Petition — Dichne v. United States

FILED

DEC 26 19T9

WICHABL ROBAK, JR., CLERA

IN THE

Supreme Court of the United States

No. @9-!1 000

ZEEV DICHNE,

Petitioner,

v.

UNITED STATES OF AMERICA.

,

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

JoHN S. Martin, Jr.

Attorney for Petitioner

460 Park Avenue

New York, New York 10022

IN THE

Supreme Court of the United States

-

vv

ZeEv DicHNE,

Petitioner,

Vv.

UnitTep States or AMERICA.

dé.

“——

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Zeev Dichne petitions for a writ of certiorari to review

the judgment of The United States Court of Appeals for

the Second Circuit in this case, entered on November 27,

1979.

Opinion Below

The opinion of the Court of Appeals (App. 1-21—infra)

is not yet reported.

Jurisdiction

The opinion and judgment of the Court of Appeals was

entered on November 27, 1979. The jurisdiction of this

Court is invoked under 28 U.S.C. §1254(1).

2

Question Presented

Whether the Fifth Amendment provides a defense to a

prosecution for refusing to report the transportation of

over $5,000.00 out of the United States, as required by 31

U.S.C. § 1101?

Statement

Petitioner was indicted in the United States District

Court for the Southern District of New York for con-

spiracy to violate the Bank Secrecy Act, 31 U.S.C. $§ 1059,

1101 (the ‘‘ Act”). Prior to trial, he moved unsuccessfully

to dismiss the indictment on the ground that the reporting

requirements of the Act unconstitutionaliy violated his

Fifth Amendment right against self-ixcrimination.

On the date set for trial, petitioner waived his right to

a jury trial and stipulated the evidence which the Govern-

ment would introduce if the action were tried. The trial

court entered a judgment of conviction and the Second

Circuit affirmed.

The Government’s evidence indicated that in August

1976, petitioner Dichne, an Israeli citizen who sometimes

resides in Switzerland, was introduced by one Arie

Marinsky to Joseph Hauser, an American businessman

who wanted to transfer funds out of the United States to

Switzerland (JA 35-37).* Dichne then allegedly contacted

one Rustam Tejpar, who in turn enlisted the assistance of

one Friedrich Jaeger, a Government informant.

On October 6, 1976, Dichne, Marinsky, Tejpar, Jaeger

and an undercover agent named Martinez met at the

Beverly Wilshire Hotel in Los Angeles. On that same

* References in the form ‘‘JA’’ are to the Joint Appendix in

the Second Circuit. References in the form ‘‘App.’’ are to the

Appendix to this petition.

3

date, Jaeger opened an account at a branch of the Bank

of America in Beverly Hills in the name of a bank in St.

Georges, Grenada with which Jaeger was associated.

Jaeger told the bank personnel that he would be returning

in approximately one hour with a client with approximately

$400,000 in cash and he would want a cashier’s check for

$375,000 made out to Rustam Tejpar (JA 45-46).

After Jaeger returned to the hotel, Dichne, Tejpar and

Martinez went to Marinsky’s room where they obtained

$390,000 cash and placed it into an attache case. Tejpar,

Martinez and Dichne then met Jaeger in the hotel bar and

proceeded to the Bank of America. At the bank, Jaeger

deposited the $390,000 in the newly opened account and ob-

tained a cashier’s check in the amount of $375,000 made

payable to Rustam Tejpar. Tejpar endorsed the check and

handed it to Dichne, who placed it in his pocket (JA 43-48).

At approximately 6:00 p.m. that evening, Marinsky,

Hauser and Dichne, flew from Los Angeles to Zurich,

Switzerland. Ultimately, the $375,000 check payable to

Tejpar and endorsed by him was presented for payment

at the Bank Sarasin & Cie in Basel, Switzerland and was

returned to the Bank of America through the First Na-

tional City Bank in New York (JA 49-51). No report of

the transportation of the $375,000 check was filed, as re-

quired by the Bank Secrecy Act.

Reasons for Granting the Writ

The Court of Appeals concluded that. petitioner had been

engaged in “transporting out of the United States money

apparently stolen . . .” (App. 4). Despite the fact that

such conduct would violate 18 U.S.C. § 2314, the Court of

Appeals rejected petitioner’s claim that it violated his Fifth

Amendment privilege to compel him to file a report, as

required by the Bank Secrecy Act, in which he would be

forced to disclose his participation in this venture.

4

Thus, this case squarely presents the question of the

constitutionality of the reporting provisions of the Bank

Secrecy Act as applied to a person who, if he files the re-

port required by the statute, runs a real and appreciable

risk of self-incrimination. This question was specifically

left open by this Court in California Bankers Association

v. Shultz, 416 U.S, 21 (1974).

In Califorma Bankers Association this Court recognized

that in enacting the Bank Secreey Act, Congress “recog-

nized the importance of reports of large and unusual cur-

rency transactions in ferreting out criminal activity and

desired to strengthen the statutory basis for requiring such

reports.” 416 U.S. at 38. Indeed, the statute itself contains

a congressional finding that the reports it requires will

“have a high degree of usefulness in criminal, tax, or regu-

latory investigations or proceedings.” 31 U.S.C. $1051.

Despite this clear manifestation cf the intent of Congress

to obtain incriminating information by requiring reports

of large currency transactions, the Court below held that

petitioner could not assert his Fifth Amendment privilege

as a defense to this prosecution because Congress had cast

the reporting requirements in terms broad enough to in-

clude even those who might not incriminate themselves

when they filed the reports. In essence the Court of Ap-

peals’ holding means that Congress may at any time adopt

legislation which will require those engaged in criminal

activity to report that activity to law enforcement agencies,

so long as that statute appears to seek information from a

general class, the majority of which would not run a sub-

stantial risk of incrimination.

We respectfully submit that the result reached in the

Court below is inconsistent with the prior decisions of

this Court in Leary v. United States, 395 U.S. 6 (1969);

Haynes v. United States, 390 U.S. 85 (1968); Grosso v.

United States, 390 U.S. 62 (1968); Marchetti v. United

5

States, 390 U.S. 39 (1968); Albertson v. Subversive Activi-

ties Control Board, 382 U.S. 70 (1965).

The Court below attempted to reconcile its decision with

the prior decisions of this Court by suggesting that the

Bank Secrecy Act has purposes broader than obtaining

information useful for criminal prosecutions, such as, the

“Tljegitimate governmental interest in the flow of cur-

rency across international borders” (App. 13). This

reasoning overlooks both logic and the congressional his-

tory relating to the provision requiring reports of the

transportation out of the country of monetary instruments

in excess of $5,000.00.

Since the regulations require reports only of those

monetary instruments which are in bearer form or in such

form that title passes upon delivery, 31 C.F.R. $103.11

(1979), it is obvious that this provision is not designed to

obtain information about the general flow of money out of

the country. The impact on the flow of money out of the

country i3 no different if the check in question is payable

to a named payee and endorsed in blank, and therefore,

reportable, than it would be if the check were unendorsed

and therefore, not reportable. Indeed, Congress clearly

stated its reasons for requiring reports such as these:

For years American criminal elements have been

taking or sending currency out of the United States

either in furtherance of a criminal activity or for

deposit in a secret foreign haven. The money may

come from criminal activities, skim money from

gambling operations and the like. Moreover, many

Americans have used couriers to send money to for-

eign jurisdictions with secrecy laws for the purpose

of evading taxes and otherwise hiding assets. There

is a courier or ‘‘hand payment”’’ system which provides

this service for fees ranging from 2 per cent to 5 per

cent of the funds carried out. The reporting proce-

6

dure required by the bil will close a serious investiga-

twe loophole. H.R. Rep. No. 91-975, 92nd Cong., 2d

Sess. 2, reprinted im [1970] U.S. Code Cong. & Ad.

News, 4394, 4398 (emphasis added).

In his concurrence in California v. Byers, 402 U.S. 424,

437 (1971), Justice Harlan noted that:

[I]t must be recognized that a reading of our more

recent cases—especialiy Marchetti v. United States,

390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968), and

Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19

L.Ed.2d 906 (1968)—suggests the conclusion that the

applicability of the privilege depends exclusively on a

determination that, from the individual’s point of view,

there are ‘‘real’’ and not ‘‘imeginary’’ risks of self-

incrimination in yielding to state compulsion (emphasis

added).

There can be no question that from petitioner’s point of

view there were real risks of self-incrimination had he

yielded to the requirement that he report his participation

in a scheme to smuggle $375,000 out of the United States.

Thus, we respectfully suggest that this Court should grant

the petition to review the decision below and to resolve

this important issue which it left open in California

Bankers Association v. Shultz, supra.

CONCLUSION

The petition for a writ of certiorari should be

granted.

3 Respectfully submitted,

JoHN S. Martin, Jr.

Attorney for Petitioner

App. l

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

—<——

No. 243—September Term, 1979.

(Argued September 27, 1979

Decided November 27, 1979.)

Docket No. 79-1230

>

UNITED STATES OF AMERICA,

Appellee,

= —against—

ZEEVE DICHNE,

Defendant-Appellant.

Before:

Moore, OAKES, and NEWMAN,

Circuit Judges.

>

Defendant Dichne appeals his conviction in the

United States District Court for the Southern Dis-

trict of New York, Honorable Richard Owen, District

Judge, for violation of the reporting requirements of

the Bank Secrecy Act (31 U.S.C. §1051 et seq.).

Dichne claims that (1) the Government failed to

prove beyond a reasonable doubt that he had

knowledge of the reporting requirements of the Act;

465

App. 2

(2) the reporting provisions of the Act violate his

fifth amendment right against self-incrimination; and

(3) the District Court committed reversible error

when it failed to observe the time provisions of the

Speedy Trial Act (18 U.S.C. § 3161 ef seq.).

Conviction affirmed.

>

JERRY L. SIEGEL, Assistant United States

Attorney, Southern District of New

York (Robert B. Fiske, Jr., U.S. At-

torney, David C. Patterson, Assistant

United States Attorney, of counsel)

for Appellee.

JOHN S. MARTIN, JR., Esq., New York,

N.Y. (Schulte & McGoldrick, Stacey

J. Moritz, of counsel), for Defendant-

Appellant.

>

Moore, Circuit Judge:

Zeev Dichne appeals his conviction in the United

States District Court for the Southern District of

New York (Honorable Richard Owen, District Judge),

based upon a non-jury trial and stipulated evidence

submitted to the Court. Dichne offered no proof. He

was convicted of violating the reporting requirements

of what is known as the Bank Secrecy Act (31

U.S.C. 1051 et seq.) (hereinafter the “Act”). The

judgment provided for a sentence of eighteen mon-

ths, three months of which was to be served in jail,

the balance suspended with unsupervised probation

and a $10,000 fine. Dichne appeals on the following

466

App. 3

grounds: (1) the Government failed to prove beyond

a reasonable doubt that he had knowledge of the re-

porting requirements of the Act; (2) the reporting

_ provisions of the Act violate his fifth amendment

right against self-incrimination; and (3) the District

Court committed reversible error when it failed to

observe the time provisions of the Speedy Trial Act

(18 U.S.C. § 3161 et seq.). We affirm the conviction.

FACTS

Zeev Dichne, Arie Marinsky and Rustamali Tejpar

were indicted and charged with conspiracy to evade

the foreign reporting requirements of the Act, 18

U.S.C. §§ 1059 and 1101(a), by planning and parti-

ally executing a conspiracy to transport approximate-

ly $2,000,000 in monetary instruments out of the

United States without filing the required currency

transaction forms. Because the defendants Marinsky

and Tejpar were fugitives at the time of trial, Dichne

was the sole defendant.

Prior to trial Dichne moved unsuccessfully to dis-

miss the indictment against him on the ground that

the reporting requirements of the Act violated his

fifth amendment right against self-incrimination.

Thereafter, the Government moved for an extension

of the time limits set forth in the Speedy Trial Act,

18 U.S.C. §3161(g), on the ground that a principal

government witness had himself been indicted and

was therefore unavailable to testify. Although Dichne

contested this motion, the Court below granted the

Government's request and ordered an extension of

the relevant time period.

467

App. 4

On April 20, 1979, the date set for trial, defen-

dant Dichne waived his right to a jury trial and stip-

ulated to the evidence which the Government would

introduce. On the basis of the stipulated evidence,

Dichne moved for a judgment of acquittal on the

ground that the United States had failed to prove

beyond a reasonable doubt that he had notice of the

reporting requirements of the Act. The Court denied

the defendant's motion and on May 11, 1979 entered

a judgment finding the defendant guilty as charged

in the indictment.

The stipulated evidence revealed the following:

Zeev Dichne was a self-employed export-import and

financial broker. In August of 1976, Dichne was in-

troduced to Joseph Hauser, a self-employed insurance

salesman who controlled and operated a number of

insurance companies involved in providing health

care insurance to labor unions. Hauser was interested

in transporting out of the United States money ap-

parently stolen from a fund allocated for the pay-

ment of health and welfare claims of union members.

Approximately one month later, Dichne, acting on

behalf of Hauser, approached a former business asso-

ciate, Theodore Arnold, in Zurich, Switzerland, and

asked him if he knew someone who could secretly

move some United States currency from the United

States to Switzerland. Arnold thereafter contacted

the defendant Tejpar, who in turn contacted an asso-

ciate of his in New York, one Friedrich Jaegar, and

asked if he would be interested in participating in

the smuggling transaction. Unbeknownst to the other

participants, Jaeger subsequently notified Special

Agent John Martinez of the United States Customs

Service of the planned transaction.

468

App. 5

7

On October 4, 1976, Jaeger had conversations with

Tejpar which were recorded. Jaeger told Tejpar that

confirmed cashier’s checks drawn on the United

Americas Bank in New York would be used to carry

out the transaction. Tejpar informed Jaeger that

Dichne was representing the organization that wished

to move $2,000,000 (the initial amount to be moved)

out of the country, and that Dichne would be present

in Los Angeles for the transaction. Through further

discussion Jaeger and Tejpar agreed that the transac-

tion would be carried out by their accompanying

Dichne to the Bank of America in Los Angeles,

where $450,000 in cash (the first installment to be

moved) would be deposited. Jaeger would then give

Dichne three cashier’s drafts totalling $450,000 con-

firmed by the United Americas Bank.

On Tuesday, October 5, Jaeger had three bank

drafts made payable to bearer prepared by the

United Americas Bank in the amount of $150,000

each. Later that same day Tejpar arrived at the air-

port in New York and was met there by Jaeger and

Special Agent John Martinez, posing as Jaeger’s

armed bodyguard. Tejpar told Jaeger that Dichne

would be the one who would actually carry the

checks from Los Angeles to Zurich, Switzerland,

where they would be deposited.

The following day, Tejpar, Jaeger and Agent Mar-

tinez arrived in Los Angeles a d met Dichne, Marin-

sky, and Hauser. Dichne had arrived in the United

States on October 1, 1976, and at that time had

filled out a Customs Baggage Declaration upon which

he answered “No” in response to the question “Are

you or anyone in your party carrying over $5,000 in

coin, currency or monetary instruments?”

469

App. 6

On the morning of October 6, 1976, Tejpar met

with Jaeger and Special Agent Martinez, and in-

formed them that Dichne preferred to use a bank

draft drawn on a Los Angeles bank, rather than the

cashier's checks from the United Americas. Bank

which had been planned. Dichne informed Jaeger

that the bearer instrument had to be ready at the

bank when they deposited the cash, Dichne stated

that he did not want to have to-wait at the bank for

a check to be issued because he did not want any

questions asked and did not want to be told that the

transaction had to be reported to the Internal

Revenue Service,

Jacxer later met with Dichne and Tejpar and told

them the transaction was set and that he was going

to the bank to open up an account and make ar-

rangements for the check. Dichne wanted the check

to be made payable to “Bearer”, but when Jaeger in-

formed him that no American bank would do this, it

was agreed that the check would be made payable to

Tejpar, and that he would immediately endorse it,

thus rendering it negotiable, and give it to Dichne.

Jaeger and Special Agent Martinez then proceeded

to a local bank where they opened an account and

arranged for a $375,000 check to be drawn, payable

to Tejpar, upon the deposit later in the day of

$400,000 in cash (apparently the other $50,000 in

cash was not forthcoming). Dichne produced from his

hotel room $400,000 in American currency in

denominations of $20, $50 and $100 bills. Later,

Dichne, Tejpar, Jaegar and Special Agent Martinez

proceeded to the bank where the account had been

opened, At the bank the cash was deposited into the

newly opened account, and a cashier's check in the

470

App. 7

amount of $375,000 was received back, payable to

“Rustam Tejpar", On Dichne's instructions, Tejpar.

then endorsed the check in blank and handed it to

Dichne, who put it in his pocket,

Later that day Dichne and Marinsky proceeded to

the Los Angeles airport where they were met by

Hauser. Dichne, Marinsky and Hauser proceeded to

the boarding area for a British Airways flight to

London, During the time Dichne, Marinsky and

Hauser were observed in the departure area, United

States Customs Inspector Conrad Millan read an an-

nouncement concerning the United States monetary

reporting requirements over the public address sys-

tem on four separate occasions,' In addition, a num-

ber of large color posters explaining the reporting re-

quirements were prominently displayed throughout

the departure area.’ Neither Dichne, Marinsky nor

Hauser asked or attempted to ask anyone for the re-

quired monetary instrument reporting forms, and no

such form was in fact prepared before Dichne,

Marinsky and Hauser departed aboard a flight to

London, The check was eventually presented for pay-

ment at a Swiss Bank.

1 The form from which the Customs Inspector read contained

the following language:

“Notick: If you transport, mail, ship or receive $5000 or more

in currency of the United States or any other revered or

monetary instruments such as travelers checks, negotiable in

atruments in bearer form or money orders into or out of the

United States, you must file a report with U.S. Customs, Ask

a Customs Officer for the form, Failure to do so can result in

civil and criminal penalties.” (emphasis in original). See Ap-

pellee's Br. at 10.

2 These posters, measuring 20" by 13°, were printed and illus-

trated in red, white and blue, and the figure “$5000" was

printed in 2” high letters, The posters contained language almost

identical to that of the form that was read aloud. See Appellee's

Br. at 11.

471

App. 8

I,

Section 1101 of the Bank Secrecy Act requires

that anyone who knowingly transports monetary in-

struments into or out of the United States in an

amount exceeding $5,000 on any one occasion must

file the appropriate report.’ Title 31 U.S.C. §§ 1058

f 31 U.S.C, § 1101 reads as follows:

Persons required to file

(a) Except as provided in subsection (c) of this section, [an

exception for common carriers] whoever, whether as principal,

agent, or bailee, or by an agent or bailee, knowingly—

(1) transports or causes to be transported monetary instru-

ments—

(A) from any place within the United States to or

through any place outside the United States, or

(B) to any place within the United States from or

through any place outside the United States, or

(2) receives monetary instruments at the termination of

their transportation to the United States from or through

any place outside the United States

in an amount exceeding $5,000 on any one occasion shall file

lek or reports in accordance with subsection (b) of this

ion,

Contents of filed report

_(b) Reports required under this section shall be filed at such

times and places, and may contain such of the following in-

formation and any additional information, in such form and in

such detail, as the Secretary may require:

” legal pupaey in which the person filing the report

is ng with res to the mo i

rel | pect netary instruments

(2) The origin, destination, and route of the transportation.

(3) Where the monetary instruments are not lly and

beneficially owned by the person transporting Pood or

are transported for any purpose other than the use in his

own behalf of the person transporting the same, the iden-

tities of the person from whom the monetary instruments

are received, or to whom they are to be delivered, or both.

(4) The amounts and ¢t f

ieaebohed: ypes of monetary instruments

472

App. 9

and 1059 provide criminal sanctions for the willful

violation of any section of the Act, including, inter

alia, §1101, Because the language of these sections

of the Act imposes criminal liability only upon an in-

dividual who knowingly transports monetary in-

struments in willful violation of the Act, and because

the Act requires the reporting of an otherwise inno-

cent act, it hac consistently been held that the Gov-

ernment must prove beyond a reasonable doubt the

defendant’s “knowledge of the reporting requirements

and his specific intent to commit the crime”. United

States v. Granda, 565 F.2d 922, 926 (5th Cir. 1978).

Accord United States v. San Juan, 545 F.2d 314,

318-19 (2d Cir. 1976); United States v. Schnaider-

man, 568 F.2d 1208, 1211 (5th Cir, 1978).

Appellant argues that the stipulated evidence

failed to establish beyond a reasonable doubt that he

was aware of the reporting requirements of the Act.

Furthermore, Dichne argues that even if he was

aware of the general provisions of the Act, the Gov-

ernment failed to establish beyond a_ reasonable

doubt that Dichne had knowledge that the endorsed

check for $375,000 required reporting under the

Act’s definition of “monetary instruments”. We find

the stipulated evidence sufficiently supports the find-

ing of the District Court that Dichne knowingly and

willfully violated the provisions of the Act.

In United States v. San Juan, 545 F.2d 314 (2d

Cir, 1976), this Court held that “in order to prove

willfulness, the government should make some effort

to bring the reporting requirement to the traveler's

attention”, Jd. at 319, Unlike the facts of San Juan,

where the Government had made no such attempt, in

the instant case the Government prominently dis-

473

——————————————————————————eooooaeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeeerleeeeeeeeeeerer errr ee — is . *

App. 10

played a number of large multi-colored posters in the

airport departure area. These notices were posted in

areas where the traveler was likely to be attentive to

travel advice and warnings, and specifically advised

travelers that they were required to report “$5000 or

more in . . . monetary instruments” transported .out

of the country. The posted warnings additionally

stated: “Failure to do so can result in civil and crimi-

nal penalties”. (emphasis in original)

In addition to these visual notices, departing pas-

sengers were verbally advised of the reporting re-

quirement over the public address system. The Gov-

ernment’s proof showed that this was done on no

less than four separate occasions during the period

when Dichne and his co-conspirators were waiting in

the departure area. It is highly unlikely that he

could have failed both to notice any of the posters

and to hear any of the public announcements.

Dichne also contends that even if it can be con-

ceded that he observed the posters and heard the an-

nouncements, the Government had not established

beyond a reasonable doubt that he was aware that

the endorsed check he carried required report‘ng. We

hold that the District Court's finding that the ct ack

was “an instrument that [Dichne] could reasonably

conclude was required to be reported” is supported

by the stipulated evidence.

The announcement and posters each informed the

public that they were required to report the tran-

sporting of over $5,000 in “currency of the United

States or any other country, or monetary instruments

such as travelers checks, negotiable instruments in

bearer form or money orders. . . .” While the express

language of the notices thus referred to “negotiable

474

App. ll

instruments in bearer form”, it is clear from the wor-

ding of these warnings that the instruments listed

were not all inclusive, but merely served as several

common examples of the general types of “monetary

instruments” that must be reported. In view of the

fact that the conspirators expressly required Tejpar

to endorse the check in blank so that Dichne could

deposit it, it is clear that Dichne was aware that the

check he was carrying was indeed negotiable.‘ It is

implausible that he was unaware that such a check

constituted a “monetary instrument” within the

meaning of the warning announcements and posters.

The District Court’s conclusion that Dichne was

aware that he was required to report the transpor-

ting of the check is supported by other facts. Dichne

and his co-conspirators repeatedly expressed their de-

sire for secrecy and for not reporting the transaction

in any way. In recorded conversations, Tejpar expli-

citly told Jaegar that the funds were being “smug-

gled out to keep their source secret” and further

stated that ti.e principals “did not want to use con-

ventional banking facilities in order to avoid any in-

quiry about the funds by American authorities”. (Ap-

pellee’s Brief at 20). Dichne himself, in discussing

the transaction with Jaegar on October 6, stated that

“he did not want any questions asked and did not

want to be told the transaction had to be reported to

the I.R.S.” (Appellee’s Brief at 2U). This last state-

4 That the check was negotiable is demonstrated by U.C.C.

§ 3-204(2) which provides:

“(2) An indorsement in blank specifies no particular in-

dorsee and may consist of a mere signature. An instrument

payable to order and indorsed in blank becomes payable to

bearer and may be negotiated by delivery alone until specially

indorsed.”

App. 12

ment indicates Dichne's familiarity with the domestic

reporting requirements of the Act which require any

banking institution carrying out a cash transaction

involving more than $10,000 to file a report with

the I.R.S. See 31 U.S.C. § 1081-1083. Furthermore,

Dichne himself was a knowledgeable export-import

broker, a fact which cannot be ignored. These facts

make even less plausible Dichne’s claim of ignorance

of the Act’s foreign reporting requirements.

Dichne and his co-conspirators were thus proved to

have conducted themselves in a highly secretive man-

ner, and also to have shown a knowledge of, and a

desire to avoid, reporting requirements in general.

While these secretive acts alone would not suffici-

ently support a judgment of conviction, such support

is found when these facts are combined with the sig-

nificant affirmative steps taken by the Customs Ser-

vice to advise Dichne and other travelers of the re-

porting requirements of the Act. The stipulated evi-

dence thus amply supports the District Court’s find-

ing that beyond a reasonable doubt Dichne knew that

the negotiable check he was carrying had to be re-

ported under the Bank Secrecy Act.

IT.

Dichne's next claim is that the reporting re-

quirements of the Bank Secrecy Act contained in

§ 1101 are unconstitutional in that they require the

reporting of potentially self-incriminating information

in violation of the fifth amendment. The District

Court denied this claim, concluding that the trans-

porting of over $5,000 out of the country was not

“per se an illegal act causing the filing of the report

476

App. 13

to involve the signer in the admission of a crucial

element of a crime; nor is the statute addressed to ‘a

highly selective group inherently suspect of criminal

activities.’ Legitimate governmental interest in the

flow of currency across international borders is

clearly enunciated by Congress in 31 U.S.C. §1141

.... (Joint Appendix at 8 (citations omitted)). We

conclude that the District Court’s finding as to the

constitutionality of 31 U.S.C. §1101 is correct.

The Supreme Court noted in California v. Byers,

402 U.S. 424 (1971): “Whenever the Court is con-

fronted with the question of a compelled disclosure

that has an incriminating potential, the judicial scru-

tiny is invariably a close one”. Jd. at 427. While an

individual’s right to avoid self-incrimination must not

be treated lightly, the societal interest in establishing

certain disclosure requirements also must not be ig-

nored. Since many forms of compelled disclosure

statutes present the potential for self-incrimination—

some more acutely than others—a balance must be

struck between the competing interests of the state

and the individual when evaluating the constitu-

tionality of a disclosure requirement. See California

v. Byers, 402 U.S. at 427. Various Supreme Court

cases have confronted this balancing problem, and

have established certain criteria for determining

when the threat of self-incrimination from a

disclosure statute is so offensive to the mandate of

the fifth amendment as to render the statute un-

constitutional.

These criteria were initially suggested in Albertson

vu. Subversive Activities Control Board, 382 U.S. 70

(1965). There, the statute at issue was the Subversive

Activities Control Act of 1950, which required mem-

477

App. 14

bers of the Communist Party to register as such,

thereby subjecting themselves to possible federal

criminal prosecution. In holding that statute uncon-

stitutional, the Supreme Court contrasted those regis-

tration requirements with the requirement to file tax

returns upheld in United States v. Sullivan, 274 U.S.

259 (1927). The Court in Albertson noted:

“In Sullivan the questions in the income tax re-

turn were neutral on their face and directed at

the public at large, but here they are directed at

a highly selective group inherently suspect of cri-

minal activities. Petitioners’ claims are not as-

serted in an essential non-criminal and _reg-

ulatory area of inquiry, but against an inquiry in

an area permeated with criminal statutes, where

response to any of the form’s questions in con-

text might involve the petitioners in the admis-

sion of a crucial element of a crime.” 382 U.S.

at 79.

Later Supreme Court cases utilized these criteria

in striking down various disclosure statutes. See

Leary v. United States, 395 U.S. 6 (1969) (registra-

tion of those who “deal in” marijuana); Marchetti v.

United States, 390 U.S. 39 (1968) and Grosso v.

United States, 390 U.S. 62 (1968) (registration of

gamblers); Haynes v. United States, 390 U.S. 85

(1968) (registration of certain firearms). The Court’s

most recent pronouncement on this issue, California

v. Byers, 402 U.S. 424 (1971), reaffirmed the Albert-

son approach. |

In Byers the Court upheld a statute requiring that

drivers involved in road accidents report their names

and addresses to the police. Summarizing its prior

478

App. 15

holdings, the Court concluded that “the disclosures

condemned were only those extracted from a ‘highly

selective group inherently suspect of criminal ac-

tivities’ and the privilege was applied only in ‘an

area permeated with criminal statutes’—not in an es-

sentially noncriminal and _ regulatory area of

inquiry.” Jd. at 430. The Court additionally noted

that the statutes struck down in prior cases had in-

volved reporting requirements which created “‘sub-

stantial hazards of self incrimination.’” Jd. Based

upon its finding that the automobile accident repor-

ting statute was primarily regulatory rather than cri-

minal and was directed at all drivers involved in ac-

cidents rather than at an inherently suspect group,

id. at 430-31, the Court held that it did not present

such a substantial risk of incrimination so as to out-

weigh the Governmental need for such a reporting

statute. We conclude that based upon these criteria

§1101 of the Bank Secrecy Act is not con-

stitutionally infirm.

Section 1101 requires the reporting of the trans-

portation of over $5,000 in monetary instruments in-

to or out of the United States.* The present form

5 “Monetary instrument” is defined in 31 U.S.C. § 1052(l) which

provides:

(l) The term ‘monetary instruments’ means coin and cur-

rency of the United States, and in addition, such foreign coin

and currencies, and such types of travelers’ checks, bearer

negotiable instruments, bearer investment securities, bearer

securities, and stock with title passing upon delivery, or the

equivalent thereof, as the Secretary may by regulation specify

for the purposes of the provision of this chapter to which the

regulation relates.”

The regulations promulgated under this section make clear that

a negotiable check endorsed in blank is within the definition of

“monetary instruments”. 31 C.F.R. § 103.11 defines “monetary

instruments” as follows:

479

App. 16

which must be filled out is United States Customs

Service form 4790. This form requires personal iden-

tifying information such as name, address, and

passport number, the type and amount of the cur-

rency, its destination and mode of transportation,

and the identity and occupation of the person on be-

half of whom, if any, the reporter is acting.

Initially, we note that the reporting requirement is

directed at all persons travelling across the border

with more than $5,000 in monetary instruments.

Since the transportation of such amounts of currency

is by no means an illegal act, the District Court was

correct in its finding that the reporting requirement

was not “addressed to ‘a highly selective group inher-

ently suspect of criminal activities.’ ” (Joint Appen-

dix at 8). Unlike the statutes struck down by the Su-

preme Court in Albertson, Leary, Marchetti, Grosso

and Haynes, which almost necessarily pertained to

individuals involved in criminal activities, the vast

majority of those affected by the requirements of

§ 1101 will be completely uninvolved in any related

criminal action. The statute will pose no danger

whatsoever to most international travelers, and as

such cannot be faulted as being aimed at an inher-

ently suspect group.

“Coin or currency of the United States or of any other coun-

try, traveler's checks, money orders, investment securities in

bearer form or otherwise in such form that title thereto

passes upon delivery, and negotiable instruments . . . in

bearer form or otherwise in such form that title thereto

passes upon delivery. The term includes bank checks, travelers’

checks and money orders which are signed but on which the

name of the payee has been omitted, but does not include

hank checks, travelers’ checks or money orders made payable

to the order of a named person which have not been endorsed

or which bear restrictive endorsements.” (emphasis added).

480

App. 17

Additionally, the reporting requirement in question

does not involve an area “permeated with criminal

statutes”. Albertson v. Subversive Activities Control

Board, 382 U.S. at 79. In each of the Supreme Court

cases holding a reporting requirement invalid, the re-

porting individual.was required to reveal to the Gov-

ernment information which would almost necessarily

provide the basis for criminal proceedings against

him for the very activity that he was required to

disclose. In Leary the marijuana dealing required to

be reported was itself criminal “in every one of the

50 states”. 395 U.S. at 16. The gambling activities

required to be reported in Marchetti and Grosso were

“widely prohibited under both federal and state law”.

390 U.S. at 44. The firearms required to be reported

in. Haynes were limited to certain concealable

weapons “used principally .. . in unlawful activities”,

and the reporting requirement was “directed prin-

cipally at those persons who [had] obtained posses-

sion of a firearm without complying with the Act’s

other requirements”. 390 U.S. at 87,96. The area of

Communist Party membership required to _ be

reported in Albertson was “permeated with criminal

statutes”. 382 U.S. at 79.

Unlike the disclosures involved in those cases, the

reporting requirements of the Bank Secrecy Act do

not involve a direct link to any related criminal ac-

tivity, In facet, since there ia nothing inherently il-

legal about transporting large sums of money into or

out of the United States, any potential incrimination

would of necessity involve a tangentially related cri-

minal transaction. This finding again indicates that

the risk of incrimination from the reporting statute

is not substantial.

Against any risk of incrimination from the Act,

however, must be balanced the governmental interest

481

App. 18

in establishing such a disclosure requirement. The

policies behind this reporting statute are expressed in

the Act’s declaration of purpose, which states that

the reports or records required will be useful not

only for criminal purposes, but also in “tax, or regu-

latory investigations or proceedings”. 31 U.S.C.

§ 1051. The purposes behind the enactment of § 1101

are further explained in the House Report which

states:

“the purposes of Title II [of which §1101 is a

part] . . . are: (1) to facilitate the supervision of

financial institutions properly subject to Federal

supervision, (2) to aid duly constituted authori-

ties in lawful investigations, and (3) to provide

for the <ollection of statistics necessary for the

formulation of monetary and economic policy”.

H.R.Rep. No. 975, 91st Cong., 2d Sess., re-

printed in [1970] U.S. Code Cong. & Admin.

News 4394, 4405.

These statements by Congress clearly indicate the

Government's concern with the flow of currency

across the nation’s borders. The legitimacy of such a

concern is indicated by the fact that many other na-

tions impose a direct restriction on the amount of

currency permitted to be transported into or out of

the country. While Congress clearly intended the

Act's disclosure requirements to be of some use in

criminal proceedings, we regard these non-prosecutor-

ial interests as substantial.

This conclusion is supported by District Judge Cof-

frin's opinion in United States v. San Juan, 405 F.

6 England has just repealed her restriction

Times, Oct. 25, 1979 § D, p.l, Os ne the tas

482

App. 19

Supp. 686 (D.Vt. 1975), revd on other grounds, 545

F.2d 314 (2d Cir. 1976), apparently the only other

reported case to thoroughly consider the constitu-

tionality of the Bank Secrecy Act’s reporting re-

quirements in fifth amendment terms. While the Dis-

trict Court’s opinion evinced a concern for what it

perceived as the underlying prosecutorial purposes be-

hind the Act, it nonetheless concluded that the re-

porting requirement could withstand a fifth amend-

ment challenge in view of the legitimate governmen-

tal concern regarding its border activities.’

In view of the lack of a direct linkage between the

required disclosure and the potential criminal activi-

ty, and in view of the fact that the statute is not di-

rected at an “inherently suspect group”, we conclude

that the reporting requirement does not present such

a “substantial risk of incrimination” so as_ to

outweigh the governmental interest in requiring such

a disclosure. As the Supreme Court concluded in

upholding the automobile accident reporting statute

in California v. Byers: “the mere possibility of in-

crimination is insufficient to defeat the strong poli-

7 The governmental interest in the flow of currency across the

border is additionally indicated, as noted in District Judge

Owen's memorandum, by the Congressional statement of findings

in a later section of Title 31. 31 U.S.C. § 1141 provides:

The Congress finds that:

(1) movements of mobile capital can have a significant im-

pact on the proper functioning of the international monetary

system;

(2) it is important to have as complete and current data as

feasible on the nature and source of these capital flows, in-

cluding transactions by large United States business enter-

prises and their foreign affiliates;

(3) it is desirable to emphasize this objective by supplement-

ing existing legal authority for the collection of data on

capital flows contained in section 95a of Title 12 and section

286f of Title 22.”

483

App. 20

cies in favor of a disclosure called for by statutes

like the one challenged here”. 402 US. at 428. In

view of these considerations, the constitutionality of

§ 1101 is upheld.

ITI.

Dichne’s final claim is that the District Court com-

mitted reversible error when it allegedly failed to ob-

serve the time limits of the Speedy Trial Act (18

U.S.C. §3161 et seg.). The District Court granted a

postponement of the trial for approximately four

weeks based upon the fact that a key Government

witness had been indicted and therefore refused to

testify because of the risk of self-incrimination. The

District Court concluded that such a refusal to tes-

tify rendered the witness “unavailable” within the

meaning of 18 U.S.C. § 3161(hX3XA), which provides

that “[alny period of delay resulting from the absence

or unavailability of . . . an essential witness” shall be

excluded from the Speedy Trial Act's time computa-

tion period. If this four week period had not been

excluded from the computing time for trial under the

Speedy Trial Act, the time delay would have ex-

ceeded the statutory requirements. We conclude that

the propriety of the District Judge's interpretation of

the meaning of “unavailability” for purposes of

§ 3161(hX3XA) does not have to be determined in the

instant case.

While the Speedy Trial Act provides for dismissal

of an indictment if the time provisions set forth are

not followed, 18 U.S.C. §3162(aX2), this sanction

was not to become effective until July 1, 1979. See

18 U.S.C. § 3163(c). Indeed, this time period has now

been extended by Congress until July 1, 1980. See

484

App. 21

P.L. 96-43 (Aug. 2, 1979). Because the District Court

decision to postpone the trial, and the defendant's ul-

timate trial, each occurred prior to the original effec-

tive date of the statute’s sanctions, it is not neces-

sary to determine if the time provisions of the

Speedy Trial Act were in fact violated by the Dis-

trict Court’s actions.

Other cases in this circuit have likewise deter-

mined that dismissal is not mandated prior to the ef-

fective date of the Speedy Trial Act’s sanctions. See

United States v. Carini, 562 F.2d 144, 148 (2d Cir.

1977); United States v. Amendola, 558 F.2d 1043,

1044 (2d Cir. 1977). Accord United States v. Lee,

575 F.2d 1184, 1185-87 (6th Cir. 1978). This conclu-

sion is further supported by the Congressional find-

ing that “no sanction [for violation of the Speedy

Trial Act] is in effect during the phase-in period”.

H.R.Rep. No. 1508, 93d Cong., 2d Sess. 32, reprinted

in [1974] U.S. Code Cong. & Admin. News 7401,

7425.

Dismissal of the indictment is thus clearly not

mandated by the Speedy Trial Act in the instant

case. Further, we find that dismissal under the pre-

sent circumstances would be a particularly unneces-

sary result. The delay was a short one and in no

way prejudiced Dichne. Additionally, there is no indi-

~ cation of misconduct, bad faith, or even negligence

on the part of the Government. Because the

postponement was granted in. the interest of justice,

and involved no serious prejudice of the accused's

rights, we conclude that the District Court’s decision

was not an abuse of discretion, and accordingly does

not mandate dismissal of the indictment.

The judgment of conviction is therefore affirmed.

485