Opinion ID: 450368
Heading Depth: 1
Heading Rank: 5

Heading: bad tree--rotten fruit.

Text: 35 Ven-Fuel offers the clever, but not unique, argument that because the license presented to Customs was regular on its face, there can be no transgression of 19 U.S.C. Sec. 1592. This approach is, as we have noted, an inverted application of the Wong Sun doctrine. Stripping the argument to its bare essentials, the appellant would have us hold that so long as the importation papers themselves were unexceptionable, Sec. 1592 does not apply; and this, despite the fact that the fee-free license, which was a condition precedent to the completion of those papers, would admittedly never have issued but for Ven-Fuel's misrepresentations to Interior. Put another way, Ven-Fuel argues that if the Customs' declarations and related paperwork were in proper form, the mere fact that they were premised on a license to which the importer was not legally entitled was of no consequence. This argument is an exercise in casuistry. 36 The caselaw is consistent in its insistence that persons should not benefit from the reasonably foreseeable results of pernicious conduct vis-a-vis the importation of goods. And, such a postulate has clearly informed the statute sub judice as well as its ancestors and its close kith and kin. 37 19 U.S.C. Sec. 1592 has a long and venerable history. Its roots can be traced to the eighteenth century, viz., the Act of 1799, 1 Stat. 677. That enactment ordained in part: 38 That if any goods, wares or merchandise, of which entry shall have been made in the office of a collector, shall not be invoiced according to the actual cost thereof, at the place of exportation, with design to evade the duties thereupon, or any part thereof, all such goods, wares or merchandise, or the value thereof, to be recovered of the person making entry, shall be forfeited.... 39 Id. at Sec. 66. 40 In Caldwell v. United States, 49 U.S. (8 How.) 366, 12 L.Ed. 1115 (1850), the Court considered the question of whether a bona fide purchaser holding goods which in fact had been entered in violation of Sec. 66 could be subject to a forfeiture order. The Court exhibited scant hesitation in answering that question in the affirmative: 41 In the first, the forfeiture is, the statutory transfer of right to goods at the time the offence is committed. If this was not so, the transgressor, against whom, of course, the penalty is directed, would often escape punishment, and triumph in the cleverness of his contrivance by which he has violated the law. The title of the United States to the goods forfeited is not consummated until after judicial condemnation; but the right to them relates backwards to the time the offence was committed.... 42 Id. 49 U.S. (8 How.) at 381 (emphasis original). 43 Caldwell took an early stitch in what has become an omnipresent thread in the fabric of Sec. 1592 and kindred laws. The decision represents a plain recognition of the need to construe customs laws with some breadth, so as to avoid ingenious end-runs on the collection of revenues and the control of imports. 44 Another landmark case of the same vintage, Wood v. United States, 41 U.S. (16 Pet.) 342, 10 L.Ed. 987 (1842), is illustrative of the same overriding policy considerations. In Wood, goods were passed through Customs without incident. But, after the fact, they were seized and declared forfeit (the government having belatedly recognized deficiencies in the accompanying invoices). The Wood Court upheld the post hoc confiscation: 45 For it can never be permitted that a party who perpetrates a fraud upon the custom-house, and thereby enters his goods upon false invoices and false valuations, and gets a regular delivery thereof upon the mere payment of such duties as such false invoices and false valuations require, can avail himself of that very fraud to defeat the purposes of justice.... The language of the sixty-sixth section ... supposes an entry at the custom-house upon false invoices with intent to evade the payment of the proper duties, and the forfeiture attaches immediately upon such an entry upon such invoices with such intent. The success of the fraud in evading the vigilance of the public officers, so that it is not discovered until after the goods have passed from their custody, does not purge away the forfeiture; although it may render the detection of the offence more difficult and more uncertain. 46 Id. 41 U.S. (16 Pet.) at 362. 47 The naked fact that the goods, at the time of entry, were accorded the imprimatur of the Customs officials neither held them harmless nor purified the entry as regular on its face or as a true entry. Such locutions, the Court made clear, did not wash away the taint which attached to the fruit of a bad tree. 48 The case of Cliquot's Champagne, 70 U.S. (3 Wall.) 114, 18 L.Ed. 116 (1865) broadened the litany of cases which rejected the rotten fruit of a bad tree in the arboretum of the customs laws. In Cliquot's, the Court held that, under the 1863 version of the statute, 12 Stat. 737 (March 3, 1863), an agent's innocence was insufficient to erase the blemish of the principal's guilt. 70 U.S. (3 Wall.) at 144. The statute, which on its face appeared not to apply to those other than the persons who entered or attempted to enter the goods, was again expansively construed to strike down the invidious practice of using an innocent agent to run cover for a guilty principal. 49 Caldwell, Wood and Cliquot's collectively teach that the customs laws punish more than poorly-executed contrivance which is nipped in the point-of-entry bud; those laws similarly impugn artifice so slick that it initially succeeds in sliding the goods undetected past the watchful eyes of the custom-house. 50 The same principles arose in United States v. Boyd, 24 Fed. 692 (C.C.S.D.N.Y.1885), rev'd on other grounds, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1886), a case which is in certain respects strikingly similar to the case at bar. 6 In Boyd, the defendant made material misstatements regarding eligibility in an application to the Treasury Department for an import permit. The permit was issued and was then used to pass goods through the custom-house at New York. The defendant called the faulty letter a remote cause of the entry, 24 Fed. at 695, and, like Ven-Fuel, relied on an assertion that the permit was a true document when used at the custom-house. Id. The defense was summarily rejected: 51 [S]uch an application there must be deemed one of the steps belonging to an attempt to enter the goods, and consequently any false paper presented, and designed by the defendant to be presented, to the secretary of the treasury for the purpose of obtaining the order for the free entry, cannot be considered as a remote or indirect cause only, but as the direct procuring cause of the free entry. The subsequent acts of the collector in conformity with the direction of his superior in entering the goods as free, were merely a formal compliance with what had already been determined upon the defendant's application in Washington. In effect, the attempt to enter these goods as free was made at Washington, on application to the head of the department, and not, as in ordinary cases, upon application at the custom-house here. 52 There is nothing in section 12 of the act of 1874 that limits its application, as regards attempts to enter goods, to proceedings at the custom-house only. The real purpose of the act, to prevent and punish frauds, as well as its general language, require [sic] it to be applied to attempts to enter goods wherever make [sic]. 53 24 Fed. at 695-96. 54 Ven-Fuel's notion that Boyd is distinguishable on the grounds that Treasury was merely the superior of the customs officials is misplaced; Interior stands as just such a superior vis-a-vis Customs under the regulatory scheme applicable in this case. See text ante at Part I. And a number of cases construe other federal statutes similarly. See, e.g., United States v. Beasley, 550 F.2d 261 (5th Cir.1977) (false and fraudulent claims made to state government held to violate False Claims Act, 18 U.S.C. Sec. 287); United States v. Del Toro, 513 F.2d 656 (2d Cir.), cert. denied, 423 U.S. 826, 96 S.Ct. 41, 46 L.Ed.2d 42 (1975) (false statements made to city held to constitute a fraud on United States); United States v. Catena, 500 F.2d 1319 (3rd Cir.1974) (physician presented false claims to United States through insurance companies). 55 It is true, as the appellant points out, that a majority of the reported cases under statutes akin to 19 U.S.C. Sec. 1592 deal with apocryphal documents presented directly to Customs. E.g., United States v. Twenty-Eight Packages of Pins, 28 F.Cas. 244, 252 (C.C.D.Pa.1832) (No. 16,561). But no case, fairly read, extends the proposition further than imposing a requirement that (i) some document must be presented to Customs, in order to (ii) effect an entry of goods, which is (iii) in some material manner irregular. That requirement was wholly satisfied in this instance. A false practice occurs if the misrepresentation is made at any stage of the transaction from the beginning to the end, anywhere. United States v. Baker, 24 F.Cas. 953, 956-57 (C.C.S.D.N.Y.1871) (No. 14,500). See United States v. Mescall, 164 Fed. 580, 583 (C.C.E.D.N.Y.1908). Cf. United States v. One Bag of Crushed Wheat, 166 Fed. 562 (C.C.S.D.N.Y.1908). 56 Ven-Fuel's restrictive reading of the statute is contradicted not only by the caselaw, but by the very language of 19 U.S.C. Sec. 1592 (which broadly prohibits both false statements, whether written or verbal, and false practices committed in connection with the importation of goods). Section 1592 in no way limits itself to the presentation of any specific type of entry document to Customs. Instead, it prohibits the importation of merchandise by any false invoice, declaration, affidavit, letter, paper, or by means of any false statement, written or verbal, or by means of any false or fraudulent practice or appliance whatsoever.... Id. The generality of this language plainly indicates that any false statement or practice, not just a particular genre of entry document, is within the statutory sweep. The application of Sec. 1592 does not, therefore, depend on the form or content of the document or statement. See United States v. Twenty-five Packages of Panama Hats, 231 U.S. 358, 360-61, 34 S.Ct. 63, 64-65, 58 L.Ed. 267 (1913) (invoice forms contained false valuation of goods); United States v. Felsen, 648 F.2d 681, 684-85 (10th Cir.1981) (applying the similarly worded criminal provision, 18 U.S.C. Sec. 542, to false statements that foreign automobiles were covered by certificates of conformity from the United States Environmental Protection Agency); United States v. Wagner, 434 F.2d 627, 627-28 (9th Cir.1970) (applying 19 U.S.C. Sec. 1592 to false statements regarding country of origin on the invoices and in the labeling of the merchandise). 57 The rule of Caldwell, Wood, Cliquot's, Boyd, and their progeny renders statutorily indigestible the putrescent fruit of Ven-Fuel's diseased tree. To read Sec. 1592 more narrowly would be an open invitation to subversion of the legitimate aims of revenue collection and to the acquisition by importers, and those in privity with them, of ill-gotten benefits. We decline to extend or to honor any such invitation. Congress never intended that an importer be rewarded for administrative deceit by being allowed to use the very product of that breach of faith to insure the duty-free passage of goods at public expense. We hold, therefore, that Ven-Fuel's assertions in this regard are baseless. 58