Court Opinion

ID: 2974455
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:18:14.679165+00
Date Added: 2024-06-11T11:43:51.429112
License: Public Domain

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                                     Pursuant to Sixth Circuit Rule 206
                                             File Name: 06a0425p.06

                       UNITED STATES COURT OF APPEALS
                                        FOR THE SIXTH CIRCUIT
                                          _________________

                                                            X
                                       Plaintiff-Appellee, -
 UNITED STATES OF AMERICA,
                                                             -
                                                             -
                                                             -
                                                                 No. 06-5464
              v.
                                                             ,
                                                              >
 MICHAEL ELY,                                                -
                                    Defendant-Appellant. -
                                                            N
                              Appeal from the United States District Court
                           for the Western District of Tennessee at Memphis.
                          No. 05-20129—Samuel H. Mays, Jr., District Judge.
                                        Submitted: October 26, 2006
                                 Decided and Filed: November 16, 2006
             Before: MARTIN and COOK, Circuit Judges; BUNNING, District Judge.*
                                             _________________
                                                  COUNSEL
ON BRIEF: Randolph W. Alden, OFFICE OF THE FEDERAL PUBLIC DEFENDER FOR THE
WESTERN DISTRICT OF TENNESSEE, Memphis, Tennessee, for Appellant. Frederick H.
Godwin, ASSISTANT UNITED STATES ATTORNEY, Memphis, Tennessee, for Appellee.
                                             _________________
                                                 OPINION
                                             _________________
        BOYCE F. MARTIN, JR., Circuit Judge. Michael Ely was convicted by a jury of bulk cash
smuggling and making a false and fictitious material statement and representation to a Customs and
Border Protection officer in violation of 31 U.S.C. §§ 5316 and 5332, and 18 U.S.C. § 1001. The
jury also found that Ely’s interest in the property was subject to forfeiture to the United States
pursuant to section 5332. The district court subsequently sentenced Ely to five months
imprisonment and five months of home detention to be served as a condition of supervised release,
as well as ordering the forfeiture pursuant to the jury verdict. Ely now appeals the forfeiture and his
sentence.

        *
          The Honorable David Bunning, United States District Judge for the Eastern District of Kentucky, sitting by
designation.

                                                         1
No. 06-5464              United States v. Ely                                                               Page 2

                                                        I.
       Ely’s conviction arose from his attempt to bring roughly $24,000 in assorted currency1 into
the United States without reporting it. Ely had been working as a contractor in the Middle East, and
was returning to the United States on a flight from Amsterdam to Memphis on April 2, 2005. At the
Memphis airport, Ely presented his Customs Declaration to Customs and Border Protection Officer
Brandon Marlier. On the Declaration, Ely had answered “no” to the question of whether or not he
was carrying currency valued at over $10,000. The Declaration explains that it is legal to carry
currency into the United States, but that if the traveler is carrying more than $10,000 it must be
reported to Customs. It also provides a clear definition of the term “currency.”
        Marlier asked Ely how much currency he was bringing into the United States, and Ely
responded that he had between six and seven thousand dollars. Marlier then began a “routine bag
examination,” and discovered currency inside of Ely’s luggage, mostly consisting of one-hundred
dollar bills. Marlier informed Ely that it was legal to carry currency, but that it merely needed to
be reported if it was over $10,000. Ely again informed Marlier that it was not over ten thousand
dollars. Marlier then counted the money from his initial discovery, and found that it amounted to
over $13,000. He then contacted his supervisor and two other customs agents. After a more
thorough search they discovered an additional $7000 to $8000, and eventually discovered a total of
$24,000 after taking Ely into custody. The following day, Ely was questioned by an Internal
Revenue Service agent, and admitted that he knew he was carrying more than $10,000 and violated
the requirement to report it. He claimed that he had wanted to wire the money to his wife from
Kuwait, but had encountered difficulty doing so, and was thus carrying the cash with him without
reporting it to keep the IRS from knowing about it.
        Ely was indicted for three counts: knowingly concealing more than $10,000 on his person
and attempting to transport it from overseas to the United States in violation of 31 U.S.C. § 5316;
knowingly and willfully making a false statement to a Customs and Border Patrol officer in violation
of 18 U.S.C. § 1001; and, a charge under 31 U.S.C. § 5332 (b) and (c)(3), authorizing forfeiture of
the entire sum of money he was carrying upon conviction for violation of section 5316. The case
was subsequently tried to a jury, which convicted Ely on all three counts, including a special verdict
on count 3 authorizing the forfeiture of all the currency he was carrying.
                                                         II.
        Pursuant to the special verdict on count 3, the district court ordered the forfeiture of the
entire $24,000, which Ely argues was an excessive fine, imposed in violation of the Eight
Amendment provision that “excessive fines [shall not be] imposed.” Because he failed to raise an
Eighth Amendment objection in the district court, we review the excessiveness of the fine for plain
error. United States v. Blackwell, 459 F.3d 739, 771 (6th Cir. 2006). “‘To establish plain error, a
defendant must show (1) that an error occurred in the district court; (2) that the error was plain, i.e.,
obvious or clear; (3) that the error affected defendant’s substantial rights; and (4) that this adverse
impact seriously affected the fairness, integrity or public reputation of the judicial proceedings.’”
Id. (citing United States. v. Abboud, 438 F.3d 554, 583 (6th Cir. 2006)).
        Ely relies largely on the Supreme Court’s decision of United States v. Bajakajian, 524 U.S.
321 (1998), in which the Court upheld a district court’s decision to limit a forfeiture for a violation
of section 5316 to an amount significantly less than the amount of currency that the defendant was
transporting. The facts of Bajakajian are similar to this case, save the fact that the defendant failed
to report a significantly higher sum of money. The defendant was traveling through an airport with

        1
         This amount included $22,490 in United States currency, in addition to the equivalent of $954.30 in European
Union Euros, and the equivalent of $642.88 in Kuwaiti Dinars.
No. 06-5464               United States v. Ely                                                                  Page 3

$357,144 in currency, knowingly avoided reporting it, and lied to a customs agent about the amount
he was carrying. Id. at 325. After a search, the government seized the cash, and sought forfeiture
of the entire amount. Id. The defendant pled guilty to the charge of failing to report, the
government agreed to dismiss the false statement charge, and the court held a bench trial on the
forfeiture issue. Id. The district court determined that the entire $357,144 was subject to forfeiture
under 18 U.S.C. § 982(a)(1),2 but that it would be grossly disproportionate to the offense for the
entire amount to be forfeited, and instead ordered a forfeiture of $15,000, plus the maximum
authorized fine of $5000 under the Federal Sentencing Guidelines. Id. at 326. The district court
specifically noted that the funds were not connected to any other crime and that the defendant was
carrying the money for the lawful purpose of paying a legitimate debt. Id. The government
appealed, but the order was upheld by the Ninth Circuit, and the Supreme Court subsequently
granted certiorari.
        The question before the Supreme Court in Bajakajian was limited to whether the full
forfeiture under section 982(a)(1) of the amount of money the defendant was carrying was
constitutional under the Excessive Fines Clause of the Eight Amendment. Id. at 337 n. 11. The
Court found that the forfeiture was punishment, subject to the Excessive Fines Clause, because it
was “imposed at the culmination of a criminal proceeding and require[d] conviction of an underlying
felony,” and that it was not based on the judiciary’s in rem jurisdiction over the currency itself, but
rather as a result of the defendant’s criminal conviction. Id. at 328-332. To qualify as an excessive
fine under the Clause, the amount of the forfeiture had to be grossly disproportionate to the gravity
of the criminal offense. Id. at 337. The Court stated that the defendant was merely guilty of a
reporting offense, as it was permissible to transfer the money so long as it was reported and there
was no connection to other illegal activities. It also looked to the Federal Sentencing Guidelines for
guidance in determining the culpability associated with a violation of the reporting statute, and
found it relevant that the maximum authorized fine was $5000, with a maximum sentence of six
months. Id. These considerations “confirm[ed] a minimal level of culpability.” Id. at 337-38.
Similarly, the defendant did not cause significant harm, as there was no fraud committed on the
United States, and no loss caused to the public fisc. Id. at 339. For these reasons, the Court agreed
with the lower courts that full forfeiture would have been grossly disproportionate to the gravity of
the offense. Id. at 339-340.
         We cannot say on appeal that the district court committed plain error by ordering forfeiture
of the entire $24,000, even though Bajakajian would have supported an excessive fines argument
if Ely were to have argued the issue below. Had Ely raised an excessive fines objection in the
district court, he would have been entitled to an assessment of whether the forfeiture was grossly
disproportionate to the gravity of his offense, in light of factors including the nature of the offense,
the connection to other illegal activities, the source and likely use of the funds, whether his conduct
fit into the class the statute was designed to cover (money launderers, tax evaders, terrorism
financiers, or drug traffickers), and the potential fine under the advisory guideline range. United
States v. Carpenter, 317 F.3d 618, 627-628 (6th Cir. 2003), vacated on other grounds, reinstated
360 F.3d 591 (6th Cir. 2004).
         Even if the district court erred in not analyzing whether the forfeiture was an excessive fine,
it is neither obvious nor clear on appeal that the amount here was grossly disproportionate to Ely’s

         2
            This statute included a forfeiture provision that was a precursor of the present version of 31 U.S.C. § 5332.
The statutory language was modified as part of the USA PATRIOT Act in 2001, by moving the forfeiture provision from
18 U.S.C. § 982 (the statute authorizing the forfeiture in Bajakajian) to 31 U.S.C. § 5332 (the statute authorizing Ely’s
forfeiture). The government advances this modification as a basis for us to find Bajakajian inapplicable. However, the
forfeiture language of the two provisions is virtually identical, and even if Congress could circumvent the Eighth
Amendment’s limitations on excessive fines by modifying a statute, which would make little sense, cutting and pasting
a provision of the United States Code from one chapter to another cannot be viewed as a meaningful change.
No. 06-5464           United States v. Ely                                                       Page 4

culpability in light of the factors that are relevant to examining the excessiveness of a fine.
Specifically, the amount of cash subject to forfeiture is less than one-tenth of the amount at stake
in Bajakajian. Further, Ely’s potential fine under the now-advisory Sentencing Guidelines was
$30,000, as compared to $5000 in Bajakajian. Thus, Ely’s forfeiture is within his potential fine
range under the Guidelines, whereas the defendant in Bajakajian stood to forfeit more than seventy
times the amount of his maximum fine under the Guidelines. The forfeiture amount here is also well
within the statutory maximum fine of $250,000 — another of the several relevant factors that can
be considered in assessing gravity of the offense. Carpenter, 317 F.3d at 627. (“While the
[Bajakajian] Court noted that authorized penalties are relevant, they are but one of several factors
to consider in assessing the overall gravity of the offense.”). Although Ely may have benefitted from
a more fact-specific inquiry had he raised this issue in the district court, we cannot say at this
juncture that a plain error was made in this case based on our rough comparison between the facts
here and those in Bajakajian.
                                                  III.
         Ely also appeals his sentence, claiming that the district court did not properly balance
relevant factors in determining the sentence, resulting in an unreasonable sentence under 18 U.S.C.
§ 3553(a). Under the Supreme Court’s decision in United States v. Booker, 543 U.S. 220 (2005),
a district court is required to consult the sentencing range under the Federal Sentencing Guidelines
for advisory purposes only. United States v. McBride, 434 F.3d 470, 476 (6th Cir. 2006). The range
is then treated as “just one of the numerous factors that a district court must consider when
sentencing a defendant,” and the district court must also address the other factors provided for in
section 3553(a). Id. Section 3553(a) also requires the district court to impose a sentence that is
“sufficient, but not greater than necessary,” to advance the factors reflected in the statute. In this
case, the district court addressed Ely’s guideline range, which was determined without objection
from Ely to be ten to sixteen months, selected the very bottom sentence from that range, and allowed
for half of the sentence to be served in home detention under U.S.S.G. § 5C1.1(c), providing five
months imprisonment and five months of home detention.
         We review Ely’s sentence for reasonableness. Booker, 543 U.S. at 260-61. While a sentence
that is within the advisory guideline range, like Ely’s, is entitled to a presumption of reasonableness,
the record must still reflect that the district court considered the relevant sentencing factors provided
in section 3553(a). United States v. Foreman, 436 F.3d 638, 644 (6th Cir. 2006) (“A sentence within
the Guidelines carries with it no implication that the district court considered the 3553(a) factors if
it is not clear from the record.”). Specifically, “[w]here a defendant raises a particular argument in
seeking a lower sentence, the record must reflect both that the district judge considered the
defendant’s argument and that the judge explained the basis for rejecting it.” United States v.
Richardson, 437 F.3d 550, 554 (6th Cir. 2006). This requirement “assures not only that the
defendant can understand the basis for the particular sentence but also that the reviewing court can
intelligently determine whether the specific sentence is indeed reasonable.” Id.
         Ely concedes that the district court considered the relevant factors from section 3553(a), and
our review of the record confirms as much. Specifically, the district court discussed extensively the
nature and circumstances of the offense, and the need to promote respect for the law, noting that
Ely’s violation was deliberate and that the failure to report the funds was a “serious offense.” The
court also addressed the need for deterrence, stating that Ely refused to concede any wrongdoing,
and could thus be considered a likely repeat offender. The district court also addressed the need to
protect the public, explaining that although Ely did not represent a security threat himself, he created
a distraction in an airport, and willfully violated a statute that is designed to detect and prevent the
funding of terrorism as well as other serious crimes. The district court also addressed the need to
provide educational or vocational training for the defendant and the benefit of incarceration. The
district court went on to consider the advisory guidelines sentence, and subsequently addressed
No. 06-5464           United States v. Ely                                                      Page 5

alternative available sentences and the need to avoid sentencing disparities, the need for restitution,
Ely’s familial responsibilities and military record, and Ely’s financial situation.
         Given the thoroughness of the district court’s consideration of the sentencing factors, Ely
does not identify any argument that he raised and the district court failed to address, but instead asks
us to balance the factors differently than the district court did. This is simply beyond the scope of
our appellate review, which looks to whether the sentence is reasonable, as opposed to whether in
the first instance we would have imposed the same sentence. Because the district court considered
all the relevant sentencing factors, and imposed a sentence of a reasonable length, we affirm the
sentence here.
                                                  IV.
       For the reasons discussed above, we affirm Ely’s sentence and the full forfeiture of the
currency he failed to report.