Summary of Ratzlaf v. U.S., S. Ct. U.S. 1994

Mistake of Law

Relevant Facts: Df ran up a debt of $160,000 playing blackjack at a Casino in Reno, NV.  The casino gave him one week to pay.  Df returned on the due date with $100,000 cash.  A casino offical informed him that all transactions over $10,000 have to be reported.  He added the casino could accept cashier’s check for the full amount w/o triggering the requirement.  Df, in a limo provided by the casino, went to local banks and purchased cashier’s checks, each less than $10,000 and delivered them to the casino.

Legal Issue(s): Whether a df’s purpose to circumvent the reporting obligation sustain a conviction for “willfully violating,” the antistructuring provision?

Court’s Holding: No

Procedure: Df was charged w/ structuring transactions to evade bank obligations to report cash transactions over $10,000.  Jury convicted df and sentenced him to prison.  App Ct. upheld conviction.  Reversed and remanded.

Law or Rule(s): Willfulness requires both knowledge of the reporting requirement AND a specific intent to commit the crime, i.e. a purpose to disobey the law.

Court Rationale:   The statutory formulation calls for proof of willfulness on the actor’s part.  Judges should hesitate to treat statutory terms in any setting, and resistance should be heightened when the words describe an element of a criminal offense.  Had Congress wished to dispense with the requirement it could have furnished the appropriate instruction, it did not.  Congress subjected criminal penalties only to “willfully violating,” the statute, signaling its intent to require for conviction proof that the df knew no only of the bank’s duty to report, but also his duty not to avoid triggering such a report. When the statute is clear the ct does not look to legislative history.

Plaintiff’s Argument: Structuring is so obviously evil or inherently bad that the willfulness requirement is satisfied irrespective of the df’s knowledge of the illegality of structuring.

Defendant’s Argument: For conviction the Gov’t must prove he was aware of the illegality of the structuring in which he was engaged.