Document: 510 U.S. 135 RATZLAF ET UX.v.UNITED STATES No. 92-1196. Supreme Court of United States. Argued November 1, 1993. Decided January 11, 1994. As here relevant, federal law requires a domestic bank involved in cash transaction exceeding $10,000 to file report with the Secretary Treasury, 31 U. S. C. § 5313(a), CFR 103.22(a); makes it illegal "structure" transaction—i. e., break up single above reporting threshold into two or more separate transactions—"for purpose evading requiremen[t]," 5324(3); and sets out criminal penalties for "[a] person willfully violating" antistructuring provision, 5322(a). After judge at petitioner Waldemar Ratzlaf's trial on charges violating §§ 5322(a) 5324(3) instructed jury that Government had prove both defendant knew 5313(a) obligation he attempted evade obligation, but did not have structuring which engaged was unlawful, Ratzlaf convicted, fined, sentenced prison. In affirming, Appeals upheld court's construction legislation. Held: To give effect 5322(a)'s "willfulness" requirement, must acted knowledge she undertook simply defendant's circumvent bank's obligation. Section 5324 itself forbids "purpose [§ 5313(a)] requirements," lower courts erred treating requirement essentially as words no consequence. Viewing light complex provisions they are embedded, is significant omnibus when applied other same statutory subchapter, consistently has been read by Courts require specific intent commit crime disobey law. The be construed way each time called play. Because currency inevitably nefarious, this unpersuaded States' argument so obviously "evil" inherently "bad" satisfied irrespective illegality structuring. interpretation adopted case does dishonor venerable principle ignorance generally defense charge, Congress may decree otherwise particular contexts, done present instance. Pp. 140-149. 976 F. 2d 1280, reversed remanded. GINSBURG, J., delivered opinion Court, STEVENS, SCALIA, KENNEDY, SOUTER, JJ., joined. BLACKMUN, filed dissenting opinion, REHNQUIST, O'CONNOR THOMAS, joined, post, p. 150. CERTIORARI TO THE UNITED COURT OF APPEALS FOR NINTH CIRCUIT Stephen Robert LaCheen argued cause petitioners. With him briefs were Anne M. Dixon, Peter Goldberger, Pamela A. Wilk, James H. Feldman, Jr., Kevin O'Connell, Christopher Kent. Paul J. Larkin, On brief Solicitor General Days, Acting Assistant Attorney Keeney, Deputy Bryson, John Manning, Richard Friedman.* JUSTICE GINSBURG Court. 1 Federal banks financial institutions reports Treasury whenever exceeds $10,000. 5313; 103.22(a) (1993). It transactions—i. transactions—for institution's requirement. 5324. "A provision subject penalties. 5322. This presents question divided: Does suffice sustain conviction "willfully provision?1 We hold mandates something more. establish violat[ed]" law, his conduct unlawful. 2 * evening October 20, 1988, defendant-petitioner ran debt $160,000 playing blackjack High Sierra Casino Reno, Nevada. casino gave one week pay. due date, returned $100,000 hand. A official informed all transactions involving than reported state authorities. added could accept cashier's check full amount without triggering any helpfully placed limousine disposal, assigned an employee accompany vicinity. Informed banks, too, required excess $10,000, purchased checks, less from different bank. He these checks Casino. 3 Based endeavor, charged "structuring transactions" banks' $10,000; conduct, indictment alleged, violated 5324(3). attempt prison.2 4 maintained appeal convicted solely basis institution intention avoid such reporting. gain "willful" asserted, aware "structuring" engaged. Ninth Circuit legislation affirmed conviction. 1280 (1992). granted certiorari, 507 1050 (1993), now conclude that, specification, therefore reverse judgment Appeals. II 5 enacted Currency Foreign Transactions Reporting Act (Bank Secrecy Act) 1970, Pub. L. 91-2508, Tit. II, 84 Stat. 1118, response increasing use intermediaries persons activity. imposes variety requirements individuals regarding foreign transactions. See 5311-5325. relevant here, applies reads: 6 "When payment, receipt, transfer States coins (or monetary instruments prescribes), amount, denomination, under circumstances prescribes regulation, participant prescribe shall prescribes. . ."3 7 deter circumvention 5324, part Money Laundering Control 1986, 99-570, I, Subtit. H, 1354(a), 100 3207-22.4 5324,5 violating," 8 "No section respect transaction— 9 10 "(3) structure assist structuring, institutions."6 11 enforcement issue, 5322(a), inter alia, provision. 12 subchapter [31 5311 et seq.] regulation prescribed (except 5315 title 5315) fined $250,000, [imprisoned for] five years, both." B 13 5313(a)." admits structured transactions, of, avoid, duty formulation (§ 5322) prosecuted, however, calls proof "willful[ness]" actor's part. case, Circuit's approbation, treated surplusage—as consequence.7 Judges should hesitate treat terms setting, resistance heightened describe element offense. Pennsylvania Dept. Public Welfare v. Davenport, 495 552, 562 (1990) (expressing "deep reluctance" interpret "so render superfluous enactment") (citation omitted); cf. Potter States, 155 438, 446 (1894) (word "wilful" used certain offenses others statute "cannot regarded mere surplusage; means something"). 14 "Willful," recognized, "word many meanings," "its [is] often... influenced its context." Spies 317 492, 497 (1943). Accordingly, we view mindful embedded. light, count "knowledge requirement" "specific crime," i. "a law." Bank New England, N. A., 821 844, 854-859 (CA1 1987) ("willful violation" 5313's over "voluntary, intentional, bad law"); Eisenstein, 731 1540, 1543 (CA11 1984) "`proof crime'") (quoting Granda, 565 922, 926 (CA5 1978)). 15 Notable regard 5314,8 concerning records agencies, 5316,9 declaration transportation into, Decisions actor who violates known legal duty." See, e. g., Sturman, 951 1466, 1476-1477 (CA6 1991) 5314's "`voluntary, intentional violation duty'") Cheek 498 192, 201 (1991)); Warren, 612 887, 890 1980) 5316's across international boundaries "have actually voluntarily intentionally duty"); Dichne, 632, 636 (CA2 1979) "`knowledge 2d, 926); 924-926 (overturning "willful 5316 because given "proper instruction [that] would include some discussion law" rejecting Government's contention "do fact breaking law").10 16 term appearing several places text appears. Estate Cowart Nicklos Drilling Co., 505 469, 479 even stronger construe formulation, Aversa, 984 493, 1993) (en banc) ("Ascribing various meanings iteration willfulness requirement]— reading word differently code applies—would open Pandora's jar. If can meaning malleable, usefulness penalty group related sections will eviscerated almost references become susceptible individuated interpretation."). 17 urges, violators, their very exhibit do wrong, suffices show "willfulness": 18 "On occasion, statutes—including requiring `willfulness'—have understood duty, But where adopted, invoked only ensure wrongful purpose. Liparota 471 419, 426 (1985). 19 20 "The anti-structuring statute, satisfies `bad purpose' component explicitly defining necessary violate law: Brief 23-25. 21 "`[S]tructuring kind activity ordinary engage innocently,'" asserts. Id., 29 Hoyland, 914 1125, 1129 (CA9 1990)). "reasonable," concludes, "to structurer responsible need evasion unlawful." 29. 22 Undoubtedly there men elude order hide inspectors laundering drug money tax evasion.11 nefarious. Consider, example, small business operator knows available Internal Revenue Service. reduce risk IRS audit, brings $9,500 twice week, lieu transporting once week. That person, if right, committed offense, "for depriving information designed obtain." 28-29.12 Nor structures invariably motivated desire keep dark. individual felony against making deposits doses, fearful increase likelihood burglary,13 endeavor former spouse unaware wealth.14 23 noted "many occasions" persons, "in impact tax." 762 Supp. 441, (NH 1991), aff'd part, 493 1993). century ago, supplied illustration: 24 Stamp 1862 imposed cents upon bank-check, drawn twenty dollars. careful individual, having dollars pay, pays handing creditor ten each. thus draws payment dollars, yet stamp duty. While operations deprive government duties might reasonably expect receive, perceived practice charge fraud. resorts devices duties, illegal. right split evidences Isham, Wall. 496, 506 (1873). 25 current days, amicus noted, countless taxpayers year gift December identical next day, thereby legitimately avoiding taxable gifts 26 2503(b).15 National Association Criminal Defense Lawyers Amicus Curiae 16. examples, Had wished dispense furnished appropriate instruction.16 C 27 5322, subjected those signaling also report. There are, recognize, contrary indications statute's legislative history.17 resort history cloud clear.18 Moreover, find ambiguous resolve doubt favor defendant. Hughey 411, 422 (lenity principles "demand resolution ambiguities statutes defendant"); Crandon 494 152, 160 ("Because guided fair warning, rare policies support broader clearly warranted text."); Bass, 404 336, 347-350 (1971) (rule lenity premised concepts "`fair warning world language common understand, what intends line passed'" "legislatures define activity") McBoyle 283 25, (1931) (Holmes, J.)). 28 charge. 199 (1991); Barlow Pet. 404, 410-412 (1833) (Story, J.). otherwise. That, hold, controls. convict charged, 5324(3), unlawful.19 properly regard, remand further proceedings consistent opinion. ordered. Notes: Alan Zarky curiae urging reversal. Compare,e. Scanio, 900 485, 491 1990) ("proof unlawful" satisfy 5322's requirement), 502 (a action" within "is consequence reckless disregard duty"). wife escorted area codefendants. For convenience, refer By ordered of"transaction[s] $10,000." 103.22(a)(1993). Although report-filing "any transaction," chose customer. (1993) Other portions make "money laundering" crime. XIII, 1352(a),100 3207-18, codified 1956(a)(2)(b) (prohibiting "proceeds form unlawful activity"). assert obtained lawful manner Subsequent conviction, recodified 5324(1)-(3) 5324(a)(1)-(3), substantive change. addition, subsection (b) replicate prohibitions (a) context Annunzio-Wylie Anti-Money Act, 102-550, XV, 1525(a), 106 4064, (1988 ed., IV). simplicity, codification decided Regarding considered, promulgate, inform customers section's proscription. 53 Fed. Reg. 7948 (1988) (proposing "procedures notify [bank] 5324" "insure compliance" provisions); 54 20398 (1989) (withdrawing proposal) confirmed oral view, below, "the offense just you never 5322." Tr. Oral Arg. 5314 provides resident citizen in, doing records, reports, resident, citizen, maintains relation agency." filing agent bailee knowingly (1) transports, about transport, transported, time" "[S]pecific crime[s]" described 5313, 5314, negated by,e.g., relied good faith advice counsel. 1543-1544 1984). brief, link describing length repeated failure gambling income returns. 5-7. alleged misdeeds. 35-36. ever asserted sought principally through question—not licensed casinos, proceeds sales ventures. Rep. 99-433, pp. 1-2 (1986) (purpose creating "provide agencies additional tools investigate [and to] curb spread laundering, criminals successfully disguised nature source funds enterprises") At argument, recognized legislation, entrepreneur absent special exemption, prosecution. 32-34 SeeUnited Dollar Market Account 1591768456, 980 233, 241 (CA3 1992) (forfeiture action 981(a)(1)(A) deposited donee steps requirement; court overturned grant summary favor, noting believe donee's "legitimate explanations organizing amounts $10,000," including donor's privacy fear donor—an "eccentric old woman [who] hid hundreds thousands her house"—might lead burglary attempts). SeeAversa, (real estate partners feared "paper trail" obviate efforts existence partners). "[i]n made [a] donor during calendar year, first included total year." 2503(b) provide civil forfeiture 1986. 981(a) (subjecting "[a]ny property, real personal, transaction.. 5324(a) ."); see 5317(a) "monetary instrument being transported [when] contains material omission misstatement") points Senate Reports accompanying stated converts $18,000 purchasing $9,000 days participating Transaction potential liability." p.22 (1986), cited 35. Report indicated "would codify [United v.] Tobon-Builes[, 706 1092 1983),] like cases [by] expressly subject[ing] liability causes attempts fail omissions misstatements fact." 22, 33. hardly crystalline. reference Tobon-Builes, 1983), illustrative. 1001, False Statements "conceal[ing] existence, source, approximately $185,200 twenty-one [and] using names, false names ." 1094. "main contention," rejected Eleventh Circuit, "could concealment prohibition 1001 transactions." 1096. No "ignorance asserted. indeed "codified" decision "expressly fact," appears second subsections track verbatim. 5324(1) (no "cause 5313(a)"); 5324(2) misstatement fact"). Indeed, addition" codifying "create requirements." 22. relevance Tobon-Builes proper evident. SeeBarnhill Johnson, 503 393, 401 (1992) (appeals well taken ambiguity). 499, n. (commenting issue "`is conflicting [statutory] ambiguous'") Wong Yang Sung McGrath, 339 33, 49 (1950)). First House, Senate, Conference accompanied final version Anti-Drug Abuse 1986; instead, proposed bills, incorporated Act. 1986 5393 (listing reports). dissent, 161, features House issued 1991 connection unenacted Report, commenting bill pass, secure indicator congressional time, surely affords reliable guide Congress' Oscar Mayer & Co. Evans, 441 750, 758 (1979) (cautioning giving weight "history" written years after passage statute). dissent asserts our holding "largely nullifies effect"of "mak[ing] prosecution difficult impossible most cases." Seepost, 162. Even dissent's conviction; why refrain qualitatively renders "impossible." may, course, requisite drawing reasonable inferences evidence 499-500 (1943) (illustrating permissible inference "affirmative willful attempt" tax); 854 (willfulness usually established facts"), found "impossible" persuade prosecutions violations 5316. 636-638 (evidence took steps" bring attention visual notices supports violated" 5316). whom CHIEF JUSTICE, O'CONNOR, THOMAS join, dissenting. 27, Ratzlaf1 arrived Nevada shopping bag pay off debt. told personnel want made. vice president Ratzlaf, along employee, then proceeded visit around Stateline, Nevada, South Lake Tahoe, California, $9,500. Ratzlafs buy checks—one them—and filed; occasions canceled paid $76,000 checks. few weeks later, three purchase themselves bought course beyond institutions' requirements. today, concludes findings insufficient 5324(3),2 conclusion lacks conflicts my basic governing statutes, squarely undermined intent, I dissent. general rule mistake deeply rooted American system."Cheek (1991). common-law numerous construing statutes." Ibid., citing International Minerals Chemical Corp., 402 558 (1971); Hamling 418 87, 119-124 (1974); Boyce Motor Lines, Inc. 342 337 (1952). Thus, "willfully" "refers consciousness act Cheek, S., 209 (SCALIA, concurring judgment); Browder 312 335, 341 (1941); (1894); Surety York Sullivan, 605, 606 1925) (L. Hand, J.) ("[T]he `willful' ... doing," "he suppose Law Institute, Model Penal Code 2.02(8) (1985) ("A wilfully acts elements unless impose appears"). majority explains, originally "person[s] subchapter." (entitled "Records Monetary Instruments Transactions") requirements, regulation; agencies; 5316, rampant large infra, 162, 13. new provides: (3) institutions." Unlike identifies violation: "evading therefore, (2) These commonly interpreted. majority's actual prohibited strays text, precedents interpreting particular. reasons nine Circuits,3 superfluous. ante, 140. ignores generality standard—willfulness— subchapter's provisions. Some cannot deemed surplusage. mean underlying involve willfulness. since already imposing artificially scienter contends element, provisions, 141-142. fact, refers stand subtle proposition pertinent compliance them.4 Consistent construction, enactment level requirements."5 "nefarious." 144. true knowledge-of-illegality agree, imposition here. First, issue—splitting tens circumventing duty—is sort innocuous Liparota, fraud food stamps face value. Further, is, definition, regulated, seriously argue lacked notice law's intrusion sphere Cf. Lambert 355 225, 229 (1957). evading" targets entitled. plainly innocent justify illegality.6 event, determined purposefully conduct.7 defined duty.' " 200, quoting Bishop, 412 346, 360 (1973); Murdock, 290 389, 394-396 (1933). Our area, "exception traditional rule," complexity laws." 200; 341-342. inapplicable where, far complex, perhaps among simplest Code.8 clear precedents, confirms intended (and evade) structuring.9 Before prohibiting combat purposeful anyone "knowingly falsifies, conceals covers trick, scheme, device fact" jurisdiction agency, 2(b), directly performed another offense" application 1092, 1096-1101 1983); Heyman, 794 788, 790-793 (CA2), cert. denied, 989 (1986). leading explained, "knew purposely prevent multiple smaller 1101. concluding either confined limited forms Varbel, 780 758, 760-763 1986); Denemark, 779 1559, 1561-1564 Anzalone, 766 676, 679-683 1985). fill loophole caused by" latter decisions, "refused apply sanctions [the Act] `structured' act's requirement." explained Judiciary Committee: "[The provision] negate Varbel Denemark. fact. amendment create whether itself, reportable Act." R. 99-746, 18-19, "codify Tobon-Builes" reveals incorporate Tobon-Builes' standard violation, them. Nothing suggests one's required.10 explain provision: "For liability. conducting splitting (for $2,000 four $500 each), amendment." (emphasis added). Committee's specification contemplate departure essential recent below. 1992, parallel governs transportation. 406411 Like prohibits requirements" (in amended every consider held them; none required. 3, supra. earlier containing explained: "Under importation exportation presently 903 1288 (9th Cir. 1990)." 102-28, pt. 45 (1991) added).12 1992 amendment's replication original provision's strongly preserve then-uniform Keene Corp. 508 212-213 least, then, today's poses dilemma reconcile 5324: ignore newly case. Finally, ignored practical matter largely "Congress importance unusual ferreting activity." California Bankers Assn. Shultz, 416 21, 38 (1974). close major scheme easy circumvention.13 cases,14 Court's reopens tried close. III officials reported, visited Petitioner intelligence, anything uncomprehending traveled converting bundles. am convinced actions constituted embodied result decision, Ratzlaf—to phrase—will "laughing bank." odds Congress, fundamental act. Now try again hole rightly felt filled before. follow majority, seeante, 138, 2, Seeante, 139, 5. 489-492 1990); Shirk, 981 1382, 1389-1392 1993); Rogers, 962 342, 343-345 (CA4 1992); Beaumont, 972 91, 93-95 Baydoun, 175, 180 Jackson, 983 757, 767 (CA7 Gibbons, 968 639, 643-645 (CA8 Dashney, 937 532, 537-540 (CA10), Brown, 954 1563, 1567-1569 (CA11), adopt allows "reckless disregard" banc). dominant demands "proof crime."United 1978); (CA1) ("willful" 5313 [defendant's] crime' "), 484 943 (1987); (same); (same predecessor 5316), 445 928 (1980); Schnaiderman, 568 1208, 1211 1978) (same). intent" not, assume, import notion illegality. Rather, corresponds concept "purpose," Bailey, 444 394, 405 (1980), add knowledge, specified prong standard. correctly notes instances referred "known Those courts, 200 (1991), despite restriction standard's context, 1476 referring "law" know 854; 1980). understanding supported Granda's statement goes heart denial crime." "Knowledge easily confused illegality" because, provisions—§§ 5316—the entity violate" duty; result, necessarily entails entity's (that report). contrast, customer abank's collapse customer's own prohibited. Under conduct," "willful." 161-162. `evil' `bad' `willfulness' structuring."Ante, 146. illegality; inquiry exceptional 419 (1985), criminalizes broad range apparently id., 426, wrongfulness. expresses concern audit. 144-145. situation. legitimate frequent genuinely characterized separate, rather structured, "evasion." 1571; theoretically possible extreme situation, example "broad conduct" aspect exchange shields prosecution." Hearing 571 2306 before Committee Banking, Housing, Urban Affairs, 99th Cong., Sess., 136-137 (response Asst. Atty. Gen. Knapp Sun Sen. D'Amato) offers examples "avoidance" apparent "innocence" 145-146. inapposite specifically "evading" "bad purpose." analogy field flawed. Tax involves unique consisting myriad categories thresholds, yearly segments, generate levels taxation while influencing behavior ways. Innocent operate undermine purposes sharp completely deprives obtain, wholly undermines statute. unambiguously lenity. persuaded defeat evidenced SeeLiparota, 427; Bramblett, 348 503, 509-510 (1955). Contrary suggestion,ante, 147-148, 17, sanction "codify," addressed violation. 1101 1983). characterizing 21. misreads stating creates "`[i]n addition' Tobon-Builes." Ante, 148, 17. phrase previous sentence states "codification" encompasses sentences, Report's "codifying creation particularly direct Senator D'Amato, sponsor asked Sun: "Assuming antistructuring] books, demonstrated Denemark cases?" stated: would, markedly different. defendants undertaken Title 31. provision], demonstrated." moved created onHoyland affirming See,e. 2-3, 7. Welling, Smurfs, Laundering, Law: Crime Structuring Transactions, 41 Fla. Rev. 287, 320

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