RATZLAF ET UX. v. UNITED STATES
No. 92-1196
Supreme Court of the United States
Argued November 1, 1993—Decided January 11, 1994
510 U.S. 135
Stephen Robert LaCheen argued the cause for petitioners. With him on the briefs were Anne M. Dixon, Peter Goldberger, Pamela A. Wilk, James H. Feldman, Jr., Kevin O‘Connell, and Christopher H. Kent.
Paul J. Larkin, Jr., argued the cause for the United States. On the brief were Solicitor General Days, Acting Assistant Attorney General Keeney, Deputy Solicitor General Bryson, John F. Manning, and Richard A. Friedman.*
JUSTICE GINSBURG delivered the opinion of the Court.
Federal law requires banks and other financial institutions to file reports with the Secretary of the Treasury whenever they are involved in a cash transaction that exceeds $10,000.
I
On the evening of October 20, 1988, defendant-petitioner Waldemar Ratzlaf ran up a debt of $160,000 playing blackjack at the High Sierra Casino in Reno, Nevada. The casino gave him one week to pay. On the due date, Ratzlaf returned to the casino with cash of $100,000 in hand. A casino official informed Ratzlaf that all transactions involving more than $10,000 in cash had to be reported to state and federal authorities. The official added that the casino could accept a cashier‘s check for the full amount due without triggering any reporting requirement. The casino helpfully placed a limousine at Ratzlaf‘s disposal, and assigned an employee to accompany him to banks in the vicinity. Informed that banks, too, are required to report cash transactions in excess of $10,000, Ratzlaf purchased cashier‘s checks, each for less than $10,000 and each from a different bank. He delivered these checks to the High Sierra Casino.
Based on this endeavor, Ratzlaf was charged with “structuring transactions” to evade the banks’ obligation to report cash transactions exceeding $10,000; this conduct, the indictment alleged, violated
Ratzlaf maintained on appeal that he could not be convicted of “willfully violating” the antistructuring law solely on the basis of his knowledge that a financial institution must report currency transactions in excess of $10,000 and his intention to avoid such reporting. To gain a conviction for “willful” conduct, he asserted, the Government must prove he was aware of the illegality of the “structuring” in which he engaged. The Ninth Circuit upheld the trial court‘s construction of the legislation and affirmed Ratzlaf‘s conviction. 976 F. 2d 1280 (1992). We granted certiorari, 507 U. S. 1050 (1993), and now conclude that, to give effect to the statutory “willfulness” specification, the Government had to prove Ratzlaf knew the structuring he undertook was unlawful. We therefore reverse the judgment of the Court of Appeals.
II
A
Congress enacted the Currency and Foreign Transactions Reporting Act (Bank Secrecy Act) in 1970, Pub. L. 91-2508, Tit. II, 84 Stat. 1118, in response to increasing use of banks and other institutions as financial intermediaries by persons engaged in criminal activity. The Act imposes a variety of reporting requirements on individuals and institutions regarding foreign and domestic financial transactions. See
“When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of
United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes....”3
To deter circumvention of this reporting requirement, Congress enacted an antistructuring provision,
“No person shall for the purpose of evading the reporting requirements of section 5313(a) with respect to such transaction—
...
“(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.”6
The criminal enforcement provision at issue,
“A person willfully violating this subchapter [31 U. S. C. § 5311 et seq.] or a regulation prescribed under this subchapter (except section 5315 of this title or a regulation prescribed under section 5315) shall be fined not more than $250,000, or [imprisoned for] not more than five years, or both.”
B
Section 5324 forbids structuring transactions with a “purpose of evading the reporting requirements of section 5313(a).” Ratzlaf admits that he structured cash transactions, and that he did so with knowledge of, and a purpose to avoid, the banks’ duty to report currency transactions in excess of $10,000. The statutory formulation (§ 5322) under which Ratzlaf was prosecuted, however, calls for proof of “willful[ness]” on the actor‘s part. The trial judge in Ratzlaf‘s case, with the Ninth Circuit‘s approbation, treated § 5322(a)‘s “willfulness” requirement essentially as surplusage—as words of no consequence.7 Judges should hesitate so to treat statutory terms in any setting, and resistance
“Willful,” this Court has recognized, is a “word of many meanings,” and “its construction [is] often ... influenced by its context.” Spies v. United States, 317 U. S. 492, 497 (1943). Accordingly, we view §§ 5322(a) and 5324(3) mindful of the complex of provisions in which they are embedded. In this light, we count it significant that § 5322(a)‘s omnibus “willfulness” requirement, when applied to other provisions in the same subchapter, consistently has been read by the Courts of Appeals to require both “knowledge of the reporting requirement” and a “specific intent to commit the crime,” i. e., “a purpose to disobey the law.” See United States v. Bank of New England, N. A., 821 F. 2d 844, 854-859 (CA1 1987) (“willful violation” of § 5313‘s reporting requirement for cash transactions over $10,000 requires “voluntary, intentional, and bad purpose to disobey the law“); United States v. Eisenstein, 731 F. 2d 1540, 1543 (CA11 1984) (“willful violation” of § 5313‘s reporting requirement for cash transactions over $10,000 requires “‘proof of the defendant‘s knowledge of the reporting requirement and his specific intent to commit the crime‘“) (quoting United States v. Granda, 565 F. 2d 922, 926 (CA5 1978)).
Notable in this regard are
The United States urges, however, that § 5324 violators, by their very conduct, exhibit a purpose to do wrong, which suffices to show “willfulness“:
“On occasion, criminal statutes—including some requiring proof of ‘willfulness‘—have been understood to require proof of an intentional violation of a known legal duty, i. e., specific knowledge by the defendant that his conduct is unlawful. But where that construction has been adopted, it has been invoked only to ensure that the defendant acted with a wrongful purpose. See Liparota v. United States, 471 U. S. 419, 426 (1985)....
“The anti-structuring statute,
31 U. S. C. § 5324 , satisfies the ‘bad purpose’ component of willfulness by explicitly defining the wrongful purpose necessary to violate the law: it requires proof that the defendant acted with the purpose to evade the reporting requirement of Section 5313(a).” Brief for United States 23-25.
“[S]tructuring is not the kind of activity that an ordinary person would engage in innocently,” the United States asserts. Id., at 29 (quoting United States v. Hoyland, 914 F. 2d 1125, 1129 (CA9 1990)). It is therefore “reasonable,” the Government concludes, “to hold a structurer responsible for evading the reporting requirements without the need to prove specific knowledge that such evasion is unlawful.” Brief for United States 29.
Undoubtedly there are bad men who attempt to elude official reporting requirements in order to hide from Government inspectors such criminal activity as laundering drug money or tax evasion.11 But currency structuring is not inevitably nefarious. Consider, for example, the small business operator who knows that reports filed under
Courts have noted “many occasions” on which persons, without violating any law, may structure transactions “in order to avoid the impact of some regulation or tax.” United States v. Aversa, 762 F. Supp. 441, 446 (NH 1991), aff‘d in part, 984 F. 2d 493 (CA1 1993). This Court, over a century ago, supplied an illustration:
“The Stamp Act of 1862 imposed a duty of two cents upon a bank-check, when drawn for an amount not less than twenty dollars. A careful individual, having the amount of twenty dollars to pay, pays the same by handing to his creditor two checks of ten dollars each. He thus draws checks in payment of his debt to the amount
of twenty dollars, and yet pays no stamp duty.... While his operations deprive the government of the duties it might reasonably expect to receive, it is not perceived that the practice is open to the charge of fraud. He resorts to devices to avoid the payment of duties, but they are not illegal. He has the legal right to split up his evidences of payment, and thus to avoid the tax.” United States v. Isham, 17 Wall. 496, 506 (1873).
In current days, as an amicus noted, countless taxpayers each year give a gift of $10,000 on December 31 and an identical gift the next day, thereby legitimately avoiding the taxable gifts reporting required by
In light of these examples, we are unpersuaded by the argument that structuring is so obviously “evil” or inherently “bad” that the “willfulness” requirement is satisfied irrespective of the defendant‘s knowledge of the illegality of structuring. Had Congress wished to dispense with the requirement, it could have furnished the appropriate instruction.16
C
In § 5322, Congress subjected to criminal penalties only those “willfully violating” § 5324, signaling its intent to require for conviction proof that the defendant knew not only
We do not dishonor the venerable principle that ignorance of the law generally is no defense to a criminal charge. See Cheek v. United States, 498 U. S. 192, 199 (1991); Barlow v. United States, 7 Pet. 404, 410-412 (1833) (Story, J.). In particular contexts, however, Congress may decree otherwise. That, we hold, is what Congress has done with respect to
Because the jury was not properly instructed in this regard, we reverse the judgment of the Ninth Circuit and remand this case for further proceedings consistent with this opinion.
It is so ordered.
On October 27, 1988, petitioner Waldemar Ratzlaf¹ arrived at a Nevada casino with a shopping bag full of cash to pay off a $160,000 gambling debt. He told casino personnel he did not want any written report of the payment to be made. The casino vice president informed Ratzlaf that he could not accept a cash payment of more than $10,000 without filing a report.
Ratzlaf, along with his wife and a casino employee, then proceeded to visit several banks in and around Stateline, Nevada, and South Lake Tahoe, California, purchasing separate cashier‘s checks, each in the amount of $9,500. At some banks the Ratzlafs attempted to buy two checks—one for each of them—and were told that a report would have to be filed; on those occasions they canceled the transactions. Ratzlaf then returned to the casino and paid off $76,000 of his debt in cashier‘s checks. A few weeks later, Ratzlaf gave three persons cash to purchase additional cashier‘s checks in amounts less than $10,000. The Ratzlafs themselves also bought five more such checks in the course of a week.
A jury found beyond a reasonable doubt that Ratzlaf knew of the financial institutions’ duty to report cash transactions in excess of $10,000 and that he structured transactions for the specific purpose of evading the reporting requirements.
The Court today, however, concludes that these findings are insufficient for a conviction under
I
“The general rule that ignorance of the law or a mistake of law is no defense to criminal prosecution is deeply rooted in the American legal system.” Cheek v. United States, 498 U. S. 192, 199 (1991). The Court has applied this common-law rule “in numerous cases construing criminal statutes.” Ibid., citing United States v. International Minerals & Chemical Corp., 402 U. S. 558 (1971); Hamling v. United States, 418 U. S. 87, 119-124 (1974); and Boyce Motor Lines, Inc. v. United States, 342 U. S. 337 (1952).
Thus, the term “willfully” in criminal law generally “refers to consciousness of the act but not to consciousness that the act is unlawful.” Cheek, 498 U. S., at 209 (SCALIA, J., concurring in judgment); see also Browder v. United States, 312 U. S. 335, 341 (1941); Potter v. United States, 155 U. S. 438, 446 (1894); American Surety Co. of New York v. Sullivan, 7 F. 2d 605, 606 (CA2 1925) (L. Hand, J.) (“[T]he word ‘willful’ ... means no more than that the person charged with the duty knows what he is doing,” not that “he must suppose that he is breaking the law“); American Law Institute, Model Penal Code § 2.02(8) (1985) (“A requirement that an offense be committed wilfully is satisfied if a person acts knowingly with respect to the material elements of the offense, unless a purpose to impose further requirements appears“).
As the majority explains,
Unlike other provisions of the subchapter, the antistructuring provision identifies the purpose that is required for a § 5324 violation: “evading the reporting requirements.” The offense of structuring, therefore, requires (1) knowledge of a financial institution‘s reporting requirements, and (2) the structuring of a transaction for the purpose of evading those requirements. These elements define a violation that is “willful” as that term is commonly interpreted. The majority‘s additional requirement that an actor have actual knowledge that structuring is prohibited strays from the statutory text, as well as from our precedents interpreting criminal statutes generally and “willfulness” in particular.
The Court reasons that the interpretation of the Court of Appeals for the Ninth Circuit, and that of nine other Circuits,³ renders § 5322(a)‘s willfulness requirement superfluous. See ante, at 140. This argument ignores the general-
The majority also contends that § 5322(a)‘s willfulness element, when applied to the subchapter‘s other provisions, has been read by the Courts of Appeals to require knowledge of and a purpose to disobey the law. See ante, at 141-142. In fact, the cases to which the majority refers stand for the more subtle proposition that a willful violation requires knowledge of the pertinent reporting requirements and a purpose to avoid compliance with them.4 Consistent with and in light
The Court next concludes that its interpretation of “willfully” is warranted because structuring is not inherently “nefarious.” See ante, at 144. It is true that the Court, on occasion, has imposed a knowledge-of-illegality requirement upon criminal statutes to ensure that the defendant acted with a wrongful purpose. See, e. g., Liparota v. United States, 471 U. S. 419, 426 (1985),
I cannot agree, however, that the imposition of such a requirement is necessary here. First, the conduct at issue—splitting up transactions involving tens of thousands of dollars in cash for the specific purpose of circumventing a bank‘s reporting duty—is hardly the sort of innocuous activity involved in cases such as Liparota, in which the defendant had been convicted of fraud for purchasing food stamps for less than their face value. Further, an individual convicted of structuring is, by definition, aware that cash transactions are regulated, and he cannot seriously argue that he lacked notice of the law‘s intrusion into the particular sphere of activity. Cf. Lambert v. California, 355 U. S. 225, 229 (1957). By requiring knowledge of a bank‘s reporting requirements as well as a “purpose of evading” those requirements, the antistructuring provision targets those who knowingly act to deprive the Government of information to which it is entitled. In my view, that is not so plainly innocent a purpose as to justify reading into the statute the additional element of knowledge of illegality.6 In
In interpreting federal criminal tax statutes, this Court has defined the term “willfully” as requiring the “‘voluntary, intentional violation of a known legal duty.‘” Cheek v. United States, 498 U. S., at 200, quoting United States v. Bishop, 412 U. S. 346, 360 (1973); see also United States v. Murdock, 290 U. S. 389, 394-396 (1933). Our rule in the tax area, however, is an “exception to the traditional rule,” applied “largely due to the complexity of the tax laws.” Cheek, 498 U. S., at 200; see also Browder v. United States, 312 U. S., at 341-342. The rule is inapplicable here, where, far from being complex, the provisions involved are perhaps among the simplest in the United States Code.8
Although I believe the statutory language is clear in light of our precedents, the legislative history confirms that Congress intended to require knowledge of (and a purpose to evade) the reporting requirements but not specific knowledge of the illegality of structuring.9
Before 1986, the reporting requirements included no provision explicitly prohibiting the structuring of transactions to evade the reporting requirements. The Government attempted to combat purposeful evasion of the reporting requirements through
Other courts rejected imposition of criminal liability for structuring under §§ 1001 and 2(b), concluding either that the
Congress enacted the antistructuring provision in 1986 “to fill a loophole in the Bank Secrecy Act caused by” the latter three decisions, which “refused to apply the sanctions of [the Act] to transactions ‘structured’ to evade the act‘s $10,000 cash reporting requirement.” S. Rep. No. 99-433, p. 7 (1986). As explained by the Report of the Senate Judiciary Committee:
“[The antistructuring provision] would codify Tobon-Builes and like cases and would negate the effect of Anzalone, Varbel and Denemark. It would expressly subject to potential liability a person who causes or attempts to cause a financial institution to fail to file a required report or who causes a financial institution to file a required report that contains material omissions or misstatements of fact. In addition, the proposed amendment would create the offense of structuring a transaction to evade the reporting requirements, without regard to whether an individual transaction is, itself, reportable under the Bank Secrecy Act.” Id., at 22.
See also H. R. Rep. No. 99-746, pp. 18-19, and n. 1 (1986). Congress’ stated purpose to “codify Tobon-Builes” reveals its intent to incorporate Tobon-Builes’ standard for a willful violation, which required knowledge of the reporting requirements and a purpose to evade them. Nothing in Tobon-Builes suggests that knowledge of the illegality of one‘s conduct is required.10
“For example, a person who converts $18,000 in currency to cashier‘s checks by purchasing two $9,000 cashier‘s checks at two different banks or on two different days
with the specific intent that the participating bank or banks not be required to file Currency Transaction Reports for those transactions, would be subject to potential civil and criminal liability. A person conducting the same transactions for any other reasons or a person splitting up an amount of currency that would not be reportable if the full amount were involved in a single transaction (for example, splitting $2,000 in currency into four transactions of $500 each), would not be subject to liability under the proposed amendment.” S. Rep. No. 99-433, at 22 (emphasis added).
The Committee‘s specification of the requisite intent as only the intent to prevent a bank from filing reports confirms that Congress did not contemplate a departure from the general rule that knowledge of illegality is not an essential element of a criminal offense.
A recent amendment to § 5324 further supports the interpretation of the court below. In 1992, Congress enacted the Annunzio-Wylie Anti-Money Laundering Act, creating a parallel antistructuring provision for the reporting requirements under
“Under the new provision, codified as subsection (b) of section 5324, it would be illegal to structure the importation or exportation of monetary instruments with the intent to evade the ... reporting requirement. As is the case presently for structuring cases involving currency transaction reports, the government would have to prove that the defendant knew of the reporting requirement, but would not have to prove that the defendant knew that structuring itself had been made illegal. United States v. Hoyland, 903 F. 2d 1288 (9th Cir. 1990).” H. R. Rep. No. 102-28, pt. 1, p. 45 (1991) (emphasis added).12
The 1992 amendment‘s replication of the original antistructuring provision‘s language strongly suggests that Congress intended to preserve the then-uniform interpretation of the scienter requirement of § 5324. See Keene Corp. v. United States, 508 U. S. 200, 212-213 (1993). At the very least, then, today‘s decision poses a dilemma for any attempt to reconcile the two parallel antistructuring provisions now codified in § 5324: Courts must either ignore clear evidence of legislative intent as to the newly added antistructuring provision or interpret its identical language differently from the antistructuring provision at issue in this case.
Finally, it cannot be ignored that the majority‘s interpretation of § 5324 as a practical matter largely nullifies the effect of that provision. In codifying the currency transaction reporting requirements in 1970, “Congress recognized the importance of reports of large and unusual currency transactions in ferreting out criminal activity.” California Bankers Assn. v. Shultz, 416 U. S. 21, 38 (1974). Congress enacted the antistructuring law to close what it perceived as
III
The petitioner in this case was informed by casino officials that a transaction involving more than $10,000 in cash must be reported, was informed by the various banks he visited that banks are required to report cash transactions in excess of $10,000, and then purchased $76,000 in cashier‘s checks, each for less than $10,000 and each from a different bank. Petitioner Ratzlaf, obviously not a person of limited intelligence, was anything but uncomprehending as he traveled from bank to bank converting his bag of cash to cashier‘s checks in $9,500 bundles. I am convinced that his actions constituted a “willful” violation of the antistructuring provision embodied in
The majority‘s interpretation of the antistructuring provision is at odds with the statutory text, the intent of Congress, and the fundamental principle that knowledge of illegality is not required for a criminal act. Now Congress must try again to fill a hole it rightly felt it had filled before. I dissent.
Notes
The only Court of Appeals to adopt a contrary interpretation is the First Circuit, and even that court allows “reckless disregard” of one‘s legal duty to support a conviction for structuring. See United States v. Aversa, 984 F. 2d 493, 502 (1993) (en banc).
“Knowledge of the reporting requirements” is easily confused with “knowledge of illegality” because, in the context of the other reporting provisions—
The majority expresses concern about the potential application of the antistructuring law to a business operator who deposits cash twice each week to reduce the risk of an IRS audit. See ante, at 144-145. First, it is not at all clear that the statute would apply in this situation. If a person has legitimate business reasons for conducting frequent cash transactions, or if the transactions genuinely can be characterized as separate, rather than artificially structured, then the person is not engaged in “structuring” for the purpose of “evasion.” See United States v. Brown, 954 F. 2d, at 1571; S. Rep. No. 99-433, p. 22 (1986). Even if application of § 5324 were theoretically possible in this extreme situation, the example would not establish prohibition of a “broad range of apparently innocent conduct”
“[The antistructuring provision] requires proof beyond a reasonable doubt that the purpose of the ‘structured’ aspect of a currency exchange was to evade the reporting requirements of the Bank Secrecy Act. It is this requirement which shields innocent conduct from prosecution.” Hearing on S. 571 and S. 2306 before the Senate Committee on Banking, Housing, and Urban Affairs, 99th Cong., 2d Sess., 136-137 (1986) (response of Deputy Asst. Atty. Gen. Knapp and Asst. U. S. Atty. Sun to written question of Sen. D‘Amato).
The majority misreads the Senate Report as stating that § 5324 creates the structuring offense “[i]n addition’ to codifying Tobon-Builes.” Ante, at 148, n. 17. The phrase “in addition” plainly refers to the previous sentence in the Report, which states that § 5324 “would expressly subject to potential liability a person who causes or attempts to cause a financial institution to fail to file a required report or who causes a financial institution to file a required report that contains material omissions or misstatements of fact.” S. Rep. No. 99-433, at 22. The “codification” of Tobon-Builes encompasses both sentences, and thus all three subsections of the original § 5324. In any event, there is no doubt that the Report‘s reference to “codifying Tobon-Builes” is a reference to the creation of the antistructuring offense, particularly given that Tobon-Builes expressly imposed criminal liability for “structuring” transactions. 706 F. 2d, at 1101.
Even more direct evidence of Congress’ intent to incorporate the Tobon-Builes scienter standard is found in the response to a question from Senator D‘Amato, the Senate sponsor of the antistructuring provision. He asked Deputy Assistant Attorney General Knapp and Assistant United States Attorney Sun: “Assuming that the [antistructuring] provision had been on the books, could you have demonstrated a willful violation in the Anzalone, Varbel and Denemark cases?” The written response stated: “Assuming that the terms of [the antistructuring provision] were in effect at the time of the conduct described in Anzalone, Varbel, and Denemark, the result would, or should have been markedly different. Statements from defendants in those cases indicated that the structuring conduct was purposely undertaken to evade the reporting requirements of Title 31. As this is expressly what is prohibited under [the antistructuring provision], a willful violation ... would have been demonstrated.” Hearing on S. 571 and S. 2306 before the Senate Committee on Banking, Housing, and Urban Affairs, 99th Cong., 2d Sess., at 141-142.
The new law moved the antistructuring provision at issue here into a new subsection (a) of § 5324 and created subsection (b) for the new antistructuring provision.But the legislative history cited by the United States is hardly crystalline. The reference to United States v. Tobon-Builes, 706 F. 2d 1092 (CA11 1983), is illustrative. In that case, the defendant was charged under
See Barnhill v. Johnson, 503 U. S. 393, 401 (1992) (appeals to legislative history are well taken only to resolve statutory ambiguity). See also United States v. Aversa, 984 F. 2d, at 499, n. 8 (commenting that legislative history of provisions here at issue “is more conflicting than the [statutory] text is ambiguous“) (quoting Wong Yang Sung v. McGrath, 339 U. S. 33, 49 (1950)). As the First Circuit noted, no House, Senate, or Conference Report accompanied the final version of the Anti-Drug Abuse Act of 1986; instead, over 20 separate reports accompanied various proposed bills, portions of which were incorporated into that Act. See 1986 U. S. C. C. A. N. 5393 (listing reports).
The dissent, see post, at 161, features a House Report issued in 1991 in connection with an unenacted version of the Annunzio-Wylie Anti-Money Laundering Act. We do not find that Report, commenting on a bill that did not pass, a secure indicator of congressional intent at any time, and it surely affords no reliable guide to Congress’ intent in 1986. See Oscar Mayer & Co. v. Evans, 441 U. S. 750, 758 (1979) (cautioning against giving weight to “history” written years after the passage of a statute).