Judge ponders money laundering implications of not reporting foreign bank accounts

Argument Analysis

After several interruptions by abortion rights protesters, the court settled on a relatively mundane debate on Wednesday. Bittner v. USAFew cases involve provisions of the Bank Secrecy Act that require citizens to annually submit a foreign bank account identification form (FBAR). The specific question is whether the penalties for breach of that obligation depend on the number of failed submissions or the number of failed disclosure accounts. In this case, for example, Alexandru Bittner missed his five annual reports, but the total number of disclosure omissions was 272. The question for the judge is whether Bittner’s fine (he’s $10,000 per offense) should be $50,000 or $2.72 million.

My first thought about this argument (after getting over the demonstrators) is that those who challenge the government’s excesses are very unlikely to get five votes if Justices Elena Kagan and Sonia Sotomayor are not persuaded. It means having a hard time. That was the situation here, as both of them seemed quite unreceptive to Daniel Geyser’s (Representative of Bitner) claims.

Cagan, for example, forcefully criticized the logic of Geyser’s position. Because it means the government treats equally someone who has a $10,000 account and someone like your client who has extreme wealth and so many accounts that he is robbing the government. because it forces … provides a lot more information than a little person saying, “I think he has a $12,000 checking account.” To make things even more troubling for Geyser, she found the statutory language very clear by designating the unit of offense as an account rather than a filing.

parliament did [point to accounts rather than filings]starts with [Section] 5321 talks about individual accounts over and over again. In the structure of the statute there is a reasonable cause provision, which speaks of a particular account, there is a willfulness provision, which speaks of a particular account, all of which speaks of a single offense. In some cases…that’s very strange.Don’t think that Congress meant the basic clause that you’re also talking about personal accounts for no rational reason, no intention.

In case these sharp comments left questions about the clarity of her position, she emphasized a point near the end of his argument when she explained:

People who aren’t very wealthy and don’t know that they need to file something in their checking account and who have hundreds of millions or millions of dollars in so many accounts and are constantly transacting and always accountable. There is a big difference between those who open And shut them down, perhaps doing it for tax evasion or terrorist financing. And in that case the stock is against you. Look at the law. Like I said, the law is very account specific.

When Cagan thinks this law is “very” specifically against you and “stocks are against you,” you’re going to have a hard time getting her vote.

Adding to the sentiment of Cagan’s final comment, Sotomayor had a similar response: “The problem I have” is that the “whole structure” of the law obliges you to “inform the government.” It looks like a foreign banking relationship, she said. As she said, “That’s what the word ‘report’ means. It doesn’t matter to me if I do it in 1 form or 10 forms. ”

I’m not saying this case is an easy layup for the government. As Matthew Guarneri put forward, some judges seemed hesitant to accept different parts of the government’s position. It was plagued by its restrictive interpretation of the “reasonable grounds” clause, which limits penalties under the law. Alito disputed the notion that ignorance of the law is not a valid reason for failing to file. When Guarneri stuck to his position, Kavanaugh turned to Brief’s assertion that “a significant percentage of people with these accounts don’t think they’re supposed to report them.” rice field. For Kavanaugh,

That’s a bit of a problem. …So you said the reasonable reason provision could handle that. And if someone is really ignorant of their legal obligations and tries to be aware of their legal obligations with due diligence… I think you said that’s a strong case. That should be the decisive case, right?

Guarneri, however, adhered to the government’s position that the rational reason provision should be interpreted very narrowly.

Likewise, Judge Neil Gorsuch was unsatisfied with the government’s broad discretion to stockpile large penalties for numerous minor violations. I was particularly interested in the impact of provisions that allowed us to omit details. On the other hand, if you are under the age of 25 and enter the wrong bank address, you will be fined 12 times and $120,000. Is it a contradiction that people with more bank accounts are actually less likely to be penalized than those with fewer?”

This is not a discussion of deep engagement or a well-grounded position. As such, judges may resolve different responses and coalesce toward a consensus resolution. Most likely not, but we’ll have to wait until spring.