When the FBI Comes Calling…®
EVASION OF IMPORT DUTIES (continued)
United States v. Yip, 930 F.2d 142 (2d Cir., 1991).
Yip is an excellent case for interpreting what it is that section 542 actually proscribes since it is such a dense statute. In Yip, the defendant was convicted of 14 counts of mail fraud and 59 counts of depriving the United States of lawful duty payments in violation of 18 U.S.C. § 542. Yip at 143. He argued, pertaining to section 542, "that the importation of goods using non-fraudulent invoices, followed by the failure to pay customs duties owed on those goods, is not a criminal act within the meaning of § 542." Id. at 143. The court goes to great lengths to untangle section 542 and determine to what it applies.
The court first notes that the statute punishes two distinct offenses. Id. at 147. "The first offense proscribes the introduction of imported merchandise through means of any 'false or fraudulent practice' regardless of whether the United States is deprived of duties." Id. In other words, "[a]nyone seeking to import goods[,] who, in the course of that importation, makes a false statement (written or oral), is guilty of a criminal act." Id. at 148. The second offense, under which the defendant was charged, "is directed at the loss of duties and makes 'any willful act or omission' a crime, without explicitly requiring that the act or omission be done with intent to defraud the United States." Id. at 147. The court has more difficulty with the second paragraph. "The first prong refers back to the false statement provision of the first [paragraph]. … The use of the word 'such' clearly refers back to the 'invoice,' etc. listed in the first paragraph." Id. at 148. Therefore, the first part of the second paragraph "makes criminal those acts and omissions that deprive the United States of duties on the merchandise specifically related to the false statements." Id. The second part of the second paragraph is more confounding. "'[S]uch act or omission' can refer to nothing other than the beginning of the second paragraph, for that is the only other place the phrase is to be found. The beginning phrase 'Whoever is guilty of any willful act or omission' is the first mention of 'act or omission' in the statute." Id. at 148-49. The court determines that that part of the second paragraph "would make criminal the omission to file any forms on goods brought into the United States and any acts undertaken in bringing such undeclared goods into the United States. … [I]t makes sense that Congress would want to make criminal not just false statements made to secure importation of goods … but also willful attempts to avoid making statements and paying duties altogether … i.e., smuggling." Id. at 149.
The court further determined that section 542 began life as a civil statute, rather than a penal statute, and the language must be interpreted narrowly. Id. at 153. The court felt that "Congress must have planned that, in order to constitute criminal conduct, the willfulness of a person's acts must not only extend to their voluntariness and the person's competency, but also to the defendant's ability to foresee the act's effect on the government's loss of customs duties." Id. In other words, "the government must prove that the link between the act and the deprivation was so direct that a defendant knew or should have known his actions would deprive the government of lawful duties." Id.
18 U.S.C. § 543 (2005).
Entry of Goods for Less than Legal Duty
The Crime
It is a violation of section 543 to be "an officer of the revenue" and
- knowingly admit to entry, any goods, wares, or merchandise, upon payment of less than the amount of duty legally due. 18 U.S.C. § 543.
The Punishment
The punishment for a violation of section 543 is:
- a fine, imprisonment not more than two years, or both; and
- removal from office. 18 U.S.C. § 543.
Case Law Interpreting Section 543.
There are no recent cases that deal with the current section 543. However, there are a couple of cases that discuss the predecessor to section 543.
United States v. Rosenthal, 126 F. 766 (C.C.S.D.N.Y. 1903)
In Rosenthal, the "officer of the revenue" in question objected to being indicted for assisting the defendants in importing silks without paying full duty on them. Rosenthal at 773. He objected by claiming that he was an examiner rather than a weigher, and therefore, he could not legally make the collector act. Id. In other words, "[t]he argument is reduced to this: That he did not commit a crime, because the act which he did dishonestly he was not obligated to do, and could not legally do at all." Id. However, the court noted that if the examiner did act, "he was bound to act in accordance with his oath, and abstain from intentionally and corruptly giving false information to the collector, based upon corrupt acts or omissions in his examinations." Id. It is not necessary "that he should at the time of doing the forbidden act be shown to have been acting strictly as a de jure officer. … Every officer 'by any means whatever' knowingly aiding the illegal admission of goods, i[s] punishable. If the means adopted by him was to accept a duty which did not belong to him, and to take advantage of his knowledge that his performance of that duty would be recognized by his superior officer, that would be quite as much of a 'means,' within the meaning of the statute, as if he had departed from a duty regularly laid upon him." Id. at 773-74.