No. 96-1487 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1996 UNITED STATES OF AMERICA, PETITIONER v. HOSEP KRIKOR BAJAKAJIAN ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES WALTER DELLINGER Acting Solicitor General JOHN C. KEENEY Acting Assistant Attorney General MICHAEL R. DREEBEN Deputy Solicitor General IRVING L. GORNSTEIN Assistant to the Solicitor General KATHLEEN A. FELTON Attorney Department of Justice Washington, D.C. 20530-0001 (202)514-2217 ---------------------------------------- Page Break ---------------------------------------- QUESTION PRESENTED Whether 18 U.S.C. 982(a) (l) violates the Excessive Fines Clause of the Eighth Amendment insofar as it subjects to criminal forfeiture currency that is about to be transported out of the United States without the filing of the currency report required by 31 U.S.C. 5316. ---------------------------------------- Page Break ---------------------------------------- TABLE OF CONTENTS Opinions below . . . . 1 Jurisdiction . . . . 1 Constitutional and statutory provisions involved . . . . Statement . . . . 2 Summary of argument . . . . 2 Argument: The criminal forfeiture of currency that is about to be transported out of the United States without the filing of a required currency report is not an excessive fine . . . . 13 A. The criminal forfeiture of unreported currency is not excessive because unreported currency is an essential instrumentality of an unreported currency offense . . . . 15 B. The criminal forfeiture of unreported currency is not excessive because such a forfeiture is com- mensurate with the seriousness of an unreported currency offense . . . . 27 Conclusion . . . . 34 Appendix . . . . 1a TABLE OF AUTHORITIES Cases: Alexander v. United States, 509 U.S. 544 (1993). . . . 13, 28-29 Austin v. United States, 509 U.S. 602 (1993) . . . . 13, 16, 19, 23, 28 Bennis v. Michigan, 116 S. Ct. 994(1996) . . . . 18, 19 Blanton v. City of North Las Vegas, 489 U. S. 538 (1989) . . . . 29 , 30, 31 Bowsher v. Synar, 478 U. S. 714 (1986) . . . . 15 Browning-Ferris Indus. of Vermont, Inc. v. Kelco Disposal, Inc., 492 U. S. 257 (1989) . . . . 27, 28 Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 (1974) . . . . 16, 18, 29 (III) ---------------------------------------- Page Break ---------------------------------------- IV Cases--Continued: Page California Bankers Ass'n v. Shultz, 416 U.S. 21 (1974) . . . . 21 Dobbin's Distillery v. United States, 96 U. S. 395 (1878) . . . . 16, 17 Harmelin v. Michigan, 501 U.S .957 (1991 ) . . . . 19, 33 Helvering v. Mitchell, 303 U.S. 391 (1938) . . . . 25 J.W. Goldsmith, Jr. -Grant Co. v. United States, 254 U. S. 505(1921) . . . . 16, 17 Marsh v. Chambers, 463 U. S. 783 U983) . . . . 15 One Lot Emerald Cut Stones v. United States, 409 U.S. 232 (1972) . . . . . 8, 16, 17, 18, 22, 23 Salem V. Helm, 463 U.S. (1983) . . . . 29, 33 The Palmyra, 25 U.S. (12 Wheat.) 1 (1827) . . . . 16 United States v. All Right, Title and Interest in Real Property and Appurtenances, 77 F.3d 648 (2d Cir.) cert. denied, 117 S. Ct. 67 (1996) . . . . 14 United States v. Bieri, 68 F.3d 232 (8th Cir. 1995), cert. denied, 116 S. Ct. 1876 (1996) . . . . 14 United States v. Brig Malek Adhel, 43 U.S. (2 How.) 210 (1844) . . . . 16, 17 United States V. Buchanon, 70 F.3d 318 (5th Cir.), cwt. denied, 116 S. Ct. 1340-1341, 1366 (1996) . . . . 14 United States v. Chandler, 36 F.3d 358 (4th Cir. 1994), cert. denied, 514 U.S. 1082 (1995) . . . . 14 United States v. Curtiss-Wright Export Corp., 299 U.S. . 304 (1936) . . . . 17 United States v. 18755 North Bay Road, 13 F.3d 1493 (11th Cir. 1994) . . . . 14 United States v. 829 Cane De Madero, 100 F.3d 336 (lOth Cir. 1997) . . . . 14 United States v. Elder, 90 F.3d 1110 (6th Cir.), cert. denied, 117 S. Ct. 529 (1996), 117 S. Ct. 943 (1997) . . . . 14 United States v. 11869 Westshore Drive, 70 F.3d 923 (6th Cir. 1995), cert denied, 117 S. Ct. 57 (1996) . . . . . . 14 ---------------------------------------- Page Break ---------------------------------------- V Cases-Continued: United States v. 429 South Main Street, 52 F.3d 1416 (6th Cir. 1995) . . . . 14 United States v. 427 and 429 Hall Street, 74 F.3d 1165 (llth Cir. 1996) . . . . 14 United States v. Milbrand, 58 F.3d 841 (2d Cir. 1995), cert. denied, 116 S. Ct. 1284 (1996) . . . . 14 United States v. Myers, 21 F.3d 826 (8th Cir. 1994), cert. denied, 513 U.S. 1086 (1995) . . . . 14 United States v. 92 Buena Vista Avenue, 507 U.S. Us. 111 (1993) . . . . 17 United States v. O'Banion, 943 F.2d 1422 (5th Cir. 1991) . . . . 31 United States v. One Assortment of 89 Firearms, 465 U.S. 354 (1984) . . . . 16, 18 United States v. One 1970 36.9' Columbia Sailing Boat, 91 F.3d 1053 (8th Cir. 1996) . . . . 14 United States v. One Parcel Property 106 F.3d 336 (l0th Cir. 1997) . . . . 14 United States v. One Parcel Property Located at Lot 85, 100 F.3d 740 (l0th Cir. 1996), cert. denied, No. 96-1736, 1997 WL 220039 (June 2, 1997) . . . . 14 United States v. Plescia, 48 F.3d 1452 (7th Cir.), cert. denied, 116 S. Ct. 114, 329, 351, 556 (1995) . . . . 14 United States v. Ramsey, 431 U.S. 606 (1977) . . . . 15, 20 United States v. 6830 Little Canyon Road, 59 F.3d 974 (9th Cir. 1995) . . . . 13 United States v. Tencer, 107 F.3d 1120 (5th Cir. 1997) . . . . 14 United States v. United States Currency in the Amount of $145, 139 803 F. Supp. 592 (E.D.N.Y. 1992), aff'd, 18 F.3d 73 (2d Cir.), cert. denied, 513 U.S. 815 (1994) . . . . 18 F.3d 73 (2d Cir.), cert. denied, 513 U.S. 815 (1994) . . . . 20 ---------------------------------------- Page Break ---------------------------------------- VI Cases-continued: Page United States V. Ursery, 116 S. Ct. 2135 (1996) . . . . 16, 18, 25 Wisconsin v. Pelican Ins. Co., 127 U.S. 255 (1888) 15 Constitution and statutes: U.S. Const.: Amend. V . . . . l6, 18, 22 Amend. VIII . . . . passim Act of July 31, 1789, ch. 5, 1 Stat. 29: 12,1 Stat. 39 . . . . 15 23, 1 Stat. 43 . . . . 15 24,1 Stat. 43 . . . . 15 34, 1 Stat. 46. . . . 15 40,1 Stat. 49 . . . . 15 Bank Secrecy Act of 1970, Pub. L. No. 91-608,84 Stat. 1114 . . . . 3 18 U.S.C. 982(a)(l) . . . . 2, 4, 5, 6, 7, 20, 26, 33 18 U.S.C. 982(b)(l) . . . . 5, 33 18 U.S.C. 1001 . . . . 6 18 U.S.C. 3663 . . . . 25 21 U.S.C. 853(i)(l) . . . . 5, 33 31 U.S.C. 5311 . . . . 3, 21 31 U.S.C. 5316 . . . . 2, 8, 4, 5, 8, 9, 19, 26 31 U.S.C. 5316(a) . . . . 2, 24 31 U.S.C. 5316(a)(l) . . . . 24 31 U.S.C. 5316(a)(l)(A) . . . . 6 31 U.S.C. 5317(c) . . . . 4, 26 31 U.S.C. 5321(a)(2) . . . . 4 31 U.S.C. 5321(c) . . . . 5 31 U.S.C. 5322(a) . . . . 2, 4, 6, 19, 24, 30 31 U.S.C. 5322(b) . . . . 32 31 U.S.C. 5324(b) . . . . 4, 26 Miscellaneous 134 Cong. Rec. S17, 365 (daily ed. Nov. 10, 1988) . . . . 5, 26 136 Cong. Rec. 11,197 (1990) . . . . 5 H.R. Rep. No. 975, 91st Cong., 2d Sess. (1970) . . . . . . 3, 21,25 ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1996 No. 96-1487 UNITED STATES OF AMERICA, PETITIONER v. HOSEP KRIKOR BAJAKAJIAN ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES OPINION BELOW The opinion of the court of appeals (Pet. App. la- 14a) is reported at 84 F..3d 334. JURISDICTION The judgment of the court of appeals was entered on May 20, 1996. A petition for rehearing was denied on November 18, 1996. On February 7, 1997, Justice O'Connor extended the time for filing a petition for a writ of certiorari to and including March 18, 1997. A petition for a writ of certiorari was filed on March 18, 1997, and it was granted on May 27, 1997. The jurisdiction of this Court rests on 28 U.S.C. 1254(1). (1) ---------------------------------------- Page Break ---------------------------------------- 2 CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The relevant constitutional and statutory pro- visions are included in an appendix to the brief. STATEMENT On his plea of guilty in the United States District Court for the Central District of California, respon- dent was convicted on one count of willfully failing to report the transportation of $357,144 out of the United States, in violation of 31 U.S.C. 5316(a) and 5322(a). The district court held that, although 18 U.S.C. 982(a)(l) required the court to order respon- dent to forfeit the unreported currency to the United States, the imposition of a forfeiture greater than $15,000 would violate the Excessive Fines Clause of the Eighth Amendment. The court thus ordered a forfeiture in the latter amount. Pet. App. 16a-19a. The court of appeals affirmed, holding that the for- feiture of any of the unreported currency as a sanction for a reporting violation is unconstitutional. Id. at la-l4a. 1. a. With certain limited exceptions, Title 31, Section 5316 requires a person who "transports, is about to transport, or has transported, monetary in- struments of more than $10,000" outside the country to file a report with the Secretary of the Treasury. The report (Customs Form 4790) asks for the per- son's name and address, the kind of currency trans- ported, the value of the currency, and, if the person is acting on someone else's behalf, the name and address of that person. Congress imposed the currency re- porting requirement after concluding that such a report has "a high degree of usefulness in criminal, ---------------------------------------- Page Break ---------------------------------------- 3 tax, or regulatory investigations or proceedings." 31 U.S.C. 5311. The House Report to the Bank Secrecy Act of 1970, Pub. L. No. 91-508, 84 Stat. 1114, discusses the cir- cumstances that led to the enactment of Section 5316. The Report notes that "[f]or years American criminal elements ha[d] been taking or sending cur- rency out of the United States either in furtherance of a criminal activity or for deposit in a secret foreign haven." H.R. Rep. No. 975, 91st Cong., 2d Sess. 13 (1970). The money had come from "criminal activi- ties, skim money from gambling operations and the like." ibid. In addition, "many Americans ha[d] used couriers to send money to foreign jurisdictions with secrecy laws for the purpose of evading taxes and otherwise hiding assets." Ibid. Those secretive activities produced "debilitating effects * * * on Americans and on the American economy." H.R. Rep. No. 975, supra, at 12. "[H]und- reds of millions in tax revenues [were] lost." Ibid. "[Unwanted credit" was "pumped into our markets." Ibid. Corporate officers "enriched themselves" and "endangered the financial soundness of their com- panies to the detriment of their stockholders." Ibid. And "[criminals engaged in illegal gambling, skim- ming, and narcotics traffic [were] operating their financial affairs with an impunity that approached] statutory exemption." Ibid. Investigators of those activities were "in an impos- sible position." H.R. Rep. No. 975, supra, at 12. They were required to "subject themselves to a time con- suming and ofttimes fruitless foreign legal process," and "[e]ven when procedural obstacles [were] over- come, the foreign jurisdictions rigidly enforce[d] their secrecy laws against their own domestic ---------------------------------------- Page Break ---------------------------------------- 4 institutions and employees." Ibid. By enacting Section 5316 and other requirements, Congress sought to close that serious investigative loophole," Id. at 13. b. To ensure compliance with Section 5316's reporting requirement, Congress devised a series of complementary civil and criminal enforcement mechanisms. On the civil side, Congress provided that, "[i]f a report required under section 5316 with respect to any monetary instrument is not filed (or if filed, contains a material omission or misstatement of fact), the instrument and any interest in property, including a deposit in a financial institution, traceable to such instrument may be seized and forfeited to the United States Government." 31 U.S.C. 5817(c). Congress also authorized civil forfeiture of "[a]ny property, real or personal, involved in a transaction or attempted transaction in violation of section [5316], or any property traceable to such property." Ibid. (re- ferring to violation of 31 U.S.C. 5324(b), which in turn incorporates a failure to file a report required by Section 5316). In addition, "[t]he Secretary of the Treasury may impose an additional civil penalty on a person not filing a report, or filing a report con- taining a material omission or misstatement, under section 5316." 31 U.S.C. 5321(a)(2). The amount of the fine "may not be more than the amount of the monetary instrument for which the report was re- quired," and "is reduced by an amount forfeited under section 5317." Ibid. On the criminal side, a person who "willfully" vio- lates the currency reporting requirement is guilty of a felony, and "shall be fined not more than $250,000, or imprisoned for not more than five years, or both." 31 U.S.C. 5322(a). Under 18 U.S.C. 982(a)(l), the provi- ---------------------------------------- Page Break ---------------------------------------- 5 sion at issue here, "[t]he court, in imposing sentence on a person convicted of an offense in violation of [the currency reporting requirement], shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property." Property "involved in [the] offense" includes the money that is not reported, any commissions or fees paid to the person transport- ing the money, and property used to facilitate the offense. See 134 Cong. Rec. S17, 365 (daily ed. Nov. 10, 1988) (interpreting the language in 18 U.S.C. 982(a)(1) before Section 5316 was added to the list of offenses leading to criminal forfeiture); 136 Cong. Rec. 11,197- 11,198 (1990) (explaining that amendment adding Section 5316 offenses to the list of offenses subject to criminal forfeiture is intended to parallel the criminal forfeiture sanctions for the other offenses listed in 18 U.S.C. 982(a)(l)). Under the statutory scheme, a district court does not have discretion to reduce the amount of a civil or criminal forfeiture. Congress entrusted to the Secre- tary of the Treasury and to the Attorney General the responsibility to decide the circumstances under which such a reduction would be warranted. The Secretary of the Treasury has authority to "remit any part of a [civil] forfeiture," 31 U.S.C. 5321(c), and the Attorney General is authorized to "grant peti- tions for mitigation or remission of [criminal] forfeiture." 21 U.S.C. 853(i)(1) (applicable to forfei- tures under 18 U.S.C. 982(a)(1) by virtue of 18 U.S.C. 982(b)(l)). 2. a. On June 9, 1994, respondent Hosep Bajakajian was in Los Angeles International Airport, waiting to board a flight to Syria. With the assistance of a canine, U.S. Customs inspectors located approxi- ---------------------------------------- Page Break ---------------------------------------- 6 mately $140,000 concealed in respondent's checked luggage and another $90,000 in a false bottom of one of his bags. An inspector then approached respondent and his family in the airport and informed them that they were required to report all money in their possession and in their luggage that exceeded $10,000. Respondent told the inspector that he had $8,000 and that his wife had $7,000. Pet. App. 2a-3a; Plea Agree- ment 7 (Oct. 27, 1994) (Stipulated Statement of Facts). Customs inspectors eventually discovered $357,144 concealed by respondent and his wife. After respon- dent was advised of his rights, he admitted to Cus- toms agents that he knowingly and willfully failed to report the cash. Pet. App. 3a. b. On July 8, 1994, respondent was indicted in the United States District Court for the Central District of California. He was charged with one count of failing to report the export of currency in excess of $10,000, in violation of 31 U.S.C. 6316(a(1)(A) and 5322(a) one count of making a false material statement to the United States Customs Service, in violation of 18 U.S.C. 1001; and one count of criminal forfeiture of the undeclared funds under 18 U.S.C. 982(a)(1). Pet. App. 3a. On October 27, 1994, respondent pleaded guilty to the exporting unreported currency count and agreed to a bench trial on the forfeiture count. The govern- ment agreed to dismiss the false statement count at sentencing. Pet. App. 3a. At the bench trial on the forfeiture count, the parties proffered evidence that respondent had given three different explanations about the source of the funds he had concealed. Respondent first told Customs agents that a friend named Abe Ajemian had lent him approximately $200,000, that approximately ---------------------------------------- Page Break ---------------------------------------- 7 $28,000 was his own, and that various friends and relatives had lent him the remaining $130,000. Gov't Trial Mere. 5 (filed Nov. 28, 1994). Ajemian told Customs agents, however, that he had not lent respondent $200,000. Id. at 5-6. Respondent then claimed that Saeed Faroutan lent him $170,000. Id. at 6. Faroutan, however, told Customs agents that he had made no such loan and that respondent had asked him to lie about it. Ibid. Respondent finally claimed that Ajemian and six others had provided $185,000 and that the rest belonged to him. Def. Trial Mem. 2-3 (filed Dec. 15, 1994). Respondent also claimed that he owed money to his cousin and that he had intended to travel to Cyprus to deliver the money to his cousin. Id. at 3. Following the bench trial, the district court found that the entire $357,144 discovered by Customs agents was involved in respondent's offense, and that those funds were therefore subject to forfeiture under 18 U.S.C. 982(a)(l). Pet. App. 16a. At sentencing, however, the court ordered respondent to forfeit only $15,000, ruling that forfeiture of more than that amount would be "grossly disproportionate" to respondent's culpability and therefore unconstitu- tional under the Excessive Fines Clause of the Eighth Amendment. Id. at 17a-18a. The court stated: I do believe that the United States currency was in the suitcase and in the carry-on luggage for reasons that were not illegal. I do believe that, even though it's a somewhat suspicious and con- fused story, documented in the poorest way, and replete with past misrepresentation, that the funds were * * * borrowed funds. * * * * * ---------------------------------------- Page Break ---------------------------------------- 8 And I think the evidence has developed that [respondent's] state of mind * * * grew out of * * * distrust for the Government. * * * So, the amount of forfeiture will be modest, and will be very very minor, because in truth, and, in fact, I think none should be forfeited. Ibid. The court also sentenced respondent to three years' probation and fined him $5,000. Id. at 18a-19a. 3. The court of appeals affirmed. Pet. App. la-l4a, The court applied a two-part test under which a forfeiture is constitutional under the Excessive Fines Clause only if "(l) the property forfeited is an `instrumentality' of the crime committed, and (2) the value of the property is proportional to the culpability of the owner." Id. at 5a. The court held that the money concealed by respondent failed to satisfy the instrumentality component of that test. The court reasoned that money involved in a violation of Section 5316 can never be an instrumentality of that offense, because "[t]he crime is the withholding of information * * * not the possession or the transportation of the money." Id. at 6a. The court concluded that its holding did not conflict with this Court's decision in One Lot Emerald Cut Stones v. United States, 409 U.S. 232 (1972) (per curiam), which, in rejecting a double jeopardy claim, upheld as remedial the civil forfeiture of gems that had not been declared when the owner brought them into the country. Pet. App. 7a-8a. The court believed that the smuggled gems in One Lot Emerald Cut Stones were "contraband " but that the money in- volved in a currency reporting violation is not. Id. at 8a. The court further stated that the "key differ- ence, " is that "a violation of 5316 merely deprives ---------------------------------------- Page Break ---------------------------------------- 9 the government of information, whereas the smug- gling of goods across the border deprives the govern- ment of revenue." Ibid. Having concluded that a forfeiture constitutes an excessive fine unless the forfeited property was an instrumentalist y of an offense, and that money involved in a violation of Section 5316 is not an instrumentality of that offense, the court held that "[forfeiture of any amount" of respondent's un- declared money "would be unconstitutionally exces- sive under * * * [the] Excessive Fines Clause." Pet. App. 9a. The court affirmed the judgment of the district court ordering the forfeiture of $15,000 only because respondent had failed to cross appeal and therefore could not challenge the district court's judgment. Id. at 9a-10a. Judge Wallace concurred in the judgment of affirmance, but disagreed with the majority's Eighth Amendment analysis. Pet. App. 10a-14a. Judge Wallace concluded that money involved in a violation of Section 5316 is an instrumentality of that offense, because "without the currency, there can be no offense." Id. at 13a. In ruling otherwise, Judge Wallace emphasized, "the majority strikes down a portion of 18 U.S.C. 982(a)(l), thereby unduly limiting the government's forfeiture powers." Id. at 10a. Judge Wallace nonetheless voted to affirm the district court's judgment, because he concluded that the district court did not commit clear error in finding that a $15,000 forfeiture was proportional to respon- dent's culpability. Id. at 13a-14a. The government's petition for rehearing and sug- gestion for rehearing en bane were denied. Judge Wallace voted to grant both the petition for rehearing ---------------------------------------- Page Break ---------------------------------------- 10 and the suggestion for rehearing en banc. Pet. App. 15a. SUMMARY OF ARGUMENT Respondent was convicted and sentenced for the felony of willfully failing to file a required currency report as he was about to leave the United States with $357,144 in cash. The court of appeals concluded that the forfeiture of that undeclared cash-or of any cash involved in a failure-to-report violation- constitutes an excessive fine, in violation of the Eighth Amendment. That holding is incorrect. The criminal forfeiture of currency that is not declared as required by federal law is not an "excessive fine" within the meaning of the Eighth Amendment. A. Throughout the nation's history, Congress has provided for forfeiture as a sanction for the improper use of property in the commission of offenses. The First Congress provided for enforcement of the customs laws by authorizing the forfeiture of pro- perty imported without proper declaration. Later for- feiture laws reached a variety of forms of property used or involved in a criminal offense. This Court has consistently rejected constitutional challenges to such forfeitures, and the long history of such statutes provides strong support for the proposition that they are not "excessive" fines. The forfeiture of such instrumentalities of crime (i.e., property used or involved in the commission of an offense) is a proportionate sanction because, apart from any punitive purpose such forfeitures might serve, they serve important remedial aims, They encourage property owners to take care that their property does not become involved in crime; they prevent further use of the property in crime and they ---------------------------------------- Page Break ---------------------------------------- 11 impose an economic sanction that renders crime less profitable. In view of those purposes, the forfeiture of the instrumentalities of crime, whether in a civil or criminal proceeding, is a proportionate remedy. It is the property's involvement in the offense that justi- fies such a remedial forfeiture; the Eighth Amend- ment does not require an additional inquiry into the culpability of the owner or the property's economic value. The forfeiture of the undeclared currency involved in a reporting offense is justified on that basis. The currency is an indispensable instrumentality of the failure-to-report offense. The offense requires proof that cash is being transported (or is about to be transported); without the involvement of the cash, there is no offense. Forfeiture of the cash also serves the traditional remedial goals of instrumentality forfeitures. The remedy prevents the use of un- reported cash to conceal or further criminal activity, and it encourages travelers to report information that is critical in the investigation of domestic and inter- national crime. Finally, the sanction is precisely tailored to the magnitude of the violation; the greater the amount of cash that is transported without declaration, the greater the potential harm posed by the unlawful activity. B. The forfeiture of the undeclared cash as part of a criminal sentence for a failure-to-report offense is also justified as serving punitive purposes. Forfeiture of the property used by a criminal in carrying out his offense is an inherently fitting penalty for a serious crime. The defendant, in such a case, has effectively set his own "fine" by electing to employ his property in furthering a criminal venture. No further analysis of a defendant's culpability (or of ---------------------------------------- Page Break ---------------------------------------- 12 the value of his property) is needed to uphold the proportionality of such a criminal forfeiture. Even if criminal forfeiture were applied to property that is not significantly tied to the offense, the sanc- tion would not automatically be excessive. The question in such a case would be the same as in an excessive fines challenge to a monetary sanction: whether the amount of the financial penalty is exces- sive in relation to the seriousness of the offense. The answer to that question, as with other Eighth Amend- ment questions, must give deference to the legis- lature's assessment of the seriousness of the crime and appropriate penalties. Here, Congress's judgment to impose criminal forfeiture on the undeclared cash does not transgress constitutional bounds. The circulation of unreported cash throughout the world facilitates money launder- ing, tax evasion, and other illicit conduct. To address such serious harms, Congress has made it a felony for a person willfully to fail to report cash that is about to be exported, and has authorized a sentence of up to five years' imprisonment and a $250,000 fine. Including in the sentence the forfeiture of the very cash involved in the offense is not an excessive fine. Far from being excessively punitive, such a forfeiture is perfectly calibrated to the seriousness of the defendant's conduct since the amount of the fine increases in direct proportion to the amount that is concealed. ---------------------------------------- Page Break ---------------------------------------- 13 ARGUMENT THE CRIMINAL FORFEITURE OF CURRENCY THAT IS ABOUT TO BE TRANSPORTED OUT OF THE UNITED STATES WITHOUT THE FILING OF A REQUIRED CURRENCY REPORT IS NOT AN EXCES- SIVE FINE The Eighth Amendment to the Constitution pro- hibits the imposition of "excessive fines." This Court has held that both in personam criminal forfeitures and civil in rem forfeitures are "fines" within the meaning of the Excessive Fines Clause. Alexander v. United States, 509 U.S. 544, 558 (1993) (in per- sonam criminal forfeitures); Austin v. United States, 509 U.S. 602, 618-622 (1993) (civil in rem forfeitures). The Court has not, however, established a standard for determining when such forfeitures become consti- tutionally "excessive." Alexander, 509 U.S. at 559 (remanding for consideration of that issue); Austin, 509 U.S. at 622-623 (same). The court of appeals in this case held that a for- feiture is constitutionally excessive unless it satis- fies two conditions: (1) the property forfeited must be an instrumentality of the crime committed, i.e. the forfeited property must have a sufficient relationship to the illegal activity; and (2) the forfeiture must not be grossly disproportionate to the culpability of the owner. Pet. App. 5a; United States v. 6830 Little Canyon Road, 59 F.3d 974, 982 (9th Cir. 1995). The Ninth Circuit applies that same test to both criminal and civil forfeitures. Pet. App. 5a (criminal); 6830 Little Canyon Road, 59 F.3d at 982 (civil). In our view, compliance with the Eighth Amend- ment does not require satisfaction of both conditions ---------------------------------------- Page Break ---------------------------------------- 14 set forth by the court of appeals. Instead, as a general matter, a criminal forfeiture complies with the Eighth Amendment as long as it satisfies either. Under the correct constitutional standard, the for- feiture of the currency involved in this case is not excessive. 1 ___________________(footnotes) 1 While the courts of appeals have differed somewhat in the way they have framed the legal analysis, they have almost uniformly rejected excessive fines challenges to forfeitures of property involved in federal criminal offenses. See United States V. Tencer, 107 F.3d 1120, 1135 n.7 (5th Cir. 1997); United States v. One Parcel Property, 106 F.3d 336, 338-339 (lOth Cir. 1997) (per curiam); United States V. 829 Calle De Madero, 100 F.3d 734, 736-739 (lOth Cir. 1996); United States v. One Parcel Property Located at Lot 85, 100 F.3d 740, 744 (10th Cir. 1996), cert. denied, No. 96-1736, 1997 WL 220039 (June 2, 1997); United States v. Elder, 90 F.3d 1110, 1132-1133 (11th Cir.), cert. denied, 117 S. 529 (1996), 117 S. Ct. 993 (19973; United States v. One 1970 36.9' Columbus Sailing Boat, 91 F..3d 1053, 1057-1058 (8th Cir. 1996); United States v. All Right, Title and Interest in Real Property and Appurtenances, 77 F.3d 648, 658- 659 (2d Cir.), cert. denied, 117 S. Ct. 67 (1996); United States 427 and 429 Hall Street, 74 F.3d 1165, 1170-1173 (llth Cir. 1996); United States v. 11869 Westshore Drive, 70 F..3d 923,926- 930 (6th Cir. 1995), cert. denied, 117 S. Ct. 57 (1996); United States v. Buchanan, 70 F.3d 818, 830-831 n.12 (5th Cir.), cert. denied, 116 S. Ct. 1340-1341, 1366 (1996); United States v. Bieri, 68 F.3d 232, 235-238 (8th Cir. 1995), cert. denied, 116 S. Ct. 1876 (1996); United States V. Milibrand, 58 F.3d 841, 845-848 (2d Cir. 1995), cert. denied, 116 S. Ct. 1284 (1996); United States V. South Main Street, 52 F.3d 1416, 1421-1422 (6th Cir. 1995); United States v. Plescia, 48 F.3d 1452, 1462 (7th Cir.), cert. denied, 116 S. Ct. 114, 329, 351, 556 (1995); United States v. Chandler, 36 F.3d 358,362-366 (4th Cir. 1994), cert. denied, 514 U.S. 1082 (1995) United States v.. Myers, 21 F.3d 826, 830-831 (8th Cir. 1994), cert denied, 513 U.S. 1086 (1995). But see, e.g., United States v. 18755 North Bay Road, 13 F.3d 1493, 1498 1499 (11th Cir. 1994). ---------------------------------------- Page Break ---------------------------------------- 15 A. The Criminal Forfeiture Of Unreported Currency Is Not Excessive Because Unreported Currency Is An Essential Instrumentality Of An Unreported Currency-Transportation Offense 1. a. Since the First Congress, this nation's laws have provided for the forfeiture of property involved in certain offenses. The First Congress enacted cus- toms laws that provided for the forfeiture of goods entered by false statements, goods unloaded at night or without a permit, concealed goods on which duties had not been paid, and relanded goods entitled to a drawback. Act of July 31, 1789, ch. 5, 12, 23, 24, 34, 1 Stat. 39, 43, 46. The early customs laws also pro- vided for the forfeiture of vessels involved in customs offenses. 12, 40, 1 Stat. 39, 49. Under the early customs statutes, forfeiture did not depend on the value of the property or the culpability of the property owner; the property's involvement in the offense was sufficient. "The historical importance of the enactment of [those] customs statute[s] by the same Congress which proposed the [Eighth] Amendment is * * * manifest." United States v. Ramsey, 431 U.S. 606, 616-617 (1977) (applying that analysis in upholding border searches under the Fourth Amendment). The necessary premise of the early customs laws is that the forfeiture of property involved in an offense is not an excessive fine. Those laws and the view of the Eighth Amendment they reflect are "contempora- neous and weighty evidence of [the Eighth Amend- ment's] true meaning." Wisconsin v. Pelican Ins. Co., 127 U.S. 265, 297 (1888); see also Bowsher v. Synar, 478 U.S. 714, 723-724 (1986); Marsh v. Chambers, 463 U.S. 783,790-791 (1983). ---------------------------------------- Page Break ---------------------------------------- 16 b. Congress has subsequently enacted numerous laws authorizing civil forfeiture of property involved in criminal offenses, and "contemporary federal * * * forfeiture statutes reach virtually any type of pro- perty that might he used in the conduct of a criminal enterprise." Calero-Toledo v. Pearson Yacht Leas- ing Co., 416 U.S. 663, 683 (1574). In a long line of decisions, this Court has rejected Due Process and Double Jeopardy Clause challenges to the validity of such forfeitures. The Court has upheld the forfeiture of a variety of forms of property involved in offenses, including vessels involved in piracy (The Palmyra 25 U.S. (12 Wheat.) 1, 13 (1827); United States v. Brig Malek Adhel, 43 U.S. (2 How.) 210, 233-234 (1844)); a distillery and associated real and personal property when alcohol taxes were not paid (Dobbins's Distill- ery v. United States, 96 U.S. 395, 400-401 (1878)); an automobile used to transport liquor on which taxes had not been paid (J.W. Goldsmith, Jr.-Grant Co. v. United States, 254 U.S. 505, 508, 510-512 (1921)); undeclared imported gems (One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 237 (1972)): unlicensed firearms [United States v. One Assort- ment of 89 Firearms, 465 U.S. 354, 364-366 (1984)); and real property used for growing marijuana (United States v. Ursery, 116 S. Ct. 2135, 2138-2139 (1996)). As was true with the first customs laws, the for- feitures in later statutes were "fixed, not by deter- mining the appropriate value of the penalty in relation to the committed offense, but by determining what property has been `tainted' by unlawful use, to which issue the value of the property is irrelevant." Austin, 509 U.S. at 627 (Scalia, J., concurring in part and concurring in the judgment); see, e.g., The Palmyra, 25 U.S. (12 Wheat.) at 14 ("The thing is here pri- ---------------------------------------- Page Break ---------------------------------------- 17 marily considered as the offender, or rather the offence is attached primarily to the thing"); United States v. Brig Malek Adhel, 43 U.S. (2 How.) at 233 ("The vessel which commits the aggression is treated as the offender, as the guilty instrument or thing to which the forfeiture attaches, without any reference whatsoever to the character or conduct of the owner."); Dobbins's Distillery, 96 U.S. at 401 ("the offence * * * is attached primarily to the distillery, and the real and personal property used in connection with the same, without any regard whatsoever to the personal misconduct or responsibility of the owner"); Goldsmith-Grant Co., 254 U.S. at 513 ("It is the illegal use that is the material consideration, it is that which works the forfeiture, the guilt or innocence of its owner being accidental."). Con- gress's 200-year practice of providing for the forfei- ture of instrumentalities without a separate inquiry into the value of the property involved in the offense or the culpability of the owner "goes a long way in the direction of proving the presence of unassailable ground for the constitutionality of the practice." United States v. Curtiss-Wright Export Corp., 299 U.S. 304,328 (1936). 2 ___________________(footnotes) 2 The early forfeiture cases do not employ the term "instrumentality" to describe the property involved in the offense. That term, however, fairly characterizes the range of property whose forfeiture is authorized because of the use or involvement of the property in a direct and substantial way in the offense (i.e., conveyances used to transport contraband, real property used to carry out unlawful activity, property imported without proper declaration). See United States v. 99 Buena Vista Avenue, 507 U.S. 111, 119-121 (1993) (plurality opinion). ---------------------------------------- Page Break ---------------------------------------- 18 c. The cases cited above, though addressing Due Process and Double Jeopardy claims, illuminate why Congress has never viewed instrumentality forfei- tures as excessive fines. As those cases explain, the forfeiture of property involved in an offense, "while perhaps having certain punitive aspects, serves im- portant nonpunitive goals." Ursery, 116 S. Ct. at 2148, Such a forfeitve both "encourages property owners to take care in managing their property," ibid., and "prevent[s] further illicit use of the [property]," Bennis v. Michigan, 116 S, Ct. 994, 1000 (1996). See also Calero-Toledol 416 U.S. at 687 (forfeiture of wrongfully used property "fosters the purposes served by the underlying criminal statutes, both by preventing further illicit use of the [property] and by imposing an economic penalty, thereby render- ing illegal behavior unprofitable"); 89 Fire arms, 465 U.S. at 363 (forfeiture of unlicensed firearms discour- ages unregulated commerce and removes firearms intended for use outside regulated channels). Those "broad remedial aims," Ursery, 116 S. Ct. at 2142, are served by a forfeiture of property involved in an offense, regardless of the value of the property or the culpability of the owner. 3 Because instrumentality forfeitures serve impor- tant remedial goals in a direct and material way, Congress has always viewed them as fair and appro- priate sanctions, not "excessive frees." That con- sidered judgment by Congress is reasonable and ___________________(footnotes) 3 Forfeitures of instrumentalities of an offense can also serve as a reasonable form of liquidated damages to defray the government's costs of enforcement and the societal harms created by the activity in which the property is involved. See One Lot Emerald Cut Stones, 409 U.S. at 237. That purpose is implicated regardless of the culpability of the owner. ---------------------------------------- Page Break ---------------------------------------- 19 therefore entitled to deference. Cf. Harmelin v. Michigan, 501 U.S. 957, 998-999 (1991) (Kennedy, J., concurring in part and concurring in the judgment). 2. For the reasons discussed above-the persua- sive force of the views of the First Congress, the weight of 200 years of congressional practice, and the reasonableness of Congress's judgment that instrumentality forfeitures represent appropriate remedial sanctions-traditional instrumentality for- feitures are not "excessive fines" within the meaning of the Eighth Amendment. Accordingly, in such cases, there is ordinarily no requirement of a sepa- rate inquiry into the value of the property or the culpability of the owner. 4 a. The forfeiture of unreported currency involved in an offense is justifiable on an instrumentality theory. Section 5316 makes it unlawful to transport currency of more than $10,000 outside of the United States without filing a report with the Secretary of the Treasury. 31 U.S.C. 5316. A person who "will- fully" violates that requirement commits a criminal offense, 31 U.S.C. 5322(a), and the undeclared cur- ___________________(footnotes) 4 It is, however, appropriate to inquire into the degree of relationship that the property bears to the offense. An incidental or remote relationship between the property and the offense would not accord with the traditional applications of forfeiture doctrine described above. Such a relationship would therefore justify further analysis under the Excessive Fines Clause. See, e.g., Bennis, 116 S. Ct. at 1000 (forfeiture of an ocean liner because of the activities of one of its passengers] Austin, 509 U.S. at 627-628 (Scalia, J., concurring in part and concurring in the judgment) (forfeiture of a building in which an isolated drug deal happens to occur). Absent a sufficient connection between the property and the offense as tradition- ally understood, the property may not fairly be described as an "instrumentality" of the offense. ---------------------------------------- Page Break ---------------------------------------- 20 rency is subject to mandatory forfeiture, 18 U.S.C. 982(a)(l). Such a forfeiture satisfies constitutional requirements, because the undeclared currency is an essential instrumentality of the offense. The cur- rency that is transported in a-reporting violation is "the very sine qua non of the crime." United States v. United States Currency in the Amount of $145,139, 18 F.3d 73, 75 (2d Cir.), cert. denied, 513 U.S. 815 (1994). For "without the currency, there can be no offense." Pet. App. 13a (Wallace, J., concurring in the judgment). Thus, unreported cash that is about to be exported does not merely facilitate a violation of law'; there would be no violation at all without the exporta tion (or attempted exportation) of the cash. Accord- ingly, as the Second Circuit explained in United States Currency in the Amount of $145,139 Clearly, it is much more accurate to describe the currency as the means by which the crime was committed than it would be to so describe a house from which drugs had been sold or an automobile in which they had been transported. If, as we have held, a house can be considered an instrumentalist y of the crime, * * * we would be blinking reality if we held that the money in the instant case was any less an instrumentality. 18 F.3d at 75. b. As with traditional instrumentality forfeitures, the forfeiture of undeclared currency also serves important remedial purposes. The government has an overriding sovereign interest in controlling what. property leaves and enters this country. See Ram - sey, 431 U.S. at 616-619. Reporting requirements are an essential means of serving that vital interest. The reporting requirement at issue here serves a particu- ---------------------------------------- Page Break ---------------------------------------- 21 larly important function in deterring and investiga- ting crime. Before the reporting requirement was imposed, criminal enterprises had been able to send money secretly out of the country either in further- ance of their criminal activities or for deposit in countries with secrecy laws, and thus were able to operate their financial affairs "with an impunity that approached] statutory exemption." H.R. Rep. No. 975, supra, at 12. Many other persons had sent money to foreign jurisdictions with secrecy laws for the purpose of evading taxes, leading to hundreds of millions of dollars in lost tax revenues. Id. at 12-13. And some corporate officials had enriched themselves at the expense of their companies and stockholders. Id. at 12. The reporting requirement not only deters illicit movements of cash, it also gives the government valuable information to investigate and detect criminal activities associated with that cash. By "singl[ing] out transactions found to have the greatest potential" for "circumventing] the enforce- ment of the laws of the United States," see Califor- nia Bankers Ass'n v. Shuhtz, 416 U.S. 21, 63 (1974), the reporting requirement provides the' government with information that has "a high degree of useful- ness in criminal, tax, or regulatory investigations or proceedings." 31 U.S.C. 5311. The forfeiture of undeclared currency plays an important role in supporting the remedial purposes of the reporting requirement. It both encourages per- sons to inform the government that they are trans- porting more than $10,000 in cash outside the country and prevents such money from being used in circum- vention of requirements in the future. A forfeiture of all the money involved in a reporting violation is also precisely tailored to the remedial purposes of ---------------------------------------- Page Break ---------------------------------------- 22 the reporting requirement. The dangers created by money that is secretly exported increase as the amount of money secretly exported increases: The greater the amount of money that is laundered or hidden overseas, the greater the potential harm to the people and the economy of this country. Thus, it is a fair and reasonable remedy to subject to forfeiture the cash that a person attempts secretly and unlawfully to export. c. The forfeiture of currency involved in an undeclared currency violation also has deep historical roots. As noted above, since the First Congress, this nation's laws have provided for the forfeiture of goods involved in customs offenses. Those laws reflect the view that when property is imported without compli- ance with declaration and reporting requirements, it is a reasonable remedy to confiscate the property unlawfully imported. In One Lot Emerald Cut Stones, supra, this Court held, in rejecting a claim under the Double Jeopardy Clause, that the civil forfeiture of such undeclared goods serves legitimate remedial ends. In that case, a defendant who entered the United States without declaring to United States Customs one lot of emer- ald cut stones and one ring was acquitted of criminal smuggling charges. 409 U.S. at 232-233. Following the acquittal, the government instituted a civil for- feiture proceeding against the stones and ring under a statute that authorized forfeiture of any article not included in a declaration prior to inspection. Id. at 233 & n.2. This Court held that the Double Jeopardy Clause did not bar the forfeiture proceeding, noting that the civil forfeiture served remedial rather than punitive purposes. Id. at 235-237. The Court explained that the forfeiture of undeclared property ---------------------------------------- Page Break ---------------------------------------- 23 "prevents forbidden merchandise from circulating in the United States, and, by its monetary penalty, it provides a reasonable form of liquidated damages for violation of the inspection provisions and serves to reimburse the Government for investigation and enforcement expenses." Id. at 237. "[S]uch pur- poses," the Court noted, "characterize remedial rather than punitive sanctions." Ibid. This Court has made clear that the remedial characterization of such customs forfeitures applies equally under the Excessive Fines Clause. In Austin, the Court cited One Lot Emerald Cut Stones as an example of a remedial forfeiture, stating that "forfeitures of goods involved in customs violations" are justified as a remedial sanction and therefore are not excessive fines. Austin, 509 U.S. at 621. The forfeiture of money involved in a reporting violation bears important similarities to the forfei- ture of undeclared goods. Both actions reflect the government's sovereign interest in controlling what property leaves and enters this country. Both also encourage the reporting of information required for an important regulatory function: when goods are declared, the information determines their exposure to duties and their admissibility into the United States; when currency is reported, the information may be used to investigate and detect circumvention of our drug, tax, and other laws. Both kinds of for- feitures prevent circumvention of requirements in the future, and both "provide[] a reasonable form of liquidated damages for violation of the inspection provisions and serve[] to reimburse the Government for investigation and enforcement expenses." One Lot Emerald Cut Stones, 409 U.S. at 237. Finally, like undeclared goods, undeclared currency is the ---------------------------------------- Page Break ---------------------------------------- 24 very item hidden from the government and is there- fore the central instrumentality of the offense. The forfeiture of undeclared currency therefore comes within the tradition in this country of remedial cus- toms forfeitures. d. The court of appeals sought to distinguish forfeiture of undeclared currency from forfeiture of undeclared goods on the ground that Section 5316(a} does not make unlawful "the illegal possession, trans- portation, or smuggling of dutiable items: but only "the failure to provide information." Pet. App. 7a-8a. That description of the offense is incomplete. The offense is not merely the failure to report, but the willful failure to file a report when "transport [ing] monetary instruments of more than $10,000 at one time * * * from a place in the United States to or through a place outside the United States." 31 U.S.C. 5316(a)(l); 5322(a), The essence of the offense is therefore smuggling money out of the country, not simply failing to provide information. The court of appeals also believed that undeclared goods may be characterized as contraband, while undeclared currency cannot be. Pet. App. 8a. Un- declared currency and undeclared goods, however, cannot be distinguished on that ground. Both are generally lawful to possess; both become subject to seizure and forfeiture when an attempt is made to smuggle them unlawfully across the border. The Ninth Circuit found it significant that the failure to declare goods deprives the government of revenue in the form of duties, while the failure to report currency information deprives the government only of information. Pet. App. 8a. The harm to the govern- ment from reporting violations, however, though not always quantifiable, is considerable. Money is often ---------------------------------------- Page Break ---------------------------------------- 25 secretly exported in order to evade the payment of taxes. Such violations can lead to an incalculable loss in tax revenue. And, the economic power of much criminal activity depends on money laundering that secretly moves cash in and out of the country. Tracing the flow of currency plays a vital role in attacking global criminal activity. Given the major drain on the economy of such illicit financial activi- ties, crimes that allow unreported dollars to circulate throughout the world inflict significant harm. Thus, money that is secretly exported out of this country produces "debilitating effects * * * on Americans and the American economy." H.R. Rep. No. 975, .supra, at 12. 3. The currency in this case was subject to for- feiture in a criminal in personam proceeding rather than a civil in rem proceeding. That circumstance, however, does not alter the conclusion that the cur- rency is an instrumentality whose forfeiture is justifiable as a reasonable remedial measure. Crimi- nal sanctions are usually intended primarily to inflict punishment. But "nothing in the Constitution pre- vents the enforcement of distinctly remedial sanc- tions by a criminal instead of civil form of pro- ceeding." Helvering v. Mitchell, 303 U.S. 391,402 n.6 (1938). For example, an order requiring a person convicted of a crime to provide restitution to his victim serves the remedial goal of making the victim whole, regardless of whether the order is imposed in a civil or a criminal proceeding. See 18 U.S.C. 3663. Similarly, whether imposed in a civil or criminal proceeding, a forfeiture of the proceeds of an offense serves the remedial purpose "of ensuring that per- sons do not profit from their illegal acts," Ursery, 116 S. Ct. at 2149; id. at 2152 (Stevens, J., concurring in ---------------------------------------- Page Break ---------------------------------------- 26 the judgment in part and dissenting in part). The same reasoning applies to forfeitures of instru- mentalities: Such forfeitures can serve the same remedial goals in criminal proceedings that they do in civil in rem proceedings. The text of Section 982(a)(l) slows that Congress intended to rely on remedial as well as punitive goals when it mandated the criminal forfeiture of the currency at issue here. Section 982(a)(l) provides that, in imposing sentence for a reporting violation, the court shall order forfeiture of "any property, real or personal, involved in such offense." 18 U.S.C. 982(a)(l). As a general matter, property "involved in [the] offense" is a shorthand `description for the kind of property historically subject to forfeiture in a civil in rem proceeding. See 134 Cong. Rec. S17, 365 (daily ed. Nov. 10, 1988) (property involved in the offense includes the money involved in the offense, any com- missions or fees paid to the person transporting the money, and property used to facilitate the offense). Indeed, the provision authorizing civil in rem forfeiture for reporting violations uses the same "involved in" language to identify the kind of property subject to forfeiture. 31 U.S.C. 5317(c) (referring to violation of 31 US.C. 5324(b), which in turn in- corporates a failure to file a report required by Section 5316). By generally limiting the property subject to forfeiture to property that has traditionaly been subject to forfeiture in civil in rem proceedings, Congress manifested its intent to further, among other things, traditional remedial ends. In sum, the currency involved in an undeclared currency violation is subject to forfeiture as an instrumentality of the offense. Such a forfeiture is justifiable by remedial purposes, regardless of ---------------------------------------- Page Break ---------------------------------------- 27 whether the. forfeiture occurs in a civil or a criminal proceeding. In view of the remedial goals served by this traditional form of forfeiture, the forfeiture of the unreported currency in this case is not an exces- sive fine. B. The Criminal Forfeiture Of Unreported Currency Is Not Excessive Because Such A Forfeiture Is Com- mensurate With The Seriousness Of An Unreported Currency Offense Quite apart from the instrumentality analysis de- scribed above, the forfeiture of unreported currency as a criminal sanction for a failure to report trans- portation of that currency is not an excessive fine. Although criminal forfeitures often may serve remedial purposes, they need not be justified solely in those terms. Such forfeitures may also be inde- pendently justified as punishment, so long as the punishment is not excessive in relation to the offense. Given respondent's decision to involve his money in a crime and the serious nature of the offense, the forfeiture of the currency involved in this case is not a disproportionate punishment. 1. a. The background of the Excessive Fines Clause shows that its principal concern was with the imposition of excessive monetary fines for punitive purposes. Browning Ferris Indus. of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 266-267 (1989). The Excessive Fines Clause was modelled on a pro- vision of the Virginia Declaration of Rights, which in turn was based on a provision of the English Bill of Rights. Id. at 266. The English version was intended to curb the excesses of English judges under the reign of James II. Id. at 267. During the reigns of the Stuarts, the King's judges imposed heavy fines on ---------------------------------------- Page Break ---------------------------------------- 28 the King's enemies, and later, the use of fines became even more excessive and partisan, forcing some opponents of the King to remain in prison because they could not pay the huge monetary penalties assessed. Ibid. Given that background of the Eighth Amendment, when Congress authorizes the imposi- tion of a monetary fine solely as punishment, the most relevant constitutional inquiry is whether the value of the fine is excessive when compared to the serious- ness of the offense. Austin, 509 U.S. at 627 (Scalia, J., concurring in part and concurring in the judgment). The criminal forfeiture of property that the defen- dant has used or involved in a serious offense is a distinctive "fine," and will virtually always constitute a proportionate punishment. That is because the de- fendant, through his own actions, has put his property in the service of crime, and thereby has set the size of his own financial penalty. Confiscation of that prop- erty as part of his sentence is inherently propor- tionate to the violation. b. But even if criminal forfeiture were authorized of property that had not been substantially or signifi- cantly devoted to the commission of the offense, such a "fine" would not automatically be excessive. When such a forfeiture is imposed as an in personam pun- ishment for a criminal offense, it is "no different, for Eighth Amendment purposes, from a traditional [monetary] `fine.'" Alexander, 509 U.S. at 558. Such a punitive forfeiture operates as an "in-kind" assess- ment. Austin, 509 U.S. at 624 (Scalia, J., concurring in part and concurring in the judgment). The appro- priate inquiry would then be whether the value of the property is excessive when compared to the serious- ness of the offense. Id. at 627 see Alexander, 509 U.S. at 558. Because-the property such a forfeiture ---------------------------------------- Page Break ---------------------------------------- 29 may be seen as equivalent to an ordinary monetary fine, there is no constitutional requirement that it have any particular relationship to the offense. In such a case, a court has a limited role in deter- mining whether a punitive forfeiture is constitution- ally excessive. In this context, as in applying the Cruel and Unusual Punishment Clause, the Eighth Amendment "does not require strict proportionality between crime and sentence." Harmelin, 501 U.S. at 1001 (Kennedy, J., concurring in part and concurring in the judgment). Instead, it forbids only those fines that are "grossly disproportionate" to the serious- ness of the offense. Solem v. Helm, 463 U.S. 277, 288 (1983). In conducting that inquiry, substantial deference must be given to Congress' judgment con- cerning the seriousness of the offense. Harmelin, 501 U.S. at 998-999 (Kennedy, J., concurring in part and concurring in the judgment). A court "should not substitute its judgment as to seriousness for that of a legislature, which is `far better equipped to perform the task and [is] likewise more responsive to changes in attitude and more amenable to the recognition and correction of their misperceptions in this respect.'" Blanton v. City of North Las Vegas, 489 U.S. 538, 541- 542 (1989). 2. a. Under the correct standard, the criminal for- feiture mandated in this case is not excessively punitive. First, the property subjected to forfeiture is the very money that respondent involved in his offense. Such a punishment thus fairly fits the crime without further inquiry into the value of the forfeited property. Second, to the extent that the value of the property bears on the excessiveness `question, the "fine" here is proportionate. ---------------------------------------- Page Break ---------------------------------------- 30 Forfeiture of the undeclared cash is perfectIy cali- brated to the seriousness of the defendant's conduct since the amount of the fine increases in direct proportion to the amount that is concealed. United States v. United States Currency in the Amount of $145,139, 803 F. Supp. 592,600 (E.D.N.Y. 1992), a'ffd, 18 F.3d 73 (2d Cir.), cert. denied, 513 U.S. 815 (1994). And the offense itself is a serious one. Respondent was convicted of a willful violation of the reporting requir- ment. Respondent's conviction rests on an admission that he knew that it was unlawful to export more than $10,000 without filing a report and decided not to file such a report anyway. Congress authorized signifi- cant penalties for such a willful violation. In addition to mandating criminal forfeiture of the currency, Congress authorized as additional punishment a $250,000 fine and/or a five-year term of imprisonment. 31 U.S.C. 5322(a). Those authorized penalties are the best indication of Congress's view of the seriousness of the offense. See Blanton, 489 U.S. at 541, 542 ("In fixing the maximum penalty for a crime, a legislature `include[s] within the definition of the crime itself a judgment about the seriousness of the offense'" and the maximum period of incarceration is "the most powerful indication" of that judgment). Congress's judgment concerning the seriousness of a willful violation of the reporting requirement is well-founded. As previously discussed, Congress was aware that the secret export of large amounts of cash is often associated with money laundering, tax evasion, and other serious offenses, Congress reason- ably determined that a reporting requirement was essential to deter and detect such activity and that willful violations of that requirement should result in strict punishment. See United States v. O'Banion, 31 943 F.2d 1422, 1432-1433 (5th Cir. 1991) (regulation of currency that crosses our borders is a "serious matter," and claim that classification of a reporting offense as a felony violates the Cruel and Unusual Punishment Clause is not "plausible"). In light of the seriousness of a willful violation of the reporting requirement, the forfeiture of the very money involved in that offense cannot be viewed as a "grossly disproportionate" punishment. In general, while "[penalties such as * * * a fine may engender `a significant infringement of personal freedom, * * * they cannot approximate in severity the loss of liberty that a prison term entails." Blanton, 489 U.S. at 542. If respondent were sentenced to a term of imprisonment, he could not seriously claim that his punishment was grossly disproportionate to the offense. See O'Banion, 943 F.2d at 1422. Because the forfeiture of the money concealed in the offense is a less severe penalty, any claim that it is excessively punitive is even less persuasive. b. Nothing in the facts of this case suggests that forfeiture of the undeclared currency would be an excessive fine. Respondent violated the reporting requirement after a customs officer approached him and told him that he was required to file a report if he was intending to export more than $10,000 in currency. Respondent then deliberately lied about the amount of money in his possession, claiming that he had less than $10,000 when he was actually planning to export $347,144. After customs inspec- tors discovered the currency concealed by respondent and his wife, respondent admitted to agents that he knowingly and willfully failed to report the cash. Pet. App. 3a Plea Agreement 7 (Oct. 27, 1994) (Stipulated Statement of Facts). Respondent then lied about ---------------------------------------- Page Break ---------------------------------------- 32 the source of the funds, providing three different ex- planations about it. Gov't Trial Mere. 5-6 (filed Nov. 28, 1994); Def. Trial Mem. 2-3 (filed Dec. 15, 1994). For that conduct, respondent was sentenced to three years' probation and fined $5,000. Particularly in light of the range of possible sentences that Congress contemplated, it cannot be excessively punitive to add to respondent's sentence a forfeiture of the very money he concealed. c. That conclusion is not affected by the district court's finding that "even though it's a somewhat suspicious and confused story, documented in the poorest way, and replete with past misrepresenta- tion; respondent obtained the funds from a legitimate source and intended to use them for a legitimate purpose. Pet. App. 17a-18a. congress viewed willful violations of the reporting requirement as a serious offense, without regard to whether the government can prove that the defendant was violating or intend- ing to violate other laws at the same time. Rather than viewing the presence of other violations as a necessary element of the offense, Congress regarded such additional violations as grounds for doubling the maximum penalties. In such cases, Congress authorized a fine of "not more than $500,000, im- prison[ment] for not more than 10 years, or both." 31 U.S.C. 5322(b). Congress's decision to mandate forfeiture for a willful reporting violation, whether or not additional violations are proven, was entirely reasonable. Deliberately violating an important criminal law is itself a serious matter, regardless of whether the dangers that the law is designed to prevent material- ize. Moreover, if Congress had mandated forfeiture only in cases in which other violations of the law ---------------------------------------- Page Break ---------------------------------------- 33 could be proven, there would have been far less incentive for persons to comply with the reporting requirement in the first place. Those planning to export money for money laundering or tax evasion purposes would be far more willing to attempt to smuggle the cash if they knew that the money was not at risk unless the government could prove that their clandestine movement of the money was designed to further other violations of the law. Acceptance of respondent's asserted defense would therefore significantly undermine Congress's pur- poses. d. It is also relevant to the constitutional inquiry in this case that Congress has left room for miti- gation of a forfeiture in appropriate cases. Congress has authorized the Attorney General to "grant peti- tions for mitigation or remission of forfeiture, restore forfeited property to victims of a violation of this subchapter, or take any other action to protect the rights of innocent persons which is in the interest of justice and which is not inconsistent with the provisions of this section." 21 U.S.C. 853(i)(1) (applicable to forfeitures under 18 U.S.C. 982(a)(l) by reference to 18 U.S.C. 982(b)(l)). Congress could reasonably decide that the Attorney General is in the best position to decide when the mitigation of criminal forfeiture would not compromise legitimate law enforcement interests. e. In sum, as long as Congress has made a reason- able judgment that the punishment fits the crime, judicial inquiry is at an end. Harmelin, 501 U.S. at 998-999, 1001 (Kennedy, J., concurring in part and concurring in the judgment); Solem 463 U.S. at 303. Congress's determination that forfeiture of unde- clared funds is a fitting punishment for a willful ---------------------------------------- Page Break ---------------------------------------- 34 reporting violation, leaving to the Attorney General the power to decide when mitigation is warranted, is eminently reasonable and satisfies constitutional requirements. CONCLUSION The judgment of the court of appeals should be reversed and the case should be remanded for the imposition of a sentence that requires respondent to forfeit to the government the currency involved in his offense. Respectfully submitted. WALTER DELLINGER Acting Solicitor General JOHN C. KEENEY Acting Assistant Attorney General MICHAEL R. DREEBEN Deputy Solicitor General IRVING L. GORNSTEIN Assistant to the Solicitor General KATHLEEN A. FELTON Attorney JULY 1997 ---------------------------------------- Page Break ---------------------------------------- APPENDIX CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The Eighth Amendment to the United States Constitution provides: Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted. Section 5316 of Title 31, United States Code, pro- vides in relevant part: (a) Except as provided in subsection (c) of this section, a person or an agent or bailee of the person shall file a report under subsection (b) of this section when the person, agent, or bailee knowingly- (1) transports, is about to transport, or has transported, monetary instruments of more than $10,000 at one tirne- (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. * * * (la) ---------------------------------------- Page Break ---------------------------------------- 2a Section 5317(c) of Title 31, United States Code, provides in relevant part: (c) If a report required under section 5316 with respect to any monetary instrument is not filed (or if filed, contains a material omission or mis- statement of fact), the instrument and any interest in property, including a deposit in a financial institution, traceable to such instrument may be seized and forfeited to-the United States Gov- ernment. Any property, real or "-personal, `involved in a transaction or attempted transaction in viola- tion of section 5324(b), or any property traceable Lo such property, may be seized and forfeited to the United States Government. * * * Section 5321(a)(2) of Title 31, United States Code, provides: (2) The Secretary of the Treasury may impose an additional civil penalty on a person not filing a report, or finding a report containing a material omission or misstatement, under section 5316 of this title or a regulation prescribed under section 5316. A civil penalty under this paragraph may not be more than the amount of the monetary instrument for which the report was required. A civil penalty under this paragraph is reduced by an amount forfeited under section 5317(b) of this title. ---------------------------------------- Page Break ---------------------------------------- 3a Section 5322(a) of Title 31, United States Code, provides: (a) A person willfully violating this subchapter or a regulation prescribed under this subchapter (except section 5315 or 5324 of this title or a reg- ulation prescribed under section 5315 or 5324) shall be fined not more than $250,000, or imprisoned for not more than five years, or both. Section 5324(b)(1) of Title 31, United States Code, provides: (b) International monetary instrument transac- tions.-No person shall, for the purpose of evading the reporting requirements of section 5316- (1) fail to file a report required by section 5316, or cause or attempt to cause a person to fail to file such a report; Section 982(a)(1) of Title 18, United States Code, provides in part: The court, in imposing sentence on a person convicted of an offense in violation of section 5313(a), 5316, or 5324 of title 31, or of section 1956, 1957, or 1960 of this title, shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property. * * *