U.S. v. $359,500 in U.S. Currency, 827

Decision Date08 September 1987
Docket NumberNo. 827,D,827
Citation828 F.2d 930
PartiesUNITED STATES of America, Plaintiff-Appellant, v. $359,500 IN UNITED STATES CURRENCY, Defendant, Benedetto Romano, Claimant-Appellee. ocket 86-6237.
CourtU.S. Court of Appeals — Second Circuit

Frank J. Clark, III, Asst. U.S. Atty., W.D.N.Y. (Roger P. Williams, U.S. Atty., W.D.N.Y., of counsel), for plaintiff-appellant.

Murray Appleman, New York City, for claimant-appellee.

Before FEINBERG, Chief Judge, and VAN GRAAFEILAND and PRATT, Circuit Judges.

GEORGE C. PRATT, Circuit Judge:

The United States appeals from a judgment of the United States District Court for the Western District of New York, John T. Curtin, Chief Judge, which denied the government's petition seeking civil forfeiture of $359,500 in United States currency under 31 U.S.C. Sec. 5317, and ordered that the currency be returned to the claimant, Benedetto Romano. The currency had been seized from Romano by United States customs officials because he had failed to report it before he departed from the United States.

Judge Curtin held that forfeiture was not authorized in this case because Romano did not have actual knowledge of the currency reporting provision of 31 U.S.C. Sec. 5316(a). As an alternative holding, Judge Curtin found that the government's failure to provide some form of notice of the reporting requirement violated Romano's due process rights.

We hold that the district court erred on the statutory construction issue and that the statute does not require knowledge of the currency reporting requirement as a condition of forfeiture. On the due process issue, we conclude that the court should have considered whether Romano could be charged with constructive knowledge of the currency reporting requirement, thus eliminating the need, at this juncture, to decide whether enactment of Sec. 5316 alone provided Romano with notice sufficient to

satisfy due process. Accordingly, we remand to the district court for a determination of whether the notice required by due process could be satisfied by charging Romano, under the facts and circumstances of this particular case, with constructive knowledge of the currency reporting requirement.

BACKGROUND

On November 13, 1983, Romano and his wife drove their car from Buffalo, New York, across the Peace Bridge toward Fort Erie, Ontario, Canada. Motorists desiring to cross the Peace Bridge from Buffalo must first pass through a toll booth to pay a fee, but they do not encounter any customs or immigration checkpoint until they enter Canada on the far side of the bridge. The parties stipulated below that there were no signs or notices posted on or near the bridge informing motorists of the currency reporting requirement. There was a notice posted in the nearby administrative office of the United States customs service, but a departing motorist ordinarily would have no occasion to enter that office.

When he reached the Canadian side of the bridge, Romano was questioned by a Canadian customs officer and then referred to a secondary inspection yard for further examination. There, Romano voluntarily complied with Canadian inspector Mehlenbacher's request that he open the trunk of his car. Inside were several bags that collectively contained a large sum of money. In response to Mehlenbacher's inquiry, Romano admitted that he had not declared the currency before leaving the United States. After consulting with his superior, Mehlenbacher directed Romano to return to the United States and immediately notified United States customs agents by telephone that Romano would be returning with a large quantity of cash.

Upon returning to the American side, Romano was stopped and questioned at the primary station, where he initially claimed to have $30,000 to $35,000, and, after further questioning, ultimately admitted to possessing more than $300,000. Romano then entered the administrative office and completed two forms: Form 4790, entitled "Report of International Transportation of Currency or Monetary Instruments", declaring that he was returning from Canada with $360,000, and Form 6059-B, a baggage declaration form, printed in Italian, on which Romano admitted that he held more than $5,000. When a records check disclosed that Romano had not filed a Form 4790 before leaving the United States earlier that day, the money was seized.

On December 28, 1983, Romano filed with the Secretary of the Treasury a petition for remission or mitigation of the forfeiture, stating that he had no prior knowledge of, and did not intend to violate, the currency reporting requirement, that his education was limited to the fifth grade in an Italian grammar school, and that he could "not read English to any great extent." Without any action by the secretary on that petition, the government filed a civil complaint on June 12, 1984, seeking forfeiture of the currency under Sec. 5317. Romano's answer included a counterclaim for return of the currency, repeating the allegations he had asserted in his petition for remission.

Romano moved for summary judgment, which Judge Curtin denied by order dated February 4, 1985. Therein Judge Curtin rejected Romano's argument that the phrase "knowingly transports" contained in 31 U.S.C. Sec. 5316(a) refers to knowledge of the reporting requirement, ruling that

the correct interpretation of the statute is that "knowingly" refers to the carrier's knowledge that he or she is in possession of more than $5,000 while traveling from a place in the United States to or through a place outside the United States.

Following a bench trial on May 10, 1985, the subsequent filings of briefs and proposed findings of fact, and additional briefing requested by the court on the due process issue, Judge Curtin issued his unpublished opinion on September 29, 1986. On the construction of the term "knowingly" in Sec. 5316(a), Judge Curtin reconsidered the conclusion he had reached in denying Romano's summary judgment motion and Alternatively, Judge Curtin ruled that "[e]ven if actual knowledge * * * is not required for a civil forfeiture, some notice, or opportunity to learn, must be provided." Because no form of notice had been given by the government, the district court held that forfeiture would violate due process. Judge Curtin rejected the government's contention that the civil forfeiture proceeding itself provides sufficient process, stating that once the money has been seized, formal notice and a hearing are of little value and "frequently not meaningful." After a violation has occurred "forfeiture is almost assured. * * * [T]he only meaningful notice * * * would be [that] given before the point of departure." The opinion briefly disposed of several other claims raised by Romano that were found to be "without merit".

persuaded by the analysis in an intervening opinion of the eleventh circuit, United States v. One (1) Lot of $24,900 in United States Currency, 770 F.2d 1530 (11th Cir.1985) [hereinafter United States v. $24,900 ], held that actual knowledge of the currency requirement by the person from whom the monetary instrument was seized is a necessary element of a civil forfeiture action under 31 U.S.C. Sec. 5317(b) (now Sec. 5317(c)). The court found that since Romano had no such knowledge, he did not violate the statute.

On appeal, the government argues that relevant statutory language and legislative history indicate that actual knowledge of the reporting requirement is necessary only for criminal violations, not for civil forfeiture. In addition, while conceding that posting notice on the Peace Bridge "would have been wise and desirable", the government contends that the constitution does not require such posting; rather, the government claims, congress's act of enactment provides adequate notice.

We agree with the government's suggested construction of Sec. 5316(a). We believe, however, that the suggestion that mere enactment of the currency reporting requirement provided Romano with adequate notice presents a grave constitutional question, but one that we need not decide now. Rather, because due process requirements could be satisfied if the government can show that, under the circumstances, Romano should reasonably have been aware of the likelihood of having to report the currency he endeavored to transport out of the country, a remand is appropriate.

DISCUSSION

In November 1983, Sec. 5316(a) provided in relevant part that a person who "knowingly * * * transports or has transported monetary instruments of more than $5,000 at one time * * * from a place in the United States to or through a place outside the United States" shall file a report of such transportation. In 1984 congress increased the dollar amount to $10,000. See Pub.L. 98-473, Title II, Sec. 901(c), Oct. 12, 1984, 98 Stat. 2135. If the report is not filed, "the instrument and any interest in property * * * traceable to the instrument" can be seized and forfeited to the government. 31 U.S.C. Sec. 5317(c) (formerly Sec. 5317(b)).

A. The statutory issue.

The issue whether the phrase "knowingly transports" as stated in Sec. 5316(a) requires actual knowledge of the reporting requirement as an element of civil forfeiture under Sec. 5317(c) is an issue of first impression in this circuit. See United States v. $26,660 in United States Currency, 777 F.2d 111, 112 (2d Cir.1985) (per curiam). The view of the majority of the courts that have considered the issue is that actual knowledge is not required for civil forfeiture. See United States v. Forty-Seven Thousand Nine Hundred Eighty Dollars ($47,980) in Canadian Currency, 804 F.2d 1085, 1090 (9th Cir.1986) [hereinafter United States v. $47,980]; United States v. $122,043.00 in United States Currency, 792 F.2d 1470, 1474 (9th Cir.1986) [hereinafter United States v. $122,043]; United States v. Twenty Thousand Seven Hundred Fifty-Seven Dollars and Eighty-Three Cents ($20,757.83) Canadian Currency,...

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