U.S. v. Palzer

• Decision Date: 05 November 1984
• Docket Number: No. 83-5091,83-5091
• Citation: 745 F.2d 1350
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lewis PALZER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1350

745 F.2d 1350

UNITED STATES of America, Plaintiff-Appellee, v. Lewis PALZER, Defendant-Appellant.

No. 83-5091.

United States Court of Appeals Eleventh Circuit.

Nov. 5, 1984.

Joseph Beeler, Miami, Fla., for defendant-appellant.

Stanley Marcus, U.S. Atty., Chris K. Gober, Linda Collins-Hertz, David O. Leiwant, Asst. U.S. Attys., Miami, Fla., for plaintiff-appellee.

Appeals from the United States District Court for the Southern District of Florida.

Before HILL and ANDERSON, Circuit Judges, and TUTTLE, Senior Circuit judge.

R. LANIER ANDERSON, III, Circuit Judge:

Lewis B. Palzer appeals from his convictions under both counts of an indictment charging him with making a material false statement in a matter within the jurisdiction of the Customs Service, in violation of 18 U.S.C. Sec. 1001, and willfully failing to report that he was bringing more than $5,000 in currency into the United States, in violation of 31 U.S.C. Secs. 1101(a)(1)(B) & 1058; 31 C.F.R. Secs. 103.23, 103.49(a). ¹ The government concedes that reversible error occurred in the trial below relating to the polling of jurors. ² Palzer argues that a remand to the district court for retrial is inappropriate and we should order his acquittal because: (1) retrial on Count I (false statement) of the indictment would violate the Double Jeopardy Clause; and (2) retrial on Count II (failure to report importation of more than $5,000) of the indictment should be precluded because Customs Form 4790 that he failed to fill out represents an administrative rule that was improperly promulgated and therefore void, and thus it cannot be the basis of a criminal conviction against Palzer. ³ Both parties agree that Palzer's claims are properly before the court at this time and we will consider the merits of both. ⁴

FACTS

Palzer flew to Miami, Florida, from Grand Cayman, on August 4, 1982. En route to Miami, he was furnished with Customs Declaration Form 6059-B. In filling out that form, he checked the box marked "no" in response to question 11, which asked whether he or any member of his family was carrying over $5,000 in monetary instruments such as coins, currency, etc. ⁵

Upon disembarking from the plane at the Miami Airport, Palzer proceeded to the Customs enclosure for processing. Signs, posted throughout the Customs area, specifically inform travelers that if they are bringing more than $5,000 in monetary instruments into the country, they must fill out Customs Form 4790 and report the fact that they are carrying the money. ⁶ Prospero Ellis, a roving Customs Inspector on duty in the Miami Airport, spotted Palzer and thought that he might have something attached to his legs underneath his pants. Ellis asked Palzer to proceed to a second inspection line. Palzer became quite nervous, and during questioning tried to obstruct Ellis' view of the noticeable bulges in his pants legs and crotch area by covering them with his hands.

Palzer ultimately agreed to accompany Ellis and Customs Inspector Ryan to a separate room and consented to a pat-down search. After the search, Palzer stated: "What's the use," and produced $200,000 in stacks of $100 bills that he had taped to his legs and stuffed into his underwear. After some questioning on why he had failed to report the money, but without receiving instructions from the Customs officials that it was not illegal to transport more than $5,000 into the country, Palzer stated, according to the testimony of a Customs inspector: "What's the big deal anyway? ... [G]ive me the form right now and I'll fill it out."

Palzer was subsequently indicted, tried, and convicted on the two counts previously mentioned.

DISCUSSION

As noted, the government has conceded that a jury polling problem requires reversal of Palzer's convictions. Nevertheless we must consider Palzer's claim that he is entitled to acquittal on Count I, and as a matter of judicial economy we also consider Palzer's challenge to his conviction on Count II.

With regard to Count I of the indictment, we find that there was sufficient evidence introduced below to support Palzer's conviction for making a material false statement in a matter within the jurisdiction of the Customs Department of the United States. We therefore conclude that the government may, if it wishes, retry Palzer under Count I of the indictment.

With regard to Count II of the indictment and Palzer's claim that Customs Form 4790 was improperly promulgated, and therefore void, we find that the alleged invalidity of the form is not implicated in the offense charged under Count II. Because we conclude that the indictment sufficiently states a valid offense, the government is free to retry Palzer under this count.

A. Material False Statement Issue

Palzer argues that the government cannot retry him under Count I of the indictment because the evidence introduced below was insufficient to support his conviction. Although we agree with Palzer's assertion that double jeopardy would bar his reprosecution under Count I of the indictment if the government had failed to introduce sufficient evidence on this count in the trial below, see supra note 4, we conclude that the government's evidence was sufficient.

Count I of the indictment charged Palzer with making a material false statement on Customs Form 6059-B, when he answered "no" to question 11, and thus represented that he was not carrying more than $5,000. His actions were clearly in violation of the language of the statute charged in the indictment: 18 U.S.C. Sec. 1001. ⁷ However, Palzer argues that under judicial limitations on the operation of Sec. 1001, in particular the "exculpatory no" doctrine, he was entitled to a judgment of acquittal.

The "exculpatory no" doctrine, as it applies to prosecutions under 18 U.S.C. Sec. 1001, and in particular to a defendant's alleged false representation on Customs Form 6059-B, was well-explained by this court in United States v. Anderez, 661 F.2d 404 (5th Cir.1981) (Unit B): ⁸

The exculpatory no doctrine developed because this court believed that Congress intended section 1001 to punish only positive false statements that would pervert governmental functions. See Paternostro v. United States, 311 F.2d 298, 201-095 (5th Cir.1962). In addition, this court was motivated by a "latent distaste for an application of the statute that is uncomfortably close to the Fifth Amendment." United States v. Lambert, 501 F.2d 943, 946 n. 4 (5th Cir.1974). Consequently, we have held that section 1001 may not be used to punish people who make negative false statements to government investigators in an effort to exculpate themselves from an act they believe to be illegal. This doctrine was applied to the fact pattern present in this case in Schnaiderman [United States v. Schnaiderman, 568 F.2d 1208 (5th Cir.1978) ] and Granda [United States v. Granda, 565 F.2d 922 (5th Cir.1978) ]. In both of those cases we held that, unless the individual knows it is permissible to bring more than $5,000 into the country, a lie to customs agents to avoid expected retribution under currency laws will not lead to section 1001 punishment. See also United States v. Warren, 612 F.2d 887, 889-90 (5th Cir.) (en banc), cert. denied, 446 U.S. 956, 100 S.Ct. 2928, 64 L.Ed.2d 815 (1980). Unless customs officials disabuse travelers of the belief that bringing currency into the country is illegal, solicitude for fifth amendment values prevents us from attaching section 1001 liability to this sort of conduct. E.g., United States v. Schnaiderman, 568 F.2d at 1214 & n. 12.

Id. at 409.

In this context, the "exculpatory no" doctrine creates an additional element of the government's case under Sec. 1001; the government must show that the defendant knew that it was permissible or legal to bring more than $5,000 in currency into the country before a prosecution for a defendant's false representation that he was not carrying more than $5,000 can be sustained. In the posture of the instant case, we must determine whether the government offered sufficient evidence from which a reasonable juror could have concluded that Palzer knew it was not illegal to transport more than $5,000 into the country. ⁹ Pursuant to this method of review, we view all of the evidence in the light most favorable to the government. United States v. Bell, 678 F.2d 547, 549 (5th Cir.) (Unit B en banc), aff'd on other grounds, 462 U.S. 356, 103 S.Ct. 2398, 76 L.Ed.2d 638 (1983).

The most persuasive proof on the issue of the defendant's knowledge is the type of direct evidence involved in Anderez. In Anderez, the defendant was expressly told by Customs officials that it was not illegal to carry more than $5,000 into the country, but that carrying that amount or greater required him to fill out additional forms. 661 F.2d at 408-09. ¹⁰ Similarly, a modified version of the form that Palzer filled out states expressly in question 11 that it is not illegal to carry more than $5,000 into the country. See supra note 5. Proof that the false statement occurred on the modified form would directly support a finding on the defendant's knowledge. But the government is not limited to these direct means of proof in meeting its burden on the "exculpatory no" doctrine. Circumstantial and indirect proof also can support a finding that the defendant knew it was not illegal to transport more than $5,000 into the country. Cf. United States v. Satterfield, 644 F.2d 1092, 1094-95 (5th Cir.1981) (Unit B) ¹¹ (in prosecution under Sec. 1001 for falsely representing to Customs officer that he was not transporting more than $5,000, defendant argued that he had no knowledge of the currency reporting requirement; the court held that government's proof that appellant had gained knowledge eight months previously when informed of the requirement by a Customs officer during the prior entry into the country was sufficient circumstantial evidence of defendant's knowledge to support conviction).

From the evidence...