Opinion
02-CV-0339E(F)
November 19, 2003
MEMORANDUM and ORDER
This decision may be cited in whole or in any part.
The United States filed a Complaint for Forfeiture on May 6, 2002, seeking forfeiture of $74,220 in U.S. currency pursuant to 31 U.S.C. § 5317(c)(2) and 5332(c). The United States moved for summary judgment on April 7, 2003, which motion was argued and submitted on June 20, 2003. For the reasons set forth below, such motion for summary judgment will be denied.
Rule 56(c) of the Federal Rules of Civil Procedure ("FRCvP") states that summary judgment may be granted only if the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In other words, upon a proper motion, summary judgment is mandated "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment is thus appropriate where there is "no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Of course, the moving party bears the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995) (citing Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970)). If the moving party makes such a showing, the non-moving party must then come forward with evidence of specific facts sufficient to support a jury verdict in order to survive the summary judgment motion. Ibid.; FRCvP 56(e).
With respect to the first prong of Anderson, a genuine issue of material fact exists if the evidence in the record "is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, at 248. Stated another way, there is "no genuine issue as to any material fact" where there is a "complete failure of proof concerning an essential element of the nonmoving party's case." Celotex, at 323. Under the second prong of Anderson, the disputed fact must be material, which is to say that it "might affect the outcome of the suit under the governing law ***." Anderson, at 248.
See also Anderson, at 252 ("The mere existence of a scintilla of evidence in support of the [movant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [movant].")
Furthermore, "[i]n assessing the record to determine whether there is a genuine issue as to any material fact, the district court is required to resolve all ambiguities and draw all factual inferences in favor of the party against whom summary judgment is sought." St. Pierre v. Dyer, 208 F.3d 394, 404 (2d Cir. 2000) (citing Anderson, at 255). Nonetheless, mere conclusions, conjecture, unsubstantiated allegations or surmise on the part of the non-moving party are insufficient to defeat a well-grounded motion for summary judgment. Goenaga, at 18.
See footnote 2.
The defendant currency was seized December 6, 2001 at the Peace Bridge in Buffalo from Mrs. Zhong Xia Pan, a passenger in a rental van driven by Mr. Penggro Wu. When questioned by a U.S. Customs inspector, Wu stated that he was transporting approximately $100 U.S. currency to Canada. Mrs. Pan stated that she was immigrating to Canada and that she had $8,000 in U.S. currency. She was then asked if she understood the reporting requirement, which she answered in the affirmative. Indeed, Mrs. Pan was given a Customs declaration form in Chinese. She signed the declaration form — indicating that she had $8,000 in her possession — and told the Customs inspector that she had read and understood the declaration form. The Customs inspector also informed her that it was not illegal to carry more than $10,000 into Canada but that she must report it. She again stated that she understood and that she was not carrying in excess of $10,000. While verifying the amount of currency being carried, the Customs inspector found $10,000 in an envelope produced by Mrs. Pan. He also found $520 in her purse and $3,700 in another envelope. Further inspection revealed a bulge beneath her sweater in a green vest, the lining of which contained $60,000 in U.S. currency.
Although Mrs. Pan indicated that she was able to read and speak in English, she indicated that she was more comfortable reading Chinese.
Mrs. Pan filed a claim and an Answer on May 28, 2002. She claims that her husband arranged to have Mr. Wu drive her to Toronto and that she did not know and was afraid of Mr. Wu — thereby prompting her to say that she was carrying $8,000 when she was in fact carrying in excess of $74,000.
Mrs. Pan Dep., at 61-65. Mrs. Pan also claims that she was not aware that she was at an "immigration bridge" when she was asked questions by "people outside [the van]" — whom she did not know and whom she did not understand. Id. at 57-59. She did, however, admit that she knew that she was dealing with a "customs officer" after the van was pulled over for a secondary inspection. Id. at 60. She was subsequently provided a form in Chinese informing her of the reporting requirement — which she signed and wrote "$8,000." Id. at 60-65. Consequently, despite the initial confusion alleged, Mrs. Pan made the false report at a time when she knew that she was dealing with a customs officer.
The United States seeks summary judgment on the grounds that Mrs. Pan violated 31 U.S.C. § 5317(c)(2) and 5332(c). Section 5317(c)(2) provides that
"Any property involved in a violation of section *** 5316 *** of this title *** and any property traceable to any such violation *** may be seized and forfeited to the United States in accordance with the procedures governing civil forfeitures in money laundering cases pursuant to section 981(a)(1)(A) of title 18, United States Code." 31 U.S.C. § 5317(c)(2).
Section 5316 provides in relevant part that
"(a) *** a person *** shall file a report under subsection (b) of this section when the person *** knowingly — (1) transports, is about to transport, or has transported, monetary instruments of more than $10,000 at one time — (A) from a place in the United States to or through a place outside the United States; ***
"(b) A report under this section shall be filed at the time and place the Secretary of the Treasury prescribes. The report shall contain the following information to the extent the Secretary prescribes: *** (4) the amount and kind of monetary instruments transported." 31 U.S.C. § 5316.
There is no genuine issue of material fact that Mrs. Pan failed to file a report as required by section 5316 when she knowingly attempted to transport $74,220 in U.S. currency from the United States to Canada via the Peace Bridge. Consequently, pursuant to section 5317(c)(2), the United States may (and did) seize — and Mrs. Pan is liable to forfeit — the $74,220 because the United States has demonstrated by a preponderance of the evidence that the defendant currency is subject to forfeiture. As properly noted by the United States, section 5316(a)(1)(A) requires knowledge that more than $10,000 in monetary instruments was being transported out of the United States. It does not, however, require knowledge of the reporting requirement.
United States v. $49,766.29, 2003 WL 21383277, at *3 (W.D.N.Y. 2003) ("A violation of section 5316 automatically triggers the government's right to forfeiture under section 5317"). Inasmuch as the forfeiture occurred on December 6, 2001, the Civil Asset Forfeiture Reform Act ("CAFRA") applies. See $49,766.29, supra at *2; 18 U.S.C. § 983(c)(1) (setting forth the burden of proof under CAFRA).
See United States v. $359,500 in U.S. Currency, 828 F.2d 930, 934 (2d Cir. 1987) ("[A]s a matter of statutory construction the government need not prove in a civil forfeiture action under 31 U.S.C. § 5317(c) that the person who allegedly failed to comply with the reporting requirement of § 5316(a) either had actual knowledge of, or intended `willfully' to violate, that requirement."). Mrs. Pan cites United States v. $24,900, 770 F.2d 1530, 1533 (11th Cir. 1985) for the proposition that "[k]nowledge of currency reporting requirement is element [sic] of civil forfeiture action for failure to report exportation of currency." Mrs. Pan's Mem. of Law, at 9. Such decision, however, was expressly rejected by the Second Circuit Court of Appeals. See $359,500, 828 F.2d at 932-933. Moreover, Mrs. Pan's counsel cites Judge Curtin's opinion in $359,500 for the proposition that "Mrs. Pan's difficulty in speaking, reading, and writing English" should be construed in her favor. $359,500, however, specifically noted that it was distinguishable from cases where the traveler was "asked before leaving the United States about whether or not they have more than $10,000." U.S. v. $359,500 in U.S. Currency, 25 F. Supp.2d 140, 145 (W.D.N.Y. 1988). $359,500 is therefore not applicable here because Mrs. Pan was asked, prior to departing the United States, whether she had more than $10,000.
Nonetheless, Mrs. Pan claims that forfeiture of the $74,220 would violate the Eighth Amendment's prohibition against excessive fines. Specifically, she claims that — under United States v. Bajakajian, 524 U.S. 321 (1998) — total forfeiture would be grossly disproportionate to her failure to report the defendant currency. There exists a genuine issue of material fact whether total forfeiture would violate the Eighth Amendment in this case. For example, it is not clear whether Mrs. Pan's failure to report the defendant currency is related to other illegal activities. Indeed, Mrs. Pan testified that the seized currency was the product of (1) the sale of her business in China and (2) her salary as a laborer in New York City. Accordingly, plaintiff's motion for summary judgment on its section 5317 claim will be denied.
Mrs. Pan's Mem of Law, at 16-22. The USA's Reply Memorandum failed to address Mrs. Pan's excessive fine argument relative to the USA's section 5317 claim — as opposed to the applicability of the Excessive Fines Clause to the USA's section 5332 claim.
See $49,766.29, supra note 7 at *4-5 (applying Bajakajian and finding a genuine issue of material fact whether total forfeiture would violate the Eighth Amendment); U.S. v. Six Negotiable Checks, 207 F. Supp.2d 677, 687-688 (E.D. Mich. 2002) (finding genuine issue of material fact whether total forfeiture constituted an unconstitutional excessive fine).
Although Mrs. Pan invoked her Fifth Amendment right against self-incrimination when asked if she had paid income taxes while living in New York City — Mrs. Pan Dep., at 75-77 —, the USA has offered no evidence that she evaded taxes.
In so holding, however, this Court makes no findings as to the appropriate amount of currency that should be subject to forfeiture. The Court simply finds that there are unresolved issues of material fact as to whether forfeiture of the entire $74,220 would be grossly disproportionate to Mrs. Pan's offense. She ultimately has the burden of proving that the forfeiture would be excessive and, if she fails this burden, she will forfeit such currency.
The USA also seeks summary judgment pursuant to 31 U.S.C. § 5332(c), which provides in relevant part that
"(a) Criminal offense. —
(1) In general. — Whoever, with the intent to evade a currency reporting requirement under section 5316, knowingly conceals more than $10,000 in currency or other monetary instruments on the person of such individual or in any other conveyance, article of luggage, merchandise, or other container, and transports or transfers or attempts to transport or transfer such currency or monetary instruments from a place within the United States to a place outside the United States *** shall be guilty of a currency smuggling offense and subject to punishment pursuant to subsection (b).
* * * * *
(c) Civil forfeiture. —
(1) In general. — Any property involved in a violation of subsection (a) *** may be seized and, subject to subsection (d) of this section, forfeited to the United States." 31 U.S.C. § 5332.
Despite such reference to "subsection (d) of this section," section 5332 contains no subsection (d). The parties have not briefed what, if any, significance this has on the USA's section 5332 claim. This Court will treat section 5332's reference to subsection (d) as an erroneous reference to subsection (b), which provides for automatic forfeiture in the event of a criminal conviction.
There is a genuine issue of material fact whether Mrs. Pan knowingly concealed $60,000 in her vest with an "intent to evade a currency reporting requirement under section 5316." Indeed, she testified that she "knowingly concealed" her money in order to protect herself from her traveling companion and other people with "bad" ideas whom she might encounter on the road to Toronto. There is also a genuine issue of material fact whether Mrs. Pan intended to evade section 5316's reporting requirement when she failed to disclose the $14,220 in her purse — as opposed to having intended to prevent Mr. Wu from learning of her funds. Accordingly, plaintiff's motion for summary judgment on its section 5332 claim will be denied.
Section 5332 — which prohibits bulk cash smuggling — was enacted October 26, 2001. Consequently, there is little case law construing it. Indeed, only three cases even mention section 5332 and none addresses the scienter requirement. See LJ Crew Station, LLC v. Banco. Popular de Puerto Rico, 278 F. Supp.2d 547, 560 (D. V.I. 2003); United States v. $61,483, 2003 WL 1566553, at *1 (W.D. Tex. 2003); United States v. Wray, 2002 WL 31628435, at *1 (D.V.I. 2002).
Mrs. Pan Dep., at 59, 61-63.
This is not to say that the United States may never obtain a summary judgment with respect to a section 5332 claim. Indeed, this Court's present holding is peculiar to the currently known facts of this case.
Accordingly, it is hereby ORDERED that plaintiff's motion for summary judgment is denied and that the parties shall appear before Part III of this Court on December 19, 2003 at 3:00 p.m. (or as soon thereafter as they may be heard) to set a date for trial.