U.S. v. Yuzary, 285

• Decision Date: 01 May 1995
• Docket Number: No. 285,D,285
• Citation: 55 F.3d 47
• Parties: UNITED STATES of America, Appellee, v. Haim YUZARY, Defendant-Appellant. ocket 94-1137.
• Court: U.S. Court of Appeals — Second Circuit

Page 47

55 F.3d 47

UNITED STATES of America, Appellee, v. Haim YUZARY, Defendant-Appellant.

No. 285, Docket 94-1137.

United States Court of Appeals Second Circuit.

Argued Nov. 2, 1994.

Decided May 1, 1995.

Jane Simpkin Smith, New York City (Larry J. Silverman, New York City, of counsel), for defendant-appellant.

Leonard Lato, Asst. U.S. Atty., E.D.N.Y., Brooklyn, NY (Zachary W. Carter, U.S. Atty., Peter A. Norling, Asst. U.S. Atty., Brooklyn, NY, of counsel), for appellee.

Before: MESKILL, WINTER, and MAHONEY, Circuit Judges.

MAHONEY, Circuit Judge:

Defendant-appellant Haim Yuzary appeals from a judgment entered March 9, 1994 in the United States District Court for the Eastern District of New York, Gregory W. Carman, Judge, ¹ that convicted Yuzary, after a jury trial, on both counts of an indictment that charged: (1) willful failure to file an accurate report of his transport of currency in excess of $10,000 out of the United States in violation of 31 U.S.C. Secs. 5316 ² and 5322, ³ and (2) making a false statement to a United States Customs Service ("Customs") inspector in violation of 18 U.S.C. Sec. 1001. ⁴

Both the inaccurate report and the false statement were embodied in a Customs Form 4790 in which Yuzary stated that he was transporting approximately $30,000 out of the United States, when in fact he had approximately $480,000 in his possession. On appeal, Yuzary principally argues that Form 4790 was not properly promulgated in accordance with the applicable provision of the Administrative Procedure Act (the "APA"), see 5 U.S.C. Sec. 553, and that this deficiency invalidates both counts of conviction.

We affirm the judgment of the district court.

Background

On November 7, 1991, at approximately 11:00 p.m., Yuzary attempted to board Air Ecuatoriana Flight 051, bound for Panama from John F. Kennedy Airport ("Kennedy") in Queens, New York. He was carrying approximately $480,000 in cash. A Customs official interviewed Yuzary on the jetway between the terminal and the airplane, and explained that anyone carrying more than $10,000 in currency is required to provide a report on Customs Form 4790, which calls for pedigree information and a specification of the type and amount of currency being transported. Yuzary responded by presenting a letter addressed to Yuzary from his attorney, which asserted that Yuzary's company, More Money International Funding, was a "bank" that was exempted from the reporting requirement by 31 C.F.R. Secs. 103.11(b)(7) (defining "bank") and 103.23(c)(2). But see infra note 6 (Sec. 103.23(c)(2) makes exemption available only "in respect to currency or other monetary instruments mailed or shipped through the postal service or by common carrier ") (emphasis added).

Other Customs officials joined the encounter, and Yuzary ultimately yielded to their insistence that a Form 4790 report be filed. A Customs official filled in the initial pedigree information on the form, utilizing information from Yuzary's passport. Yuzary then filled in the information that he was carrying approximately $30,000 in currency, ⁵ and dated and signed the form. Further investigation revealed, however, that Yuzary was carrying $180,000 in the pockets of a vest that he was wearing, $300,000 in a satchel that he was carrying, and $793 in a billfold.

Yuzary was then arrested. He was subsequently indicted on the two counts previously summarized, and convicted on both counts after a jury trial. He was sentenced to one year of probation on each count, to run concurrently, a consecutive $500 fine on each count, and a $50 special assessment on each count.

This appeal followed.

Discussion

Yuzary contends on appeal that the primary crime charged, willful failure to file an "accurate report as defined in [31 U.S.C. Sec. 5316(b)(4) ]," is a "prosecutorial invention," because a duty to report the amount of currency transported out of the United States cannot be found in Sec. 5316 or its implementing regulations, but only in Form 4790, which was not promulgated in accordance with the requirements of the APA. Yuzary argues that consequently, (1) no criminal liability can lie under 31 U.S.C. Sec. 5322 for the willful violation of Sec. 5316 with which he is charged, and (2) his false statement to Customs did not pertain to a "matter within the jurisdiction of an[ ] ... agency of the United States" within the meaning of 18 U.S.C. Sec. 1001. He also argues that Form 4790 is ambiguous with respect to the requirement that the "amount" of transported currency be reported, and that the prosecutor's summation improperly attempted to lessen the government's burden of proof regarding Yuzary's claim that he acted on advice of counsel, rather than in willful violation of the law.

We will first address Yuzary's primary challenge to his conviction for filing a false Form 4790, and then summarily consider his other contentions.

A. The Form 4790 Requirement to Report the Amount of Transported Currency.

Section 5316 imposes a duty upon anyone transporting more than $10,000 into or out of the United States to file a report at a time and place prescribed by the Secretary of the Treasury. Sec. 5316(b), supra note 2. The report is to include, "to the extent the Secretary prescribes," id., among other items, "the amount and kind of monetary instruments transported." Sec. 5316(b)(4).

31 C.F.R. Sec. 103.23(a), implementing Sec. 5316(a)(1), requires anyone physically transporting more than $10,000 into or out of the United States to "make a report thereof." Section 103.23(b), implementing Sec. 5316(a)(2), requires anyone in the United States who receives from outside the United States more than $10,000 from such a transportation, with respect to which no report was filed under Sec. 103.23(a), to "make a report thereof, stating the amount, the date of receipt, the form of monetary instruments, and the person from whom received." ⁶ The regulations specifically state that reports required by Sec. 103.23 (inter alia ) must "be filed on forms prescribed by the Secretary," and that "[a]ll information called for in such forms shall be furnished." 31 C.F.R. Sec. 103.27(d). ⁷ The form upon which one reports under Sec. 103.23(a) and (b) is Form 4790, which requires the reporting person to state the "type and amount of currency/monetary instruments" transported and its "value in U.S. dollars." The time and place for filing Form 4790 are set forth in 31 C.F.R. Sec. 103.27(b)(3), which required Yuzary (absent any applicable exemption) to file the form with the Customs officials at Kennedy upon his departure for Panama.

Yuzary argues that the creation of Form 4790, which requires not only that each person transporting more than $10,000 "make a report thereof" but that the amount be disclosed, was "rule making" subject to the notice and comment procedures of the APA. See 5 U.S.C. Sec. 553. ⁸ To begin with, the APA definition of a "rule" is far from a model of clarity. See 5 U.S.C. Sec. 551(4) (defining "rule" as "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirement of an agency)"; I Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative Law Treatise Sec. 6.1, at 226 (3d ed. 1994) ("Treatise ") ("the APA definition of 'rule,' if read literally, is broad enough to encompass virtually any statement an agency might make in any context") (citing Center for Auto Safety v. National Highway Traffic Safety Admin., 710 F.2d 842, 846 (D.C.Cir.1983); Batterton v. Marshall, 648 F.2d 694, 700 (D.C.Cir.1980)).

By its terms, in any event, section 553 does not apply to "interpretative rules." See Sec. 553(b), supra note 8. The relevant distinction in this connection is between legislative and interpretative rules. As we recently explained:

There are two types of rules, legislative and interpretive. Legislative rules are those that "create new law, rights, or duties, in what amounts to a legislative act." White [v. Shalala, 7 F.3d 296, 303 (2d Cir.1993) ]. Legislative rules have the force of law. See Batterton v. Francis, 432 U.S. 416, 425 n. 9, 97 S.Ct. 2399, 2405 n. 9, 53 L.Ed.2d 448 (1977). Interpretive rules, on the other hand, do not create rights, but merely "clarify an existing statute or regulation." White, 7 F.3d at 303. Since they only clarify existing law, interpretive rules need not go through notice and comment. 5 U.S.C. Sec. 553(b)(3)(A). These rules do not have force of law, though they are entitled to deference from the courts. Batterton, 432 U.S. at 425 n. 9, 97 S.Ct. at 2405 n. 9.

New York City Employees' Retirement Sys. v. S.E.C., 45 F.3d 7, 12 (2d Cir.1995); see also Interport Pilots Agency, Inc. v. Sammis, 14 F.3d 133, 142 n. 2 (2d Cir.1994); I Treatise Sec. 6.3, at 233-34.

"[A]n agency has the power to issue binding legislative rules only if and to the extent Congress has authorized it to do so." I Treatise Sec. 6.3, at 234. In addition:

[A] legislative rule can impose distinct obligations on members of the public in addition to those imposed by statute, as long as the rule is within the scope of rulemaking authority conferred on the agency by statute. By contrast, an interpretative rule cannot impose obligations on citizens that exceed those fairly attributable to Congress through the process of statutory interpretation.

Id.

The regulations implementing the report of currency transports exceeding $10,000 mandated by 31 U.S.C. Sec. 5316, see supra note 2, clearly result from authority delegated by Congress and consequently constitute legislative rules. Thus, 31 C.F.R. Sec. 103.23(a) and (b), see supra note 6, which largely tracks the language of the statute, and the instructions given at 31 C.F.R. Sec. 103.27, see supra note 7, pertaining to how to obtain forms and when and where they should be filed, and specifying that all information called for therein...