 1997) (quoting Ashe v. Swinson,
397 U.S. 436, 443 (1970)).
An indictment that involves essential elements of facts and
law which have been tried and decided in an earlier case
should be dismissed. Ashe v. Swenson, 397 U.S. 436
(1970); Brown v. Ohio, 432 U.S. 161 (1977). In
ruling on such a motion, the court must determine exactly
what was decided at the earlier trial. United States v.
Davis, 369 F.2d 775, 777 (4th Cir. 1966), cert.
denied, 386 U.S. 909 (1967). It is the burden of the
moving party to demonstrate that the issue they urge is
foreclosed logically constituted the basis of the earlier
jury verdict. Id. “Only those issues
necessarily determined by the first jury are conclusive in a
second trial.” Id. However, “the inquiry
‘must be set in a practical frame and viewed with an
eye to all the circumstances of the proceedings.'”
United States v. Davis, 460 F.2d 792, 796 (4th Cir.
1972) (quoting Ashe, 397 U.S. at 444).
United States v. Computer Sciences Corp., 511
F.Supp. 1125, 1137 (E.D. Va. 1981).
defendant may, at any time before trial, raise a motion
alleging a defect in the indictment, including its failure to
comport with the applicable statute of limitations.”
United States v. Magainik, 160 F.Supp.3d 909, 913-14
(W.D. Va. 2015); Fed. R. Crim. P. 12(b)(3). Upon
consideration of such a motion, the government's
allegations are presumed to be true, and the indictment is
regarded “in a ‘practical, ' rather than
‘purely technical, ' manner.” Id.
(citing United States v. Matzkin, 14 F.3d 1014, 1019
(4th Cir. 1994). The defendant is entitled to dismissal if he
shows that the indictment's allegations, “even if
true, would not state an offense.” United States v.
Thomas, 367 F.3d 194, 197 (4th Cir. 2004).
estoppel “means simply that when an issue of ultimate
fact has once been determined by a valid and final judgment,
that issue cannot again be relitigated between the same
parties in any future lawsuit.” Ashe v.
Swinson, 397 U.S. 436, 443 (1970).
To determine whether the issue should be precluded, the court
must decide (1) whether the issue in question is identical to
the previous issue, (2) whether it was actually determined in
the prior adjudication, (3) whether it was necessarily
decided in that proceeding, (4) whether the resulting
judgment settling the issue was final and valid, and (5)
whether the parties had a full and fair opportunity to
litigate the issue in the prior proceeding. In order for the
determination of an issue to be given preclusive effect, it
must have been necessary to a judgment.
United States v. Fiel, 35 F.3d 997, 1006 (4th Cir.
1994) (citing United States v. Nash, 447 F.2d 1382,
1385 (4th Cir. 1971)).
to the fifth Fiel factor, “[t]he persons bound
by the prior factual finding include the actual parties of
the prior proceeding. Courts have also extended the
preclusion to non-parties where there is such a degree of
affinity of interests of the person who was not a formal
party to the prior proceeding, as to render the doctrine of
collateral estoppel applicable.” In re
Goldschein, 241 B.R. 370, 374 (D. Md. 1999) (citing
Va. Hosp. Assoc. v. Baliles, 830 F.2d 1308, 1312
(4th Cir. 1967)). “Participation and control of the
prior litigation by the party to be bound is necessary to the
application of collateral estoppel to a non-formal
party.” Id. at 374-75.
The question is essentially a matter of fact, to be
determined by looking for that measure of ‘practical
control' that makes it fair to impose preclusion.
Preclusion is fair so long as the relationship between the
non-party and the party was such that the non-party had the
same practical opportunity to control the course of the
proceedings that would be available to a party.
Id. (quoting Charles A. Wright, et al., Federal
Practice and Procedure § 4451 (1981)).
“party” is defined as “[o]ne by or whom a
lawsuit is brought.” Party, Black's Law
Dictionary (8th ed. 2004). Under the False Claims Act, if the
government chooses not to proceed with the action, the
relator “shall have the right to conduct the
action.” 31 U.S.C § 3730(c)(3) (2010). The
government remains “the real party in interest in a
qui tam action under the False Claims Act even if it
is not controlling the litigation.” United States
ex rel. Walker v. R&F Properties of Lack County,
Inc. 433 F.3d 1349, 1359 (11th Cir. 2005); see
also Fed.R.Civ.P. 17(a). A “party in
interest” is “[a] person entitled under the
substantive law to enforce the right sued upon and who
generally, but not necessarily, benefits from the
action's final outcome.” Real party in
interest, Black's Law Dictionary (8th ed. 2004).
False Claims Act in which the government does not elect to
intervene-such as Skinner's FCA action-the government is
not a “party, ” although it remains a
“party in interest.” While the Federal Rules of
Civil Procedure require that the action be brought in the
name of the government, the relevant statute strips the
government of its right to “control” the action.
“Party” and “party in interest” as
not synonymous. “The phrase, ‘real party in
interest, ' is a term of art utilized in federal law to
refer to an actor with substantive rights whose interests may
be represented in litigation by another.” U.S. ex
rel. Eisenstein v. City of New York, 556 U.S. 928,
934-35 (2009). If the United States chooses not to intervene
in the action, it is a “party in interest, ” but
not a “party.” Accord id. at 935
(holding that, in an FCA action in which the government does
not intervene, the United States is not an actual
“party” for purposes of the sixty-day time limit
fact that the action was brought “in the name of the
government” does not make the United States a party to
the action. “A person or entity can be named in the
caption of a complaint without necessarily becoming a party
to the action.” Id.
if the United States was not a “party” to
Skinner's lawsuit, the question becomes whether the
government exercised sufficient “practical
control” over the litigation that it would be
“fair” to bind it to the prior finding. The
answer is clearly no. By statute, if the government elects
not to intervene, it retains no right to control the
litigation in any meaningful way. It may not issues
subpoenas, conduct depositions, propound discovery, call
witnesses, or cross-examine the defendant's witnesses. It
is entitled to receive pleadings and deposition transcripts,
but no more. See 31 U.S.C. § 3730(c)(3). In
instances in which the government elects not to intervene, it
cannot reasonably be argued that the government had a
“full and fair opportunity to litigate” the
issues. It follows, then, that the government is not bound by
a jury's verdict when it elects not to join a False Claim
Act action as a party.
otherwise would undercut the system Congress established in
the False Claims Act. If the government were bound by private
actors prosecuting FCA cases in its name, there would be no
purpose to Congress's decision to permit the government
to elect to intervene, or to decline to intervene. Under
Whyte's proposed interpretation, the government would be
forced to be a party regardless of its intervention decision.
Whyte's position “would render the intervention
provisions of the FCA superfluous, as there would be no
reason for the United States to intervene in an action to
which it is already a party.” Eisenstein, 566
U.S. at 933. This court “cannot disregard that
congressional assignment of discretion by designating the
United States a ‘party' even after it has declined
to assume the rights and burdens attendant to full party
status.” Id. at 934.
Whyte's position essentially eviscerates the
government's election option- considered and approved by
Congress-in the FCA. Under the framework Whyte espouses, the
government would have no real choice on election if it has
filed or is considering filing criminal charges against an
alleged fraudster. As Whyte would have it, the government
would be bound to present its case at the whims of the
relator, and not upon the government's timetable. It is
one thing for relators to take on the role of private
attorneys general, see U.S. ex rel. Milam v. Univ. of Tx.
M.D. Anderson Cancer Ctr., 961 F.2d 46, 49 (4th Cir.
1992); that is the system Congress devised. It is quite
something else for Defendant to deputize them as private
United States Attorneys. That is not something Congress
envisioned or approved.
Eisenstein, the Supreme Court held that the 30-day
period for filing a notice of appeal, rather than the
extended sixty-day period applicable in actions involving the
United States, applied in an FCA action in which the
government did not intervene. 556 U.S. at 931. The Court
noted that one is not a “party” to an action
simply because it is named in the caption; the entity must
“intervene” to become a party. Id. at
933. When the United States does not intervene in an FCA
action, it is not a “party, ” but remains a
“party in interest.” Although the Court held the
United States was “not a ‘party' to the
litigation for purposes of either § 2107 of Federal Rule
of Appellate Procedure 4, ” id. at 937, its
analysis applies with equal, if not greater, weight here. As
the Supreme Court noted, the fact that the government is
entitled to receive pleadings and deposition transcripts
actually cuts against the argument that it is a
“party” to an FCA action in which it elects not
to intervene. “If the United States were a party to
every FCA suit, it would already be entitled to such
materials under Federal Rule of Civil Procedure 5, thus
leaving no need for a separate provision preserving this
basic right of litigation for the Government.”
Id. at 936.
the government is not a “party” to an FCA action
in which it declines to intervene, and because the government
did not exercise “practical control” over
Skinner's FCA claim, the doctrine of collateral estoppel
is not applicable. The government is not bound by the
findings of a jury in which the government was only a
“party in interest” with no authority to
participate in the action. To hold otherwise would have
far-reaching consequences in the FCA context, as well as for
“permissive interveners” under Federal Rule of
Civil Procedure 24(b).
WARTIME SUSPENSION OF LIMITATIONS ACT
Wartime Suspension of Limitations Act (WSLA) suspends the
statutes of limitations for ‘any offense' involving
fraud against the Federal Government. 18 U.S.C. § 3287.
Before 2008, this provision was activated only ‘[w]hen
the United States [was] at war.' Id. (2006 ed.)
In 2008, however, this provision was made to apply as well
whenever Congress had enacted ‘a specific authorization
for the use of the Armed Forces, as described in section 5(b)
of the War Powers Resolutions (50 U.S.C. §
1544(b)).' Id. (2012 ed.).” Kellogg,
Brown & Root Services, Inc. v. U.S. ex rel. Carter,
135 S.Ct. 1970, 1974 (2015).
states, in relevant part:
When the United States is at war or Congress has enacted
a specific authorization for the use of the Armed Forces, as
described in section 5(b) of the War Powers Resolution (40
U.S.C. 1544(b)), the running of any statutes of
limitations applicable to any offense (1) involving fraud or
attempted fraud against the United States or any agency
thereof in any manner, whether by conspiracy or not . . .
shall be suspended until 5 years after the
termination of hostilities as proclaimed by a
Presidential proclamation, with notice to Congress, or
by a concurrent resolution of Congress.
18 U.S.C. § 3287 (2016) (italics reflect 2008
amendments). At issue here is (1) whether the 2008
amendments apply to Whyte's alleged conduct (allegedly
committed before the 2008 amendments went into effect, but
before the original statutes of limitations on those counts
expired), and (2) whether hostilities “ended”
more than 5 years prior to the Indictment.
argues that Counts 4-8 and 10-12 of the Indictment were all
completed by June 22, 2007, and thus the general five-year
statute of limitations applicable to non-capital federal
crimes, see 18 U.S.C. § 3283(a), expired on or
before June 22, 2012. Because the Indictment was returned on
July 19, 2012, he contends those 8 counts are time-barred. He
also contends that hostilities in Iraq were
“ended” before that date, and thus the WLSA does
not toll the five-year limitations period.
to the first issue-whether the 2008 amendments to the WLSA
apply to Whyte's alleged conduct-courts have been uniform
in their application of the 2008 amendments to conduct that
occurred prior to 2008 but before the original statutes of
limitation had run. See, e.g., United States v.
Arnold, 991 F.Supp.2d 1307, 1315 (S.D. Ga. 2014);
U.S. v. Anghaie, No. 1:09-CR-37-SPM/AK, 2011
WL720044, at *2 (N.D. Fla. Feb. 21, 2011); United States
v. Wells Fargo Bank, N.A., 972 F.Supp.2d 593, 602
(S.D.N.Y. 2013) (“[T]he 2008 WLSA amendment . . .
applies to any claims for which the statute of limitations
had not yet run at the time of its passage.”).
Furthermore, it is relatively well-settled that the
“application of a statute of limitations extended
before the original limitations period has expired does not
violate the Ex Post Facto Clause.” United
States v. Grimes, 142 F.3d 1342, 1351 (11th Cir. 1998);
see U.S. v. Fraidin, 63 F.Supp. 271, 276 (D. Md.
1945) (“[W]here a statute extends a period of
limitations or provides for the tolling thereof, it applies
to offenses not barred at the time of the statute's
passage.”); see also Moody v. Angelone, No.
Civ. A. 3:01-cv-83, 2001 WL 34804600, at *2 (E.D. Va. June
18, 2001) (holding that a statute of limitations does not
implicate the Ex Post Facto Clause).
the second issue-whether hostilities in Iraq had
“ended” as defined by the WLSA prior to the
allegedly criminal conduct-the answer is no. Counts 4-8 and
10-12 concern conduct Whyte concedes occurred between
November 8, 2006, and June 22, 2007. Whyte contends that
hostilities had “ended” prior to those dates, and
because the WSLA “is inapplicable to crimes committed
after the date of termination of hostilities, ”
U.S. v. Smith, 242 U.S. 225, 228 (1952), the WLSA
did not toll the statute of limitations.
courts have come down on both sides of this issue, the
reasoning of the 11th Circuit Court of Appeals in United
States v. Frediani, 790 F.3d 1196 (11th Cir. 2015) is
sound and compelling. In that case, as in this one, the
defendant argued that hostilities “ended” in
Afghanistan with the December 2001 recognition and extension
of full diplomatic relations to the newly-formed government
of Hamid Karzai, and in Iraq when President George W. Bush
stated, on May 1, 2003, that “[m]ajor combat operations
in Iraq have ended.” See United States v.
Prosperi, 573 F.Supp.2d 436, 455 (D. Mass. 2008). This
argument fails because, once again, Whyte ignores that part
of the statute that inconveniences his
The plain language of the Act provides that the
“termination of hostilities” is determined by
“a Presidential proclamation, with notice to Congress,
or by a concurrent resolution of Congress.” 18 U.S.C.
§ 3287. It is not “incumbent on [our C]ourt,
” Prosperi, 573 F.Supp.2d at 454, to demarcate
the end of hostilities. The statute makes clear that the
political branches must make that determination. See
Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 56 (2012) (“The
words of a governing text are of paramount concern, and what
they convey, in their context, is what the text
means.”). Moreover, that requirement of judicial
deference to the branches that have the power to declare and
wage war makes sense. And [Whyte] has pointed to no
concurrent resolution of Congress, nor any Presidential
proclamation accompanied by notice to Congress, that the
hostilities have terminated under either authorization of
military force. A Presidential proclamation must be published
in the Federal Register, 44 U.S.C. § 1505(a)(1), as
President Truman did in 1946 to mark the end of World War II,
see United States v. Grainger, 346 U.S. 235, 246
(1953) (citing 3 C.F.R. § 77-78 (1946 Supp.)) (holding
that the tolling of the statute of limitations ends on the
date of the Presidential proclamation). No President has
issued such a proclamation here.
Frediani, 790 F.3d at 1200-01. Because hostilities
had not “ended” on or before the dates of
Whyte's alleged criminal activity, the WLSA tolled the
limitations periods applicable to those charged crimes.
Because the hostilities had not ended on or before July 19,
2007,  the charges against Whyte are timely.
other circuit courts that have addressed the issue of the
termination of hostilities (including the Fourth Circuit)
agree with the holding in Frediani:
In United States v. Pfluger, the Fifth Circuit
explained that, “[w]hen interpreting a statute, we are
bound to follow the plain and unambiguous meaning of the
statutory language[, and] . . . the plain and unambiguous
language of the [Act] mandates formal requirements for the
termination clause to be met.” 685 F.3d 481, 485 (5th
Cir. 2012) (internal quotation marks and citation omitted).
And in United States ex rel. Carter v. Halliburton
Co., the Fourth Circuit explained that the Act
“specif[ies] that termination shall not occur until the
Act's formalities have been met.” 710 F.3d 171, 179
(4th Cir. 2013), aff'd in part, rev'd in part sub
nom. Kellogg Brown & Root Servs., Inc. v. U.S. ex rel.
Carter, ___ U.S. ___, 135 S.Ct. 1970 (2015). Because
“[n]either Congress nor the President had met the
formal requirements of the Act for terminating the period of
suspension, ” the court concluded that the Act
continued to apply. Id.
Frediani, 790 F.3d at 1201. Because the requirements
of the WLSA regarding termination of hostilities were not met
prior to July 19, 2007, the charges against Whyte are timely.
unique structure and limits of the False Claims Act prevent
the government from participating in qui tam actions
in which it elects not to intervene. Because the government
did not intervene in Skinner's civil False Claims Act
action against Whyte, it was not a “party” and
did not have a “full and fair opportunity to litigate
the issues.” The doctrine of collateral estoppel is
therefore inapplicable, and the charges against Whyte are not
foreclosed by the jury's verdict in U.S. ex. rel.
Skinner v. Armet.
passed two Authorizations for the Use of Military Force that
were sufficient to bring the charges against Whyte under the
Wartime Suspension of Limitations Act. Because neither the
President nor Congress had taken the technical steps to
declare the “termination of hostilities” prior to
July 19, 2007, the WLSA served to toll the statute of
limitations applicable to Counts 4-8 and 10-12 of the
Indictment against Whyte. The Indictment, which was filed
within five years of July 17, 2007, is therefore proper, and
the charges against Whyte are not time-barred.
clerk is directed to forward a copy of this Memorandum
Opinion and accompanying Order to all counsel of record.
 Whyte had fled to Canada to avoid
prosecution. The civil case against him and Armet was
prosecuted in his absence.
 Rule 24(b) permits anyone to intervene
who “has a claim or defense that shares with the main
action a common question of law or fact.” Holding the
government to the civil jury's conclusion here could be
used against permissive interveners in the future. If a
potential intervenor “could” have intervened but
did not, as the government “could” have
intervened in Skinner's action but did not, a future
party could argue-as Whyte does here-that a permissive
intervener had a “full and fair opportunity to litigate
the issue, ” but chose not to. This is undoubtedly not
the system envisioned by Congress or the courts.
 The pre-2008 text read:
When the United States is at war the running of any
statute of limitations applicable to any offense (1)
involving fraud or attempted fraud against the United States
or an agency thereof in any manner, whether by conspiracy or
not . . . shall be suspended until three years after the
termination of hostilities as proclaimed by the President or
by a concurrent resolution of Congress.
 Whyte makes a passing argument that
the hostilities in Iraq and Afghanistan are not covered by
the WLSA, but this argument is misguided. In order for
Defendant to succeed on this argument, he requires this Court
to ignore those parts of the statute that inconvenience his
position. Congress passed two Authorizations for the Use of
Military Force (“AUMF”), citing section 5(b) of
the War Powers Resolution, and as required by the WLSA, on
September 18, 2001, Pub. L. No. 107-40, 115 Stat. 224 (2001)
(addressing the War on Terror), and October 16, 2002, Pub. L.
No. 107-243, 116 Stat. 1498 (2002) (addressing the war in
Iraq). Whyte relies on statements by Sen. Patrick Leahy that
“the ongoing conflicts in Iraq and Afghanistan are
exempt from its [the WLSA's] requirements.” But
this Court is bound by the text of the statute and the laws
passed by Congress, not Sen. Leahy's opinions on the laws
passed by Congress. The WLSA is clear that it is invoked when
Congress issues a “specific authorization for the use
of the Armed Forces” as contemplated in section 5(b) of
the War Powers Resolution. The 2001 and 2002 AUMFs clearly
qualify to invoke the WLSA.
 See supra note 4. To be fair
to him, however, the Prosperi court did the same
 The Indictment was returned on July
19, 2012; five years prior was July 17, 2007. As long as
there had been no “Presidential proclamation, with
notice to Congress, ” or a “concurrent resolution
of Congress” terminating the hostilities prior to July
17, 2007, see 18 U.S.C. § 3287, the Indictment
is timely (regardless of when or if the hostilities ended
after July 17, 2007).