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United States v. 500

decided: September 8, 1987.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT,
v.
$359,500 IN UNITED STATES CURRENCY, DEFENDANT, BENEDETTO ROMANO, CLAIMANT-APPELLEE



Appeal from a judgment of the United States District Court for the Western District of New York (Curtin, Ch.J.) denying the government's petition for civil forfeiture of $359,500 in United States currency, which petition was filed because claimant had transported the currency out of the country without first reporting its as required by 31 U.S.C. § 5316, and ordering return of the currency to claimant. Remanded.

Feinberg, Chief Judge, Van Graafeiland and Pratt, Circuit Judges.

Author: Pratt

PRATT, Circuit Judge

The United States appeals from a judgment of the United States District Court for the Western District of New York, John T. Curtin, Chief Judge, which denied the government's petition seeking civil forfeiture of $359,500 in United States currency under 31 U.S.C. § 5317, and ordered that the currency be returned to the claimant, Benedetto Romano. The currency had been seized from Romano by United States customs officials because he had failed to report it before he departed from the United States.

Judge Curtin held that forfeiture was not authorized in this case because Romano did not have actual knowledge of the currency reporting provision of 31 U.S.C. § 5316(a). As an alternative holding, Judge Curtin found that the government's failure to provide some form of notice of the reporting requirement violated Romano's due process rights.

We hold that the district court erred on the statutory construction issue and that the statute does not require knowledge of the currency reporting requirement as a condition of forfeiture. On the due process issue, we conclude that the court should have considered whether Romano could be charged with constructive knowledge of the currency reporting requirement, thus eliminating the need, at this juncture, to decide whether enactment of § 5316 alone provided Romano with notice sufficient to satisfy due process. Accordingly, we remand to the district court for a determination of whether the notice required by due process could be satisfied by charging Romano, under the facts and circumstances of this particular case, with constructive knowledge of the currency reporting requirement.

BACKGROUND

On November 13, 1983, Romano and his wife drove their car from Buffalo, New York, across the Peace Bridge toward Fort Erie, Ontario, Canada. Motorists desiring to cross the Peace Bridge from Buffalo must first pass through a toll booth to pay a fee, but they do not encounter any customs or immigration checkpoint until they enter Canada on the far side of the bridge. The parties stipulated below that there were no signs or notices posted on or near the bridge informing motorists of the currency reporting requirement. There was a notice posted in the nearby administrative office of the United States customs service, but a departing motorist ordinarily would have no occasion to enter that office.

When he reached the Canadian side of the bridge, Romano was questioned by a Canadian customs officer and then referred to a secondary inspection yard for further examination. There, Romano voluntarily complied with Canadian inspector Mehlenbacher's request that he open the trunk of his car. Inside were several bags that collectively contained a large sum of money. In response to Mehlenbacher's inquiry, Romano admitted that he had not declared the currency before leaving the United States. After consulting with his superior, Mehlenbacher directed Romano to return to the United States and immediately notified United States customs agents by telephone that Romano would be returning with a large quantity of cash.

Upon returning to the American side, Romano was stopped and questioned at the primary station, where he initially claimed to have $30,000 to $35,000, and, after further questioning, ultimately admitted to possessing more than $300,000. Romano then entered the administrative office and completed two forms: Form 4790, entitled "Report of International Transportation of Currency or Monetary Instruments", declaring that he was returning from Canada with $360,000, and Form 6059-B, a baggage declaration form, printed in Italian, on which Romano admitted that he held more than $5,000. When a records check disclosed that Romano had not filed a Form 4790 before leaving the United States earlier that day, the money was seized.

On December 28, 1983, Romano filed with the Secretary of the Treasury a petition for remission or mitigation of the forfeiture, stating that he had no prior knowledge of, and did not intend to violate, the currency reporting requirement, that his education was limited to the fifth grade in an Italian grammar school, and that he could "not read English to any great extent." Without any action by the secretary on that petition, the government filed a civil complaint on June 12, 1984, seeking forfeiture of the currency under § 5317. Romano's answer included a counterclaim for return of the currency, repeating the allegations he had asserted in his petition for remission.

Romano moved for summary judgment, which Judge Curtin denied by order dated February 4, 1985. Therein Judge Curtin rejected Romano's argument that the phrase "knowingly transports" contained in 31 U.S.C. § 5316(a) refers to knowledge of the reporting requirement, ruling that

the correct interpretation of the statute is that "knowingly" refers to the carrier's knowledge that he or she is in possession of more than $5,000 while traveling from a place in the United States to or through a place outside the United States.

Following a bench trial on May 10, 1985, the subsequent filings of briefs and proposed findings of fact, and additional briefing requested by the court on the due process issue, Judge Curtin issued his unpublished opinion on September 29, 1986. On the construction of the term "knowingly" in § 5316(a), Judge Curtin reconsidered the conclusion he had reached in denying Romano's summary judgment motion and, persuaded by the analysis in an intervening opinion of the eleventh circuit, United States v. One (1) Lot of $24,900 in United States Currency, 770 F.2d 1530 (11th Cir. 1985) [hereinafter United States v. $24,900 ], held that actual knowledge of the currency requirement by the person from whom the monetary instrument was ...


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