A federal appeals court Thursday vacated the conviction of Houston lawyer Jack Stephen Pursley on the grounds that his statute of limitations defenses were not properly considered by the trial court.
The 14-page opinion, by a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit, comes as Pursley serves a two-year sentence that expires later this year. The panel included Circuit Judges Kurt Engelhardt, Eugene Davis and Stephen Higginson.
Pursley was indicted in September 2018 of three counts of tax evasion and one count of conspiracy to defraud the United States and was convicted on all four counts a year later after a four day jury trial in Houston federal court. The government presented evidence that Pursley helped a client and college friend, Shaun Mooney, transfer $18 million in offshore funds from the Isle of Man to shell companies in the U.S. by disguising the transfers as stock purchases. For his help in the elaborate scheme, the government said, Pursley got $4.8 million and received an interest in his client’s ongoing business — income never reported to the IRS.
Federal law establishes the statute of limitations for tax conspiracy at six years from the time of the alleged offense to the indictment. The government got a suspension of the statute of limitations in 2016 because of key evidence it sought from a foreign country (the Isle of Man). The tax evasion and conspiracy in question occurred between 2007 and 2010. U.S. District Judge Sim Lake, who presided over the grand jury proceedings, granted the statute of limitations extension without specifying the length.
Before and during the 2019 trial, Pursley’s defense lawyers asked U.S. District Judge Lynn Hughes (who presided over the trial) to dismiss the case based on the limitations statute. He denied it each time without analysis or stating the length of suspension, and declined to include limitations language in the jury charge.
The Fifth Circuit ruled Judge Hughes erred by failing to include statute of limitation language in the jury charge and remanded to him the task of determining the proper suspension for the limitations.
“Pursley was entitled to have the district court fully consider his statute of limitations defense, to have the district court calculate the exact time the statute of limitations ran under existing precedent, to dismissal of any charge that was untimely under that calculation, and to a jury instruction on the statute of limitations defense,” Judge Englehardt wrote.
Victor Vital, Pursley’s lead lawyer at trial, said the opinion correctly concluded the statute of limitations issue should have been examined closer.
“Pursley had a strong limitation defense,” Vital, a partner in Barnes & Thornburg’s Dallas office, told The Texas Lawbook. “At trial we unsuccessfully sought a jury submission on that issue at the charge conference and the appellate court correctly noted the trial court’s error in refusing that submission.
“The statute of limitations supports a strong policy of ensuring that defendants are not prosecuted when evidence is stale, evidence is no longer available and witnesses’ memories have faded,” Vital added.
The Department of Justice did not respond to a request for comment.