510 U.S. 135 (1994), 92-1196, Ratzlaf v. United States

Docket Nº:Case No. 92-1196
Citation:510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615, 62 U.S.L.W. 4037
Party Name:RATZLAF et ux. v. UNITED STATES
Case Date:January 11, 1994
Court:United States Supreme Court
 
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Page 135

510 U.S. 135 (1994)

114 S.Ct. 655, 126 L.Ed.2d 615, 62 U.S.L.W. 4037

RATZLAF et ux.

v.

UNITED STATES

Case No. 92-1196

United States Supreme Court

January 11, 1994

Argued November 1, 1993

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

Syllabus

As here relevant, federal law requires a domestic bank involved in a cash transaction exceeding $10,000 to file a report with the Secretary of the Treasury, 31 U.S.C. § 5313(a), 31 CFR § 103.22(a); makes it illegal to "structure" a transaction— i. e., to break up a single transaction above the reporting threshold into two or more separate transactions—"for the purpose of evading the reporting requiremen[t]," 31 U.S.C. § 5324(3); and sets out criminal penalties for "[a] person willfully violating" the antistructuring provision, § 5322(a). After the judge at petitioner Waldemar Ratzlaf's trial on charges of violating §§ 5322(a) and 5324(3) instructed the jury that the Government had to prove both that the defendant knew of the § 5313(a) reporting obligation and that he attempted to evade that obligation, but did not have to prove that he knew the structuring in which he engaged was unlawful, Ratzlaf was convicted, fined, and sentenced to prison. In affirming, the Court of Appeals upheld the trial court's construction of the legislation.

Held:

To give effect to § 5322(a)'s "willfulness" requirement, the Government must prove that the defendant acted with knowledge that the structuring he or she undertook was unlawful, not simply that the defendant's purpose was to circumvent a bank's reporting obligation. Section 5324 itself forbids structuring with a "purpose of evading the [§ 5313(a)] reporting requirements," and the lower courts erred in treating the "willfulness" requirement essentially as words of no consequence. Viewing §§ 5322(a) and 5324(3) in light of the complex of provisions in which they are embedded, it is significant that the omnibus "willfulness" requirement, when applied to other provisions in the same statutory subchapter, consistently has been read by the Courts of Appeals to require both knowledge of the reporting requirement and a specific intent to commit the crime or to disobey the law. The "willfulness" requirement must be construed the same way each time it is called into play. Because currency structuring is not inevitably nefarious, this Court is unpersuaded by the United States' argument that structuring is so obviously "evil" or inherently "bad" that the "willfulness" requirement is satisfied irrespective of the defendant's knowledge of the illegality of structuring. The interpretation adopted in this case does not dishonor the venerable principle that ignorance of the law generally is no

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defense to a criminal charge, for Congress may decree otherwise in particular contexts, and has done so in the present instance. Pp. 140-149.

976 F.2d 1280, reversed and remanded.

Ginsburg, J., delivered the opinion of the Court, in which Stevens, Scalia, Kennedy, and Souter, JJ., joined. Blackmun, J., filed a dissenting opinion, in which Rehnquist, C. J., and O'Connor and Thomas, JJ., joined, post, p. 150.

Stephen Robert LaCheen argued the cause for petitioners. With him on the briefs were Anne M. Dixon, Peter Goldberger, Pamela A. Wilk, James H. Feldman, Jr., Kevin O'Connell, and Christopher H. Kent.

Paul J. Larkin, Jr., argued the cause for the United States. On the brief were Solicitor General Days, Acting Assistant Attorney General Keeney, Deputy Solicitor General Bryson, John F. Manning, and Richard A. Friedman. [*]

Justice Ginsburg delivered the opinion of the Court.

Federal law requires banks and other financial institutions to file reports with the Secretary of the Treasury whenever they are involved in a cash transaction that exceeds $10,000. 31 U.S.C. § 5313; 31 CFR § 103.22(a) (1993). It is illegal to "structure" transactions— i. e., to break up a single transaction above the reporting threshold into two or more separate transactions—for the purpose of evading a financial institution's reporting requirement. 31 U.S.C. § 5324. "A person willfully violating" this antistructuring provision is subject to criminal penalties. § 5322. This case presents a question on which Courts of Appeals have divided: Does a defendant's purpose to circumvent a bank's reporting obligation suffice to sustain a conviction for "willfully violating" the antistructuring provision?[1] We hold that the "willfulness"

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requirement mandates something more. To establish that a defendant "willfully violat[ed]" the antistructuring law, the Government must prove that the defendant acted with knowledge that his conduct was unlawful.

I

On the evening of October 20, 1988, defendant-petitioner Waldemar Ratzlaf ran up a debt of $160,000 playing blackjack at the High Sierra Casino in Reno, Nevada. The casino gave him one week to pay. On the due date, Ratzlaf returned to the casino with cash of $100,000 in hand. A casino official informed Ratzlaf that all transactions involving more than $10,000 in cash had to be reported to state and federal authorities. The official added that the casino could accept a cashier's check for the full amount due without triggering any reporting requirement. The casino helpfully placed a limousine at Ratzlaf's disposal, and assigned an employee to accompany him to banks in the vicinity. Informed that banks, too, are required to report cash transactions in excess of $10,000, Ratzlaf purchased cashier's checks, each for less than $10,000 and each from a different bank. He delivered these checks to the High Sierra Casino.

Based on this endeavor, Ratzlaf was charged with "structuring transactions" to evade the banks' obligation to report cash transactions exceeding $10,000; this conduct, the indictment alleged, violated 31 U.S.C. §§ 5322(a) and 5324(3). The trial judge instructed the jury that the Government had to prove defendant's knowledge of the banks' reporting obligation and his attempt to evade that obligation, but did not

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have to prove defendant knew the structuring was unlawful. Ratzlaf was convicted, fined, and sentenced to prison.[2]

Ratzlaf maintained on appeal that he could not be convicted of "willfully violating" the antistructuring law solely on the basis of his knowledge that a financial institution must report currency transactions in excess of $10,000 and his intention to avoid such reporting. To gain a conviction for "willful" conduct, he asserted, the Government must prove he was aware of the illegality of the "structuring" in which he engaged. The Ninth Circuit upheld the trial court's construction of the legislation and affirmed Ratzlaf's conviction. 976 F.2d 1280 (1992). We granted certiorari, 507 U.S. 1050(1993), and now conclude that, to give effect to the statutory "willfulness" specification, the Government had to prove Ratzlaf knew the structuring he undertook was unlawful. We therefore reverse the judgment of the Court of Appeals.

II

A

Congress enacted the Currency and Foreign Transactions Reporting Act (Bank Secrecy Act) in 1970, Pub. L. 91-2508, Tit. II, 84 Stat. 1118, in response to increasing use of banks and other institutions as financial intermediaries by persons engaged in criminal activity. The Act imposes a variety of reporting requirements on individuals and institutions regarding foreign and domestic financial transactions. See 31 U.S.C. §§ 5311-5325. The reporting requirement relevant here, § 5313(a), applies to domestic financial transactions. Section 5313(a) reads:

"When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of

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United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes. . . ."[3]

To deter circumvention of this reporting requirement, Congress enacted an antistructuring provision, 31 U.S.C. § 5324, as part of the Money Laundering Control Act of 1986, Pub. L. 99-570, Tit. I, Subtit. H, § 1354(a), 100 Stat. 3207-22.[4] Section 5324,[5] which Ratzlaf is charged with "willfully violating," reads:

"No person shall for the purpose of evading the reporting requirements of section 5313(a) with respect to such transaction—

. . . . .

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(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions."[6]

The criminal enforcement provision at issue, 31 U.S.C. § 5322(a), sets out penalties for "[a] person willfully violating," inter alia, the antistructuring provision. Section 5322(a) reads:

"A person willfully violating this subchapter [31 U.S.C. § 5311 et seq. ] or a regulation prescribed under this subchapter (except section 5315 of this title or a regulation prescribed under section 5315) shall be fined not more than $250,000, or [imprisoned for] not more than five years, or both."

B

Section 5324 forbids structuring transactions with a "purpose of evading the reporting requirements of section 5313(a)." Ratzlaf admits that he structured cash transactions, and that he did so with knowledge of, and a purpose to avoid, the banks' duty to report currency transactions in excess of $10,000. The statutory formulation (§ 5322) under which Ratzlaf was prosecuted, however, calls for proof of "willful[ness]" on the actor's part. The trial judge in Ratzlaf's case, with the...

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