United States v. San Juan

• Decision Date: 29 December 1975
• Docket Number: Crim. No. 75-46.
• Parties: UNITED STATES of America v. Delia Aguilar SAN JUAN.
• Court: U.S. District Court — District of Vermont

405 F. Supp. 686

UNITED STATES of America v. Delia Aguilar SAN JUAN.

Crim. No. 75-46.

United States District Court, D. Vermont.

December 29, 1975.

COPYRIGHT MATERIAL OMITTED

David A. Reed, Asst. U. S. Atty., Rutland, Vt., for the Government.

Samuel Gruber, Gruber & Turkel, Stamford, Conn., and James W. Murdoch, Wool & Murdoch, Burlington, Vt., for defendant.

COFFRIN, District Judge.

This case raises questions regarding the constitutionality of the Bank Secrecy Act which were left unanswered by the Supreme Court in California Bankers Assn. v. Shultz, 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974). The Act (Pub.L. 91-508; 81 Stat. 1121), now codified principally in 31 U.S.C. §§ 1051, 1052, 1081-83, 1101-05, 1121, 1122, empowers the Secretary of the Treasury to promulgate regulations requiring record keeping and reporting of a wide range of domestic and foreign monetary transactions "where such reports or records have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings." 31 U.S.C. § 1051. Regarding the specific coverage of the Act, it is sufficient for purposes of this opinion to note that Title I and and the implementing regulations promulgated thereunder by the Secretary of the Treasury require banks and financial institutions to maintain records of the identities of their customers, to make micro-film copies of certain checks drawn on them, and to keep records of certain other items, while Title II of the Act and its implementing regulations require reports of certain domestic and foreign currency transactions. Shultz, supra at 30-41, 94 S.Ct. 1494. In this case we are concerned only with that portion of Title II and its implementing regulations which require persons who transport monetary instruments exceeding $5000 into or out of the United States to file reports with the Treasury Department, disclosing, inter alia, the amount of money transported, the name, address and business of the person for whom the money is being transported, and the identity, address and destination of the person transporting the money. 31 U.S.C. §§ 1101(a) and 1101(b); 31 C.F.R. §§ 103.23(a) and 103.25(b).¹

The defendant, Delia Aguilar San Juan, was charged by Information on October 22, 1975² with wilful failure to file the reports required in connection with her transportation of approximately $77,500 in cash from Canada to the United States on March 30, 1975 in violation of the above-named provisions. Criminal liability is sought to be imposed pursuant to 31 U.S.C. § 1058.³ Mrs. San Juan has moved to dismiss the information against her on the grounds that the reporting requirements violate her First Amendment right to freedom of association, her Fourth Amendment rights to freedom from unreasonable searches and seizures, and her Fifth Amendment privilege against self-incrimination.⁴ Counsel for both parties have filed memoranda of law, and a hearing was held on October 29, 1975.

The Court believes that the Supreme Court's decision in Shultz, supra at 59-63, 94 S.Ct. 1494, is entirely dispositive of defendant's Fourth Amendment claim, and further discussion of that issue is unwarranted. See also, Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925) and Almeida-Sanchez v. United States, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973).

The questions raised by defendant's First and Fifth Amendment claims, though raised in Shultz, were left unanswered by the Supreme Court's ruling in that case that a Fifth Amendment challenge to the Act by bank depositor plaintiffs was premature, Shultz, supra, 416 U.S. at 72-75, 94 S.Ct. 1494, and that the First Amendment challenge of the ACLU was speculative and hypothetical. Id. at 75-76, 94 S.Ct. 1494. In this case, however, defendant's First and Fifth Amendment claims arise in a factual context which is entirely different from that in Shultz.

Mrs. San Juan was the subject of a routine border search as a passenger on board a bus passing from Canada into the United States at Highgate Springs, Vermont. The primary search in the bus led to the discovery of brown paper bags in Mrs. San Juan's suitcase, and a follow-up search in the Inspection Station revealed that the paper bags contained approximately $77,500 in cash. Customs Inspectors explained to Mrs. San Juan that she was required by law to fill out a report concerning the money she was carrying into the United States.⁵ Mrs. San Juan apparently understood this explanation of the reporting requirement of 31 C.F.R. §§ 103.23(a) and 103.25(b), but chose not to fill out the form. Whatever her motives were at that time for refusing to comply with the reporting requirement, Mrs. San Juan's constitutional claims now stand as a direct challenge to her criminal prosecution, and we are therefore obliged to consider whether those claims have merit.

Defendant's Fifth Amendment claim calls into question the scope of governmental power to compel persons crossing our national border to file reports of information which might later be used as evidence against them or lead to evidence which could be used against them in criminal prosecutions. The Government contends that the reports required by 31 U.S.C. § 1101 and its implementing regulations give rise to only minimal hazards of incrimination and are within the scope of the so-called "required records exception" to the Fifth Amendment privilege, as it was first suggested in United States v. Sullivan, 274 U.S. 259, 47 S.Ct. 607, 71 L.Ed. 1037 (1927) and later clarified in Shapiro v. United States, 335 U.S. 1, 68 S.Ct. 1375, 92 L. Ed. 1787 (1948). The defendant claims that the required records doctrine is inapplicable to the challenged statute and regulations and that the privilege against self-incrimination bars the Government from compelling her to file reports which later might be used against her in a criminal proceeding. As authority for her claim, defendant refers to Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968); Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968), and Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968), cases which substantially limit the scope and meaning of the required records doctrine.

In order to resolve these conflicting claims, the Court must first determine whether or not compliance with the challenged reporting requirement actually exposed the defendant to "real and appreciable" dangers of incrimination. Brown v. Walker, 161 U.S. 591, 599, 16 S.Ct. 644, 40 L.Ed. 819 (1896). If no such danger existed, or if the dangers were merely "imaginary and unsubstantial," Ibid, the Fifth Amendment would offer no protection to defendant. As stated more recently by the Supreme Court: "In order to invoke the privilege it is necessary to show that the compelled disclosures will themselves confront the claimant with `substantial hazards of self-incrimination.'" California v. Byers, 402 U.S. 424, 429, 91 S.Ct. 1535, 1538, 29 L.Ed.2d 9 (1971).

At the outset, it must be observed that in comparison with reporting and registration requirements which have been held by the Supreme Court to violate the Fifth Amendment privilege, the challenged reporting requirement of the Bank Secrecy Act and Regulations exposes the persons it affects to a much lesser danger of self-incrimination. A review of the pertinent cases will illustrate this point.

Albertson v. SACB, 382 U.S. 70, 86 S. Ct. 194, 15 L.Ed.2d 165 (1965) was the first case to establish clear limits on government power to compel self-reporting of potentially incriminating activity. That power had earlier received Supreme Court sanction without clear limitations in United States v. Sullivan, 274 U.S. 259, 47 S.Ct. 607, 71 L.Ed. 1037 (1927) and Shapiro v. United States, 335 U.S. 1, 68 S.Ct. 1375, 92 L.Ed. 1787 (1948). In Sullivan, the court had held that the privilege against self-incrimination did not entitle a bootlegger to decline altogether to file an income tax return, even though specific questions in the return might call for disclosure of the illegal source of his income. In Shapiro the privilege was asserted against the record keeping requirements of the Emergency Price Control Act of 1942 which compelled businessmen during the war to preserve their business records for examination by the Office of Price Administration. The Court, enunciating the so-called "required records" doctrine, held that the privilege against self-incrimination was not available as to records which were "appropriate subjects of government regulation," were "ordinarily kept" by the person compelled to produce them, and had "public aspects." Shapiro, supra at 32-36, 68 S.Ct. 1375.

In Albertson, supra, the compelled disclosures were of a different nature. That case involved Fifth Amendment challenges to the registration requirements imposed upon Communists by the Subversive Activities Control Act of 1950. Compliance with those requirements constituted an admission of membership in the Communist Party and exposed the registrant to immediate prosecution under the membership clause of the Smith Act, 18 U.S.C. § 2385 (1964 ed.) and under § 4(a) of the Subversive Activities Control Act, 50 U.S.C. § 783(a) (1964 ed.), Albertson, supra, 382 U.S. at 77, 86 S.Ct. 194. Obviously, the dangers of incrimination created by the challenged requirements, compelling virtual admissions of criminal liability, were far greater than in Sullivan or Shapiro or in the case at hand. The Court in Albertson made the following comments by way of distinction:

In Sullivan the questions in the income tax return were neutral on their face and directed at the public at large, but here they are directed at a highly selective group inherently suspect of criminal activities. Petitioners' claims are not asserted in an essentially noncriminal and regulatory area of inquiry, but against an inquiry in an area permeated with criminal statutes, where response

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