U.S. v. Tatoyan

Decision Date30 January 2007
Docket NumberNo. 05-50784.,No. 05-50783.,05-50783.,05-50784.
Citation474 F.3d 1174
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Krikor Baghdassar TATOYAN, a/k/a Krikor Tatoyan, Defendant-Appellant. United States of America, Plaintiff-Appellee, v. Zenda Bedros Tatoyan, a/k/a Zenda Tatoyan, Defendant-Appellant.
CourtU.S. Court of Appeals — Ninth Circuit

Appeal from the United States District Court for the Central District of California; Stephen V. Wilson, District Judge, Presiding. D.C. Nos. CR-03-00961-SVW-01, CR-03-00961-SVW-02.

Before CORNELIA G. KENNEDY,* CYNTHIA HOLCOMB HALL, and MICHAEL DALY HAWKINS, Circuit Judges.

HAWKINS, Circuit Judge.

We examine the long-standing requirements surrounding the personal export of cash from the United States, the more recently enacted bulk cash smuggling prohibitions, and the ever-elusive requirement of willfulness. Here, as in many other areas, honesty remains the best policy.

FACTS AND PROCEDURAL HISTORY

As they were about to board a flight to Paris at Los Angeles International Airport, Krikor and Zenda Tatoyan ("the Tatoyans") were stopped by United States Customs Inspector Chung J. Lou ("Inspector Lou"), who was conducting currency enforcement examinations of passengers on that flight. At the time, Krikor had $8,000 cash in his pants pocket and $17,601 cash in two pouches hanging around his neck underneath his sweater, while Zenda had $10,000 cash in a plastic bag in her purse and $43,717 cash in various pouches in her purse. Although Inspector Lou did not follow, to the letter, the Customs Service's procedures for conducting currency examinations when he examined the Tatoyans,1 he did inform them that there was no law against taking money out of the United States but that, if they were carrying more than $10,000, they must declare it and file a form with the Customs Service. He also informed them that there would be no taxes or penalties on any money they declared.2

When Inspector Lou asked the Tatoyans how much money they were carrying, Krikor responded that he was carrying $8,000 and Zenda said she was carrying exactly $10,000. Although, technically, a person need not fill out Customs Form 4790 unless carrying more than $10,000, Inspector Lou nonetheless asked Zenda to move to a nearby table and complete this form. On the form—which Zenda signed and Inspector Lou explained in detail—Zenda declared that she was carrying only $10,000.

Asked to produce the money, Zenda pulled a plastic bag from her purse that contained a bundle of exactly $10,000 cash. A subsequent search of the Tatoyans revealed the additional $43,717 Zenda was carrying, as well as the $8,000 in Krikor's pants pocket and the $17,601 in his under-sweater pouches. When asked why they had responded the way they did when asked about the money, Krikor explained that the inspector had been talking quickly and that he did not want other passengers to hear how much money he and his wife were carrying. Zenda added that "people just told her to write $10,000." Interviewed separately, both Tatoyans said the funds were destined for Krikor's uncle in Iraq who needed financial help. The government presented no evidence at trial to contradict this or to establish that the funds were related to any illicit activity.

As a result of these events, the Tatoyans were each charged with conspiracy, failure to report an attempted transportation of over $10,000 out of the United States, bulk cash smuggling, and making a false statement to a government official.3 On October 9, 2003, the Tatoyans agreed to a forfeiture settlement with the government under which $39,659—one half of the total funds—were administratively forfeited. The Tatoyans were later convicted by a jury of all counts and were each sentenced to pay a $100,000 fine, serve three years probation, perform 360 hours of community service, and pay a $400 special assessment.

Before trial, the district court granted the government's motion to exclude evidence regarding the apparently innocent purpose of the smuggled funds. The court also declined to adopt the Tatoyans' proposed jury instructions with regard to bulk cash smuggling under 31 U.S.C. § 5332 and making false statements under 18 U.S.C. § 1001. After sentencing, the court denied the Tatoyans' Motion for Judgment of Acquittal or for a New Trial. The Tatoyans now appeal their convictions, sentences, and the denial of their post-trial motion.

DISCUSSION
I. Sufficiency of the Evidence

The Tatoyans first argue that the evidence presented at trial was insufficient to support their currency reporting and bulk cash smuggling convictions under 31 U.S.C. §§ 5322(a) (requiring a "willful" violation of the currency reporting requirement) and 5332(a)(1) (requiring an "intent to evade" the currency reporting requirement) because Inspector Lou failed to follow the Customs Service's internal procedures for apprising travelers of the currency reporting laws.

A district court's determination that sufficient evidence supports a conviction is reviewed de novo. United States v. Weber, 320 F.3d 1047, 1050 (9th Cir.2003). "There is sufficient evidence to support a conviction if, viewing the evidence in the light most favorable to the government, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Id.

Under the currency reporting statutes, a defendant acts "willfully" if he has "knowledge of the reporting requirement" and a "purpose to disobey the law." Ratzlaf v. United States, 510 U.S. 135, 141, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994). Although Inspector Lou did not follow the protocol of presenting the Tatoyans with form CP 503—which might have more clearly established that they had "knowledge of the reporting requirement," id. — a rational fact-finder still could have concluded that the Tatoyans had actual knowledge of the requirement because Inspector Lou repeatedly explained it to them orally and because Customs Form 4790 (which the Tatoyans were given), as well as placards posted around the airport and warnings in the Tatoyans' passports, detailed the requirement in writing. See United States v. Gomez-Osorio, 957 F.2d 636, 640-41 (9th Cir.1992); United States v. Alzate-Restreppo, 890 F.2d 1061, 1064 (9th Cir.1989); United States v. Rodriguez, 592 F.2d 553, 557 (9th Cir.1979). A rational fact-finder also could have concluded that the Tatoyans had a "purpose to disobey the law," Ratzlaf, 510 U.S. at 141, 114 S.Ct. 655, based on their misrepresentations both to Inspector Lou and on Form 4790, as well as their careful concealment of the exact amount of money they failed to report.

These conclusions are unaffected by the argument that the currency examination procedures Inspector Lou failed to follow were "mandatory" according to the Customs Service's internal policies.4 Compliance with these internal agency regulations is not "mandated by the Constitution or federal law," see United States v. Caceres, 440 U.S. 741, 749, 99 S.Ct. 1465, 59 L.Ed.2d 733 (1979),5 and, therefore, it is not the province of this court to penalize the government for non-compliance. Cf. id. at 749-50, 99 S.Ct. 1465 (tape recording admissible even though procured in violation of "mandatory" IRS procedures); United States v. Hinton, 222 F.3d 664, 674-75 (9th Cir.2000) (package contents admissible even though postal service procedures not followed); United States v. Ani, 138 F.3d 390, 392 (9th Cir.1998) (package contents admissible even though customs regulation violated). Indeed, to hold otherwise would be to discourage the Customs Service from promulgating internal guidelines that, in general, provide travelers with important information to help them avoid inadvertent customs violations. Cf. Caceres, 440 U.S. at 755-56, 99 S.Ct. 1465 ("[A] rigid application of an exclusionary rule to every regulatory violation could have a serious deterrent impact on the formulation of additional standards to govern prosecutorial and police procedures.").

Therefore, Inspector Lou's failure to follow the Customs Service's internal procedures neither violated due process under Caceres, 440 U.S. at 749, 99 S.Ct. 1465, nor warranted an automatic finding of insufficient knowledge under Ratzlaf, 510 U.S. at 141, 114 S.Ct. 655. His actions merely made it more difficult—though, as evidenced by this case, not impossible—for the government to prove "actual knowledge."

II. Exclusion of Evidence

The Tatoyans next argue that the district court abused its discretion when, on the grounds of irrelevancy, it refused to allow the Tatoyans to present evidence of the apparently legitimate source and benevolent purpose of the confiscated funds. The Tatoyans contend that evidence showing that they were transporting money for an innocent reason— and not as part of their involvement in an illicit activity such as terrorism, money laundering, or drug dealing—would tend to show that they lacked the criminal culpability necessary for conviction of the specific intent crimes of failure to report and bulk cash smuggling. "We review a district court's ruling on the relevance of evidence for an abuse of discretion." United States v. Rubio-Topete, 999 F.2d 1334, 1338 (9th Cir.1993).

As explained above, a defendant need only have "knowledge of the reporting requirement" and "a purpose to disobey the law" to be found guilty of willfully violating § 5316, Ratzlaf, 510 U.S. at 141, 114 S.Ct. 655, and need only have the "intent" to violate § 5316 to be guilty of bulk cash smuggling. Such specific intent—by whatever name—"does not require evil intent, but only that the defendant act `deliberately and with knowledge.'" United States v. Heuer, 4 F.3d 723, 732 (9th Cir.1993) (quoting Hirsch v. INS, 308 F.2d 562,...

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