ORDER

JAMES C. MAHAN, District Judge.

Presently before the court are defendant's objections to Magistrate Judge Hoffman's reports and recommendations, (doc. # 75, 76), in response to defendant's1: (1) motion to dismiss the indictment due to investigative misconduct and delay, (doc. # 50) and (2) motion to dismiss count one of the indictment as time barred under the statute of limitations, (doc. # 49).2

I. Background

On March 6, 2013, the grand jury indicted the defendant, charging her in count one with conspiracy to commit bank fraud, mail fraud, and wire fraud in violation of 18 U.S.C. section 1349.

The government alleges that from in or about January 2003, to in or about November 2006, the defendant, through approximately "233 transactions with a combined purchase price in excess of $83,000,000.00," participated in a conspiracy to obtain mortgage loans from lenders by "causing materially false information to be placed in the buyers' mortgage loan applications and supporting documentation[,] causing money from the mortgage loans to be disbursed to [the] defendant's own use and benefit." (Doc. # 76).

II. Legal Standard

This court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." 28 U.S.C. § 636(b)(1). Where a party timely objects to a magistrate judge's report and recommendation, then the court is required to "make a de novo determination of those portions of the [report and recommendation] to which objection is made." 28 U.S.C. § 636(b)(1).

III. Discussion

A. Investigative Misconduct

There are two available theories under which an indictment can be dismissed as a result of prosecutorial misconduct: (1) when the government's conduct is so extreme and outrageous that it constitutes a due process violation and (2) under the court's supervisory powers. United States v. Chapman, 524 F.3d 1073, 1084 (9th Cir. 2008).

In the court's supervisory role, there are three legitimate bases for the exercise of the supervisory power over prosecutorial discretion: (1) to implement a remedy for the violation of a recognized statutory or constitutional right; (2) to preserve judicial integrity by ensuring that a conviction rests on appropriate considerations validly before a jury; and (3) to deter future illegal conduct. Id. at 1085 (quoting United States v. Simpson, 927 F.2d 1088, 1090 (9th Cir. 1991)). Dismissal of an indictment is proper only when there is "flagrant" and "substantially prejudicial" misconduct. United States v. Jacobs, 855 F.2d 652, 655 (9th Cir. 1988). Furthermore, "the court's power to dismiss an indictment on the grounds of prosecutorial misconduct is frequently discussed but rarely invoked." United States v. Samango, 607 F.2d 877, 881 (9th Cir. 1979).

In the instant case, without pointing to any constitutional or statutory right, the defendant argues that "to preserve judicial integrity" the case must be dismissed based on investigators' improper use of intimidating and coercive interview tactics. The defendants allege that investigators pressured and intimated witnesses under threats of prosecutorial retaliation during pre-indictment investigation, specifically when conducting interviews of witnesses and obtaining documents. (Doc. # 75).

A statement is involuntary if it is "extracted by any sort of threats or violence, [or] obtained by any direct or implied promises, however slight, [or] by the exertion of any improper influence." Hutto v. Ross, 429 U.S. 28, 30 (1976) (quoting Bram v. United States, 168 U.S. 532, 542-43 (1897)); See also United States v. Crawford, 372 F.3d 1048, 1060 (9th Cir. 2004); United States v. Haswood, 350 F.3d 1024, 1027 (9th Cir. 2003) (holding that a "confession is involuntary if coerced either by physical intimidation or psychological pressure"). Furthermore, "a promise of leniency accompanied by threats or other coercive practices constitutes improper influence and makes a subsequent inculpatory statement involuntary." United States v. Tingle, 658 F.2d 1332, 1336 (9th Cir.1981) (the defendant's confession was involuntary when it was induced by an interrogating officer who accused the defendant of lying, recited the maximum penalties of crimes that could be charged, threatened the defendant that she might not see her two-year-old child if she went to prison, and promised the defendant that the agent would inform the prosecutor if she cooperated or refused to cooperate).

However, this broadly-stated rule has not been applied to invalidate, per se, all statements made by a suspect in response to a promise made by law enforcement personnel. The promise must be sufficiently compelling to overbear the suspect's will in light of all attendant circumstances. Leon Guerrero, 847 F.2d at 1366; Hutto, 429 U.S. at 30. In determining whether a defendant's confession was voluntary, the question is "whether the defendant's will was overborne at the time he confessed." Clark v. Murphy, 331 F.3d 1062, 1072 (9th Cir. 2003), cert. denied, 540 U.S. 968 (2003) (quoting Haynes v. Washington, 373 U.S. 503, 513 (1963)). Moreover, psychological coercion does not invoke a per se rule and "[the court] must consider the totality of the circumstances involved and their effect upon the will of the defendant." United States v. Miller, 984 F.2d 1028, 1030-31 (9th Cir. 1993) (citing Schneckloth v. Bustamonte, 412 U.S. 218, 226-27, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973)).

Specifically, "an interviewing agent's suggestion that a suspect's cooperation with the government will have a positive effect on the suspect's possible sentence is not an improper inducement that causes the suspect's later testimony for the government to be involuntary." United States v. Leon Guerrero, 847 F.2d 1363, 1366 (9th Cir. 1988); Williams v. Woodford, 384 F.3d 567, 594-95 (9th Cir. 2004) (finding that statements by the police implying that suspect would not receive jail time on his drug charge so long as he testified against defendant, did not render trial testimony against defendant involuntary); see also United States v. Moody, 778 F.2d 1380, 1384-85 (9th Cir. 1985) (witness testimony provided pursuant to a plea agreement was not involuntary or coerced). This applies even when a promise to inform the government about a suspect's cooperation is accompanied by a promise to recommend leniency or by speculation that cooperation will have a positive effect. United States v. Leon Guerrero, 847 F.2d 1363, 1366 (9th Cir. 1988); see United States v. Brandon, 633 F.2d 773, 777 (9th Cir. 1980); United States v. Glasgow, 451 F.2d 557, 558 (9th Cir. 1971); Fernandez-Delgado v. United States, 368 F.2d 34, 35-36 (9th Cir. 1966).

In examining the record, none of the statements made by investigators are sufficient to jeopardize having the "conviction rest[] on appropriate considerations, validly before a jury," or to otherwise constitute coercion. The investigators did suggest that suspects may "become co-defendant[s]," would be indicted if they did not cooperate, should be concerned about their future, that helping defendants would cause "problems," and encouraged them to "make [a] deal[]" with the government. (Doc. # 50). However, there are no threats of violence, implied or direct promises, or promises of leniency accompanied by threats. Therefore, the magistrate judge was correct in finding there was no investigative misconduct.

B. Investigative Delay

To succeed on a claim of pre-indictment delay based on denial of due process, the defendant must satisfy a two prong test, showing that (1) actual, non-speculative prejudice resulted from the delay, and (2) the length of the delay, weighted against the reasons for the delay, "offends fundamental concepts of justice which are the base of our civil and political institutions." United States v. Corona-Verbera, 509 F.3d 1005, 1112 (9th Cir. 2007).

The defendant speculates, without support, that witnesses will not testify and that potential jurors will be more difficult to select because of a negative bias against defendants in criminal cases regarding home mortgages. Both of these assertions are premature and insufficiently specific to constitute "actual, non-speculative prejudice." See, e.g., United States v. Gilbert, 266 F.3d 1180, 1187 (9th Cir. 2001) ("[B]urden of showing actual prejudice is heavy and rarely met."); United States v. Manning, 56 F.3d 1188, 1194 (9th Cir. 1995) ("Generalized assertions of the loss of memory, witnesses, or evidence are insufficient to establish actual prejudice."). Therefore, the magistrate judge was correct in denying the defendant's claim of investigative delay as no actual prejudice exists.

C. Conspiracy and Statute of Limitations

"[S]tatutes [that] limit[] how much time the government has to indict an alleged violator once a conspiracy is complete, . . . [do] not limit the temporal scope of a conspiracy for which a violator is liable." Flintkote Co. v. United States, 7 F.3d 870, 873 (9th Cir. 1993). Therefore so "long as some part of the conspiracy [occurred within the statute of limitations] preceding the indictment, the statute of limitations [should] not insulate from criminal liability." Flintkote Co., F.3d at 873; see United States v. Walker, 653 F.2d 1343, 1347 (9th Cir. 1981), cert. denied, 455 U.S. 908 (1982); United States v. Inryco, Inc., 642 F.2d 290, 293 (9th Cir. 1981), cert. dismissed, 454 U.S. 1167 (1982).

The parties agree that the conspiracy ended in November 2009, that some of the entities involved in the alleged illegal transactions at the time were not defined as "financial institutions," and that these entities were subject to a shorter, five-year statute of limitations. However, the defendant objects to the recommendation of the magistrate judge on the grounds that the first count of the indictment, alleging conspiracy to commit fraud, is (at least in part) barred by the statute of limitations.

Title 18 U.S.C. 3293(2) was amended in 2009 to include mortgage lending businesses as financial institutions, thereby increasing the statute of limitations for fraud against such businesses from five years to ten years. The defendant argues that allowing the government to maintain all 233 transactions would constitute a retroactive application of the new definition in violation of the ex post facto clause of the Constitution because a "non-financial institution identified during the alleged conspiracy [cannot] serve as a basis for a charge of [c]onspiracy to [c]ommit [b]ank [f]raud or substantive [b]ank [f]raud." Id. The defendant concedes that the government would be able to prosecute some of the transactions in count one, so long as they were with FDIC insured lenders, but argues that the government must be required to "resubmit the instant matter to the grand jury, as they tainted the presentation with inadmissible and time barred evidence." Id.

However, because conspiracy does not require that all conduct undergone in furtherance of the conspiracy fall within the applicable statute of limitations, the defendant's arguments fail. It is undisputed that some of the 233 properties referred to in the first count fall within the statute of limitations and therefore the magistrate judge was correct in refusing to make a summary disposition of the entire count based on a portion of the evidence. The magistrate judge was also correct in his conclusion that whether the defendant's conduct "affected a financial institution [under section 3293(2)]," is an issue "directly intermeshed with questions going to a material element of the charge, and therefore, falls `within the province of the ultimate finder of fact and must be deferred.'" (Doc. # 76, p. 6).

IV. Conclusion

The magistrate judge was correct in determining that there was no evidence of investigative misconduct or investigate delay. The investigators engaged in proper interview tactics, well within their discretion, and brought the indictment in a timely manner without prejudicing the defendant.

Furthermore, the magistrate judge was correct in determining that the conspiracy charge should not be dismissed based on its inclusion of some transactions which fall outside of the statute of limitations.

. . .

Accordingly,

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the magistrate judge's reports and recommendations (docs. # 75, 76) be, and the same hereby are, ADOPTED in their entireties.

IT IS FURTHER ORDERED that the defendant's motion to dismiss count one (doc. # 49) and motion to dismiss the indictment (doc. # 50) be, and the same hereby are, DENIED.