United States v. $132,245.00 in U.S. Currency

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, No. 12-56988

Plaintiff-Appellee,

D.C. No.

ALAIN CYR, 2:11-cv-07180-

Claimant-Appellant, R-CW

v.

OPINION

$132,245.00 IN U.S. CURRENCY,

Defendant.

Appeal from the United States District Court

for the Central District of California

Manuel L. Real, District Judge, Presiding

Argued and Submitted

April 10, 2014—Pasadena, California

Filed August 21, 2014

Before: A. Wallace Tashima, N. Randy Smith,

and Mary H. Murguia, Circuit Judges.

Opinion by Judge N.R. Smith

2 UNITED STATES V. CYR

SUMMARY*

Civil Forfeiture

The panel affirmed the district court’s decision forfeiting

$132,245 for failure to report the currency when crossing the

United States border in violation of 31 U.S.C. § 5316, and for

bulk cash smuggling, in violation of 31 U.S.C. § 5332.

The panel compared the gravity of the claimant’s offense

with the amount to be forfeited, and held that forfeiture of all

$132,245 did not violate the Excessive Fines clause of the

United States Constitution.

COUNSEL

Richard Kaplan (argued), Kaplan Marino, P.C., Beverly Hills,

California; Eric Honig, Law Office of Eric Honig, Marina del

Rey, California, for Claimant-Appellant.

Steven Reuben Welk (argued), Assistant United States

Attorney, Chief, Asset Forfeiture Section; André Birotte Jr.,

United States Attorney; Robert E. Dugdale, Assistant United

States Attorney, Chief, Criminal Division; P. Greg Parham,

Assistant United States Attorney, Asset Forfeiture Section;

Office of the United States Attorney, Los Angeles, California,

for Plaintiff-Appellee.

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

UNITED STATES V. CYR 3

OPINION

N.R. SMITH, Circuit Judge:

Alain Cyr appeals the district court’s decision forfeiting

$132,245 for failure to report the currency when crossing the

United States border in violation of 31 U.S.C. § 5316, see 31

U.S.C. § 5317(c), and for bulk cash smuggling, id. § 5332.

Cyr argues the forfeiture constitutes an excessive fine under

the Eighth Amendment.

Congress’s enactment of 31 U.S.C. § 5332, which

prohibits the act of bulk cash smuggling, affects the

excessiveness analysis in bulk cash smuggling cases. A

violation of § 5332, when connected with illegal activity,

constitutes a serious crime that inflicts significant harm. See

United States v. Del Toro-Barboza, 673 F.3d 1136, 1154 (9th

Cir. 2012). “Congress has thus tipped the forfeiture equation

in favor of the [government] in bulk cash smuggling cases.”

United States v. Jose, 499 F.3d 105, 111 (1st Cir. 2007).

Accordingly, we affirm the district court.

FACTS

Cyr is a Canadian resident. On March 12, 2011, he flew

from Montreal to Los Angeles carrying $132,245 in United

States currency. Upon arrival in the United States, Cyr failed

to report the cash on a customs declaration form. Nine days

later, as Cyr drove from Palm Springs to Los Angeles, a

deputy sheriff pulled Cyr over for speeding. The deputy

sheriff observed that Cyr was “extremely nervous, squirming

in his seat.” Upon the deputy sheriff’s request, Cyr allowed

the deputy sheriff to search Cyr’s car; the deputy sheriff

found a bag containing the $132,245. With Cyr’s consent, a

4 UNITED STATES V. CYR

drug dog (Jasper), inspected the cash and alerted a positive

response, meaning that the cash was contaminated with the

odor of a narcotic substance.

The deputy sheriff summoned an investigator to the

scene. The investigator interviewed Cyr. At the start of the

interview, the investigator noticed that Cyr “appeared to be

very nervous” and that “Cyr’s hands were shaking.” Cyr told

the investigator that he had just come from a casino, but Cyr

could not remember the name of the casino and was unable

to tell the investigator where the casino was located.

Cyr informed the investigator that “he had inherited the

money from his father,” who had recently passed away.

When the investigator asked Cyr if he could prove he had

inherited the money, Cyr stated that he could not provide any

documentation. Instead, he stated that he had actually found

the money in his father’s house after his father had died. Cyr

also stated that no one could corroborate his story, because he

had not told anyone about finding the money. Cyr told the

investigator that he was in California for vacation and

intended to use the money for gambling.

The officers seized the cash and arrested Cyr. The

officers also seized two sheets of notepad paper and two

cellular phones from Cyr’s person. The government filed a

civil forfeiture action for the entire $132,245. Cyr stipulated

that the defendant currency was subject to forfeiture under

31 U.S.C. §§ 5316, 5317, and 5332. However, the stipulation

allowed Cyr the right to move to mitigate the forfeiture

amount pursuant to the Eighth Amendment’s bar on excessive

fines. The district court found that, under the totality of the

circumstances, Cyr failed to show that the forfeiture of

$132,245 was unconstitutional.

UNITED STATES V. CYR 5

STANDARD OF REVIEW

We “review the district court’s determination of

excessiveness de novo,” but we “accept the district court’s

findings of fact in conducting the excessiveness inquiry

unless they are clearly erroneous.” United States v.

$100,348.00 in U.S. Currency, 354 F.3d 1110, 1121 (9th Cir.

2004). “A finding is clearly erroneous if we are ‘left with the

definite and firm conviction that a mistake has been

committed.’” Ruiz v. Affinity Logistics Corp., 754 F.3d 1093,

1100 (9th Cir. 2014) (quoting Twentieth Century Fox Film

Corp. v. Entm’t Distrib., 429 F.3d 869, 879 (9th Cir. 2005)).

DISCUSSION

Ordinarily, “[i]n a civil forfeiture action, the government

bears the burden of proving by a preponderance of the

evidence that the property is subject to forfeiture.” United

States v. $11,500.00 in U.S. Currency, 710 F.3d 1006, 1013

(9th Cir. 2013) (citing 18 U.S.C. § 983(c)(1)). By stipulating

that the defendant currency is subject to forfeiture for failure

to report in violation of 31 U.S.C. § 5316, see 31 U.S.C.

§ 5317(c), and for bulk cash smuggling, see 31 U.S.C.

§ 5332, Cyr has relieved the government of this burden.

Thus, we answer solely the question of whether Cyr’s

forfeiture of $132,245 violates the Eighth Amendment’s bar

on excessive fines.

“If the amount of the forfeiture is grossly disproportional

to the gravity of the defendant’s offense, it is

unconstitutional.” United States v. Bajakajian, 524 U.S. 321,

337 (1998). Cyr carries “the burden of establishing that the

forfeiture is grossly disproportional by a preponderance of the

evidence.” 18 U.S.C. § 983(g)(3). While we are not

6 UNITED STATES V. CYR

restricted to “any rigid set of factors,” United States v.

Mackby, 339 F.3d 1013, 1016 (9th Cir. 2003), we have

typically “considered four factors in weighing the gravity of

the defendant’s offense: (1) the nature and extent of the

crime, (2) whether the violation was related to other illegal

activities, (3) the other penalties that may be imposed for the

violation, and (4) the extent of the harm caused.”

$100,348.00, 354 F.3d at 1122. In light of these factors, we

conclude that Cyr failed to meet his burden under 18 U.S.C.

§ 983(g)(3).

1. Nature and Extent of the Crime

A violation of 31 U.S.C. § 5316 is “solely a reporting

offense” and does not constitute a serious crime under the

Excessive Fines Clause. See Bajakajian, 524 U.S. at 325,

337. In contrast, § 5332 criminalizes the act of bulk cash

smuggling into or out of the United States. Thus, transporting

more than $10,000 of unreported currency across the border

in violation of § 5332 is more than a reporting offense.

Congress highlighted that it intended to criminalize the

act of bulk cash smuggling when it enacted § 5332:

The current penalties for violations of the

currency reporting requirements are

insufficient to provide a deterrent to the

laundering of criminal proceeds. In particular,

in cases where the only criminal violation

under current law is a reporting offense, the

law does not adequately provide for the

confiscation of smuggled currency. In

contrast, if the smuggling of bulk cash were

UNITED STATES V. CYR 7

itself an offense, the cash could be confiscated

as the corpus delicti of the smuggling offense.

USA Patriot Act, Pub. L. No. 107-56, § 371(a)(6), 115 Stat.

272, 337. Congress also attached purposes to § 5332, which

included the need “to emphasize the seriousness of the act of

bulk cash smuggling.” Id. § 371(b)(3). We refuse to second-

guess Congress’s determination that bulk cash smuggling is

a serious crime. Such a determination is better left to the

legislature than to the courts. See Bajakajian, 524 U.S. at 336

(“[J]udgments about the appropriate punishment for an

offense belong in the first instance to the legislature.”).

2. Other Illegal Activities

Based on the evidence before it, the district court did not

clearly err in finding that “the currency was probably

connected to drug trafficking.”1 Cyr was carrying a

substantial sum of cash. See United States v. U.S. Currency

$83,310.78, 851 F.2d 1231, 1236 (9th Cir. 1988)

(“[P]ossession of a large amount of cash is strong evidence

that the money was furnished or intended to be furnished in

return for drugs.” (internal quotation marks omitted)). A

drug dog alerted to the defendant currency. See United States

v. $22,474.00 in U.S. Currency, 246 F.3d 1212, 1216 (9th Cir.

2001) (“[A] drug detection dog’s positive alert to a large sum

1

We disagree with Cyr’s assertion that the district court’s use of the

word “probably” somehow alters the effect of the district court’s finding.

Cyr has the burden of showing that the money is not connected to other

illegal activity by a preponderance of the evidence. See 18 U.S.C.

§ 983(g)(3). The district court’s finding that the money was probably

connected to drug trafficking logically precludes Cyr from meeting this

burden. See Merriam-Webster Third New International Dictionary 1806

(2002) (defining probably as “very likely” or “with practical certainty”).

8 UNITED STATES V. CYR

of money” constitutes “‘strong evidence’” of a connection to

drug trafficking.). Cyr originally told officers that he brought

the money with him to California to gamble; after the

government sought forfeiture, Cyr asserted that he had the

money to invest in an RV business. See id. at 1217

(“[Claimant’s] inconsistent statements about the money . . .

tended to support an inference that the money was drug-

related.”). The deputy sheriff stated that Cyr “appeared to be

extremely nervous,” and the investigator stated that Cyr

“appeared to be very nervous.” See United States v.

$49,576.00 U.S. Currency, 116 F.3d 425, 428 (9th Cir. 1997)

(“[Claimant’s] general nervous behavior [is] indicative of

some illegal activity.”). Finally, text messages recovered

from Cyr’s cell phone, and sent within a day of when Cyr was

arrested, reveal an inquiry about “the money” and the

statement that “Tom wants to give (it) to him tomorrow

morning at 8 AM.”2 Viewing all of this evidence and the

reasonable inferences that arise from it, we cannot say that

the district court’s finding was clearly erroneous.

Cyr argues that the drug-dog alert is irrelevant, because

Jasper is not a sophisticated drug dog—a dog that alerts only

to currency that has recently been in contact with drugs. See

$22,474.00, 246 F.3d at 1216. However, Jasper’s handler

submitted a declaration stating that Jasper “does not alert to

the odor of currency unless that currency has been in recent

close proximity to a narcotic substance for which he has been

trained to detect.” This undisputed declaration suffices to

qualify Jasper as a sophisticated drug dog. See United States

v. Currency, U.S. $42,500.00, 283 F.3d 977, 982 (9th Cir.

2002) (finding drug dog sophisticated where the dog’s

2

The text messages were originally sent in French; the government

subsequently translated them into English.

UNITED STATES V. CYR 9

“handler submitted a declaration stating that [the dog] does

not alert to cocaine residue found on currency in general

circulation”).

Cyr also contends that the government’s failure to charge

him with a crime combined with the other evidence he put

forward to show the money’s legitimacy sufficiently

demonstrates that the money is not connected to other illegal

activity. See $100,348.00, 354 F.3d at 1122 (weighing the

fact that the claimant had not been charged with other

criminal activity and had submitted an affidavit explaining

the legitimate source of the money in an excessiveness

analysis). The government does not dispute that it did not

charge Cyr with an offense. Cyr also offers as evidence a

distribution of property form from Quebec and affidavits

from two of his friends all indicating that Cyr received money

from his father.

However, the date on the distribution of property form

reveals that Cyr did not complete the form until February of

2012, almost a full year after the government seized the

money. Further, the affidavits from Cyr’s friends merely

mention that Cyr received money from his father; they lack

even the most basic details, such as how the friends knew

about the money or the amount of money Cyr’s father

provided. This evidence, while not negligible, falls short of

leaving us with a “definite and firm conviction” that the

district court made a mistake. See Ruiz, 754 F.3d at 1100.

3. Other Penalties

“‘In considering an offense’s gravity, the other penalties

that the Legislature has authorized are certainly relevant

evidence,’ as are the maximum penalties that could have been

10 UNITED STATES V. CYR

imposed under the Sentencing Guidelines.” United States v.

3814 NW Thurman St., 164 F.3d 1191, 1197 (9th Cir. 1999)

(quoting Bajakajian, 524 U.S. at 339 n.14) (alteration and

citation omitted). “[T]he maximum penalties under the

Sentencing Guidelines should be given greater weight than

the statutory maximum because the Guidelines take into

account the specific culpability of the offender.”

$100,348.00, 354 F.3d at 1122. We consider both the term of

imprisonment and the fine suggested by the Sentencing

Guidelines. See Mackby, 339 F.3d at 1018.

Cyr stipulated that the defendant currency is subject to

forfeiture as a violation of both 31 U.S.C. § 5316 and

31 U.S.C. § 5332. Because the government could have

charged Cyr with both offenses, United States v. Tatoyan,

474 F.3d 1174, 1182 (9th Cir. 2007), our relevant inquiry

must focus on the penalties that could have been imposed for

both offenses. Congress authorized a statutory maximum of

five years imprisonment and/or a $250,000 fine for a

violation of § 5316, 31 U.S.C. § 5322(a), and a maximum of

five years imprisonment for a violation of § 5332, 31 U.S.C.

§ 5332(b). Under the Sentencing Guidelines, Cyr’s offense

level would have been 16.3 See U.S. Sentencing Guidelines

3

We calculate Cyr’s offense level as follows: 6 levels for failure to file

a currency report; a 10-level increase for the $132,245 value in currency;

a 2-level increase for bulk cash smuggling; and a 2-level decrease for

acceptance of responsibility. Acceptance of responsibility typically goes

to defendants who plead guilty to a criminal offense, which Cyr has not

done. Nevertheless, Cyr stipulated that the defendant currency is subject

to forfeiture, which saved the government from having to prepare for trial.

Out of an abundance of caution, we award Cyr the 2-level decrease. Cyr’s

remaining arguments as to the appropriate offense level are foreclosed by

the plain language of the Sentencing Guidelines. We also assume a

Criminal History Category of I.

UNITED STATES V. CYR 11

Manual § 2S1.3 (2012). The maximum fine in Cyr’s case

would have been $50,000, and—without any criminal

history—the maximum term of imprisonment would have

been 27 months for each offense.

Thus, the forfeiture of all $132,245 falls far below the

maximum statutory fine but exceeds the fine under the

Sentencing Guidelines. However, forfeiture does not per se

violate the Eighth Amendment simply because the amount to

be forfeited exceeds the maximum fine under the Sentencing

Guidelines. See, e.g., $100,348.00, 354 F.3d at 1122–24

(upholding forfeiture of $10,000 where maximum fine under

Sentencing Guidelines could be as little as $5,000); Mackby,

339 F.3d at 1018 (holding that a $729,454 fine did not violate

the Eighth Amendment when the maximum fine under the

Sentencing Guidelines was $75,000). Considering that the

forfeiture amount here is only 2.6 times the maximum fine

under the Guidelines and that Cyr’s hypothetical criminal

sentence could have also included a 27-month term of

imprisonment for each offense, Cyr has failed to show that

the amount of forfeiture is out of line with the maximum

penalty under the Sentencing Guidelines.

Bajakajian supports this conclusion. In Bajakajian, the

Supreme Court held that the maximum penalties under the

Sentencing Guidelines, a 6-month sentence and a $5,000 fine,

weighed against the forfeiture of $357,144 because they

“confirm[ed] a minimal level of culpability.” 524 U.S. at

338–39. The Court also acknowledged that the respondent

“[did] not fit into the class of persons for whom the statute

was principally designed,” because the respondent was not a

money launderer, drug trafficker, or tax evader. Id. at 338.

12 UNITED STATES V. CYR

Here, Cyr’s hypothetical maximum 27 months of

imprisonment for each offense and $50,000 fine do not

“confirm a minimal level of culpability” when compared to

the 6 months’ imprisonment and $5,000 fine in Bajakajian.

Id. at 339; cf. Mackby, 339 F.3d at 1018 (holding hypothetical

$75,000 fine and 46-month term of imprisonment do not

confirm a minimal level of culpability). Moreover, the

forfeiture amount here is only 2.6 times the fine under the

Sentencing Guidelines, whereas in Bajakajian the forfeiture

amount was 70 times the fine under the Sentencing

Guidelines.

Furthermore, Cyr’s admission that the defendant currency

is subject to forfeiture for bulk cash smuggling, coupled with

the district court’s finding that the defendant currency was

probably connected to drug trafficking, places Cyr squarely

“into the class of persons for whom the statute was

principally designed.” See Bajakajian, 524 U.S. at 338; see

also USA Patriot Act, Pub. L. No. 107-56, § 371(a)(3), (5),

115 Stat. 272, 337 (indicating § 5332 is principally directed

toward money launderers, drug traffickers, tax evaders,

terrorists, and their couriers).

4. Harm

For the fourth factor, we must determine “the extent of

the harm caused” by Cyr’s violation of §§ 5316 and 5332.

See $100,348.00, 354 F.3d at 1122. The harm caused by

Cyr’s violation of § 5316 was “minimal.” Bajakajian,

524 U.S. at 339. “Had his crime gone undetected, the

Government would have been deprived only of the

information that [$132,245] had [come into] the country.”

See id.

UNITED STATES V. CYR 13

However, his violation of the bulk cash smuggling statute

constitutes a far greater harm. In the sentencing context, we

have observed that “by enacting the bulk cash smuggling

statute, Congress was demonstrating its view that [a

violation] of the bulk cash smuggling statute constitutes a

significant harm.” Del Toro-Barboza, 673 F.3d at 1154

(internal quotation marks omitted). Congressional findings

attached to § 5332 state that the “intentional transportation

into or out of the United States of large amounts of currency

or monetary instruments, in a manner designed to circumvent

the mandatory reporting provisions . . . is the equivalent of,

and creates the same harm as, the smuggling of goods.”

USA Patriot Act, Pub. L. No. 107-56, § 371(a)(4), 115 Stat.

272, 337 (emphasis added). Congress found that “the

movement of large sums of cash is one of the most reliable

warning signs of drug trafficking, terrorism, money

laundering, racketeering, tax evasion and similar crimes.” Id.

§ 371(a)(3). It also found that enforcement of § 5332

effectively combats these various types of serious criminal

activity. Id. § 371(a)(5).

We need not decide whether every violation of § 5332

constitutes a significant harm for purposes of an excessive-

fine analysis; here, the defendant currency “was probably

connected to drug trafficking.” Accordingly, had Cyr’s

offense gone undetected, it would have undermined the

Government’s efforts to “break the cycle of criminal activity

of which the laundering of bulk cash smuggling is a critical

part.” See id. § 371(a)(5). Cyr’s violation of § 5332 thereby

constitutes a significant harm. Accord Jose, 499 F.3d at 112

(“We adhere to Congress’s view that defendant’s violation of

the bulk cash smuggling statute constitutes a significant

harm.”).

14 UNITED STATES V. CYR

CONCLUSION

These factors lead us to the conclusion that Cyr’s offense

leans more toward the high end of the gravity spectrum.

Comparing the gravity of Cyr’s offense with the amount to be

forfeited, we find that forfeiture of all $132,245 does not

violate the Excessive Fines clause of the United States

Constitution.

AFFIRMED.