Document: 544 U.S. 349 PASQUANTINO ET AL.v.UNITED STATES. No. 03-725. Supreme Court of United States. Argued November 9, 2004. Decided April 26, 2005. Petitioners carried out a scheme to smuggle large quantities liquor into Canada from the States evade Canada's heavy alcohol import taxes. They were convicted violating federal wire fraud statute, 18 U. S. C. § 1343, for doing so. That statute prohibits use interstate wires effect "any or artifice defraud, obtaining money property by means false fraudulent pretenses." The Fourth Circuit affirmed their convictions, rejecting petitioners' argument that prosecution contravened common-law revenue rule, which bars courts enforcing foreign sovereigns' tax laws. also held right receive was "money property" within 1343's meaning. Held: A plot defraud government violates statute. Pp. 355-372. (a) Section plain terms criminalize such as petitioners'. Their smuggling operation satisfies both 1343 elements are in dispute here. First, uncollected excise taxes on petitioners imported is "property" statute's an entitlement collect petitioners, possession "something value" Canadian Government. McNally v. States, 483 350, 358. Such valuable entitlements term ordinarily employed. Second, "scheme defraud" its revenue, because routinely concealed officials and failed declare those goods customs forms. See Durland 161 306, 313. 355-359. (b) foregoing construction does not derogate rule. 359-372. (1) Relying canon "`[s]tatutes invade common law . be read with presumption favoring retention long-established familiar principles, except when statutory purpose contrary evident,'" Texas, 507 529, 534, argue that, avoid reading should construe otherwise-applicable language frauds directed at evading Whether derogates rule depends whether reach this conflicts well-established principle. Craft, 535 274, 276. Thus, before concluding Congress intended exempt present broad reach, must find clearly barred 1952, year enacted Neder 527 1, 22-23. 359-360. (2) No case decided 1952 established prosecuting 360-368. (i) has long been treated corollary "[t]he Courts no country execute penal laws another." Antelope, 10 Wheat. 66, 123. It first cases prohibiting enforcement liabilities one sovereign another sovereign, suits enforce judgments. rule's grounding these shows core, it prohibited collection obligations nations. unlike classic examples actions traditionally suit recovers liability, but criminal brought punish domestic conduct. 360-362. (ii) Cases applying bar indirect laws, contrast direct obligation, cannot bear weight place them. Many them after passed Others come courts. And, significantly, none involved acting pursuant authority conferred sovereign's own law. Moreover, action had primary object deterrence punishment conduct — substantial regulatory interest entirely independent enforcement. main each would pay claims. absence here link between incidental attenuated best. said have considered answer unpersuasively recovery indeed restitution lost required under Mandatory Victims Restitution Act 1996. mandatory irrelevant advances Government's punishing In any event, if awarding sovereigns proper resolution later allow awards, rather than assume impliedly repealed applied prosecution. 362-365. (iii) Also unavailing early English holding unenforceable contracts executed other nations' demonstrate "indirect" very core margins. Those driven lessening commercial disruption caused high tariffs. By mid-20th century, however, rationale supplanted, began apply strength analogy country's ones. Because rested far different foundation came rest, they say little about derogated mid-20th-century form. 365-366. (iv) Petitioners' "enforces" sense, sense contravene never proscribed all For example, same time law, void lacked stamps line draws impermissible permissible "enforcement" therefore always unclear. uncertainty persisted American cases, extent recognition unsettled 1952. 366-368. (3) traditional rationales do plainly suggest poses risk causing principal evil against thought guard: judicial evaluation policies sovereigns. This Executive, "the sole organ field international relations," Curtiss-Wright Export Corp., 299 304, 320. Although like requires court recognize determine defendant violated may assumed electing prosecute, Executive assessed prosecution's impact Nation's relationship Canada, concluded danger friction. broader avoids giving politically sensitive controversial policy decisions embodied worries little. prosecution, authorized embodies choice two political branches Government free use, irrespective fraud. gives advancing illegitimately. Finally, section lack competence examine validity unfamiliar schemes persuasive Foreign posed unmanageable complexity case, Federal Rule Criminal Procedure 26.1 sufficient resolve issues arise prosecutions. 368-370. (4) Court's interpretation give extraterritorial effect. offense complete moment intending inside Durland, S., Therefore, only issue punishes "in commerce," involves concerns. 371-372. 336 F. 3d 321, affirmed. THOMAS, J., delivered opinion Court, REHNQUIST, STEVENS, O'CONNOR, KENNEDY, JJ., joined. GINSBURG, filed dissenting opinion, BREYER, joined, SCALIA SOUTER, joined Parts II III, post, p. 372. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR FOURTH CIRCUIT. Laura W. Brill argued cause petitioners. With her briefs Bruce R. Bryan Jensen E. Barber. Deputy Solicitor General Dreeben him brief Acting Clement, Assistant Attorney Wray, Irving L. Gornstein, Kirby A. Heller.* JUSTICE THOMAS Court. 1 At generally question presented (2000 ed., Supp. II). scheme, we hold does. 2 * Carl J. Pasquantino, David B. Arthur Hilts indicted carrying According evidence trial, Pasquantinos, while New York, ordered over telephone discount package stores Maryland. 325 (CA4 2003) (en banc). employed others drive border, without paying Ibid. drivers avoided hiding vehicles failing officials. Id., 333. During operation, 1996 2000, heavily taxed importation alcoholic beverages. 1997 C., ch. 36, §§ 21.1(1), 21.2(1); Excise Schedule 1.(1), E-14 (1985); 2001, 4, 22, 2002 239. Uncontested trial showed then due purchased transported approximately double liquor's purchase price. App. 65-66. 3 Before moved dismiss indictment ground stated offense. pretenses, representations, promises." contended committed 48-57. District denied motion, went trial. jury 4 appealed convictions Appeals Circuit, again urging state take cognizance Canada. Over Judge Hamilton's dissent, panel agreed reversed convictions. 305 291, 295 (2002). meaning unanimously rejected argument. 294-295; id., (Hamilton, dissenting). 5 granted rehearing en banc, vacated panel's decision, 321 2003). barring simply allowed refuse judgments nations, did preclude 327-329. well 331-332. 6 We certiorari conflict 541 972 (2004). Compare Boots, 80 580, 587 (CA1 1996) (holding nation violate statute), Trapilo, 130 547, 552-553 (CA2 1997) statute). agree affirm judgment below.1 7 consider falls literal using Two crime, here, engage defraud," ibid., "object `[money or] property' victim's hands," Cleveland 531 12, 26 (2000).2 elements. 8 Taking latter element first, hands. 358 (1987) (internal quotation marks omitted). Valuable Leocal Ashcroft, 543 9 (2004) ("When interpreting words ordinary natural meaning" omitted)); Black's Law Dictionary 1382 (4th ed. 1951) (defining "extend[ing] every species interest"). Had complied legal paid evasion deprived money, inflicting economic injury less embezzled funds treasury. deprive legally due, thereby deprivation "property." confirms characterization property. Blackstone, Commentaries Laws England 153-155 (1768) (classifying sue debt personal property); Kent, *351 (same). Consistent understanding, included victim his money. instance, debtor who assets settling debts creditors Story, Equity Jurisprudence 378 (I. Redfield 10th rev. 1870); Chesterfield Janssen, 28 Eng. Rep. 82, Ves. Sen. 125 (ch. 1750); Rapalje & Lawrence, 546 (1883). made given equivalence hand due. fact happens government, private party, lessen injury. Our conclusion hands, contentions, consistent Cleveland, supra. defendant, obtained video poker license making statements application. 16-17. State's unissued "property," choosing particular licensees "`purely regulatory'" "[could not] economic." noted nowhere allege[d] defrauded State entitled law." 11 case. Unlike allocating applicants, straightforward "economic" interest. There suggestion aimed depriving license; quite opposite, there "no [the defendant's partnership] Louisiana share revenue" 22. Here, contrast, alleged proved could hardly more receipt revenue. our word used 12 Turning second 3d, conduct, represented declare. This, then, "designed representations," 313 (1896), smuggled goods. 13 Neither antismuggling 546,3 nor treaties, see Reynolds Tobacco Holdings, Inc., 268 103, 115-119 2001), convince us outside statute.4 treaties wires, constitutes smuggling, occurs aboard vessel, evades 380, n. (GINSBURG, dissenting) (noting prosecution). equally liable "applies differentiation" categories Clark Martinez, 371, (2005). "To category invent interpret one." decline "interpret [this] narrowly written." Brogan 522 398, 406 (1998). III 14 next relies "[s]tatutes evident." 534 (1993) is, "`speak[s] directly' addressed 15 depends, turn, clarified constraint application nonderogation 274 Craft tenant entirety lien. construed lien interest, despite tension entireties enjoys immunity liens, "common-law so respect enactment now us." 288.5 So too conclude 22-23 (1999).6 16 aware implied moreover, swept broadly. points turn. 17 jurisprudence existed 1343. Since late 19th 20th Chief Justice Marshall put it, 123 (1825). statutes, tracked principle crimes prosecuted committed. See, e. g., Conflict 620, 840 (M. Bigelow 8th 1883). basis inferring Wisconsin Pelican Ins. Co., 127 265, 290 (1888); Leflar, Extrastate Enforcement Penal Governmental Claims, 46 Harv. Rev. 193, 219 (1932) (hereinafter Leflar). drew inference judgment.7 Unsurprisingly, often Brief most arises attempts directly nation").8 19 judgment. capacity nevertheless Revenue establish proposition, much 20 analogize several obligation. cite, decision Irish liquidator recover unlawfully distributed Ireland corporate director, go satisfy company's Scottish obligations. Peter Buchanan Ltd. McVey, 1955 516, 529-530 (Ir. H. Ct. 1950), app. dism'd, 530 Sup. 1951).9 found liquidation proceedings Scotland debt," won, "every penny recovered certain costs claimed Revenue." 530. court, "[i]n substance claim scrutinized, appears really collecting rejected." 529. 21 rely relied Drawing sure inferences regarding Congress' intent citations perilous, illustrate.10 22 More important, establishes None difference significant. An enforces prohibition prevent extension, knowledge, unprecedented history either 23 (with arguable exception Banco Do Brasil, Israel Commodity N. Y. 2d 190 235 (App. 1963)) best, whole revenue." Buchanan, supra, Even extended beyond faced closely analogous thus reasonable certainty 24 suit, 1996, 3663A-3664 II).11 think matters provision Regardless, significant feature absent cases. tax, mete appropriate 25 change today. If persuaded rely. originally derived. contract nations enforceable, notwithstanding illegal purposes. Boucher Lawson, Cas. T. Hard. 85, 89-90, 95 53, 55-56 (K. 1734); Planche Fletcher, Dougl. 251, 99 164 1779). 27 unavailing. developed doctrine original Early tariffs day. As Lord Hardwicke explained, circumventing unenforceable, "it cut off benefit trade kingdom, bad consequence beneficial trade." Boucher, 89, Rep., 56. supplanted. begun ones, 360-361, superseding promotion-of-commerce Dodge, Breaking Public Taboo, 43 Int'l 161, 178 (2002); 522-524, 528-529. rest rest. Granted, From earliest days, Alves Hodgson, 241, 243, 101 953, 955 1797); Clegg Levy, Camp. 166, 167, 170 (N. P. 1812). Like voiding doubt "enforced" encouraged payment taxes; yet fell scope. 29 recognized appearances America, Hampshire entertained extensive sister Henry Sargeant, (1843). There, plaintiff sought damages, alleging Vermont selectman imposed him. 331. action, 331-332, though Vermont, 335-338. 30 Likewise, re Hollins, 79 Misc. 200, 139 713 (Sur. Ct.), aff'd, 160 Div. 886, 144 1121 (1913); 212 567, 106 1034 1914) (per curiam), estate executor decedent's estate, legatee's authorizing payments. Misc., 207-208, 716-717. explained: 31 "While doubtless true will aid just equitable administration part jurisdiction merely direction result laws." 208, 717. 32 These Following reasoning might even incidentally highlights "[i]ndirect easier describe define," sometimes difficult draw involving it." Dicey Morris, 90 (L. Collins gen. 13th 2000). rely, yield sufficiently narrow context B 33 Having clear turn purposes articulated relevant authorities, differently. not. 34 policy-laden enactments Moore Mitchell, 600, 604 1929) Hand, concurring). Hand allowing delicate inquiry 35 "when concerns relations citizens To pass upon provisions public order rate be, powers court; states themselves, incompetent deal, intrusted authorities." 36 creates friction through Congress. system 320 (1936), ample manage citizens" "embarass[ing] neighbor[s]," Moore, concurring); Chicago Southern Air Lines, Inc. Waterman 333 111 (1948). True, But bring know accompanied safeguard, neither dissent directs any. greater danger, fact, lie judging based animating "neither aptitude, facilities responsibility" evaluate. 37 broadly, regardless need Nacional de Cuba Sabbatino, 376 448 (1964) (White, ("[C]ourts customarily state, since obligation further governmental interests sovereign"). choice. 38 Still final urge concern schemes. Leflar 218. course, uncontroverted testimony witness 39 Nevertheless, addresses setting forth procedure improves available Specifically, permits deciding material source including regard Rules Evidence." procedures dealing formulated cumbersome. Advisory Committee's Notes Fed. Crim. Proc. 26.1, App., 1606 proving law). encounter IV 40 "extraterritorial effect."12 Post, States; success." Pierce, 224 158, 166 2000) brackets omitted); ("The purpose"). what prosecutes individual corporation, market participant. 379, prosecutions individuals, corporations, governments applications statute).13 II), surely "domestic mind." Small 388 (citation internal 41 42 seem odd resources prosecute citizen cheap authorizes so, narrowly. affirmed.14 ordered. Notes: Joshua Dratel, Quentin Riegel, Jeremy Maltby National Association Defense Lawyers et al. amici curiae reversal. express view related mail predicate offenses, civil Racketeer Influenced Corrupt Organizations (RICO) SeeAttorney 2001) RICO taxes); Republic Honduras Philip Morris Cos., 341 1253, 1255 (CA11 (same governments). AlthoughCleveland interpreted 1341 identical statutes pari materia. (1999) ("`scheme defraud'"); Carpenter 484 19, 25, ("scheme defraud"; property"). provides: "Any person owning vessel employs, participates in, allows employment of, attempting smuggle, assisting merchandise territory violation force, penalty forfeiture provided respecting domiciled corporation incorporated controlling substantially participating control indirectly, ownership shares otherwise, purpose, found, discovered been, board shall fined title imprisoned years, both." Any overlap beside point. Code replete overlapping Stuntz, Pathological Politics Law, 100 Mich. 505, 518, 62 (2002);United Wells, 519 482, 505-509, nn. 8-10 (1997) (STEVENS, mere similar says scope either. alsoUnited (requiring "`speak law"); Astoria Sav. Loan Assn. Solimino, 501 104, 108 (1991) (stating applicable "where established"); Turley, 352 407, 411 (1957) (declining "`stolen'" according accepted meaning"). principles summary "unavoidably obvious implicates rule" "`primarily law,'"post, 377, 382 dissenting), firmly task undertake. SeeColorado Harbeck, 232 71, 133 357, 360 1921); Maryland Turner, 75 10-13, 132 173, 175 (Sup. 1911); Detroit Proctor, 44 Del. 200-202, 61 412, 415-416 (Super. 1948); 603-604 concurring) (citing cases), aff'd grounds, 281 (1930); Arkansas Bowen, D. 1891), 537 (1894); 216, 63 cases). alsoHer Majesty Queen Gilbertson, 597 1161, 1163-1164 (CA9 1979) judgments, citing, inter alia, pre-1952 cases); 526 "establish[ing] claims authority"); "extrastate collection"); 603 (characterizing "liability arising another"); E., "precludes collector state"); cf. Restatement (Third) Relations (1986) require, allows, judgments). citeQRS Aps Frandsen, [2000] Litig. 8, [1999] All 289 (App.) needed Stringam Dubois, [1993] 273, Alta. (3d) 120 1992) (rejecting require sale real 235, 237 1963) instrumentality Brazil conspiracy circumvent exchange regulations); Harden, [1963] 630, 633, 366, 370-371 Can.) stipulated enforceable courts); Attorney-General Schulze, [1901] Scots Times 4-5 (refusing costs, where incurred defending legality infraction laws); Indian Investment Trust, Borax Consolidated, Ltd., [1920] K. 539, 550 deduct income payments loan England). inGovernment India Taylor, 491 (H. L.), heavily, court's peculiar namely, Parliament excluded demonstrated "appear[ed] Parliament." 506; Borax, 549 loan, "there [was] Income Tax authorities discharge pro tanto owes yearly another" "[t]here reckoned discharge"); forfeiture, [i. e., Scottish] expenses regarded accessory incident claim"). addition, explain below, features separation cast notion infra, 369-370. 3663A(c)(1)(A)(ii) ("This sentencing deceit") some indication novelty dissent's "extraterritoriality" argument, note pressed below raised afterthought reply brief, chance respond. Reply 17-18 "does necessarily depend determination law" "is order."Post, (opinion J.). Without proof impossible tell defined 355-356; 165-168 involve type derogation 359-370, "extraterritorial." footnote sentences light ofBlakely Washington, 542 296 29. raise petition certiorari. address it. e.g., Lopez Davis, 230, 244, (2001) "matter certiorari"); Whitfield 209 (2005) (affirming imposition sentence enhancements, therein, O. 2004, 03-1293, etc., 7, 6). whom BREYER joins, SOUTER join dissenting. 45 extension "wire fraud" scenario part: invoked revenues nation's Silent activity culminating borders, scheme" employs execution communication wires. background norm, known sellers Maryland, trucked hefty alcohol.1 Defendants devising "to Province Ontario duties relating liquor." Pet. Cert. 58a. Each six counts calls York 60a-64a. 47 today reads courts, prosecutor's option, charges evaded. stand way, instructs, 48 I urged, 17-19, ascribed exorbitant disregard repeated "Congress legislates backdrop extraterritoriality." EEOC Arabian Oil 499 248 (ARAMCO); 388-389 (The "adopt[ed] intends domestic, extraterritorial, application."); 17, `[t]he [Canada] naturally understood kernel of' fraud." (quoting Sosa Alvarez-Machain, 692, 700-701 (2004)).2 Notably, explicitly 546, reciprocal criminalizing Currently, 49 Of overriding importance regard, internationally area sway. (referencing party). treaty taxes, accord certification taxing owed "finally determined." Protocol Amending Convention Respect Taxes Capital, Sept. 1980, Treaty Doc. 104-4, 2030 236, 245, Art. 15, ¶ (entered force Nov. 1995) Protocol). inapplicable persons, liability incurred. 246, 8. 50 Today's novel troubling failure account matter stake. violations can extradited Canada.3 best positioned decide "whether, extent, defendants own, 343 banc) (Gregory, 51 grounded allege prove engaged ante, 356 (describing "victim" having "as `property'"). nature defendants' withheld defendants, offered imposes liquor, duties. 58a; 65-74. resulted from, 166-168 ("If duty actually existed, [defendants] guilty wires" City, sincere mistaken belief City shipments."). 52 reliance continued sentencing. Sentencing Guidelines mandated sentenced among things, amount Commission, Manual 2F1.1(b)(1) (Nov. Accordingly, calculated number aggregate evaded defendants. Pasquantinos $2.5 million duties, Hilts, $1.1 million. 97-101, 104-105.4 resulting offense-level increases yielded significantly longer defendants.5 Gregory bulk related, crime fraud, evasion," "this primarily 342-343. 53 Expansively text pretenses," upholds deployment essentially times observed arm, extending "everything designed representations past present, suggestions promises future." (1896). incautious dramatically expand refused proscription exorbitantly. 1341, corruption local stating: "[W]e limited protection rights. desires further, speak has."); 24-25 (2000) make application, reluctance "approve sweeping expansion statement Congress").6 54 Construing encompass ignores anything signaling extraordinary effect.7 "It longstanding law," ARAMCO, 248, Congress, legislative endeavors, concerned conditions," ibid. Foley Bros., Filardo, 281, 285 (1949)). Small, (interpreting phrase "convicted court," 922(g)(1), "commonsense notion" Smith 197, 204, (1993))). Absent affirmative intention Congress," Benz Compania Naviera Hidalgo, A., 353 138, 147 (1957), country," 286; Hoffmann-La Roche Ltd Empagran 155, (referring "legislators legitimate write laws"). 55 contains reference contrasts chart courts' course regard. 1956(c)(1) (defendant transaction proceeds "that felony State, Federal, 3372(a)(2)(A) (banning wildlife "taken, possessed, transported, sold law"). indicate fully capable conveying silence left discretion.8 56 extraterritoriality, guides congressional direction, provides extend instant scheme. scant room general perspective: actively indicated, legislation "strictly [to] limit parameters assistance given" 119; 588 ("National [foreign] undermined country."). 57 specific offenses genre here: transporting "into force." 546's expressly conditioned government's (prohibition applies "if revenue"). reciprocity limitation reflects provide cabins discretion enforce, avoiding appearance prosecutorial overreaching. 297, 2002) J.) ("Where countries' help enforce?"), reh'g banc granted, 2003 LEXIS 585, *1 (CA4, Jan. 14, Significantly, rendering resembling here.9 58 negotiated, Senate ratified, comprehensive treaty, providing other's 15. call calculate statutes; finally adjudicated requesting nation. Further, requested State." 8(a). Hilts. branches, specifically declined promise. 59 Complementing await instruction thrust, holds another's "our Milwaukee County M. White 268, 275-276 (1935). argues, accepts, premised implicate "recognize [revenue] 369, "enforce" sense." 366; 17-19. discussed above, arguably laws; shorn aspect country. 375-377; ("[U]pholding conviction laws."). seems me unavoidably obvious, therefore, endeavor, enacting displace 60 3663A, corroborative. 3663A "offense[s] property," 3663A(c)(1)(A)(ii), "[n]otwithstanding offense," 3663A(a)(1) (emphasis added). acknowledges, "did district theory `appropriate loss derives government.'" 19-20 Letter Schenning Motz, Feb. 16, 106). disavows concession. Tr. Oral Arg. (While prosecutor concede appropriately ordered," position infringe rule."). effectively invited overlook revealing. demonstrates expansive warrants disapprobation. suggests relieved exclude shoal. 365; 21. expressed notable clarity "quite ambiguous" concerning coverage 38. Act, my view, additional indicator [did envision [a] 35-36, accordingly. lenity counsels adopting "close question" includes solely defrauding revenues. 33. confronted "two rational readings harsher other, choose spoken definite language." McNally, 359-360; Universal I. Credit 344 218, 221-222 (1952). interpretive guide particularly Wire (RICO), 1961(1) laundering 1956(c)(7)(A) ed.). 25. finding exposes severe penalties forfeitures RICO, 1963 ed.), 1956(a), 64 65 reasons stated, reverse Appeals. officer's $56 per $100 65-66; seeinfra, 376, 4. mind afterthought. Seeante, 12. featured brief. (observing, extraterritoriality especially stake"); 40, 46. Both parties ask kind endeavoring discern text. responses arguments coincide extraterritoriality. 22-26 35, 46-47 (responding questions counsel asserted "enforcement systems" appropriate). Indeed, report spirits, extradition, 12-13, casual manner reached totals detracts assertion "[f]oreign case."Ante, 370. recommendation proffer precise imports, Rather, intelligence officer Customs, surmised, experience working $100. 104. expert [D]istrict [C]ourt determined [her] calculations accurate easily able serious attempt effort shared ensure potentially affecting possible, "deeply troubling," unprepared grapple details enhanced factfindings, Sixth Amendment. SeeUnited Booker, 220, 230-234 Court); Blakely Despite affirmance resentencing. (BREYER, Court). declines plea resentencing, stating "[p]etitioners certiorari." 372, 14. omission fault Blakely. possible point: merits briefing. prudential, jurisdictional, Izumi Seimitsu Kogyo Kabushiki Kaisha Philips 510 27, 32-33 remand Blakely-Booker prejudice delve complex below. interpretation, prosecutors resort commerce,"ante, 371-372, acts commerce, repeatedly held, itself design 250-253 (1991). II) entity participant, order, inUnited 1996), upholding "would functionally "will non-tax unless process, fundamental considerations interfere" 483, Reporters' Notes, (1986)), "[o]ur sovereign" dissenting))). requirement transport render event

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