Aversa v. U.S.

Citation99 F.3d 1200
Decision Date08 May 1996
Docket NumberNo. 95-2216,95-2216
Parties-5372, 25 Media L. Rep. 1033 Daniel AVERSA, et al., Plaintiffs, Appellants, v. UNITED STATES of America, et al., Defendants, Appellees. . Heard
CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)

Francis G. Murphy, with whom Kathryn B. Johnston and Hall, Hess, Kenison, Stewart, Murphy & Keefe, P.A., Manchester, NH, were on brief, for appellants.

Richard A. Olderman, Attorney, with whom Barbara L. Herwig, Attorney, Civil Division, Department of Justice, Paul M. Gagnon, United States Attorney, and Frank W. Hunger, Assistant Attorney General, were on brief, for appellees.

Before LYNCH, Circuit Judge, and CAMPBELL and BOWNES, Senior Circuit Judges.

BOWNES, Senior Circuit Judge.

Daniel and Carla Aversa filed a civil action alleging that Patrick Walsh, an Assistant United States Attorney in the District of New Hampshire, and Kenneth Claunch, Chief of the Criminal Investigation Division of the Internal Revenue Service, falsely stated and implied to the local and national news media that Daniel Aversa was involved in laundering illegally-gotten money, tax evasion, drug trafficking and racketeering activity, and thus committed slander and other common law torts under New Hampshire law and deprived him of his right to liberty guaranteed by the Constitution of the United States. Senior District Judge Martin F. Loughlin, who presided over the related criminal case, found the statements to have been "totally false," "misleading," "outrageous," "self-serving" and "unfair." In this civil action, Magistrate Judge Lovegreen and District Judge Mary Lisi agreed with Judge Loughlin's condemnation, adding that the defendants' conduct showed "extraordinarily poor judgment" and was "lacking in professionalism." The district court, however, dismissed the Aversas' lawsuit, finding that Walsh and Claunch were absolutely immune from suit for the common law torts, and qualifiedly immune from suit for the constitutional tort.

The purpose of immunity--absolute or qualified--is not to protect erring federal officials from the consequences of their injurious acts, but to safeguard the public interest in having responsible governmental employees faithfully carry out their duties without fear of protracted litigation in unfounded damage suits. See Wyatt v. Cole, 504 U.S. 158, 167-68, 112 S.Ct. 1827, 1833, 118 L.Ed.2d 504 (1992); Westfall v. Erwin, 484 U.S. 292, 295, 108 S.Ct. 580, 583, 98 L.Ed.2d 619 (1988); Harlow v. Fitzgerald, 457 U.S. 800, 807, 102 S.Ct. 2727, 2732, 73 L.Ed.2d 396 (1982); Scheuer v. Rhodes, 416 U.S. 232, 241-42, 94 S.Ct. 1683, 1688-89, 40 L.Ed.2d 90 (1974); Barr v. Matteo, 360 U.S. 564, 565, 79 S.Ct. 1335, 1336, 3 L.Ed.2d 1434 (1959) (plurality opinion); Wood v. United States, 995 F.2d 1122, 1126 (1st Cir.1993); Buenrostro v. Collazo, 973 F.2d 39, 42 (1st Cir.1992). In obvious tension with that objective is that well-founded damage suits promote the public interest in compensating victims and deterring unlawful conduct. Harlow, 457 U.S. at 814, 819, 102 S.Ct. at 2736, 2738-39; Barr, 360 U.S. at 576, 79 S.Ct. at 1342.

The law of immunity seeks a balance between the evils inevitable in any available alternative. Harlow, 457 U.S. at 813, 102 S.Ct. at 2735-36; Wood, 995 F.2d at 1126. Thus, a federal employee who allegedly commits a common law tort will be absolutely immune from suit if he acted within the scope of his federal employment, 28 U.S.C. § 2679(b)(1), but the plaintiff can proceed against the government unless some exception to the Federal Tort Claims Act applies. And a federal official is qualifiedly immune from suit for an alleged constitutional tort if his "conduct [did] not violate clearly established ... constitutional rights of which a reasonable person would have known," Harlow, 457 U.S. at 818, 102 S.Ct. at 2738, even though his actions may have been "despicable and wrongful" in some more general sense. Souza v. Pina, 53 F.3d 423, 427 (1st Cir.1995).

Although we affirm, we believe that the false and misleading information allegedly disseminated to the press in Aversa's criminal case deserves more than condemnation, and therefore refer the matter to the appropriate disciplinary bodies.


Except where otherwise noted, the following facts are taken from Aversa's complaint. Daniel Aversa ("Aversa") and Vincent Mento ("Mento") were partners in a legitimate real estate business. 1 In January of 1989, they sold a parcel of land, splitting the proceeds. At the same time, Aversa was experiencing marital difficulties with his wife Carla. In order to conceal some of his assets from his wife in the event of a divorce, Aversa asked Mento if he could deposit his share of the proceeds, amounting to $55,000, into Mento's personal bank account. Mento agreed.

Both men were aware that domestic financial institutions were required to report currency transactions in excess of $10,000 to the Secretary of the Treasury, see 31 U.S.C. § 5313(a); 31 C.F.R. § 103.22(a)(1), and wished to avoid causing a Currency Transaction Report ("CTR") to be filed. Aversa therefore made a series of deposits into Mento's account in sums just under $10,000. 2 At the time, Aversa was unaware that structuring the transactions to avoid causing a CTR to be filed was a crime under federal law. See 31 U.S.C. § 5324(a).

In June of 1990, IRS agents contacted Aversa and informed him that he was under investigation for structuring deposits. He immediately met with Assistant United States Attorney Walsh, and without an attorney present, explained that he was hiding the money from his wife, that it was not derived from an illegal source, and that he did not know that structuring was illegal. Walsh told Aversa that he and Mento had been under investigation for some time and that he had no reason to believe the money was anything but "clean," but said that he did not need to prove that it was derived from an illegal source or that Aversa knew that structuring was illegal. Walsh told Aversa that there was no reason to seek counsel and encouraged him to plead guilty because all that was needed for a conviction was what Aversa had just told him. In a later meeting with Aversa's counsel, Walsh said that he previously had been successful in prosecuting individuals for structuring in Miami, but that this case would be his first involving "clean money," and he planned to use it to "set a precedent" and "educate the public about the currency transaction reporting requirements."

On June 28, 1990, Walsh obtained an indictment charging Aversa and Mento with conspiracy, structuring, and making false statements, and Aversa alone with attempting to cause a domestic financial institution to file a report containing a material omission or misstatement of fact. That same day, Walsh, Claunch, and the United States Attorney for the District of New Hampshire, Jeffrey R. Howard (with whom Aversa alleged Walsh and Claunch conspired but who was not joined as a defendant) issued a press release and held a press conference announcing to the local and national news media, which reported to the public, that Aversa and Mento had been arrested for money laundering. Walsh and Claunch knew that Aversa and Mento were not involved in laundering illegally-gotten money, or in drug trafficking, tax evasion or organized crime, but created the impression that they were. An article in the Boston Globe dated June 29, 1990, reported:

Walsh said money laundering is usually done for purposes of tax evasion, drug dealing or organized crime. He would not say if either of yesterday's indictments are related to these activities, but added after the news conference that "it would be a fair statement" to say authorities are looking into how [these] men amassed the sums of money involved.

Walsh also stated that Aversa faced up to forty years in prison and added that the investigation was continuing and more charges would be filed.

A front-page article in the Concord Monitor dated June 29, 1990 reported:

The indictments are a sign that prosecutors are serious about using the money laundering laws, a tool that allows them to charge people for handling money illegally without having to prove that the money was gained illegally, said Jeffrey Howard, U.S.A. attorney for New Hampshire.

"The indictments are important because they are examples of the commitment the I.R.S. has made ... to use the money laundering statutes in order to ferret out tax evasion, drug trafficking and other crimes," he said.

Prosecutors declined to say how Aversa and Mento got the money or why they believe the men tried to evade the currency laws.

Claunch stated at the press conference that "[t]hese cases represent the IRS's commitment to ferreting out money launderers," and that the IRS wanted "to send a message that money laundering is going to be detected, investigated and prosecuted to the full extent."

On October 10, 1990, after Judge Loughlin granted the government's motion in limine to preclude a defense based on ignorance of the anti-structuring law, Aversa pled guilty to structuring. The plea agreement stipulated:

1. The United States has no evidence that the currency involved in these transactions was obtained from an unlawful source.

2. The United States has no evidence that the defendant knew of the structuring provision, but states to the Court that such knowledge is not necessary to establish a violation of Section 5324.

Aversa reserved his right to appeal the issue of whether a conviction under 31 U.S.C. § 5324 required knowledge that structuring is illegal.

On October 17, 1990, following Mento's conviction, Walsh issued a press release in which he stated that the currency transaction reporting laws and the laws that prohibit structuring "were passed to assist in the investigation of related criminal conduct, such as narcotics trafficking, organized crime and racketeering activity and tax...

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