Court Opinion

ID: 9495392
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:01:49.2373+00
Date Added: 2024-06-11T17:56:59.780827
License: Public Domain

HAMILTON, Senior Circuit Judge,
dissenting:
I fully agree with the majority opinion’s holding that a government’s right to collect taxes based upon its revenue laws is a sufficient property right for purposes of the federal wire fraud statute, 18 U.S.C. § 1343. Ante at 295. However, I sharply disagree with the majority opinion’s holding “that a scheme to defraud a foreign government of tax revenues is not cognizable under the [federal] wire fraud statute.” Ante at 297. Thus, on this second point, I respectfully dissent.
As the majority opinion acknowledges, “[t]he revenue rule is a ‘longstanding common law doctrine providing that courts of one sovereign will not enforce final tax judgments or unadjudicated tax claims of other sovereigns.’ ” Ante at 296 (quoting Attorney Gen. of Canada v. R.J. Reynolds Tobacco Holdings, Inc., 268 F.3d 103, 109 (2d Cir.2001)). The majority candidly admits that “this case ‘does not require us to enforce a foreign tax judgment as such....’” Id. (quoting United States v. Boots, 80 F.3d 580, 587 (1st Cir.1996)). However, the majority opinion goes on to hold that the common law revenue rule bars the appellants’ prosecution for the multiple federal wire fraud violations as charged in their indictment because such prosecution “ ‘amountfs] functionally to penal enforcement of Canadian customs and tax laws.’ ” Id. (quoting Boots, 80 F.3d at 587). This holding by the majority rests upon flawed premises and is at odds with Supreme Court precedent. Accordingly, I am constrained to dissent.
Critically, prosecution of the appellants in this case for multiple violations of the federal wire fraud statute, 18 U.S.C. § 1343, does nothing civilly or criminally to enforce any tax judgments or claims that Canada or the Province of Ontario has or will obtain against the appellants based upon the appellants’ conduct in this case. Rather, prosecution of the appellants enforces a criminal statute enacted by the United States Congress and contained in the United States Code that plainly prohibits the very conduct in which the appellants engaged — i.e., the use of wire communications in the United States, in interstate or foreign commerce, for the purpose of executing a scheme or artifice to defraud another of its property. Such enforcement has the singular goal of vindicating the intended purpose of the federal wire fraud statute “to prevent the use of [our telecommunication systems] in furtherance of fraudulent enterprises.” United States v. Trafilo, 130 F.3d 547, 552 (2d Cir.1997) (internal quotation marks omitted) (alteration in original). Here, the fact that the property at issue in the appellants’ wire fraud scheme belonged to foreign governments by virtue of those governments’ respective revenue laws is merely incidental to the application of the federal wire fraud statute. Id. (federal wire fraud statute proscribes use of telecommunication systems of the United States in furtherance of scheme whereby one intends to defraud another of property, and identity and location of victim are irrelevant). In short, the common law revenue rule does not require that we reverse the appellants’ convictions and remand with instructions that the indictment be dismissed. Id. at 551 (“The [federal wire fraud] statute neither expressly, nor impliedly, precludes the prosecution of a scheme to defraud a foreign government of tax revenue, and the common law revenue rule ... provides no justification for departing from the plain meaning of the statute.”).
*300The majority holding is also at odds with Supreme Court precedent holding that federal courts are not free to alter the plain language of a federal statute as a matter of policy. See Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 108, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991) (“Courts do not, of course, have free rein to impose [common law] rules of preclusion, as a matter of policy, when the interpretation of a statute is at hand.”). Admittedly, “where a common-law principle is well established ... the courts may take it as given that Congress has legislated with an expectation that the principle will apply except when a statutory purpose to the contrary is evident.” Id. (internal quotation marks and citations omitted). However, such is definitely not the situation here. There is simply no basis on which to reasonably conclude that prior to Congress’ enactment of the federal wire fraud statute on July 16, 1952, well established common law provided that the courts of one sovereign would not criminally prosecute a person who devised or intended to devise a wire fraud scheme to defraud a foreign sovereign of its property rights when such property rights are in the nature of accrued tax revenue. Accordingly, the majority opinion’s holding that “a scheme to defraud a foreign government of tax revenues is not cognizable under the [federal] wire fraud statute,” ante at 298, is purely an imposition of its own expanded version of the common law revenue rule on the federal wire fraud statute as a matter of judicial policy. As such, the majority opinion does nothing less than judicially rewrite the plain language of the wire fraud statute so that it no longer prohibits a person from devising or intending to devise .a wire fraud scheme to defraud a foreign sovereign of its property rights when such property rights are in the nature of accrued tax revenues. Because federal courts have no authority to engage in such an exercise, I cannot agree with the majority opinion. I would affirm the appellants’ convictions across the board.