The following excerpt is from U.S. v. Watson, 690 F.2d 15 (2nd Cir. 1979):
Ordinarily, when the limitations period has passed, "there is an irrebuttable presumption that a defendant's right to a fair trial would be prejudiced," United States v. Marion, supra, 404 U.S. at 322, 92 S.Ct. at 464, and so we bar prosecution-however strong the prosecutorial interest may be. There is a narrow exception to this rule where the prosecution has delayed beyond the limitations period in unsealing a timely indictment. In such a case, we do not give force to the presumption and, if the defendant does not demonstrate actual prejudice, we tolerate delay justified by a legitimate prosecutorial need in unsealing the indictment. But the Government is not relieved of the statutory recognition that actual commencement of prosecution after passage of the limitations period may prejudice the defendant. Accordingly, prosecution should be barred if the defendant can show "substantial, actual prejudice" arising at any time prior to the post-limitations unsealing of an indictment. In such a situation, as in the ordinary case of an untimely indictment, even a strong prosecutorial interest should not toll the statute.
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