Prepared by the Office of Enforcement Operations, Criminal Division,
United States Department of Justice
On October 21, 1986, President Reagan signed into law the Electronic
Communications Privacy Act of 1986, Public Law No. 99-508. This
legislation is primarily a comprehensive revision of Title III of the
Omnibus Crime Control and Safe Streets Act of 1968. It provides
coverage for the technological advances developed in the area of
electronic communications since the passage of the original act. The
1968 act governed only the aural acquisition of the contents of a wire
or oral communication. Thus, if the intercepted conversation could not
be heard or understood by the human ear, the existing law did not apply.
The new legislation encompasses not only the interception of wire and
oral communications as defined in the original act, but virtually all
forms of non-aural electronic communications during both the
transmission stage and the period when such communications are
maintained in electronic storage. Included within the concept of
electronic communication are such new and increasingly utilized
communication methods as electronic mail, computer data transmissions
and video teleconferencing. The principal purpose of the new statute is
to regulate the use of these dramatically improved communications
technologies that have been developed since 1968 and to protect the
transmission of all forms of information, including voice, data and some
forms of video, from improper interception. The overall thrust of the
legislation is to expand privacy protection in the new areas of
electronic communication while recognizing and preserving the interests
of effective law enforcement. The purpose of this memorandum is to
provide a broad overview of the new Act and acquaint you with those
provisions that have special significance for federal law enforcement.
Initially, it should be noted that most of the provisions of the new
Act become effective on January 20, 1987, which is 90 days from the date
the Act was signed. There is, however, one provision of the Act which
takes effect immediately. The new provisions of 18 U.S.C. 2516 extend
authority to authorize a request for an electronic surveillance order to
any Acting Assistant Attorney General or Deputy Assistant Attorney
General in the Criminal Division, as well as to an Assistant Attorney
General, once those officials are so designated by the Attorney General.
This provision of the Act will be implemented by a new Attorney General
delegation order.
It should also be noted at the outset that while the intent of the
new statute is to cover all known electronic communications technologies
to which an expectation of privacy can reasonably attach, several
exceptions were made to exclude forms of communications where privacy
interests were deemed to be relatively weak (e.g., handheld or cordless
telephones, tone only pagers) or nonexistent (e.g., many forms of radio
communications). These exceptions will be discussed in detail later in
this memorandum.
The Electronic Communications Privacy Act of 1986 is divided into
three separate, but closely related, titles: Title I -- Interception of
Communications and Related Matters; Title II -- Stored Wire and
Electronic Communications and Transactional Records Access; and Title
III -- Pen Registers and Trap and Trace Devices.
The first portion of the new Act is comprised of amendments to Title
III of the 1968 act. The amendments establish a new category
denominated "electronic communications" in addition to the wire and oral
communications covered under the original act and address some of the
difficulties perceived by law enforcement officials in utilizing the
former Title III. 18 U.S.C. 2510-2520.
The new statute defines and regulates three types of communications:
(1) wire; (2) oral; and (3) electronic communications. The last type,
in essence, is any form of communication using electronics in which the
human voice is not utilized. In addition, in one transmission there may
be more than one type of communication, such as a voice telephone
conversation followed by a computer transmission on the same line
utilizing modems. All forms of communications will now be covered with
the limited exceptions noted below. Thus, coverage of transmission of
electronic communications both from the perspective of protecting the
individual communication from third party interception and regulating
governmental interception will be virtually all-inclusive.
In actuality, the new Act mandates little change in the substantive
or procedural requirements for obtaining an order to intercept a
traditional wire or oral communication. For the most part, with respect
to wire and oral communications, the United States Attorneys will
proceed in precisely the same manner as they have in the past. With
respect to electronic communications, the substantive provisions of the
law are primarily the same as those governing oral and wire
communications, but the procedural provisions are somewhat different.
The Act treats electronic communications in two different categories.
Title I of the Act regulates interception of electronic communications
during the transmission stage and, accordingly, treats them much as a
wire or oral interception, although, as noted, with several lessened
procedural requirements. Title II of the Act, discussed infra, is
directed to electronic records that are temporarily in storage before or
after the actual transmission. Many of the changes to the wire or oral
communications provisions noted below are quite beneficial to law
enforcement, and many of these were made at the Department's suggestion.
The new Act's most significant changes, additions and exceptions set
forth in Title I are the following:
The definition of "wire communication" under the old statute has been
redrafted to include only "aural transfers," which are defined as
communications that involve the human voice at some point in the
transmissions. 81 U.S.C. 2510(1)(18). Wire communications are
specifically excluded from the new definition of electronic
communications. 18 U.S.C. 2510(12)(B). The Department insisted on
keeping the distinction between wire and electronic communications in
order to ensure that the case law in this area, built up over 18 years,
would continue to be applicable and the courts would not be called upon
to reinterpret established electronic surveillance principles.
The new law eliminates the distinction contained in the original
Title III between common carrier and non-common carrier electronic
communication systems where the system is designed to carry private
communications not readily accessible to the public. The new Act
applies to any person (as defined in 18 U.S.C. 2510(6)) engaged in
providing facilities for the transmission of interstate or foreign
communications or communications affecting interstate or foreign
commerce. 18 U.S.C. 2510(1). This amendment was added to provide
coverage of private communications systems where the affecting commerce
jurisdictional basis is present. This change is in recognition of the
fact that some major corporations and professional firms that are not
traditional common carriers are installing their own private
communications systems.
The definition of oral communication remains the same but is
specifically excluded from the definition of electronic communication.
18 U.S.C. Section 2510(2). The effect of the exclusion is to make it
clear that an oral communication under the statute can never be a radio
communication. See, United States v. Rose, 669 F.2d 23, 25-26 (1st
Cir.) cert. denied, 459 U.S. 828 (1982)
An "electronic communication" under the new statute is any transfer
of signs, signals, writing, images, sounds, data or intelligence of any
nature transmitted in whole or in part by a wire, radio,
electromagnetic, photoelectronic or photo-optical system that affects
interstate or foreign commerce. "Electronic communication" is also
specifically defined to exclude a wire or oral communication. 18 U.S.
C. 2510(12)(B). The effect of the breadth of this definition is that
any and all forms of electronic communications, unless specifically
exempted, are now subject to the provisions of the statute just as wire
communications have been covered since 1968.
The term "intercept" under the new Act has been broadened to mean the
aural "or other" acquisition of the contents of wire, electronic or oral
communications. The "or other" was added to accommodate the non-aural
acquisition of electronic communications. 18 U.S.C. 2510(4)
Because the definition of electronic communication is so broad and
all-inclusive it became necessary to carve out some forms of electronic
communications that either appeared patently not to be deserving of
privacy protection or where a policy decision was made by the Congress
not to include a specific form of electronic communication. Those
exceptions appear in the legislation either as exceptions to defined
terms in 18 U.S.C. 2510 or as exceptions to the section that penalizes
certain activity as unlawful, 18 U.S.C. 2511. The exceptions are as
follows:
(a) The radio portion of handheld or cordless telephone
conversations. These utilize a radio transmission over a limited
distance to a base station at a regular telephone. They are so
easily intercepted, often over an ordinary AM radio, that the
decision was made that there is no reasonable expectation of
privacy in these communications. Such handheld, cordless,
telephones should be distinguished from cellular telephones, which
are covered under the Act. 18 U.S.C. 2510 (12)(A)
(b) Tone only paging devices. It has been the Department's
position that intercepting only tone beeps or vibrations from a
pager is not a search and, therefore, such interceptions raise no
Fourth Amendment implications; the Act endorses this policy. By
contrast, digital display and voice paging devices are covered by
the new legislation. 18 U.S.C. 2510(12)(C)
(c) Communications from tracking devices (beepers) placed in
automobiles or packages to trace their location. 18 U.S.C. 2510(
12)(D). These are specifically excluded from this legislation,
and the decision was made to leave this area to case law
development. However, it should be noted that the new legislation
adds a new 18 U.S.C. 3117 to specifically solve one problem that
arises in connection with the use of mobile tracking devices.
These devices, by their nature, can easily be transported across
jurisdictional lines. However, a court order, in those
circumstances where one is required under case law, might well be
limited to one judicial district. This new section provides
extra-jurisdictional effect to a court order that authorizes the
installation of a mobile tracking device. It should be noted that
the authorization outside the jurisdiction of the court is not
limited to the territorial jurisdiction of the United States for a
mobile tracking device.
(d) A partial exception for video interceptions exists. The
new Act covers and criminalizes the unauthorized interception of a
closed circuit television broadcast between two points. For
example, a business competitor breaking into the wire transmission
of a teleconference violates the law, and a law enforcement
interception of that communication by tapping into the lines
requires a court order under the statute. The Act, however, does
not cover the government's use of its own video equipment to
surreptitiously intercept and televise a meeting without the
consent of a party because there is no interception of an
electronic communication occurring as no wires are tapped. (See
H. Rep. No. 99-647, 99th Cong., 2d Sess. p. 36 (1986) The latter
does require a search warrant issued pursuant to Rule 41 of the
Federal Rules of Criminal Procedure and, accordingly, the law in
this area has been left to the courts to develop. See, United
States v. Biasucci, 786 F.2d 506 (2nd Cir. 1986); United States
v. Torres, 751 F2d 875 (7th Cir. 1984), cert. denied, 105 S. Ct.
1853 (1985).
(e) Pen registers and trap and trace devices. These
investigative tools qualify as electronic communications as that
term is broadly defined. Since the privacy interests involved are
so limited with these techniques, they have both been excluded
from the coverage of Title I of the Act. 18 U. .C. 2511(h)(i).
However, Title III of the Act specifically regulates these
techniques. By and large that Title, to be discussed infra,
merely codifies existing Department policy and practices on pen
registers and trap and trace devices. 18 U.S.C. 3121-3125.
(f) Certain radio communications. The definition of electronic
communication is so broad that it sweeps in all forms of radio
communications. Thus, it was necessary for the statute to
specifically exclude various forms of radio communications that
patently should not be subject to protection from interception
such as electronic communications that are broadcast so as to be
readily accessible to the public (AM and FM radio station
broadcasts), ship to shore general public type communications,
public safety communications, citizen band radio, general mobile
radio services and the like. 18 U.S.C. 2511(2)( g). This
subsection of the Act also contains other specific exceptions
relating to interaction with the Federal Communications Act or
where there is a necessity to service the system or locate
interference. Id.
To cure that ambiguities that exist relating to conservations that
are in part wire and in part radio communications, the Act had to
address handheld or cordless telephone conversations, cellular telephone
conversations and paging devices. All of these combine wire and
electronic communications. See, United States v. Hall, 488 F2d 193 (9th
Cir. 1973). As noted, the radio portion of a handheld or cordless
telephone communication is specifically excluded from the Act. 18 U.S.
C. 2510(1). This is in recognition of the fact that such "backyard"
phones are so easily intercepted within their very short range from the
base station phone that no true privacy interests can be deemed present.
An interception of the wire portion of such a conversation, however, is
covered by the Act as long as the interception is made on the wire
portion as opposed to listening to the radio portion.
Both the wire and radio portions of a cellular telephone conversation
are specifically covered by the Act. A reference to connections in
switching stations in 18 U.S.C. 2510(1) is included so that even radio
to radio cellular communications that would occur in a conversation
between persons utilizing two cellular car phones will come within the
proscriptions of the statute. Including cellular communications within
the statute is a Congressional recognition that persons using car phones
or briefcase phones that are fully mobile expect that their
conversations are private, much as conversations on traditional
telephones are private. The mobility of these phones, as opposed to the
very limited mobility of a handheld, cordless phone, and the difficulty
of intercepting cellular conversations also argue for their privacy
protection.
Another problem addressed by the statute is the potential for
combining both wire and electronic communications into one conversation
over the same telephone line. For instance, two parties can converse in
a normal voice conversation, then, using modems, send data to computer
terminals and/or exchange written messages on their terminals, and later
return to the voice communication method before terminating the
conversation. The legislative history makes it clear that if any part
of the conversation is a wire communication, then for purposes of the
statute, Congress expects that the conversation will be deemed a wire
communication. H. Rep. No. 99-647, supra, at p. 35. This has only a
limited practical effect because only certain of the procedural aspects
of the statute are different for wire communications than they are for
electronic communications.
The basic penalty provisions of the existing statute are retained and
anyone who intentionally discloses or endeavors to disclose the contents
of any wire, oral or electronic communication having reason to know the
information was obtained through an unlawful interception is subject to
both criminal and civil penalties. Thus, the penalty provisions that
apply to the illegal tapping of wire communications are extended to
interceptions of electronic communications.
Several of the existing penalty provisions have been modified. For
instance, the culpability standard for all wire, oral or electronic
communications interception offenses has been changed from "willfully"
to "intentionally." 18 U.S.C. 2511. Initial research indicates that
this change will be of little practical effect.
In addition, the penalty provision for the interception of the radio
portion of a cellular telephone conversation required careful handling
because of the presence of radio scanners on the market. These
scanners, which are currently in the hands of amateur radio hobbyists,
are designed so that they can intercept cellular calls as long as the
cellular phone and the radio interceptee are in the same cell and on the
same frequency. A first offense for such an interception, if the
interception is not for a tortious or illegal purpose or for commercial
gain, carries only a $500 fine. 18 U.S.C. 2511(4)(b)(ii). Subsequent
offenses or an offense for a tortious or illegal purpose or for
commercial gain can carry up to a five year prison term. 18 U.S.C.
2511(4)(a).
Finally, the bill also sets up a reduced penalty structure for a
private home television viewer sho, using a satellite dish, intercepts
specified unscrambled satellite transmissions for private,
non-commercial use. For a first offense under these circumstances the
only sanction available will be a civil suit by the federal government
seeking injunctive relief. 18 U.S.C. 2511(5)(a)(ii).
A full discussion of the penalty provisions of the statute will
appear later in an amended United States Attorneys' Manual section.
The legislation also adds a new provision to Title 18 that
criminalizes the disclosure of a court approved electronic surveillance
application. This new statute, added as a subsection (c) to 18 U.S.C.
2232, provides a five year penalty and a fine for warning, or attempting
to warn, the subject of an electronic surveillance application "in order
to obstruct, impede, or prevent such interception." The provision
applies to both interceptions under the new Act and those authorized
under the Foreign Intelligence Surveillance Act (50 U.S.C. 1801, et
seq.). Disclosure of existing wiretap orders has been an occasional
problem in recent years, since not all cases fit within the less
specific obstruction of justice and contempt statutes. A specific
offense will close this gap.
A large number of new crimes have been added to the list of crimes
enumerated in 18 U.S.C. Section 2516 for which a wire or oral
interception order can be obtained. Expansion of the list of wiretap
predicate offenses was a major goal of the Department in the drafting of
the Act and should work to make this investigative technique more
useful. These additional crimes are: 18 U.S.C. 751 (escape), 18 U.S.
C. 1952A (use of interstate commerce facilities in the commission of
murder for hire), 18 U.S.C. 1952B (violent crimes in aid of racketeering
activity), 18 U.S.C. 2312, 2313, 2314, (interstate transportation or
receipt of stolen vehicles), the second section 2320 of Title 18
(trafficking in certain motor vehicles or motor vehicle parts), 18
U.S.C. 1203 (hostage taking), 18 U.S.C. 1029 (fraud and related activity
in connection with access devices), 18 U.S.C. 3146 (penalty for failure
to appear), 18 U.S.C. 3521(b)(3) (witness relocation and assistance), 18
U.S.C. 32 (destruction of aircraft or aircraft facilities), 18 U.S.C.
115 (threatening or retaliating against a federal official), 18 U.S.C.
1365 (destruction of an energy facility), 18 U.S.C. 1341 (mail fraud),
18 U.S.C. 2511, 2512 (interception and disclosure of certain
communications and use of certain interception devices), 18 U.S.C. 831
(prohibited transactions involving nuclear materials), 18 U.S.C. 33
(destruction of motor vehicles or motor vehicle facilities), 18 U.S.C.
1992 (wrecking trains), 22 U.S.C. 2778 (relating to the Arms Export
Control Act), 42 U.S.C. 2284 (sabotage of nuclear facilities or fuel),
49 U.S.C. 1679( c)(2) (destruction of natural gas pipeline), 49 U.S.C.
1472(i) or (n) (aircraft piracy), and any felony violations of Chapter
65 (malicious mischief), Chapter 111 (destruction of vessels), and
Chapter 81 (piracy) of Title 18, United States Code. In addition, a new
subsection was added that authorizes interception to ascertain the
location of any fugitive from justice from an offense described in 18
U.S.C. 2516(1).
Section 2518 of Title 18, which describes the procedure for
intercepting wire, oral, and now electronic communications remains
substantially the same under the new law. There are, however, some
significant changes designed, or the most part, to ease certain
procedural requirements for the interception of such communications by
federal law enforcement officers. Some of these new procedural
provisions are as follows:
(a) Interception of electronic communications. 18 U.S.C. 2516(3)
allows any attorney for the government to make an application for an
electronic communications interception order in connection with any
federal felony. This is in contrast to the enumerated crimes that limit
requests for wire or oral interception orders. Moreover, the new law
does not require approval from Washington as a prerequisite to filing an
application for an electronic communications interception order.
However, although Washington approval for this type of interception
order is not required by the Act, the Department of Justice has agreed
with Congress to administratively require Washington approval for the
first three years to insure that the Act is properly implemented. See,
H. Rep. No. 99-647, supra, at p. 51. Accordingly, for the initial three
year period, requests to intercept electronic communications must be
authorized by the same officials in Washington that authorize the
interception of wire communications.
It is also important to note that pursuant to 18 U.S.C. 2518(10)(c),
as to the interception of electronic communications, the remedies and
sanctions described in the statute are the only judicial remedies and
sanctions available for nonconstitutional violations of the Act. When a
violation of constitutional magnitude is involved, the trial court will
apply the existing constitutional law with respect to the exclusionary
rule. United States v. Leon, 468 U.S.C. 897 (1984).
(b) Mobile interception devices. Under the prior wiretap statute, a
law enforcement agency wishing to install an oral interception device in
an automobile had to obtain an order authorizing the interception from a
court in every district that the automobile was expected to enter or
forego intercepting conversations in districts in which no order had
been obtained. The new statute amends 18 U.S.C. 2518(3) by providing
that court orders for mobile interception devices need only be obtained
in one district. Thus, there will no longer be a need to secure
separate court orders in each jurisdiction that the vehicle passes
through; an order in any jurisdiction within the United States will
authorize the requested interception. This provision should be
available not only for oral bugging devices installed in vehicles, but
for court orders authorizing interception of cellular phone
conversations over car telephones. Note that in contrast with the
provision on mobile tracking devices, 18 U.S.C. 3117, the authorization
under 18 U.S.C. 2518(3) for mobile interception devices is valid only
within the United States.
(c) Commencement of the thirty day period. 18 U.S.C. 2518(5) has
been amended to provide that the thirty day period for an order
authorizing the interception of a wire, oral or electronic communication
begins on the earlier of the day on which the interception begins or ten
days after the order is entered. This latter provision allows a grace
period in case of difficulties in setting up equipment or other
technical or operational problems. Thus, investigative agents will have
up to ten days in which to place a listening device, often a difficult
job, before the thirty day time limit begins to run on the order. This
provision makes it more likely that a full interception period will take
place before an extension order has to be sought.
(d) After the fact minimization. 18 U.S.C. 2518(5) has also been
amended to specifically authorize after the fact minimization in cases
where codes or foreign languages are used by the interceptees and there
is no expert reasonably available to translate the conversations during
the interception period. This amendment provides statutory
authorization for what is becoming a more frequent practice as
interceptees use complex codes and foreign languages in an attempt to
ensure the secrecy of their conversations. Often, the codes and
languages used are so obscure that it is impossible to find a translator
until the interception period is well under way or over.
(e) The use of support personnel. One of the most frequent problems
encountered by agencies conducting electronic surveillance pursuant to
the original statute has been the need to use "law enforcement
officers," as that term is defined in 18 U.S.C. 2510(7), to monitor
intercepted conversations. This requirement necessitated that non-agent
translators, state and local investigators, or any other individuals
needed to aid in the monitoring, who were not federal law enforcement
officers under the specific statutory definitions, be deputized as
United States Marshals before conducting the interceptions. The
deputation requirement often resulted in disputes over the meaning of
"law enforcement officer" and delays in the authorization process. The
problem has been eliminated by the new law, which provides that an
interception may be conducted by "Government personnel, or by an
individual operating under a contract with the Government, acting under
the supervision of an investigative or law enforcement officer
authorized to conduct the interception." 18 U.S.C. 2518(5). This
change is designed to substantially reduce the deputation procedure as
well as free field agents from the need to monitor interceptions so that
they can engage in other law enforcement activities. The key to the
provision is that the government or contract personnel must be working
under the supervision of an appropriate investigative or law enforcement
official.
(f) Roving interceptions. One of the most significant additions to
18 U.S.C. 2518 concerns the specificity required in the description of
the place to be bugged or the telephone to be tapped. The original law
required that the application for, and the order authorizing, an
electronic surveillance request indicate the "particular" facility or
place in which the interception was to occur. The new law contains an
exception to the particularity requirement and, in effect, allows an
interception order to target a specific person rather than the specific
telephone or premises that that person might use. The amendments
establish two similar rules to govern the interception of "oral
communications" and "wire or electronic communications" where the target
facility need not be identified with specificity before the interception
order is obtained. 18 U.S.C. 2518(11).
With respect to "oral communications," the application must contain a
full and complete statement as to why the ordinary specification
requirements are not practical. The application must also identify the
person committing the offense and whose communications are to be
intercepted. The judge must then make a specific finding that the
ordinary specification rules are not practical under the circumstances.
18 U.S.C. 2518(11)(a). Examples of situations where ordinary
specification rules would not be practical include cases in which
suspects meet in parking lots or fields or move from hotel room to hotel
room in an attempt to avoid electronic surveillance. In such cases, the
order would allow law enforcement officers to follow the targeted
individual and engage in the interception once the conversation occurs.
18 U.S.C. 2518(12).
The provision concerning "wire or electronic communications" is
similar to that governing oral communications. The application must
specifically identify the person committing the offense whose
communications are to be intercepted. The application must also show,
however, that the person committing the offense has demonstrated a
purpose to thwart interception by changing facilities. In these cases,
the court must specifically find that such a purpose has been evidenced
by the suspect. An example of a situation that would meet this test
would be the subject who moves from phone booth to phone booth numerous
times to avoid interception. 18 U.S.C. Section 2518(11)(b).
With respect to both oral and wire or electronic communications, the
approval of the Attorney General, Deputy Attorney General, Associate
Attorney General, Assistant Attorney General or an Acting Assistant
Attorney General is required before a relaxed specificty order is
sought. Approval by a Deputy Assistant Attorney General in the Criminal
Division, which is authorized for all other interceptions, is not
sufficient for this type of application.
The government cannot begin the interception until the facilities
from which, or the place where, the communication is to be intercepted
is determined by the agency implementing the order. 18 U.S.C. 2518(
12). Congress also intended that the actual interception not commence
until the targeted individual begins, or evidences an intention to
begin, a conversation. It was not intended that the relaxed specificity
order be used to tap a series of telephones, intercept all conversations
over those phones, and then minimize the conversations recorded as a
result. This provision puts the burden on the investigatory agency to
determine when and where the interception is to commence. See, H. Rep.
No. 99-647, supra, at p. 53. There is no requirement of notification to
the court once the premises or specific phone is identified prior to
making the interception; however a specific place or phone must be
identified. Limiting interceptions to specific places once they are
determined should satisfy the specificity requirement of the Fourth
Amendment.
Obviously, this provision will be a valuable tool in criminal
investigations as sophisticated suspects have been quite effective in
avoiding electronic surveillance by frequently changing their meeting
places and telephones. However, the Fourth Amendment implications
involved in this procedure should not be ignored. This is an
extraordinary provision and it is the intention of the Department of
Justice that it be used sparingly and only in clearly appropriate cases.
This provision is not a substitute for investigative footwork; it is
not intended that the ordinary showing of probable cause with respect to
a specific telephone or location be dispensed with on the theory that
the subject is a criminal who engages in criminal conversations wherever
he goes.
A further consideration, especially in wire or electronic
interceptions, is the practical problems faced by the telephone company
or other provider of electronic communication services in effecting the
interception, complete with leased lines to the government listening
post, on extremely short notice. Care has to be exercised to work with
the telecommunication companies and to provide them with as much
information and notice as possible as far in advance as possible.
Telephone companies in particular have expressed great concern about
their ability to comply with such orders, which may require action on
their part that will strain their ability to assist law enforcement
officials in these cases. Congress, at the request of the telephone
companies, included a provision in the Act allowing the companies to
move the court that has issued a reduced specificity order for the
interception of wire or electronic communications to modify or quash the
order if the interception cannot be performed in a timely or reasonable
manner. 18 U.S.C. 2518(12). The key for all concerned is to approach
this procedure with care and foresight and to be aware of the practical
and legal problems that may arise.
(g) Reporting requirements. 18 U.S.C. 2519, which requires judicial
reports to the Administrative Office of the United States Courts, has
been amended to require reports on wire, oral, or electronic
communication surveillance orders issued under the relaxed specificity
provisions noted above. 18 U.S.C. 2519(1)(b). Otherwise the reporting
section is unchanged.
18 U.S.C. 2520 relating to civil damages has been largely rewritten.
The new section provides for equitable relief, compensatory and punitive
damages, and attorneys' fees for a violation of the chapter. Added to
section 2520 are statutory provision for the computation of damages and
a two year statute of limitations on actions brought under the section.
Finally, 18 U.S.C. 2520(d) provides a good faith defense to actions
brought under the section and specifically includes reliance on a
facially valid court order within the meaning of "good faith."
A new section, 18 U.S.C. 2521, has been added to the law. This
section enables the Attorney General to initiate civil proceedings to
enjoin a felony violation of the chapter that presents a continuing and
substantial injury to the United States or to any person or class for
whose protection the action is brought.
Title II of the Act is completely new and is designed to protect the
privacy of stored electronic communications, either before such a
communication is transmitted to the recipient or, if a copy of the
message is kept, after it is delivered. In developing legislation to
cover new communications technologies, now identified by the statute as
"electronic communications," it became apparent that entirely different
problems exist with reference to such methods as electronic mail and
computer transmissions than are present in the case of wire or oral
communications. In the former, copies, whether backup to guard against
computer failure or stored copies in a remote computing system, are a
central feature of the new technology; in the latter, preserved copies
of spoken telephone messages are virtually unknown. Businesses and
companies that provide communications services urged Congress to
establish appropriate methods for government access to these new stored
records to protect their customers' interests and to bring certainty to
this developing communications industry. In addition, privacy interests
were recognized by making it a federal offense to improperly access or
disclose the contents of stored electronic communications. In developing
the legislation these new electronic communications were divided into
two categories: a) communications during the transmission stage, and b)
communications in "storage." Electronic storage is defined in 18 U.S.C.
2510(17) as both any temporary, intermediate storage of a wire or
electronic communication incidental to the electronic transmission
thereof and the storage of such communication by an electronic
communication service for purposes of backup protection of such
communication.
There was general recognition that the interception of communications
during the transmission stage is more intrusive than of those in storage
and, accordingly, those communications were given almost the same
protection as that provided for wire and oral communications. However,
as noted earlier in this memorandum, it is somewhat easier to obtain an
interception order for an electronic communication in transmission than
it is to obtain a wire or oral interception order. The provisions
governing electronic communications during the transmission stage are
set forth in Title I of the Act and are discussed in detail at p. 9,
supra.
With respect to stored communications, the Department originally
urged that these communications should be treated as third party records
and should be available by administrative or grand jury subpoena or by a
court order. The various concerned segments of the communications
industry had considerable difficulty with this concept, arguing that in
the business community clients would not use electronic communications
services if the records being transmitted were readily available to law
enforcement agencies. These communications were likened to regular mail
being handled by the Post Office. Under present day standards, a search
warrant would be required to intercept mail since it enjoys Fourth
Amendment protection. Congress ultimately decided that electronic mail
in storage incident to transmission should be accorded the same
protection. 18 U.S.C. 2703(a).
The same principle applies to "backup" copies made by the providers
of electronic communications services to protect the communications from
loss when the system has a malfunction and records are inadvertently
lost, a not infrequent occurrence. As these copies are kept to protect
the owner, the argument was made that since their existence is for the
owner's benefit, a search warrant should be required to obtain them just
as it would be needed to seek the records if possessed at the owner's
headquarters. Similar protection was requested for records maintained
by providers of remote computing services that were simply performing
processing functions and did not have access to the contents of the
communications. Without the right to actually access the records, the
claim was made that the remote computing service provider was not truly
a third party custodian. An example of a remote computing service would
be a firm that takes time and salary records from a large firm, applies
established computer programs to the records, and returns pay checks
with appropriate tax deductions made.
The consensus that was reached was to accord Fourth Amendment type
protection to the stored data for the first 180 days, requiring a search
warrant under Rule 41 of the Federal Rules of Criminal Procedure for
government access. After the 180-day period expired, any records still
retained would revert to the status of third party records and would be
available by administrative or grand jury subpoena or by a specially
created court order procedure. The Act's provisions also permit the
government to ask a computer storage company to create a copy of
existing records as they exist on a specific day and hold them pending
court order access. This provision, to be discussed infra, should be
quite beneficial in certain large scale fraud investigations where
remote computing facilities are used as it will eliminate the danger of
a computer command to destroy the records when the perpetrator suspects
law enforcement interest in his activities.
The most important provisions of Title II are the following:
18 U.S.C. 2701 makes it an offense to (a) intentionally access,
without authorization, a facility through which an electronic
communication service is provided; or (b) intentionally exceed the
authorization of such facility; and as a result of this conduct,
obtain, alter or prevent authorized access to a wire or electronic
communication while it is in electronic storage in such a system. 18
U.S.C. 2701(a). An "electronic mail" service, which permits a sender to
transmit a digital message to the service's facility, where it is held
in storage until the addressee requests it, would be subject to 18
U.S.C. 2701. A "voice mail" service operates in much the same way,
except that the stored message takes the form of the sender's voice,
usually in digital code. It would likewise be subject to this section.
Moreover, a remote computing service provided through an electronic
communication service is also protected.
This provision is intended to address the increasing problem of both
unauthorized "computer hackers" and corporate spies who deliberately
gain access to, and sometime tamper with, electronic communications that
are not available to the public. The provision is not intended to
criminalize access to "electronic bulletin boards," which are generally
open to the public so that interested persons may communicate on
specific topics. Where communications are readily accessible to the
general public, the sender has, for purposes of 18 U.S.C. 2701(a),
extended an "authorization" to the public to access those
communications. A communication will be found to be readily accessible
to the general public if the telephone number of the system and other
means of access are widely known, and if a person does not, in the
course of gaining access, encounter any warnings, encryptions, password
requests, or other indicia of intended privacy. To access a
communication on such a system is not a violation of the law. 18 U.S.
C. 2701(a).
If a violation of 18 U.S.C. 2701(a) was committed for commercial
advantage, malicious destruction or damage, or private financial gain,
the violator could receive up to a year in prison and a $250,000 fine
for the first offense and up to two years imprisonment and a fine as
provided by Title 18, United States Code, for a second or subsequent
offense. In all other cases, a jail term of up to six months and a fine
of $5,000, or both, could be imposed. 18 U.S.C. 2701(b)(2).
18 U.S.C. 2702 governs disclosure of the contents of a stored
communication. 18 U.S.C. 2702(a) generally prohibits the provider of a
wire or electronic communication service from knowingly divulging the
contents of any communication while in electronic storage by that
service to any person other than the addressee or intended recipient of
the communication. Similarly, 18 U.S.C. 2511(3), as amended, prohibits
such a provider from divulging the contents of a communication while it
is in the transmission stage. Neither provision, however, nor any other
provision of the Act, is intended to affect any other provision of
federal law that prohibits the disclosure of information on the basis of
the content of the information, such as the Fair Credit Reporting Act,
15 U.S.C. 1681(b), which limits the circumstances under which consumer
reporting agencies may disclose certain information relating to
consumers.
18 U.S.C. 2702(a)(1) states that a provider of an electronic
communication service shall not knowingly divulge the contents of a
communication while in electronic storage.
18 U.S.C. 2702(a)(2) prohibits the provider of a remote computing
service from disclosing the contents of any communication that is
maintained by the service if certain conditions are met. The first
condition is that the dommunication must be on behalf of and received by
means of electronic transmission from (or created by means of computer
processing of communications received by means of transmission from) a
subscriber or cutomer of such service. 18 U.S.C. 2702(a)(2)( A). The
second condition is that the communication must be solely for the
purpose of providing storage or computer processing services to the
subscriber or customer if the provider is not authorized to access the
contents of any such communications for purposes of providing services
other than storage or computer processing. 18 U.S.C. 2702(a)(2)(B).
The practical purpose of this provision was set forth in the Report of
the House of Representatives Committee on the Judiciary as follows:
This provision reflects the rapidly growing importance of
information storage and processing to the Nation's commerce.
Today, the subject matter of commerce increasingly is information
in electronic form and the processing of information itself has
become a major industry. The secure storage of electronic
information has thus become as important to the commercial system
as the protection of paper records. Accordingly, where an
electronic communication is transmitted by a subscriber or
customer to such a service, and is stored on the subscriber's
behalf solely for the purpose of providing storage or computer
processing services to the subscriber, the Committee intends that
the communication -- together with the products of any processing
that the service performs for the customer -- remain available
only to the subscriber and to the persons he designates, with
certain exceptions enumerated in Section 2702(b). H. Rep. No.
99-647, supra, pp. 65-66.
18 U.S.C. 2702(b) provides six distinct exceptions that modify the
general prohibitions against disclosure contained in 2702(a).
Accordingly, the contents of a communication may be disclosed under the
following circumstances:
a. to an addressee or intended recipient of the communication
or his agent;
b. as otherwise authorized in 18 U.S.C. 2517 (the basic wire
and electronic communications disclosure provisions); 18 U.S.C.
2511(2)(a) (disclosure to suitable switchboard operators and
telephone company personnel in the ordinary course of business);
or the new 18 U.S.C. 2703 (access by the government to the
contents of electronic communications);
c. with the consent of the originator, addressee, or intended
recipient, or the subscriber in the case of a remote computing
service;
d. to an employee or other person whose facilities are used to
transmit the communication to its destination;
e. as may be necessary in order to provide the service or to
protect the property or rights of the provider of the service;
f. to a law enforcement agency, if the contents were:
(i) inadvertently obtained by the service provider; and
(ii) appear to pertain to the commission of a crime.
The final exception is intended to be read narrowly. It is not
intended to be a substitute for fulfilling the procedural requirements
contained in 18 U.S.C. 2703, which govern government access to stored
communications. A service provider's systematic practice of reviewing
these communications to look for evidence of a crime would not qualify
as inadvertent. H. Rep. No. 99-647, supra, at p. 67.
It should be noted that the penalty for improper disclosure by a
service provider of stored communications is civil in nature since this
section provides no criminal penalty. A provision for a civil action
for violation of most of the provisions of Title II of the bill is set
out in the new 18 U.S.C. 2707.
(a) Procedures for access to the contents of a stored communication.
18 U.S.C. 2703 sets forth the procedural requirements that the
government must meet in order to obtain access to electronic
communications in storage and related transactional records. The
statute draws a distinction between contents of electronic
communications that have been in storage for 180 days or less and those
that have been stored for a longer period of time. Thus, the section
provides that a governmental entity may only obtain access to the
contents of an electronic communication that has been in storage for 180
days or less pursuant to a search warrant issued under the Federal Rules
of Criminal Procedure or an equivalent state warrant. If the message
has been stored for more than 180 days the government can, as discussed
below, obtain the information by a variety of procedures including a
search warrant, grand jury subpoena, administrative subpoena, or a court
order, depending on the type of notification the government wishes to
provide the subscriber. The distinction results from Congress's
conclusion that while the contents of a message in storage should be
protected by Fourth Amendment standards as are the contents of a
regularly mailed letter, to the extent that the record is kept beyond
six months, it is closer to a business record maintained by a third
party for its own benefit and, therefore, deserving of a lessened
standard of protection. The above provision clearly applies to the new
communication concept generally referred to as electronic mail in which
messages are sent between parties much like traditional mail except that
an electronic communications system is utilized instead of a postal
service. As noted below, the provision, with its search warrant
requirement, may not apply in the case of a remote computing service in
which a data base may be held by the service for less than or more than
180 days and can be modified and updated on a weekly or even a daily
basis.
18 U.S.C. 2703(b) sets forth the procedures that the government may
use to obtain access to electronic communications held for more than 180
days or to such communications held by a provider of a remote computing
service. That subsection provides that the government may proceed using
any of three alternative means of access. The government may, without
providing any notice to the subscriber, obtain a state or federal search
warrant based upon probable cause. 18 U.S.C. 2703(b)( A). If the
government chooses to give notice to the subscriber, it may obtain
access to the records by using either a grand jury or administrative
subpoena, 18 U.S.C. 2703(b)(B)(i), or a new statutory court order based
upon a finding that the records are relevant to a legitimate law
enforcement inquiry. 18 U.S.C. 2703(d). Please note that the required
notification to the subscriber may be delayed pursuant to 18 U.S.C.
2705, as discussed below.
As noted, 18 U.S.C. 2703(a), which governs the procedures for
governmental access to the contents of records in electronic storage,
requires that a search warrant based on probable cause be obtained for
access to the contents of an electronic communication held for less than
180 days. Such communication contents held for more than 180 days can
be obtained by the methods set forth in 18 U.S.C. 2703(b), which, along
with search warrants, include a specially created court order and grand
jury and administrative subpoenas. 18 U.S.C. 2703(b) relates
specifically to records held in remote computing systems and such
records are not mentioned anywhere in 18 U.S.C. 2703(a). The question
arises as to whether the 180 day provision in 18 U.S.C. 2703(a) applies
as well to records held in remote computing systems as it clearly does
to communications during transmission such as those utilized by an
electronic mail company. Is access to records held by remote computing
systems limited during the first 180 days in the system to situations
where search warrants can be obtained, or can those records be accessed
by the government, regardless of their length of time in the system,
simply by use of a grand jury or administrative subpoena or the new
statutory court order?
The Act is clearly disjunctive in its treatment of "Electronic
Communications in Electronic Storage" under 18 U.S.C. 2703(a) and
"Electronic Communications in a Remote Computing Service" under 18 U.S.
C. 2703(b). It would appear, therefore, that Congress intended that
access to communications in a remote computing service be governed only
by the provisions of 2703(b), which makes a search warrant optional to a
subpoena or court order. Since no time limit is set forth in 2703( b),
it seems that the government could obtain records in a remote computing
service at any time by issuing an administrative or grand jury subpoena
or obtaining a court order based upon a simple showing of relevancy.
The legislative histories of the Act, however, make this proposition far
from clear.
The House Report treats communications in electronic storage and
communications in a remote computing system in the disjunctive, as the
Act itself does. Thus, the House Report states that 18 U.S.C. 2703(a)
deals with the contents of an electronic communication in storage,
noting that such records can only be obtained through a search warrant
during the first 180 days in storage. H. Rep. No. 99-647, supra, at pp.
67-68. The House Report also notes that "electronically stored
communications can be of two types. The first type of stored
communications are those associated with transmission and incident
thereto. The second type of storage is of a back-up variety." Id. at p.
68. This statement, and the fact that remote computing service records
are discussed under a separate subsection in the House Report, supports
the view that records given to a remote computing service are neither
given or for, nor held incidentally to, purposes of transmission and,
therefore, are not governed by the 180 day provisions set forth in 18
U.S.C. 2703(a).
The Senate Report, however, appears to treat the two types of records
in the same manner in stating that 18 U.S.C. 2703(b) "provides that for
electronic communications that are maintained by a remote computing
service and that have been in storage in an electronic communication
service for more than 180 days the Government can gain access in several
ways." S. Rep. No. 99-541, 99th Cong., 2d Sess. at pg. 38 (1986). The
Senate Report contains no independent discussion of remote computing
service records in storage for less than 180 days. The argument can be
made that the Senate Report is incorrect as it does not reflect the
plain meaning of the statute as set forth in 18 U.S.C. 2703(a) and (b).
Moreover, since the language was originally drafted by the House, the
House Report should be the more authoritative as the Senate made no
changes in this language.
Although it does not appear in either Report, an argument can be made
that because a remote computing company has little access to the records
themselves, the are nothing more than a mere extension of the record
originator and should stand in the originator's place in the face of a
government request for access to the records. If a search warrant would
be required to obtain the originator's records in his own office, then,
similarly, a search warrant should be necessary to obtain the same
records from a remote computing service possessing the records under
circumstances in which the service cannot access the records except for
purposes of storage or to run a computer program. Without independent
access to the records, the remote computing service should not be deemed
an ordinary third party custodian of records who must respond to a
subpoena. This is the argument the remote computing industry is sure to
raise.
Ultimately, the courts will have to determine the correct legislative
meaning and intent on this issue. Initially, United States attorneys
are urged to argue that government access to the contents of an
electronic communication held by a remote computing service does not
require a search warrant during the first 180 days. All those
implementing this statute for the government should be aware, however,
that this ambiguity exists and be prepared for a court challenge to a
subpoena or the more limited statutory court order for such records.
As just referred to above, the type of electronic communication held
by a remote computing service that is subject to these provisions on
governmental access is limited. The communication must be on behalf of
a subscriber of a remote computing service and must have been given to
the remote computing service under narrow conditions. The communication
must have been received in a certain form (i.e., by means of electronic
transmission or similar means). 18 U.S.C. 2703(b)(2)(A). In addition,
the communication must have been surrendered solely for the purpose of
providing storage or computer processing services to the subscriber, and
the provider may not be authorized to access the contents of any such
communication for purposes of providing any services other than storage
or computer processing. 18 U.S.C. 2703(b)( 2)(B). A computer storage
company that does not meet these requirements would certainly be deemed
an ordinary third party custodian of records regardless of the ultimate
decision as to the remote computing service.
(b) Procedures for access to transactional information including
telephone toll records. 18 U.S.C. 2703(c) sets forth the rules under
which the government may obtain access to transactional records. These
are records that pertain to the subscriber to, or customer of, an
electronic communication service or remote computing service and which
do not involve the contents of a communication. In electronic
communications these are the records that are the equivalent of the
traditional telephone toll records maintained by a telephone company.
As drafted, this provision covers not only transactional records of an
electronic mail company or a computer data processor, but also, in fact,
covers and regulates governmental access to traditional telephone toll
records themselves. It is important to note at the outset that the
statute's provisions in the area of telephone toll records impose no
greater burden on the government than the previous Department policy of
obtaining such records by way of subpoena or administrative summons. In
fact, in some cases, the statute will actually make it easier for an
investigative agency to obtain and use such records. Nevertheless, as
part of the general intent of the Act to cover all forms of wire and
electronic communications, telephone toll records, like pen registers,
will not be covered by a federal statute.
As discussed below, the government will be able to obtain such
transactional records by grand jury subpoena, administrative subpoena,
or court order based upon a finding of relevancy. In the past, the
Federal Bureau of Investigation could only obtain these records pursuant
to a grand jury subpoena with such a subpoena's attendant Rule 6(e)
disclosure and storage restrictions and problems. Under 18 U.S.C.
2703(c), the Bureau, and other investigative agencies lacking
administrative subpoena powers, will now be able to obtain transactional
records, including telephone toll records, pursuant to a court order
based on a readily available standard and telephone toll records
available solely as grand jury records will no longer be a problem.
18 U.S.C. 2703(c)(1)(B) and 18 U.S.C. 2703 (c)(2) allow the
government to obtain transactional records without notice to the
subscriber by obtaining (1) an administrative or grand jury subpoena;
(2) a search warrant pursuant to state or federal law; or (3) a court
order pursuant to 18 U.S.C. 2703(d) based upon a finding that the
information is relevant to a legitimate law enforcement inquiry.
Granted that pen register data (regulated in Title III of the Act) and
telephone toll records provide identical type data, that court process
of some nature is now required under Department policy for such records,
and that the Act's intent is to regulate all forms of wire and
electronic communications, this provision with its relevancy standard
both effectuates the Congressional purpose and protects legitimate law
enforcement interests in obtaining the necessary information. The
government may also, of course, obtain such records from the service
provider when the customer consents to the disclosure. 18 U.S.C. 2703(
c)(1)(B)(iv).
(c) Court orders for disclosure of the contents of communications or
transactional records. 18 U.S.C. 2703(d) governs court orders issued
pursuant to 18 U.S.C. 2703(b)(B)(ii) relating to the contents of stored
communications and 18 U.S.C. 2703(c)(1)(B)(iii) relating to
transactional records. 18 U.S.C. 2703(d) provides that to obtain such
an order the government must demonstrate that there is reason to believe
that the contents of an electronic communication, or the records or
other information sought, are relevant to a legitimate law enforcement
inquiry. The only contents that can be sought using the court order
option are those stored for more than 180 days. Thus, the standard for
the order for contents of records stored more than 180 days is the same
as for transactional records. However, for contents, as opposed to
transactional records, notice to the subscriber is also required unless
it can be delayed under 18 U.S.C. 2705; no notice is required to the
subscriber for access to transactional records.
(d) Cause of action barred. 18 U.S.C. 2703(e) provides that no cause
of action shall lie against the provider of a wire or electronic
communications service, or its officers and employees, for providing
information, facilities, or assistance to the government pursuant to a
court order, "subpoena, warrant or certification.
(a) Government access. 18 U.S.C. 2704 sets forth the procedures that
apply to backup copy preservation. This is the provision that will
permit law enforcement officials to have a copy, in the nature of a
picture of the records that exist on a given day, made of records of
illegal activities in which a computer storage or remote processing firm
is utilized in the criminal activity. It is an innovation that should
be of major value to law enforcement in coming years. 18 U.S.C.
2704(a)(1) provides that when the government seeks records that are
being held by a remote computing storage company pursuant to 18 U.S.C.
2703(b)(2), the government may include in its subpoena or court order a
requirement that the service provider create a backup copy of the
communication in order to preserve the communication. The provider is
directed to create the requested backup copy as soon as practicable
consistent with its regular business practices, put in any event within
two business days of the receipt of the order or subpoena and then
notify the government that the copy has been made. The provider is also
directed not to notify the subscriber of the order or subpoena.
18 U.S.C. 2704(a)(2) provides that the government is required to
notify the subscriber of the subpoena or court order within three days
after the receipt of the service provider's confirmation of the creation
of the backup copy. This notice can be delayed pursuant to 18 U.S.C.
2705(a). 18 U.S.C. 2704(a)(3) states that the provider may not destroy
the backup copy until the later of (1) the delivery of the information
to the government; or (2) the resolution of any legal proceedings
related to the government's order or subpoena.
Under 18 U.S.C. 2704(a)(4) the service provider is required to
release the backup copy to the government no sooner than 14 days after
the government provides notice to the subscriber if (1) the provider has
not received notice that the subscriber has challenged the government's
request; and (2) the provider has not initiated proceedings to
challenge the subpoena or court order.
18 U.S.C. 2704(a)(5) provides that a government agency may require
the creation of a backup copy under 2701(a)(1) if in its sole discretion
the agency determines that there is reason to believe that notification
pursuant to 18 U.S.C. 2703 of the existence of a subpoena or court order
for the production of stored communications may result in the
destruction of or tampering with the evidence sought. It is of special
significance that this determination is not subject to challenge by the
subscriber or service provider. The key to this provision is that the
government can make certain that a copy of the relevant records is
created prior to any litigation or notice and before any attempt to
alter or destroy the records electronically can be made.
(b) Customer challenges. 18 U.S.C. 2704(b)(1) provides that within
14 days after notice by the government that a backup copy has been
requested, the subscriber may move to vacate the court order or quash
the subpoena ordering that the backup copy be made. The subsection then
sets forth the procedural details governing proceedings to quash or
vacate. The challenger must serve the government with notice and
provide written notice to the service provider. The challenger must
then establish that he is the relevant customer or subscriber and that
the records sought are not relevant to a legitimate law enforcement
inquiry or that the government failed to comply with the statutory
requirements for access to the records.
If the court finds that the challenger has met the requirements of
2704(b)(1), the government must file a sworn response, in camera if
appropriate. 18 U.S.C. 2704(b)(3). If the court determines that the
challenger has failed to meet these requirements, it will order the
process enforced. On the other hand, if the challenger has standing and
can show either lack of relevance or noncompliance with the procedural
requirements, the court can vacate the order or quash the subpoena. 18
U.S.C. 2704(b)(4). Thus, once the backup copy is created, the
government can enforce access to it by complying with the procedural
provisions of this section and by merely establishing relevancy to a
legitimate law enforcement inquiry.
18 U.S.C. 2704(b)(5) provides that a court order denying a motion or
application shall not be deemed a final order and, therefore, no
interlocutory appeal may be taken from the denial. Of course, nothing
precludes a subscriber from raising these issues again during a
subsequent hearing or trial.
(a) Procedure. 18 U.S.C. 2705 governs delay of notification to the
customer or subscriber. Where the government seeks the contents of a
stored electronic communication pursuant to the provisions of 18 U.S.C.
2703(b) by way of a court order, it may include in its application a
request for delayed notification of 90 days or less. The court is to
grant this request if it determines that there is reason to believe that
notification might have an adverse result as described in 2705(a)( 2).
18 U.S.C. 2705(a)(1)(A). Where the government seeks the contents of a
communication governed by 18 U.S.C. 2703(b) by way of an administrative
or grand jury subpoena, it may obtain a delay of notification for a
period of up to 90 days upon the certification of a supervisory official
that there is reason to believe that notification of the existence of
the subpoena may have an adverse result described in 2705(a)(2). 18
U.S.C. 2705(a)(1)(B). It should be noted that under this latter
provision, the government need provide only the written certification;
it is not necessary for the government to obtain a court order based
upon a finding of adverse results. Thus, this provision, unlike similar
delayed notification provisions in statutes such as the Right to
Financial Privacy Act, 12 U.S.C. 3409, requires nothing more than a
government certification to trigger delayed notification.
A "supervisory official" for purposes of this provision includes the
investigative agent or assistant investigative agent in charge of a
field office or an equivalent official in the investigation agency's
headquarters or regional office. Thus, for instance, it will require
the certification of a supervisory agent such as the Special Agent in
Charge or the Assistant Special Agent in charge of an FBI or DEA office
to comply with this provision. A certification by the agent in charge
of an investigation would not suffice. The term also means the chief
prosecuting attorney, the first assistant or an equivalent official in a
regional or headquarters office. 18 U.S.C. 2705(a)(6).
18 U.S.C. 2705(a)(4) provides that extensions of up to 90 days may be
made of the delayed notification as long as the original requirements of
the section are met with respect to the extension.
(b) Adverse results. An adverse result that can trigger delayed
notification is one of the following: (1) endangering the life or
physical safety of an individual; (2) flight from prosection; (3)
destruction of, or tampering with, evidence; (4) intimadation of
potential witnesses (including victims of any crimes); and (5)
otherwise seriously jeopardizing an investigation or unduly delaying an
ongoing trial. 18 U.S.C. 2705(a)(2).
(c) Preclusion of notification. 18 U.S.C. 2705(b) provides a
procedure for the government to preclude the service provider from
notifying its customer or subscriber of the existence of a warrant,
subpoena, or court order. That section states that such preclusion may
only be obtained in cases where the government is not required to
notify, or where the government has obtained the authority to delay
notification. A preclusion of notification must be granted by a court
of competent jurisdiction that finds that there is reason to believe
that adverse results set forth in 18 U.S.C. 2705(a)(2) will occur if
notification is given.
(a) Payment. 18 U.S.C. 2706(a) provides that the government, when
seeking records pursuant to 18 U.S.C. 2702, 2703, or 2704, must
reimburse the person or entity assembling or providing the records for
all reasonable costs that have been incurred in providing the
information. Note that 18 U.S.C. 2706(c) exempt telephone toll records
and telephone listings from the reimbursement requirement. These
records are excluded primarily because the government has not
traditionally paid the telephone companies for providing this type of
information. The court can, however, order the government to reimburse
the provider of telephone toll records where the information sought is
unusually voluminous or causes an undue burden on the provider. 18 U.
S.C. 2706(c).
(b) Amount. Under 18 U.S.C. 2706(b), the amount of the reimbursement
payment will be as mutually agreed by the government and the provider
or, in the absence of such an agreement, as determined by the court.
(a) Cause of action. 18 U.S.C. 2707(a) provides a civil cause of
action for a provider of an electronic communication service, or its
customer or subscriber who is aggrieved by an intentional violation of
the statute. However, this provision and 18 U.S.C. 2703(e) specifically
preclude any cause of action against a provider of an electronic
communication service that discloses information pursuant to a court
order, warrant, subpoena or certification.
(b) Relief. 18 U.S.C. 2707(b) defines the relief that may be
appropriate in civil actions to include preliminary or other equitable
or declaratory relief, damages, attorneys' fees, and other reasonably
incurred litigation costs. Damages include actual damages and any
profits made by the violator as a result of the violation, put in no
case less than $1,000. 18 U.S.C. 2707(c).
(c) Defenses. 18 U.S.C. 2707(d) sets forth the defenses to actions
brought under the statute. This subsection provides a complete defense
to any civil or criminal action brought under Title 18, United States
Code, or any other law where the defendant demonstrates a good faith
reliance on a court order, warrant, subpoena, or legislative or
statutory authorization, or in good faith complies with a request from a
law enforcement officer. 18 U.S.C. 2707(d) also provides a complete
defense to defendants who rely upon a good faith determination that 18
U.S.C. 2511(3) permitted the conduct complained of.
(d) Statute of limitations. 18 U.S.C. 2707(e) provides that a civil
action may not be commenced later than two years after the date upon
which the claimant first discovered or had reasonable opportunity to
discover the violation.
18 U.S.C. 2708 provides that the remedies and sanctions described in
the statute are the only judicial remedies and sanctions available for
nonconstitutional violations of the Act. When a violation of
constitutional magnitude is involved, the trial court will apply the
existing constitutional law with respect to the exclusionary rule.
United States v. Leon, 468 U.S. 897 (1984).
(a) Duty to provide. 18 U.S.C. 2709 sets forth the rules governing
counterintelligence access to telephone toll and transactional records.
18 U.S.C. 2709(a) provides that a communications common carrier or the
provider of an electronic communication service shall provide such
subscriber information or telephone toll records pursuant to a request
from the Director of the Federal Bureau of Investigation under 18 U.S.
C. 2709(b).
(b) Certification. 18 U.S.C. 2709(b) contains the conditions under
which the Director of the FBI, or his designee, may request these
records. This section states that the Director or his designee must
certify in writing that the information sought is relevant to an
authorized foreign counterintelligence investigation; and that there
are specific, articulable facts giving reason to believe that the person
or entity to whom the information sought pertains is a foreign power or
an agent of a foreign power as defined in the Foreign Intelligence
Surveillance Act of 1978, 50 U.S.C. 1801 et seq.
(c) Disclosure prohibition. 18 U.S.C. 2709(c) prohibits the service
provider from disclosing to any person that the FBI has sought or
obtained transactional records under the provisions of 18 U.S.C. 2709.
(d) Dissemination by the FBI. 18 U.S.C. 2709(d) provides that the
FBI may disseminate records obtained under this section only as provided
in guidelines approved by the Attorney General for foreign
counterintelligence collection and foreign counterintelligence
investigations conducted by the FBI, and with respect to dissemination
to an agency of the United States the dissemination can only be made if
the information is clearly relevant to the authorized responsibilities
of such agency.
(e) Congressional consultation. 18 U.S.C. 2709(e) provides that the
Director of the FBI shall fully inform the House and Senate intelligence
committees concerning all requests made under this section.
The final Title of the legislation adds a new Chapter 206 to Title 18
of the United States Code, Section 3121 et seq., which regulates the use
of pen registers and trap and trace devices. The title begins with a
general prohibition against the use of a pen register or a trap and
trace device without first obtaining a court order pursuant to 18 U.S.
C. 3123 or the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C.
1801 et seq.). Although the courts have clearly held that pen registers
were not within the reach of the wiretap statute and that the Fourth
Amendment does not require a warrant for this procedure, (United States
v. New York Telephone Co., 434 U.S. 159 (1977); Smith v. Maryland, 442
U.S. 735 (1979)), the telephone companies have insisted on court orders
for fear of civil liability before they would assist in placing a pen
register. The same principle has applied to trap and trace devices.
Accordingly, for a number of years Department policy has required the
use of a court order issued under Rules 41 or 57 of the Federal Rules of
Criminal Procedure for pen registers and trap and trace devices. USAM
9-7.014; 7.231. Thus, this new chapter in Title 18 in essence codifies
the existing Department policy of obtaining a court order to authorize
the installation of a pen register or a trap and trace device and sets
forth the procedure for seeking such an order. It is important to note
that the chapter places no new restrictions on law enforcement in this
regard in that it applies basically the same standards required now. In
addition, it has certain procedural changes that are advantageous to law
enforcement. Moreover, codifying the pen register and trap and trace
procedures should eliminate the risk of more restrictive legislation,
such as that contained in the original bills in this area, from being
enacted in the future.
The statute contains provision excepting the use of pen registers and
trap and trace devices from the court order requirement in certain
circumstances. Thus, a service provider need not obtain a court order
before using a pen register or trap and trace device in order to test,
operate, or maintain its equipment and services, or to protect the
property rights of its customers. 18 U.S.C. 3121(b)(1). The service
provider may also use a pen register or trap and trace device without
first securing a court order to record the fact that a wire or
electronic communication was initiated or completed in order to protect
itself, or another provider, or a customer from fraud or abuse. 18 U.
S.C. 3121(b)(2). Finally, it is not necessary to obtain a court order
when the telephone user consents to the installation of the pen register
or trap and trace device. 18 U.S.C. 3121(b)(2).
(a) The application. 18 U.S.C. 3122(a)(1) provides that any attorney
for the government may apply for a pen register or trap and trace order
or an extension of such an order under 18 U.S.C. 3123. The application
must be in writing and under oath. It must identify the agency
conducting the investigation and the person making the application and
must contain a certification that the information likely to be obtained
is relevant to an ongoing criminal investigation.
Please note that the standard for obtaining the order is relevancy to
an ongoing criminal investigation, not probable cause or reasonable
suspicion. This lesser standard reflects that while Congress wished to
provide some protection against the random use of these devices, it
recognized that an individual does not have a reasonable expectation of
privacy in the numbers dialed to or from his telephone and, therefore,
that the installation and use of a pen register or trap and trace device
is not a "search" within the meaning of the Fourth Amendment requiring
the protection of a warrant based upon probable cause. See, Smith v.
Maryland, 442 U.S. at 743-44.
18 U.S.C. 3122(a)(2) provides that a state investigative or law
enforcement officer may apply for a pen register or trap and trace order
"(u)nless prohibited by State law." This phrase was included in the
section to make it clear that the new law does not preempt any existing
state laws governing the installation and use of pen registers and trap
and trace devices by state officials. Thus, a state law requiring a
higher standard of proof as a prerequisite to a pen register or trap and
trace order will continue in effect with respect to that state's
officials.
(b) The order. 18 U.S.C. 3122 provides that a pen register or trap
and trace order may be issued by "a court of competent jurisdiction."
The definition of court of competent jurisdiction includes any "district
court of the United States (including a magistrate of such a court)." 18
U.S.C. 3126(2)(A). This definition, and, indeed this title, finally
provides the magistrates with unquestioned authority to issue pen
register and trap and trace orders. The problem prior to this provision
was that although magistrates have authority under Rule 41 of the
Federal Rules of Criminal Procedure to authorize the use of pen
registers, there are no statutes, rules, or reported case law indicating
whether magistrates could issue the ancillary technical assistance
orders, and the telephone companies have refused to honor such an order
issued by a magistrate. It was therefore the Department's policy that
pen register and trap and trace orders be obtained only from district
court judges. As noted, the definition of "court of competent
jurisdiction" in section 3126 now makes it clear that a magistrate may
issue enforceable pen register and trap and trace orders. See 18 U.S.C.
3124.
18 U.S.C. 3123 sets forth the procedure that must be followed by the
court in issuing a pen register or trap and trace order. The section
contains four subsections as follows:
Subsection (a) states that upon an application the court shall issue
an ex parte order authorizing the installation and use of a pen register
or trap and trace device within the jurisdiction of the court if the
court finds that the government attorney has certified that information
likely to be obtained through the pen register or trap and trace is
relevant to an ongoing criminal investigation. This provision does not
authorize the court to conduct an independent judicial review of whether
the application meets the relevance standard; it need only review the
completeness of the attorney's certification. Accordingly, there will
be no need for an affidavit to establish a factual basis; all that will
be required is a sworn application containing the requisite
certification and a draft order for the court to issue. This, too,
comports with current practice.
Subsection (b) sets forth the contents of the pen register or trap
and trace order. The order is required to specify (1) the identity, if
known, of the person to whom is leased, or in whose name is listed, the
telephone line to which the device is to be attached; (2) the identity,
if known, of the person who is the subject of the criminal
investigation; (3) the number and, if known, physical location of the
telephone line to which the pen register or trap and trace is to be
attached; and (4) a statement of the offense to which the information
likely to be obtained by the device relates. In addition, the order is
to direct, upon request, the furnishing of information, facilities and
technical assistance necessary to accomplish the installation of the
device from the service provider. The content of the order relating to
cooperation is intended to codify the existing informal practice of
cooperation between the telephone companies and the Department. The
subsection on the required order contains largely the same requirements
now imposed on federal prosecutors for a pen register order as set forth
in the United States Attorneys' Manual. USAM 9-7.014, 9-7.925 and
9-7.926.
Subsection (c) provides that an order may authorize the use of a pen
register or trap and trace device for a 60 day period, with possible
extensions of 60 days. This is a doubling of the 30 day period now set
out in the existing Department policy and should serve to limit the
number of such repetitive orders.
Subsection (d) directs that the order be sealed until otherwise
ordered by the court. This subsection also prohibits the disclosure of
the existence of either the order or the underlying investigation to any
unauthorized person unless or until otherwise ordered by the court.
Violations of this provision will be punishable as a contempt of court.
(c) Technical assistance. 18 U.S.C. 3124 governs technical
assistance orders. 18 U.S.C. 3124(a), which relates to pen register
technical assistance orders, provides that upon the request of an
authorized person a provider of a wire communication service, landlord,
custodian, or other person shall furnish all the information,
facilities, and technical assistance necessary to effectuate the order
unobtrusively and with a minimum of interference. This is patterned on
the same provision in 18 U.S.C. 2518 for assistance in the installation
of a wiretap.
18 U.S.C. 3124(b) regulates technical assistance orders for trap and
trace devices. The installation of these devices requires more in the
way of telephone company assistance than does the installation of a pen
register. Thus, this subsection states that the provider of a wire
communication service, landlord, custodian, or other person shall
install the trap and trace device on the appropriate line and provide
all other necessary technical assistance. The subsection also requires
that the third party furnish the results of the trap and trace device to
the designated law enforcement agency at reasonable intervals during
regular business hours for the duration of the order.
It should be noted that the telephone companies have requested, and
the Department has agreed, that trap and trace technical assistance
applications contain the following language that reflects the technical
and business hour requirements unique to trap and trace orders:
i. the tracing operation is to be limited to Electronic
Switching System (ESS) or No. 5 cross-bar facilities;
ii. the tracing operation is to be restricted to tracing and
recording only those calls originating from a specific city within
a certain mileage radius or, in the case of a large city, from a
specific section or sections of that city; and
iii. the tracing operation is to be restricted to certain
specific hours daily.
This specific language is currently required by Department policy,
and, although not included in the statute, Department policy will be to
continue this practice until changing technology requires modification.
USAM 9-7.927 and 7.928.
18 U.S.C. 3124(c) states that the persons providing technical
assistance shall be reasonably compensated for reasonable expenses
incurred in providing technical facilities and other assistance. This
compensation provision is also modeled after the provision that applies
in Chapter 119 of Title 18 concerning wiretap orders and is intended to
be interpreted and implemented in a similar fashion.
18 U.S.C. 3124(d) provides that no cause of action shall lie against
the provider of a wire or electronic communication service or its
employees for providing technical assistance as required by a court
order issued pursuant to this section.
Finally, 18 U.S.C. 3124(e) provides that a good faith reliance upon a
court order or a legislative or statutory authorization is a complete
defense to any civil or criminal action brought under this chapter or
any other law.
18 U.S.C. 3125 requires the Attorney General to make an annual report
to Congress on the number of pen register and trap and trace orders
applied for by law enforcement agencies of the Department of Justice.
Current Department policy already requires that the Department's
agencies compile quarterly statistics concerning their pen register
usage. (Memorandum of September 24, 1979, to investigative agencies
from Philip B. Heymann, Assistant Attorney General, Criminal Division.)
This section merely requires that this information be reformulated, with
the added trap and trace data, and submitted to Congress. As there are
relatively few trap and trace orders there should be little added burden
caused by this reporting requirement.
William F. Weld
Assistant Attorney General
Criminal Division
CHARLES S. SAPHOS, Chief
Narcotic and Dangerous Drug Section
MICHAEL ZELDIN
Deputy Chief
Narcotic and Dangerous Drug Section
HARRY HARBIN
GARY SCHNEIDER
Trial Attorneys
Narcotic and Dangerous Drug Section
THOMAS M. HOLLENHORST
Trial Attorney
Asset Forfeiture Office
This handbook on the Anti-Drug Abuse Act of 1986 has been prepared to
assist federal prosecutors and investigators, as well as other persons
with federal criminal justice responsibilities, in their review and
implementation of this major new law.
This handbook describes seriatim the provisions of the Act which bear
on our practice. For each subpart, the handbook sets forth a summary,
analysis, and discussion explaining the new departmental policies
affecting the implementation of these provisions, and the name and
telephone number of an attorney in the Criminal Division who is familiar
with the new provisions and who has been assigned to assist in resolving
questions concerning them. The Criminal Division will also be compiling
a list of possible corrective amendments to the Act.
William F. Weld
Assistant Attorney General
To all who assisted in the preparation of this handbook, we wish to
express our sincere thanks and gratitude.
Special thanks are accorded current and former Narcotic Section
Attorneys John Kuray, Jack Geise, Dale Zusi, Jorge Rios-Torres, William
Corcoran, Jeff Russell, Peter Djinis, and June Seraydar for their hard
work in drafting sections of this handbook. We gratefully acknowledge
the important substantive contributions made by Karen Skrivseth and
Vicki Portney, of the Appellate Section and Office of Legislation,
respectively. We would additionally like to thank Deputy Associate
Attorneys General James Knapp, Charels W. Blau, and William J. Landers
for their review of the handbook, particularly the chapter on the Money
Landering Control Act. We are also eternally grateful to Roger A.
Pauley, Director, and the entire Office of Legislation, as well as Cary
Copeland and the entire Office of Legislative Affairs, for the endless
hours spent to ensure the passage of the Anti-Drug Abuse Act of 1986.
To Kathy Carlton, Clara Davis, Mary Anne Linane, Gloria Berry, Ann
Gillespie, Maria Hahn, Chrystal Meadows, Michele Payne, and the entire
clerical staff of the Narcotic and Dangerous Drug Section, we extend our
sincere appreciation for their dedicated assistance in preparing this
handbook.
This handbook is not intended to create or confer any rights,
privileges, or benefits on prospective or actual witnesses or
defendants. It is also not intended to have the force of law or of a
United States Department of Justice directive. See United States v.
Caceres, 440 U.S. 741 (1979).
Charles S. Saphos, Chief
Michael Zeldin, Deputy Chief
Narcotic and Dangerous
Drug Section
The Anti-Drug Abuse Act of 1986 was signed by President Reagan on
October 27, 1986, at 2:42 P.M. (EST). This legislation, Public Law
Number 99-570, was to a large extent effective as of the President's
signature. There are, however, several provisions which have effective
dates other than the date of enactment. This handbook, as well as the
actual language of the Act, should be consulted to determine whether
there is a different effective date than the date of enactment. The
following list of effective dates for the offense created or amended by
the Act, which relate to Title I (the Anti-Drug Enforcement Act) unless
otherwise indicated, should be of assistance in this determination:
Subtitle A - all penalty provisions were effective on signature by
the President; certain provisions relating to sentencing procedures are
delayed until the sentencing provisions of the Comprehensive Crime
Control Act of 1984 become effective on November 1, 1987.
Subtitle H - new 18 U.S.C. Sections 1956 and 1957 were effective on
signature by the President; provisions on "structuring" (new 31 U.S.C.
Section 5324) and related provisions were delayed for three months from
the date of enactment, as were provisions relating to amendments to 31
U.S.C. Section 5317 (seizure and forfeiture of monetary instruments in
CMIR violations) and provisions requiring banking regulatory agencies to
issue regulations relating to their supervision of financial institution
recordkeeping systems (and included civil penalties).
Subtitle I - effective on signature by the President (but note that
shift of 18 U.S.C. Appendix Section 1202 to 18 U.S.C. Section 924, which
is amended further by this subtitle, did not take place until November
15, 1986, pursuant to Pub. L. 99-308).
Subtitle O - effective 90 days after the enactment of the Act.
Other proscriptive provisions of Title I - in subtitles B, C, D, E,
F, G, M, P, Q, T, and U - were effective as of the signing of the Act.
The enforcement-related provisions in Title II (International
Narcotics Control), including the revisions to the "Mansfield
Amendment," were effective as of the President's signature.
The proscriptions contained in Title III (Interdiction) and Title XV
(relating to "boobytraps" in national forests) also became effective as
of the signing of the Act. All offenses created or amended by Title X
(Ballistic Knife Prohibition) were effective 30 days after the enactment
of the Act.
Additional information regarding the effective dates of these
provisions may be obtained from the Narcotic and Dangerous Drug Section
of the Criminal Division, FTS 786-4699 or 786-4700.
Title I, Subtitle A - Narcotics Penalties and Enforcement Act of 1986
Title I, Subtitle G - Controlled Substances Import and Export Act
Penalties Enhancement Act of 1986
Subtitles A and G of Title I of the Anti-Drug Abuse Act of 1986
substantially increase the maximum penalties -- terms of imprisonment,
fines, and special parole terms (now called "terms of supervised
release" in the new penalty statutes, and to be changed as to all of
Title 21 on November 1, 1987) -- which may be imposed for offenses under
Section 401(a) of the Controlled Substances Act (21 U.S.C. Section
841(a)) and Section 1010(a) of the Controlled Substances Import and
Export Act (21 U.S.C. Section 960(a)) (hereafter collectively referred
to as "drug-trafficking offenses"). There are now three levels of
penalties for such offenses which very in severity according to the kind
and quantity of controlled substance involved in the particular offense,
the defendant's prior record of drug-related convictions, and whether
death or serious bodily injury has resulted from use of the substance in
question. The three levels of penalties are: (i) penalties involving
10-year or greater mandatory jail terms; (ii) penalties involving
5-year or greater mandatory jail terms; and (iii) penalties involving
primarily non-mandatory jail terms. Each of these levels of penalties
is described below.
Terms (21 U.S.C. Section 841(b)(1)(A); 21 U.S.C.
Section
960(b)(1))
The most severe penalties under the new Act are reserved for
drug-trafficking offenses involving the following Schedule I and II
controlled substances in the following quantities:
(i) 1 kilogram or more of a mixture or substance containing a
detectable amount of heroin;
(ii) 5 kilograms or more of a mixture or substance containing a
detectable amount of --
(I) coca leaves, except coca leaves and extracts of coca leaves
from which cocaine, ecgonine, and derivatives of ecgonine or their
salts have been removed;
(II) cocaine, its salts, optical and geometric isomers, and
salts of isomers;
(III) ecgonine, its derivatives, their salts, isomers, and
salts of isomers; or
(IV) any compound, mixture, or preparation which contains any
quantity of any of the substances referred to in subclauses (I)
through (III);
(iii) 50 grams or more of a mixture or substance described in
clause (ii) which contains cocaine base;
(iv) 100 grams or more of phencyclidine (PCP) or 1 kilogram or
more of a mixture or substance containing a detectable amount of
phencyclidine (PCP);
(v) 10 grams or more of a mixture or substance containing a
detectable amount of lysergic acid diethylamide (LSD);
(vi) 400 grams or more of a mixture or substance containing a
detectable amount of N-phenyl-N-(1-(2-phenylethyl)-4-piperidinyl)
propanamide (commonly known as fentanyl) or 100 grams or more of a
mixture or substance containing a detectable amount of any
analogue of N-phenyl-N-(1-(2-phenylethyl)-4-piperidinyl)
propanamide; or
(vii) 1000 kilograms or more of a mixture or substance
containing a detectable amount of marihuana. /1/
Subsections 841(b)(1)(A) and 960(b)(1) of Title 21, United States
Code, now provide that persons convicted of drug-trafficking offenses
involving such large quantities of controlled substances who have no
prior, final drug-related felony convictions must be sentenced to a
mandatory minimum term of imprisonment of ten years and may be sentenced
up to life imprisonment. If death or serious bodily injury /2/ has
resulted from use of the substance involved in a particular case, such
"first-time drug offenders" must be sentenced to a mandatory minimum
term of imprisonment of twenty years with a maximum of life
imprisonment. In addition to imposing the mandatory term of
imprisonment, courts may fine such "first-time drug offenders" an amount
not to exceed the greater of that authorized under Title 18, United
States Code, /3/ or $4,000,000 if the defendant is an individual and
$10,000,000 if the defendant is other than an individual. A court must
also impose a "term of supervised release" of at least five years on
such "first-time drug offenders."
Persons convicted of such offenses who have prior, final state,
federal, or foreign drug-related felony convictions /4/ must be
sentenced to a mandatory minimum term of imprisonment of twenty years
with a maximum of life imprisonment. If death or serious bodily injury
/5/ has resulted from use of the substance in question, such "repeat
drug offenders" must be sentenced to life imprisonment. In addition to
imposing the mandatory term of imprisonment, courts may fine such
"repeat drug offenders" an amount not to exceed the greater of twice
that authorized under Title 18, United States Code, /6/ or $8,000,000 if
the defendant is an individual and $20,000,000 if the defendant is other
than an individual, although some defendants may argue that these
particular fine provisions apply only in cases where death or serious
bodily injury has resulted from use of the substance in question. /7/ A
court must also impose a term supervised release of at least ten years
on such "repeat drug offenders."
Terms (21 U.S.C. Section 841(b)(1)(B); 21 U.S.C.
Section
960(b)(2))
Penalties involving mandatory jail terms of five years up to 40 years
will be imposed for drug-trafficking offenses involving the following
quantities of the same controlled substances set forth in 21 U.S.C.
Sections 841(b)(1)(A) and 960(b)(1):
(i) 100 grams or more of a mixture or substance containing a
detectable amount of heroin;
(ii) 500 grams or more of a mixture or substance containing a
detectable amount of --
(I) coca leaves, except coca leaves and extracts of coca leaves
from which cocaine, ecgonine, and derivatives of ecgonine or their
salts have been removed;
(II) cocaine, its salts, optical and geometric isomers, and
salts of isomers;
(III) ecgonine, its derivatives, their salts, isomers, and
salts of isomers; or
(IV) any compound, mixture, or preparation which contains any
quantity of any of the substances referred to in subclauses (I)
through (III);
(iii) 5 grams or more of a mixture or substance described in
clause (ii) which contains cocaine base;
(iv) 10 grams or more of phencyclidine (PCP) or 100 grams or
more of a mixture or substance containing a detectable amount of
phencyclidine (PCP);
(v) 1 gram or more of a mixture or substance containing a
detectable amount of lysergic acid diethylamide (LSD);
(vi) 40 grams or more of a mixture or substance containing a
detectable amount of N-phenyl-N-(1-(2-phenylethyl)-4-piperidinyl)
propanamide; or
(vii) 100 kilograms or more of a mixture or substance
containing a detectable amount of marihuana. /8/
Subsections 841(b)(1)(B) and 960(0)(2) of Title 21, United States
Code, how provide that persons convicted of such drug-trafficking
offenses who have no prior, final drug-related felony convictions must
be sentenced to a mandatory minimum term of imprisonment of five years,
with a maximum of forty years in prison. If death or serious bodily
injury /9/ has resulted from use of the substance in question, such
"first-time drug offenders" must be sentenced to a mandatory minimum
term of imprisonment of twenty years and a maximum of life imprisonment.
In addition to imposing the term of imprisonment, a court may fine such
"first-time drug offenders" an amount not to exceed the greater of that
authorized under Title 18, United States Code, /10/ or $2,000,000 if the
defendant is an individual and $5,000,000 if the defendant is other than
an individual. A court must also impose a term of supervised release of
at least four years on such "first-time drug offenders."
Persons convicted of such offenses who have prior, final state,
federal, or foreign drug-related felony convictions must be sentenced to
a mandatory minimum term of imprisonment of ten years with a maximum of
life imprisonment. If death or serious bodily injury /11/ has resulted
from use of the substance in question, such "repeat drug offenders" must
be sentenced to life imprisonment. In addition to imposing a term of
imprisonment, a court may fine such "repeat drug offenders" an amount
not to exceed the greater of twice that authorized under Title 18,
United States Code, /12/ or $4,000,000 if the defendant is an individual
or $10,000,000 if the defendant is other than an individual, although it
is agruable that these particular fine provisions apply only in cases
where death or serious bodily injury has resulted from use of the
substance in question. /13/ A court must also impose a term of
supervised release of at least eight years on such "repeat drug
offenders."
(21 U.S.C. Section 841(b)(1)(C); 21 U.S.C. Section
960(b)(3))
Subsections 841(b)(1)(C) and 960(b)(3) of Title 21, United States
Code, now impose penalties involving primarily non-mandatory jail terms
for drug-trafficking offenses involving lesser quantities of the
foregoing controlled substances or any other Schedule I or II controlled
substance (except where 2, U.S.C. Sections 841(b)(1)(D) and 960(b)(4)
require lesser terms for offenses involving less than 10 kilograms of
hashish or less then 1 kilogram of hashish oil or less than 50 kilograms
of marihuana (unless the offense involves 100 or more marihuana plants
regardless of weight)). Persons convicted of such offenses who have no
prior, final drug-related convictions may be sentenced to a term of
imprisonment of up to twenty years. If death or serious bodily injury
/14/ has resulted from use of the substance in question, however, such
"first-time drug offenders" must be sentenced to a mandatory minimum
term of imprisonment of twenty years with a maximum of life imprisonment
and may also be fined according to the foregoing amounts. Any
"first-time drug offender" who is sentenced to a term of imprisonment
under either Subsection 841(b)(1)(C) or 960(b)( 3) must also be
sentenced to a term of supervised release of at least three years.
Persons who have prior, final drug-related felony convictions may be
sentenced to a term of imprisonment of up to thirty years. If death or
serious bodily injury /15/ has resulted from use of the substance in
question, such "repeat drug offenders" must be sentenced to life
imprisonment. The court must impose a term of supervised release of at
least six years on all "repeat drug offenders" who are sentenced to a
term of imprisonment.
All "first-time drug offenders" are subject to a discretionary fine
not to exceed the greater of that authorized under Title 18, United
States Code, /16/ or $1,000,000 if the defendant is an individual or
$5,000,000 if the defendant is other than an individual, and all "repeat
drug offenders" are subject to a discretionary fine not to exceed the
greater of twice that authorized in accordance with Title 18, United
States Code, /17/ or $2,000,000 if the defendant is an individual or
$10,000,000 if the defendant is other than an individual. However, some
may argue that the statute limits such fines to only those cases where
death or serious bodily injury has resulted from use of the substance in
question. /18/
The new Act includes a "work-off" provision (to be codified as 18 U.
S.C. Section 3553(e)) which allows a court to impose a term of
imprisonment less than the applicable mandatory minimum term upon motion
by the Government seeking such a reduced sentence, and demonstrating
that the defendant has rendered substantial assistance in the
investigation and/or prosecution of another criminal offender. /19/ Any
sentence so reduced must still comport with the guidelines to be
established by the Sentencing Commission. Both 28 U.S.C. Section 994
and Fed.R.Crim.P. 35 have been amended to make this latter restriction
explicit.
A minor enforcement problem is presented by the fact that those
sections of the new Act implementing the "work-off" provision will not
become effective until 18 U.S.C. Section 3553 and the amendments to
Fed.R.Crim.P. 35 take effect. The latter section and the amendments to
Rule 35 are currently scheduled to become effective on November 1, 1987.
In the interim, the only practical means by which a cooperating
defendant can avoid an otherwise applicable mandatory minimum term of
imprisonment is to plead to a "lesser included offense" in which the
quantity of the controlled substance in question is not specified (and
assuming that the court does not rely upon the pre-sentence
investigation or other means to make its own determination as to the
type and quantity of drug involved) or to plead to a conspiracy charge,
21 U.S.C. Section 846 or Section 963, to which the mandatory minimum
provisions do not apply. The defendant will then be sentenced under the
provisions of 21 U.S.C. Section 841(b)(1)(C) or Section 960(b)(3), which
contain no mandatory minimum terms of imprisonment unless death or
serious bodily injury has resulted from use of the substance in
question. Of course, the court may still sentence the defendant to a
jail term greater than the mandatory minimums set forth in Subsections
841(b)(1)(A) and (B) and 960(b)(1) and (2), put it will also have
discretion to impose less than the otherwise applicable mandatory
minimum jail term.
Counsel should note that the "work-off" provision can be triggered
only upon motion by the Government and that such motions are to be filed
pursuant to Fed.R.Crim.P. 35(b), as amended by Section 215(b) of Pub. L.
98-473 (which currently is scheduled to take effect on November 1,
1987). The amended rule will require that all motions pursuant thereto
be filed "within one year after imposition of. . .sentence." /20/ This,
of course, places a time limit on the Government's ability to benefit a
defendant who decides after conviction and sentencing to cooperate in
the hope of having his/her jail term reduced to less than the applicable
mandatory minimum. Defense counsel should be advised of this time
limit.
Counsel should also note that the "work-off" provision permits a
court to impose less than the otherwise applicable mandatory minimum
jail term only where a defendant has rendered "substantial assistance in
the investigation or prosecution of another (criminal offender)." There
is, however, no guidance in either the statutory language or the
legislative history of the new Act as to what degree of cooperation
constitutes such "substantial assistance." It can be expected that the
forthcoming sentencing guidelines will address this issue. Because the
"work-off" provision is triggered only upon motion by the Government, it
is the federal prosecutor who must determine in the first instance
whether a defendant has rendered (or is willing to render) the
"substantial assistance" entitling him/her to the benefit of the
"work-off" provision. This determination will necessarily be somewhat
subjective (although it must be exercised in good faith) and will very
from defendant to defendant and case to case. Because the "work-off"
provision gives defendants facing mandatory minimum jail terms a
powerful incentive to cooperate, Government counsel are urged to seek
the maximum degree of cooperation from such defendants before agreeing
to file a motion triggering the "work-off" provision.
It appears that a court is powerless to impose less than the
applicable mandatory minimum jail term in the absence of a motion by the
Government triggering the "work-off" provision. What, then, of the
cooperating defendant who claims to have given "substantial assistance
in the investigation or prosecution of another (criminal offender)" but
who cannot persuade the Government to file the motion triggering the
"work-off" provision? The answer to this question depends entirely on
whether there is a plea agreement embodying a Government promise to file
a triggering motion in exchange for the defendant's cooperation and
whether the defendant has entered a plea pursuant to that agreement.
Where such a plea agreement exists and a plea has been entered
pursuant to that agreement, /21/ the defendant may seek to enforce the
Government's obligations under the agreement through a motion to the
sentencing court under Fed.R.Crim.P. 32(d) /22/ or 35(a), /23/ through a
direct appeal to the court of appeals, /24/ or through collateral attack
pursuant to 28 U.S.C. Section 2255. /25/ The legal basis for such an
enforcement action is the Supreme Court's oft-cited holding in
Santobello v. New York, 404 U.S. 257, 262 (1971): "when a plea rests in
any substantial degree on a promise or agreement of the prosecutor, so
that it can be said to be part of the inducement or consideration, such
promise must be fulfilled." A defendant who prevails in such an
enforcement action is entitled either to specific enforcement of the
plea agreement or to withdrawal of the plea. Id. at 263. Accord United
States v. Martin, 788 F.2d 184, 187 (3rd Cir. 1986); United States v.
Voccola, 600 F. Supp. 1534, 1537 (D.R.I. 1985). If the court finds that
the defendant did not render the requisite "substantial assistance," the
Government is relieved of its promise to file the triggering motion.
See, e.g., Reardon, supra, n.25, 787 F.2d at 516; United States v.
Baldachino, 762 F.2d 170, 179 (1st Cir. 1985).
Plea agreements are contracts and, in interpreting such agreements,
courts generally apply principles of contract law. See, e.g., United
States v. Harvey, 791 F.2d 294, 300 (4th Cir. 1986); Reardon, 787 F.2d
at 516; United States v. Field, 766 F.2d 1161, 1168 (7th Cir. 1985).
Thus, if the court finds that the terms of the plea agreement are
unambiguous, and there is no evidence of overreaching or bad faith on
the part of the Government, the court must resolve the dispute according
to the unambiguous terms of the agreement. Harvey, 791 F.2d at 300.
If, however, there are ambiguities or imprecisions in any terms of the
agreement, such terms will be read in favor of the defendant and against
the Government. Id. at 300, 303; Fields, 766 F. 2d at 1168. /26/
This is true even where defense counsel has contributed to the ambiguity
or imprecision in the agreement: "derelictions on the part of defense
counsel that contribute to ambiguities and imprecisions in plea
agreements may not be allowed to relieve the Government of its primary
responsibility for insuring precision in the agreement." Harvey, 791
F.2d at 301. It is essential, therefore, that federal prosecutors
strive for clarity, precision, and detail in defining the obligations
and undertakings of each party to a plea agreement. Fields, 766 F.2d at
1168 (citing cases).
This need for precision and detail in drafting plea agreements is
particularly strong when dealing with such inherently ambiguous
statutory language as "substantial assistance in the investigation or
prosecution of another person who has committed an offense." A
prosecutor who simply employs such ambiguous statutory language in
defining a defendant's obligations under a plea agreement (e.g.,
"defendant agrees to provide substantial assistance in the investigation
or prosecution of another person") leaves the defendant free to argue,
and the court free to decide, that whatever the defendant did
constituted "substantial assistance." The prosecutor must, therefore,
spell out in the plea agreement exactly what the Government requires in
terms of "substantial assistance." By entering a plea pursuant to such
an agreement, the defendant undertakes to fulfill all of those
requirements and an unexcused failure to fulfill any such requirement
will relieve the Government of its promise to file a triggering motion.
Where there is no plea agreement embodying the Government's promise
to file a triggering motion in exchange for the defendant's substantial
assistance -- or where the Government has revoked such an agreement
prior to entry of the plea - there apparently is nothing the defeandant
or the court can do to compel the Government to file the motion
triggering the "work-off" provision and there is no other authority
under which the court may impose less than the applicable mandatory
minimum jail term. This is true even if the defendant has provided the
Government with valuable information concerning the criminal conduct of
others and even has testified against such persons.
Provisions
The New Act provides that a court may not place on probation or
suspend the sentence of any person sentenced under any provisions
providing for imposition of mandatory minimum terms of imprisonment. It
also provides that such persons may not be released on parole during the
term of imprisonment imposed. Thus, a person sentenced to a term of
imprisonment in excess of the applicable mandatory minimum must serve
the entire term of imprisonment imposed, not merely the applicable
mandatory minimum.
There are some minor ambiguities in the language of the new Act which
could conceivably lead to enforcement problems in some cases. First,
the provisions imposing what have been described above as "mandatory
minimum terms of imprisonment" provide that offenders sentenced
thereunder "shall be sentenced to a term of imprisonment which may not
be less than . . . years, a fine . . ., or both." The underscored
language arguably would permit a court to impose either (i) the
applicable mandatory minimum term of imprisonment; (ii) a fine in lieu
of a term of imprisonment; or (iii) a fine in addition to a term of
imprisonment. Thus, defense counsel may argue that these provisions
permit the court to impose a fine instead of a term of imprisonment.
This argument is clearly without merit for the reasons set forth below.
First, the argument is completely inconsistent with the statutory
language as a whole. Each of the mandatory minimum imprisonment
provisions precludes placing the defendant on probation and expressly
provides that "(n)o person sentenced . . . shall be eligible for parole
during the term of imprisonment imposed . . . ." (Emphasis supplied.)
Those provisions also require that "any sentence" imposed thereunder
include a "term of supervised release." Compare with 21 U.S.C. Sections
841(b)(1)(C) and 960(b)(3), also added by this Act, which allow for
terms of supervised release only as to "(a)ny sentence imposing a term
of imprisonment . . . ." (Emphasis added.) Under 18 U.S.C. Section 3583
(which currently is scheduled to become effective on November 1, 1987),
a "term of s pervised release," as the name suggests, may only follow a
term of imprisonment. Finally, Subtitle C of the new Act -- the
"Juvenile Drug Trafficking Act of 1986" (which is to be codified as 21
U.S.C. Section 845b) -- specifically states that a person convicted
thereunder "of an offense for which a mandatory minimum term of
imprisonment is applicable shall not be eligible for parole . . . until
the individual has served the mandatory term of imprisonment required by
section 401(b) (21 U.S.C. Section 841(b)) as enhanced by this section."
The defense argument is also contradicted by the legislative history
of the new drug bill. In discussing the mandatory minimum sentencing
provisions of that bill, then-Senate Minority Leader Robert Byrd stated:
(A major drug offender) must know that there will be no escape
hatch through which he can avoid a term of years in the
penitentiary. He must know in advance exactly how lengthy that
prison term is going to be. He must know that no matter how good
a lawyer he gets, how experienced, how expensive, how well-known,
and how clever and sharp, that lawyer will not be able to keep him
out of jail once he has been found guilty in a court of law. And
that will be because the laws we pass will henceforth make it
abundantly clear that a jail term must be imposed and must be
served. * * * *
(Those laws) . . . will require that for certain crimes
involving drugs, the convicted defendant, must -- I repeat must --
be sentenced to the penitentiary. He must serve jail time. . . .
It will not be a matter for judge's discretion for these types of
crimes. It will be a requirement imposed by law on the sentencing
judge.
We divide these major drug dealers into two groups for purposes
of fixing what their required jail terms shall be:
For the kingpins -- the masterminds who are really running
these operations -- and they can be identified by the amount of
drugs with which they are involved -- we require a jail term upon
conviction. If it is their first conviction, the minimum term is
10 years. If it is their second conviction, the minimum term is
20 years. Again, let us remember, they would have to serve that
amount of time, at a minimum, without any chance of parole. This
new law would also provide that the judge, if he felt the
circumstances warranted, could sentence them to a lot more time
than that. In fact, the judge could see to it that they were
locked up for life.
Our proposal would also provide mandatory minimum penalties for
the middle-level dealers as well. Those criminals would also have
to serve time in jail. The minimum sentences would be slightly
less than those for the kingpins, but they nevertheless would have
to go to jail -- a minimum of 5 years for the first offense and 10
years for the second. As is the case for the kingpins, those 5-
and 10-year terms are only the mandatory minimums; the judge
could, if he believes the circumstances dictate, sentence the
middle-level drug dealer to 40 years for a first offense and life
imprisonment for a second offense. In no event would such
offenders ever become eligible for parole.
132 Cong. Rec. S14301 (daily ed. September 30, 1986).
Similarly, Senator DeConcini, a sponsor of the bi-partisan Senate
version of H.R. 5484, stated:
When the penalty structure contained in the bill is in place,
the sentences imposed under our criminal code will be served in
their entirety. Judges will no longer be able to suspend and
offer probation to professional criminals. I believe that the
penalties in this bill are severe. But I also believe that the
penalties for drug dealers must be severe. If we are to take
effective action to reduce drug trafficking, we must let drug
dealers know that punishment will be severe, quick, and final.
Id., at S14270. And the section-by-section analysis of the Senate
version of H.R. 5484, in describing Title I of the bill (the Drug
Penalties Enhancement Act of 1986), states:
The most serious drug traffickers, so-called "drug kingpins,"
would face a mandatory minimum of ten (10) years, and up to life
imprisonment. This bill also increases fines, to reflect the
enormous profits generated by drug dealing. (This section also)
prohibits suspension of sentences and prohibits probation and
parole.
132 Cong. Rec. S13779 (daily ed. September 26, 1986). See also 132
Cong. Rec. S14001 (daily ed. September 27, 1986) (statement of Sen.
D'Amato: "this bill provides mandatory prison terms for persons -- 20
years to life for repeat offenders, or if death or serious bodily injury
results -- trafficking in specified amounts of certain drugs").
Finally, counsel should note that interpreting the statute to permit
the judge to impose a fine instead of the mandatory prison term would
lead to an illogical result. The statute provides maximum, but no
minimum, fines. Thus, if the defense argument were correct, the judge
could impose a token fine instead of a multi-year prison term with no
early release. It is difficult to imagine a court accepting an argument
that Congress intended such a result. Similarly, the defense argument
would leave the courts with a choice of either imposing no jail term at
all or imposing a minimum 5-year jail term (or whatever other minimum
jail term applies to the particular offense). The courts would never be
free to impose a jail term of between one day and the applicable
mandatory minimum. There is no conceivable rationale for this "gap." If
Congress had intended to provide the courts with discretion to impose no
term at all, it presumably would have done so in the same manner in
which it accomplishes this result in practically all criminal statutes,
i.e., by permitting the court to impose no term at all or any term up to
the statutory maximum.
Another minor ambiguity arises from the distinction drawn between the
quantities of "cocaine base" and those for other forms of cocaine in the
provisions imposing either the "heavy" (10 years or more) or the
"lesser" (5 years or more) mandatory jail terms. For example, the
provisions imposing 10-year or greater mandatory jail terms apply not
only to offenses involving 5 kilograms or more of a mixture or substance
containing a detectable amount of coca leaves, cocaine, or other coca
derivatives but also to offenses involving only 50 grams or more of a
mixture or substance containing a detectable amount of "cocaine base."
"Cocaine base" is the alkaloid form of cocaine, commonly referred to as
"crack" or "rock" or "cocaine paste." The reason for the quantitative
distinction drawn in the new Act between "cocaine base" and all other
forms of cocaine is that the alkaloid forms of cocaine such as "crack"
are far more potent and addictive at much lower dosages than the other
forms of cocaine, including cocaine hydrochloride (the commonly abused
powder form of cocaine). DEA advises, however, that detectable
quantities of cocaine base frequently are found in large quantities of
cocaine hydrochloride caused by laboratory errors in converting the
alkaloid into cocaine hydrochloride. Thus, it is quite possible that a
quantity of cocaine hydrochloride weighing more than 50 grams but less
than 5 kilograms would contain a detectable, although trace, amount of
cocaine base, making it unclear whether a person convicted of a
trafficking offense involving such cocaine should be subject to a
10-year or greater mandatory jail term because the mixture or substance
weighs more than 50 grams and contains a detectable amount of cocaine
base. The other options are either the 5-year or greater mandatory jail
term or up to 20 years in prison with no mandatory term depending or
whether the mixture or substance consists almost entirely of cocaine
hydrochloride and weighs, respectively, between 500 grams and 5,000
grams or under 500 grams. In order to eliminate this uncertainty and
because DEA has advised that its laboratories do not have the resources
necessary to determine whether there is a detectable amount of cocaine
base present in every exhibit of cocaine hydrochloride they receive, the
Department recommends that the lesser quantities applicable to "cocaine
base" be used only in cases where the mixture or substance consists
primarily of cocaine base (e.g., "crack" or cocaine paste). All other
offenses should be charged using the requisite greater quantities
applicable to other forms of cocaine. This approach appears to be
consistent with the legislative intent. See, e.g., 132 Cong. Rec.
S14288 (daily ed. September 30, 1986) (statement of Sen. Chiles: "I am
very pleased that the . . . bill recognizes crack as a distinct and
separate drug from cocaine hydrochloride with specified amount of 5
grams and 50 grams for enhanced penalties.").
There is some question as to whether the mandatory minimum terms of
imprisonment under revised 21 U.S.C. Sections 841(b)(1)(A) and (B) and
960(b)(1) and (2) carry over and apply, where otherwise applicable to
the underlying offense, to persons convicted of conspiracy or attempt
offenses. Both 21 U.S.C. Sections 846 and 963 expressly provide that
persons convicted of "conspiracy" or "attempt" thereunder are
"punishable by imprisonment or fine or both which may not exceed the
maximum punishment prescribed for the offense, the commission of which
was the object of the attempt or conspiracy" (emphasis added). There is
no mention in either section of mandatory minimum terms of imprisonment.
While it is clear, therefore, that the maximum terms of imprisonment
under 21 U.S.C. Section 841(b)(1) or Section 960 (b) carry over and
apply under 21 U.S.C. Section 846 or Section 963, the same cannot be
said with respect to the new mandatory minimum terms of imprisonment. A
review of the legislative history of the Anti-Drug Abuse Act of 1986
sheds no light on this issue. Thus, it is necessary to resolve this
issue through application of rules of statutory construction. For the
reasons set forth below, the Department is taking the position that the
mandatory minimum terms of imprisonment (plus the provisions calling for
no suspension of sentence nor imposition of probation) under 21 U.S.C.
Sections 841(b)(1) and 960(b) do not carry over and apply to conspiracy
and attempt offenses. (An open question remains, however, as to whether
the maximum term of imprisonment which may be imposed for
conspiracy/attempt offenses involving activities punishable under 21
U.S.C. Section 841(b)(1)(A) and (B) or Section 960(b)(1) and (2) (which
all include a specific prohibition on the availability of parole) is the
otherwise applicable maximum under those subsections without parole.)
"Rule of Lenity": As a matter of statutory construction, penal
statutes are "strictly construed against the Government or parties
seeking to exact criminal penalties and in favor of persons on whom such
penalties are sought to be imposed." 3 Sutherland Statutory Construction
Section 59.03, at 6-7 (4th ed. 1974). This principle has been adopted
by the Supreme Court as a "rule of lenity" under which "ambiguity
concerning the ambit of criminal statutes should be resolved in favor of
lenity." Rewis v. United States, 401 U.S. 808, 812 (1971). See also
Bifulco v. United States, 447 U.S. 381, 387 (1980) (rule of lenity
"applies not only to interpretations of criminal prohibitions but also
to the penalties they impose),.
In Bifulco, supra, a majority of the Supreme Court applied the "rule
of lenity" in holding that "special parole terms" under 21 U.S.C.
Section 841(b) do not carry over and apply to conspiracy and attempt
offenses under 21 U.S.C. Section 846. The majority based its decision
on the facts that (1) 21 U.S.C. Section 846 expressly provides that
persons convicted thereunder are "punishable by imprisonment or fine or
both" but fails to make any mention of "special parole terms," and (2)
the legislative history of the Controlled Substances Act is silent on
whether Congress intended that special parole terms carry over and
apply. Id., at 388-98. The same may be said with respect to mandatory
minimum terms of imprisonment under 21 U.S.C. Sections 841(b)(1) and
960(b): both 21 U.S.C. Sections 846 and 963 provide for imposition of
terms of imprisonment up to the maximum set forth for the underlying
offense but say nothing of mandatory minimum terms of imprisonment nor
do they address probation, parole, or suspension of the sentence;
moreover, the legislative history of the Anti-Drug Abuse Act is silent
on whether Congress intended that "mandatory minimums" be imposed for
conspiracy and attempt offenses. Thus, Bifulco is strong persuasive
authority that mandatory minimum terms of imprisonment should not carry
over and apply to such offenses.
Expressio unius es exclusio alterius: One might attempt to
distinguish Bifulco by arguing that (1) while neither 21 U.S.C. Section
846 nor Section 963 provide for imposition of "special parole terms,"
both provide for "imprisonment" up to the statutory maximum, and (2)
because mandatory minimum terms of imprisonment under 21 U.S.C.
Sections 841(b)(1) and 960(b) are terms of "imprisonment" well within
the statutory maximum, they can -- and must -- be imposed under 21 U.S.
C. Sections 846 and 963. But this argument simply ignores the fact that
where Congress intended mandatory minimum terms of imprisonment under 21
U.S.C. Section 841(b) to apply to other sections of the Controlled
Substances Act it made its intent explicit. See, e.g., 21 U.S.C.
Section 845b(b) (providing that persons convicted thereunder shall be
subject to up to twice the term of imprisonment, fine, and term of
supervised release otherwise authorized for the underlying offense and
adding that "(e)xcept to the extent a greater minimum sentence is
otherwise provided, a term of imprisonment under this subsection shall
not be less than one year") (emphasis added); 21 U.S. C. Section
845b(c) (same); 21 U.S.C. Section 845b(e) ("(a)n individual convicted
under this section of an offense for which a mandatory minimum term of
imprisonment is applicable shall not be eligible for parole . . . until
the individual has served the mandatory term of imprisonment required by
section 401(b) (21 U.S.C. Section 841(b)) as enhanced by this section").
There is a canon of statutory construction, generally referred to as
"espressio unius es excl sio alterius," which provides that "where
Congress includes particular language in one section of a statute but
omits it in another section of the same Act, it is generally presumed
that Congress acts intentionally and purposely in the disparate
inclusion or exclusion." /27/ Thus, the express inclusion of provisions
in 21 U.S.C. Section 845b incorporating the mandatory minimum terms of
imprisonment under 21 U.S.C. Section 841(b) and the omission of any
similar provisions in 21 U.S.C. Sections 846 and 963 create a
presumption that Congress intended that the mandatory minimum terms of
imprisonment should not apply under the latter sections.
Legislative intent: Neither of the foregoing rules of statutory
construction may be so rigidly applied as to defeat the intent of
Congress. See, e.g., Liparota v. United States, . . . U.S. . . . , 105
S.Ct. 2084, 2089 (1985) ("rule of lenity is not to be applied where to
do so would conflict with the implied or expressed intent of Congress");
Campbell v. Wells Fargo Bank, N.A., 781 F.2d 440, 442 (5th Cir.), cert.
denied, . . . U.S. . . . , 106 S.Ct. 2279 (1986) ("controlling
consideration is legislative intent and the maxim ("expressio unius. .
.") can be overcome by a strong indication of contrary congressional
intent"). Unfortunately, the legislative history of the Anti-Drug Abuse
Act of 1986 affords no guidance as to whether Congress intended that the
mandatory minimum jail terms under 21 U.S.C. Sections 841(b) and 960(b)
carry over and apply to "conspiracy" and "attempt" offenses under 21
U.S.C. Section 846 or Section 963.
A colorable argument can be made, of course, that Congress, in
amending 21 U.S.C. Sections 841(b) and 960(b), clearly intended that
persons who traffic in major quantities of certain controlled substances
be subject to substantial and mandatory jail terms and, therefore, must
also have intended that persons who conspire or attempt to traffic in
such major quantities of the same controlled substances be subject to
the same mandatory jail terms. Unfortunately, the Bifulco majority
rejected a similar argument made with respect to "special parole terms."
First, it noted that "(w)hen one focuses on the fact that (21 U.S.C.
Section 846) penalizes attempts as well as conspiracies, it is not
surprising that Congress would provide for less stringent sanctions to
be imposed for violations of that provision than for a completed
substantive offense." Bifulco, 447 U.S. at 399. Second, with respect to
conspiracy offenses, the majority noted that "nothing prevents the
Government from prosecuting (persons charged with conspiracy) as
principals or as aiders and abettors, for substantive (drug-trafficking)
offenses" under 21 U.S.C. Section 841 and thereby subjecting them to the
penalty provisions of that section. Id., at 400 n.16. /28/ Finally,
the majority noted that members of particularly large-scale drug
conspiracies may be subject to special provisions, including the
continuing criminal enterprise statute (21 U.S.C. Section 848) and
dangerous special drug offender statutes (21 U.S.C. Section 849(e)(2)
and (3)), which impose especially severe sanctions. Id. The same
reasons may be advanced as grounds for holding that the mandatory
minimum terms of imprisonment under 21 U.S.C. Sections 841(b)(1) and
960(b) were not intended by Congress to carry over and apply to
conspiracy and attempt offenses under 21 U.S.C. Sections 846 and 963.
Conclusion: The Department believes, pased on the foregoing
authorities, that most courts would conclude that the mandatory minimum
terms of imprisonment under 21 U.S.C. Sections 841(b)(1) and 960(b) do
not carry over and apply to "conspiracy" and "attempt" offenses under 21
U.S.C. Sections 846 and 963. While the issue is not entirely free of
doubt, there appears to be no truly convincing argument to the contrary.
Moreover, the Supreme Court has directed that any such doubts "be
resolved in accord with the rule of lenity." Bifulco, 447 U. S. at 440.
The Department is therefore considering recommending to Congress that
it amend 21 U.S.C. Sections 846 and 963 so that those provisions
expressly incorporate the mandatory minimum terms of imprisonment under
21 U.S.C. Sections 841(b)(1) and 960(b). Unless and until Congress
acts, however, federal prosecutors should take the position that the
mandatory minimum terms of imprisonment do not carry over and apply. *
* * *
The Department recommends that where the enhanced and mandatory
minimum penalty provisions of 21 U.S.C. Sections 841(b)(1) and 960(b),
as amended, are based upon the kind and quantity of drug involved in the
particular offenses (e.g., 21 U.S.C. Sections 841(b)(1)(A), 841(b)(
1)(B), 960(b)(1) and 960(b)(2), as well as 841(b)(1)(c) and 960(b)(3)
for certain marihuana, hashish, and hashish oil offenses), both the kind
and the quantity of the drug be specified in the indictment and proven
at trial. See, e.g., United States v. McHugh, 769 F.2d 860, 867-68 (1st
Cir. 1985) (noting, in dictum, that "proving the amount of mari(h)uana
is an essential element of the offense . . . under 21 U.S. C. Section
841(b)(6)," which provided enhanced penalties for persons convicted of
trafficking quantities of marihuana in excess of 1,000 pounds); United
States v. Webster, 750 F.2d 307, 331-34 (11th Cir. 1984), cert. denied,
. . . U.S. . . ., 105 S.Ct. 2340 (1985); United States v. Alvarez, 735
F.2d 461, 466-68 (11th Cir. ,984). But see McMillan v. Pennsylvania, .
. . U.S. . . ., 106 S.Ct. 2411 (1986) (upholding state sentencing
statute imposing mandatory minimum jail terms for visible possession of
a firearm during commission of enumerated offenses and specifically
providing that visible possession of firearm was not an element of the
offense and was to be established at sentencing by a preponderance of
the evidence). However, it is not necessary to plead or prove that the
defendant knew the quantity (or, presumably, the kind) of drug involved
in the offense. See United States v. Normandeau, 800 F.2d 953, 956 (9th
Cir. 1986). The same recommendation applies to those enhanced and
mandatory minimum penalties which apply where death or serious bodily
injury has resulted from use of the substance in question. See Jordan
v. United States District Court, 233 F.2d 362, 367 (D.C. Cir.), vacated
and remanded on other grounds, 352 U.S. 904 (1956) ("facts in
aggravation (of sentence) must be charged in the indictment and found to
be true by the jury"). Accord United States v. Moore, 540 F.2d 1088,
1089-91 (D.C. Cir. 1976) (construing penalty enhancement provisions of
21 U.S.C. Section 845( a)). Imposition of those enhanced or mandatory
minimum penalty provisions applicable to persons with prior drug-related
convictions will continue to be governed by the notice provisions of 21
U.S.C. Section 851. * * * *
The provisions of 21 U.S.C. Sections 841(b) and 960(b), as amended,
are silent as to whether the terms of imprisonment provided thereunder,
including any mandatory minimum terms of imprisonment, are to run
concurrently or consecutively where a defendant is convicted of more
than one federal drug-trafficking offense. Thus, it must be presumed
that terms of imprisonment imposed for such multiple offenses will run
concurrently unless the sentencing court specifically directs that they
are to run consecutively. See, e.g., Causey v. Civiletti, 621 F2d 691,
693 n.2 (5th Cir. 1980). Accord United States v. Naas, 755 F.2d 1133,
1136 (5th Cir. 1985) (citing cases). /29/ Counsel should note in this
regard that when the Sentencing Reform Act of 1984 takes effect
(currently scheduled for November 1, 1987), 18 U.S.C. Section 3584 will
provide that, where the judge does not specify whether sentences are
consecutive or concurrent, sentences imposed at the same time will run
concurrently and sentences imposed at different times will run
consecutively. This rule will apply irrespective of whether a sentence
already being served at the time of sentencing on a new federal offense
is a state or federal sentence. See S. Rep. No. 225, 98th Cong., 1st
Sess. 125-128 (1983). 18 U.S.C. Section 3584 will also provide that the
courts are free to specify whether the sentences are to run
consecutively or concurrently.
(B), and (C) and 960(b)(1), (2), and (3).
The fine provisions applicable to "repeat drug offenders" under 21
U.S.C. Sections 841(b)(1)(A) and (B) and 960(b)(1) and (2) -- unlike the
provisions applicable to "first-time drug offenders" -- use the phrase
"shall be sentenced" in two clauses separated by the word "and." This
seemingly innocuous language could lead to a defense argument that
"first-time drug offenders" under Subsections 841(b)(1)(A) or (B) and
960(b)(1) or (2) are clearly subject to jail terms and fines in all
cases whereas "repeat drug offenders" under those subsections arguably
are subject to fines (in addition to the prescribed term of
imprisonment) only in cases where death or serious bodily injury has
resulted from use of the substance in question. To illustrate this
point, the penalty provisions applicable to "repeat drug offenders"
under Subsections 841(b)(1)(A) and 960(b)(1) might be set forth as
follows:
"If any person commits such a violation after one or more prior
convictions . . . , such person:
(i) shall be sentenced to a term of imprisonment which may not
be less than 20 years and not more than life imprisonment and
(ii) if death or serious bodily injury results from the use of
such substance shall be sentenced to life imprisonment, a fine .
. . , or both." (Emphasis and subsection numbers supplied.,
This result defies common sense and there is no evidence in the
legislative history to suggest that Congress intended that "first-time
drug offenders" be subject to fines in all cases but that "repeat drug
offenders" be subject to fines only where death or serious bodily injury
has resulted from use of the substance in question. The Department may
be requesting that Congress enact technical amendments to correct this
problem. In the interim, Government counsel must be prepared to argue
that the fine provisions applicable to "repeat drug offenders" under
Subsections 841(b)(1)(A) and (B) and 960(b)(1) and (2) apply to all
offenses thereunder irrespective of whether death or serious bodily
injury has resulted from use of the substance in question.
Although it is an elementary rule of statutory construction that
effect must be given -- if possible -- to every word, clause, or
sentence of a statute, it has been said that "words and clauses which
are present in a statute only through inadvertence can be disregarded if
they are repugnant to what is found, on the basis of other indicia, to
be the legislative intent." 2A Sutherland Statutory Construction Section
46.06, at 104 (4th ed. 1984). Indeed, a majority of cases permit the
elimination or disregarding of words in a statute in order to carry out
the legislative intent and hold that words may be disregarded or
eliminated where, inter alia, "the word(s) (are) found in the statute
due to the inadvertence of the legislature, . . . where (it is) apparent
from the context of the act that the word(s) (were) a mere inaccuracy,
or clearly apparent mhishap, or (they were) obviously erroneously
inserted, . . . (or) where it is necessary to avoid inconsistencies and
to make the provisions of the act harmonize . . . ." Id., Section
47.37, at 258 (footnotes omitted). As mentioned earlier, the second
phrase "shall be sentenced" in the fine provisions applicable to "repeat
drug offenders under Subsections 841(b)(1)(A) and (B) and 960(b)(1) and
(2) does not appear in the companion fine provisions applicable to
"first-time drug offenders" under those subsections, giving rise to the
incongruous result that "first-time drug offenses" under those
subsections clearly face fines in all cases whereas "repeat drug
offenders" under those subsections arguably face fines only in cases
where death or serious bodily injury has resulted from use of the
substance in question. There is no indication in the legislative
history that Congress intended this result. Thus, when responding to a
defense challenge on this point, Government counsel should argue that
the second phrase "shall be sentenced" in the fine provisions applicable
to "repeat drug offenders" under Subsections 841( b)(1)(A) and (B) and
960(b)(1) and (2) was inadvertently inserted and constitutes mere
surplusage that courts should, therefore, disregard in order to
harmonize those provisions with the fine provisions applicable to
"first-time drug offenders" under those subsections. The absence of any
form of punctuation (comma, semi-colon, or period) before the phrase
"and if death or serious bodily injury results . . ." lends weight to
this argument. Id., Section 47.15 at 157 ("(W)hen . . . intent is
uncertain, punctuation may be looked to as an aid if it affords some
indication of the true intention.").
A similar problem is presented by new Subsections 841(b)(1)(C) and
960(b)(3) where the problematic second phrase "shall be sentenced"
appears in both the penalty provisions relating to "first-time drug
offenders" and those relating to "repeat drug offenders." As a result,
it is arguable that the fine provisions of those subsections apply only
in cases where death or serious bodily injury has resulted from use of
the substance in question. However, the absence of any form of
punctuation (e.g., comma, semi-colon, or period) before the phrase "and
if death or serious bodily injury results" indicates that Congress
intended the fine provisions to apply in all cases. Moreover, the fine
provisions of these subsections should be interpreted consistently with
their companion provisions in Subsections 841(b)(1)(A) and (B) and 960(
b)(1) and (2). Id., Section 46.05 at 90-92. As shown above, it appears
that Congress intended the fine provisions of the latter subsections to
apply in all cases.
Former Subsections 841(b)(1)(C) (now codified as Subsection 841(b)(
1)(D)) and 960(b)(3) (now codified as Subsection 960(b)(4)) of Title 21,
United States Code -- which apply to drug-trafficking offenses involving
less than 50 kilograms of marihuana, 10 kilograms of hashish, or 1
kilogram of hashish oil, or any Schedule III substance (and Schedule IV
and V substances for importation or exportation offenses) -- are now
amended to raise the fine applicable to persons who have no prior final
drug-related felony convictions from a maximum of $50,000 to an amount
not to exceed the greater of that authorized under Title 18, United
States Code, /30/ or $250,000 if the defendant is an individual or
$1,000,000 if the defendant is other than an individual. The fine
applicable to persons who have such prior, final drug-related felony
convictions has been raised from a maximum of $100,000 to an amount not
to exceed the greater of twice that authorized under Title 18, United
States Code, /31/ or $500,000 if the defendant is an individual or
$2,000,000 if the defendant is other than an individual. The terms of
imprisonment under this subsection remain unchanged. It should be noted
that an exception is made where the marihuana weighs less than 50
kilograms for offenses that involves 100 or more marihuana plants; such
offenses are punishable under the more severe provisions of new
Subsection 841(b)(1)(C) and 960(b)(3), which are discussed supra in
Section C. The purpose of this exception is to deter the cultivation of
marihuana.
Subsection 841(b)(2) of Title 21, United States Code -- which applies
to drug-trafficking offenses involving Schedule IV substances -- is
amended so that the fine applicable to persons with no prior, final
drug-related felony conviction is raised from a maximum of $25,000 to an
amount not to exceed the greater of that authorized under Title 18,
United States Code, /32/ or $250,000 if the defendant is an individual,
or $1,000,000 if the defendant is other than an individual. The fine
applicable to persons who have prior, final drug-related felony
convictions is now raised from a maximum of $50,000 to an amount not to
exceed the greater of twice that authorized under Title 18, United
States Code /33/ or $500,000 if the defendant is an individual, or
$2,000,000 if the defendant is other than an individual. The terms of
imprisonment under this subsection remain unchanged.
Subsection 841(b)(3) of Title 21, United States Code -- which applies
to drug-trafficking offenses involving Schedule V substances -- has been
amended to raise the fine applicable to persons who have no prior, final
drug-related felony convictions from a maximum of $10,000 to an amount
not to exceed the greater of that authorized under Title 18, United
States Code, /34/ or $100,000 if the defendant is an individual or
$250,000 if the defendant is other than an individual. The fine
applicable to persons who have prior, final drug-related felony
convictions has been raised from a maximum of $20,000 to an amount not
to exceed the greater of twice that authorized under Title 18, United
States Code, /35/ or $200,000 if the defendant is an individual or
$500,000 if the defendant is other than an individual. The terms of
imprisonment under this subsection remain unchanged.
Subsection 841(b)(5) of Title 21, United States Code -- which applies
to offenses involving cultivation of controlled substances on federal
property -- has been amended to specifically provide that offenders
"shall be imprisoned as provided in this subsection" and shall be fined
any amount not to exceed: (1) the amount authorized in accordance with
Section 841; (2) the amount authorized under Title 18, United States
Code; /36/ (3) $500,000 if the defendant is an individual; or (4)
$1,000,000 if the defendant is other than an individual. Thus, if an
offense involves the cultivation on federal property of 100 or more
marihuana plants even if they weigh less than 100 kilograms /37/ and the
defendant has no prior drug-related convictions, he/she may be fined up
to $1,000,000 because that is the amount specified in Subsection
841(b)(1)(C) for individual defendants.
Subsection 841(d) of Title 21, United States Code -- which applies to
possessory offenses involving piperidine -- is amended to raise the fine
from a maximum of $15,000 to an amount not to exceed the greater of that
authorized under Title 18, United States Code, /38/ or $250,000 if the
defendant is an individual or $1,000,000 if the defendant is other than
an individual. The term of imprisonment under that subsection remains
unchanged.
"Terms of Supervised Release"
Subtitle A of Title I of the new Act also provides that the words
"special parole term" will be deleted wherever they appear in the
Controlled Substances Act and the Controlled Substances Import and
Export Act and will be replaced by the words "term of supervised
release" when 18 U.S.C. Section 3583 becomes effective. The latter
statute, which defines and implements the new "terms of supervised
release," currently is scheduled to take effect on November 1, 1987.
/39/
A somewhat difficult problem is presented by the fact that new
Subsections 841(b)(1)(A), and (B), and (C), and 960(b)(1), and (2), and
(3) -- which became effective as of October 27, 1986 -- require that a
"term of supervised release" be imposed in every case in which a term of
imprisonment is imposed. No mention is made of "special parole terms."
/40/ Thus, federal courts currently must impose a "term of supervised
release" in all such cases even though the provisions of Title 18
implementing the enforcement provisions applicable thereto will not
become effective until November 1, 1987. This will not present a
problem in cases in which the defendant's term of imprisonment is
sufficiently long that he/she will not be released until 18 U.S.C.
Section 3583 becomes effective. The legislation is, however, silent as
to what enforcement action may be taken against a defendant sentenced
under the new provisions of Subsections 841(b)(1) or 960(b) who is
released from prison and violates the terms or conditions of his/her
"term of supervised release" prior to November 1, 1987. Corrective
legislation may be sought in this area.
There will be no such problem, however, with respect to sentences
imposed under Subsections 841(b)(1)(D) (formerly Subsection 841(b)(1)(
C)) and 960(b)(4) (formerly Subsection 960(b)(3)). Those subsections,
as amended under the new Act, continue to provide for imposition of
"special parole terms" -n all cases which a term of imprisonment is also
imposed. Thus, courts should continue to impose "special parole terms"
under those subsections until the amending language takes effect on
November 1, 1987, after which time courts should impose "terms of
supervised release."
In addition to the comments previously made regarding specific
provisions of Subtitles A and G of Title I of the new Act, counsel
should be aware of the ex post facto ramifications of the new Act. The
Supreme Court repeatedly has held that "the ex post fact prohibition (of
U.S. Const. art. IX, Section 1, cl. 3) . . . forbids the imposition of
punishment more severe than the punishment assigned by law when the act
to be punished occurred." Weaver v. Graham, 450 U.S. 24, 30 (1981)
(citing and discussing cases) (emphasis deleted). Thus, courts may only
impose the penalties in effect on the date the offense in question was
completed, not those in effect on the date of sentencing to the extent
the latter are more severe. See United States ex rel. Forman v.
McCall, 709 F.2d 852, 856 (3rd Cir. ,983) (citing cases). Because
conspiracies are deemed to be continuing offenses, conspiracies which
began before but continue after the date that the more severe penalties
became effective are subject to the more severe penalties. See, e.g.,
United States v. Baresh, 790 F.2d 392, 404 (5th Cir. 1986); United
States v. Campanale, 518 F.2d 352, 365 (9th Cir. 1975) (citing cases).
Similarly, a defendant who planned a distribution offense under 21 U.S.
C. Section 841(a) prior to the effective date of the new Act but
distributed the drugs and received payment after the effective date,
would be subject to the new, more severe, penalties. The new Act became
effective on October 27, 1986, at 2:42 p.m. EST. Thus, new enhanced
penalties described above should not be imposed for any offense that was
completed before that date and time.
Questions concerning the provisions of Subtitles A and G of Title I
of the new Act should be directed to Harry Harbin or Gary Schneider
(786-4700) in the Narcotic and Dangerous Drug Section. In addition,
copies of significant pleadings or decisions regarding the new penalty
provisions should be sent to the Narcotic and Dangerous Drug Section,
Criminal Division, Department of Justice, 1400 New York Avenue, N.W.,
Washington, D.C. 20005.
Subtitle B of Title I of the new Act amends Section 404 of the
Controlled Substances Act (21 U.S.C. Section 844) to impose mandatory
minimum penalties for offenses involving the simple possession of
controlled substances.
Persons convicted of simple possession offenses under amended 21 U.
S.C. Section 844(a) who have no prior, final drug-related convictions
must now be fined not less than $1,000 nor more than $5,000 /41/ and may
also be sentenced to not more than one year in prison. /42/ Persons who
have one prior, final federal or state /43/ drug-related conviction must
be sentenced to a mandatory minimum term of imprisonment of 15 days (up
to a maximum of two years) and must be fined not less than $2,500 or
more than $10,000. /44/ Persons who have two or more prior, final
drug-related convictions must be sentenced to a minimum of 90 days in
prison (up to a maximum of three years) and must be fined not less than
$5,000 nor more than $25,000. /45/ A mandatory minimum term of
imprisonment imposed under this section may not be suspended or
deferred. A person convicted of simple possession must also pay the
costs of investigation and prosecution of the offense. /46/
The enactment of this provision is not intended to extend federal
jurisdiction into an area traditionally reserved for local authorities.
It is expected that this crime will continue to be charged only when
other authorities lack jurisdiction over this offense.
The same ex post facto concerns mentioned earlier with respect to
Subtitles A and G of Title I of the new Act apply to offenses under this
Subtitle as well. Thus, counsel should not seek imposition of the new
enhanced and "mandatory minimum" penalties for possessory offenses which
occurred before 2:42 p.m. EST on October 27, 1986.
Proof of prior drug-related convictions will continue to be governed
by 21 U.S.C. Section 851.
Questions concerning the provisions of Title I, Subtitle B, of the
new Act should be directed to Harry Harbin or Gary Schneider (786-4700)
in the Narcotic and Dangerous Drug Section. In addition, copies of
significant pleadings or decisions regarding the new penalty provisions
should be sent to the Narcotic and Dangerous Drug Section, Criminal
Division, Department of Justice, 1400 New York Avenue, N.W., Washington,
D.C. 20005.
Subtitle C of Title I -- the "Juvenile Drug Trafficking Act of 1986"
-- creates new offenses with penalties substantially enhanced over those
provided in 21 U.S.C. Sections 841(b) and 960(b). The new penalties are
applicable to (1) persons who employ or use juveniles to commit offenses
under Title 21 or to avoid detection or apprehension by law enforcement
officials for such offenses and (2) persons who distribute drugs to
pregnant women. Subtitle C also substantially amends the penalty
provisions of 21 U.S.C. Section 845 (d)stributions to persons under age
21) and the offense and penalty provisions of 21 U.S.C. Section 845a
(distribution in or near schools).
Women (21 U.S.C. Section 845b)
Subtitle C of Title I of the new Act creates a new offense (which is
to be codified at 21 U.S.C. Section 845b) with the penalties
substantially enhanced over those provided under 21 U.S.C. Section 841(
b) or Section 960(b) for any person at least 18 years of age who
knowingly and intentionally employs, hires, uses, persuades, induces,
entices, or coerces any person under 18 years of age to either (1)
violate any provision of the Controlled Substances Act or the Controlled
Substances Import and Export Act or (2) assist in avoiding detection or
apprehension by any federal, state, or local law enforcement official
for any offense under those Acts. The same enhanced penalties will
apply to any person who knowingly and intentionally provides or
distributes any controlled substance to a pregnant woman in violation of
the Controlled Substances Act. /47/ Any person convicted under these
provisions who has no prior, final convictions under this section is
punishable by up to twice the otherwise applicable term of imprisonment
(including any applicable mandatory minimum term of imprisonment) and/or
fine, and at least twice the otherwise applicable term of supervised
release, as provided for in the underlying provision of the Controlled
Substances Act or the Controlled Substances Import and Export Act, as
amended. In no case, however, may such a person be sentenced to less
than a one-year term of imprisonment. Offenders who have any prior,
final convictions under this new section are punishable by up to three
times the otherwise applicable term of imprisonment (including any
applicable mandatory minimum term of imprisonment) and/or fine, and at
least three times the applicable term of supervised release. In no
case, however, may such a person be sentenced to less than a one-year
term of imprisonment.
This section of the new Act also provides for supplementary penalties
if (1) the person over eighteen who knowingly and intentionally employs,
hires, uses, persuades, induces, entices, or coerces a person under
eighteen for either of the aforementioned purposes also knowingly
provides or distributes a controlled substance or controlled substance
analogue to a person under eighteen, or (2) the person employed, hired,
or used is fourteen years of age or younger. In all such cases, a term
of imprisonment of not more than five years and/ or a fine of not more
than $50,000 may be imposed in addition to the enhanced penalties
described above.
Any sentence imposed under this new section may not be suspended and
probation may not be granted. See 21 U.S.C. Section 845b(e). That
subsection also provides that a person convicted thereunder "of an
offense for which a mandatory minimum term of imprisonment is applicable
shall not be eligible for parole . . . until the individual has served
the mandatory term of imprisonment required by section 401( b) (21
U.S.C. Section 841(b)) /48/ as enhanced by this section." As set forth
below, this language creates considerable ambiguity concerning the
imposition of any applicable mandatory minimum terms of imprisonment for
offenses under this section.
Note that the penalty provisions of this section -- 21 U.S.C.
Section 845(b) and (c) -- each provide that a person convicted of an
offense shall be "punishable by a term of imprisonment up to twice (or
"three times") that otherwise authorized, or up to twice (or "three
times") the fine otherwise authorized, or both, and at least twice (or
"three times") any term of supervised release otherwise authorized for a
first offense." The Department interprets this language as incorporating
and multiplying the maximum penalties applicable to the underlying
offense. The penalty provisions go on to provide that "(e) xcept to the
extent a greater minimum term is otherwise provided, a term of
imprisonment under this subsection shall not be less than one year." The
Department interprets this part of the penalty provisions as
incorporating, but not multiplying, any mandatory minimum terms of
imprisonment which apply to the underlying offense. The term would be
non-parolable until after the mandatory minimum portion of the sentence
was served.
The aforementioned ambiguity is presented by the fact that the parole
provision codified at 21 U.".C. Section 845(e) specifically provides
that "(a)n individual convicted under this section of an offense for
which a mandatory minimum term of imprisonment is applicable shall not
be eligible for parole . . . until the individual has served the
mandatory term of imprisonment required by section 401( b) (21 U.S.C.
Section 841(b)) as enhanced by this section." The underscored language
arguably contemplates that any applicable mandatory minimum term of
imprisonment under 21 U.S.C. Section 841(b) is to be doubled (or tripled
under 21 U.S.C. Section 845b(c)) and that no person subject to such a
"multiplied" mandatory minimum term of imprisonment may become eligible
for parole until the "multiplied" minimum term has been served. It
would be illogical, however, for Congress to provide for enhancement of
mandatory minimum terms of imprisonment in a provision relating to
parole but not in the provisions relating to penalties. (Note, again,
that the penalty provisions state that offenders are punishable by "a
term of imprisonment up to twice (or "three times") that otherwise
authorized.") The Department believes that the "rule of lenity" requires
that this ambiguity be resolved against the Government and in favor of
criminal defendants. /49/ Thus, the Department recommends that
Government counsel interpret the penalty provisions under 21 U.S. C.
Section 845b(b) and (c) as requiring a court to impose any applicable
mandatory minimum term of imprisonment, during which a defendant shall
not be eligible for parole, and permitting the court to impose up to
twice (or three times) the maximum term of imprisonment applicable to
the underlying offense.
The Department does not interpret the parole provision as meaning
that a defendant shall be eligible for parole once the applicable
mandatory minimum term of imprisonment is served. Indeed, the statute
provides only that a defendant "shall not become eligible for parole"
until that time. The date on which a defendant actually becomes
eligible for parole is to be determined through reference to the parole
guidelines and the forthcoming sentencing guidelines. The parole
provision of 21 U.S.C. Section 845b(e) is implicated only where
application of those guidelines would result in a defendant becoming
eligible for parole prior to completion of the applicable mandatory
minimum term of imprisonment. In such cases, the terms of the statute
control over the guidelines. In all other cases, the guidelines control
when the defendant becomes eligible for parole.
For example, a defendant convicted of violating 21 U.S.C. Section
845b and sentenced to a term of imprisonment of 40 years would not
become eligible for parole until after serving at least 10 years if the
"term of imprisonment . . . otherwise authorized" were that provided by
21 U.S.C. Section 841(b)(1)(A) or Section 960(b)(1), or at least 5 years
if the "term of imprisonment . . . otherwise authorized" were that
provided by 21 U.S.C. Section 841(b)(1)(B) or Section 960(b)(2). If the
"term of imprisonment . . . otherwise authorized" were that provided by
21 U.S.C. Section 841(b)(1)(C), 846, 960(b)(3), or 963, none of which
carries a mandatory minimum term of imprisonment, then 21 U.S.C. Section
845b(c) provides that the defendant shall receive a mandatory minimum
sentence of one year in prison, and the defendant would not become
eligible for parole until he/she served at least the mandatory minimum
sentence of one year. The parole guidelines and forthcoming sentencing
guidelines would determine the date of the defendant's parole
eligibility after the applicable mandatory minimum term of imprisonment
had been served. It should also be noted that, in most cases, the
sentence imposed under 21 U.S.C. Section 845b will be in addition to a
sentence imposed for the underlying offense under some other provision
of the Controlled Substances Act or the Controlled Substances Import and
Export Act. Under many of those provisions, parole is not available,
and any term of imprisonment imposed must be served in its entirety.
See, e.g., 21 U.S.C. Sections 841(b)(1)(A) and (B) and 960(b)(1) and
(2). Thus, a defendant convicted of a distribution offense under 21
U.S.C. Section 841(b)(1)(A) and of an offense under 21 U.S.C. Section
845b for employing a juvenile to assist in the distribution would not
become eligible for parole until the entire term of imprisonment imposed
for the Subsection 841(b)(1)(A) offense had been served, notwithstanding
the language of 21 U.S.C. Section 845b(e). * * * *
The age(s) of the juvenile(s) involved in the offense or the fact
that the distributee was pregnant are elements of the offense under
Section 845b which must be alleged in the indictment and proven at
trial. See United States v. Moore, 540 F.2d 1088, 1089-91 (D.C. Cir.
1976) (construing 21 U.S.C. Section 845); United States v. Cummingham,
615 F. Supp. 519, 521 (S.D.N.Y. 1985). However, it is not necessary to
prove that the defendant knew the age of the person employed, hired,
used, etc., or in cases involving distributions to pregnant women, that
the defendant knew that the recipient of the controlled substances was
pregnant. See United States v. Pruitt, 763 F.2d 1256, 1261-62 (11th
Cir. 1985), cert. denied, . . . U.S. . . ., 106 S.Ct. 856 (1986)
(interpreting 21 U.S.C. Section 845). It is only the act of employment,
use, or distribution which must be knowing or intentional. Id.
Subtitle C of the Act also amends Subsection 405A(a) of the
Controlled Substances Act (21 U.S.C. Section 845a(a)) by making it
illegal to manufacture as well as distribute controlled substances
within 1,000 feet of "a public or private elementary, vocational, or
secondary school or a public or private college, junior college, or
university." It further amends the "schoolyard statute," at 21 U.S.C.
Section 845a(b), to provide that second or subsequent offenders
thereunder are punishable "(1) by the greater of (A) a term of
imprisonment of not less than three years and not more than life
imprisonment or (B) a term of imprisonment of up to three times that
authorized by (21 U.S.C. Section 841(b)) for a first offense, or a fine
up to three times that authorized by (21 U.S.C. Section 841(b)) for a
first offense, or both, and (2) at least three times any term of
supervised release authorized by (21 U.S.C. Section 841(b)) for a first
offense."
405A(a) of the Controlled Substances Act (21
U.S.C. Sections 845(a), 845(b), and 845a(a))
Subtitle C of the Act amends Subsections 405(a) and 405(b) of the
Controlled Substances Act (21 U.S.C. Section 845(a) and (b)) to provide
that "(e)xcept to the extent a greater minimum sentence is otherwise
provided by section 401(b) (21 U.S.C. Section 841(b)), a term of
imprisonment under (either Subsection 845(a) or (b)) shall be not less
than one year." Thus, a term of imprisonment of at least one year must
now be imposed for any offense under these provisions. Moreover, it
appears that the new mandatory minimum penalties under 21 U.S.C.
Section 841(b) carry over and apply, where relevant, to offenses under
21 U.S.C. Section 845. The mandatory-minimum nature of these penalties,
however, does not appear to be subject to enhancement under 21 U.S.C.
Section 845(a) and (b). Subtitle C further amends 21 U.S.C. Section
845(b), relating to "Repeat offenders," to provide that the mandatory
minimum penalties authorized thereunder shall not apply to offenses
involving 5 grams or less of marihuana. Probably as a result of
congressional oversight, there is no comparable provision in Subsection
845(a), which relates to "first-time offenders." The certainly
unintended result of this omission is that "first-time offenders" under
21 U.S.C. Section 845 are subject to the mandatory minimum penalties
thereunder in all cases whereas "repeat offenders" under that section
may avoid the applicable mandatory minimum penalties if the offense
involves 5 grams or less of marihuana. The Department may be requesting
that Congress enact corrective legislation in this area.
Subtitle C similarly amends Subsection 405A(a) of the Controlled
Substances Act (21 U.S.C. Section 845a(a)) to provide that "(e)xcept to
the extent a greater minimum sentence is otherwise provided by (21 U.S.
C. Section 841(b)), a term of imprisonment under (Subsection 845a(a))
shall be not less than one year." It also amends 21 U.S.C. 845a(a) to
provide that the mandatory minimum sentencing provisions thereunder
shall not apply to offenses involving five grams or less of marihuana.
Because this latter provision applies only to first-time offenders under
21 U.S.C. Section 845a, there is not the potential problem under this
section comparable to that under Section 845. As discussed below, it
appears that the mandatory minimum sentencing provisions of 21 U.S. C.
Section 841(b)(1) carry over and apply, where relevant, to offenses
under Section 845a, but the mandatory-minimum nature of such sentence
would not be subject to further enhancement.
It appears that Congress intended for the mandatory minimum terms of
imprisonment under revised 21 U.S.C. Section 841(b)(1) to carry over and
apply, where otherwise applicable, to persons convicted under Sections
845, 845a, and 845b. Each of those sections, as amended, specifically
provides that persons convicted thereunder (without a prior conviction
under that specific section) shall be subject to up to twice the term of
imprisonment otherwise authorized under the applicable provision of
Title 21, and that "(e)xcept to the extent a greater minimum term of
imprisonment is otherwise provided (under the applicable provision of
Title 21), a term of imprisonment . . . shall not be less than one
year." Thus, there should be no Bifulco issue with respect to these
sections as there is with respect to the conspiracy and attempt
provisions of 21 U.S.C. Sections 846 and 963. (See discussion regarding
Bifulco and the "rule of levity" in the analysis of Subparts A and G of
Title I, supra.)
The Department recommends that the provisions of 21 U.S.C. Sections
845, 845a, and 845b be used whenever appropriate but notes that these
statutes are particularly useful in combatting the "street dealing" of
drugs in large urban areas. For example, the "schoolyard" provisions of
21 U.S.C. Section 845a have been used with considerable success against
"street dealers" of cocaine and other drugs in cities such as New York,
Philadelphia, and Tampa/St. Petersburg. It is anticipated that the
provisions of new Section 845b will prove similarly useful against
"street dealers" because the employment of juveniles to actually perform
"street" drug transactions is becoming increasingly widespread.
Questions concerning the enhancement provisions of 21 U.S.C.
Sections 845, 845a, and 845b should be directed to Harry Harbin or Gary
Schneider (786-4700) in the Narcotic and Dangerous Drug Section. In
addition, copies of significant pleadings or decisions regarding these
enhancement provisions should be sent to the Narcotic and Dangerous Drug
Section, Criminal Division, Department of Justice, 1400 New York Avenue,
N.W., Washington, D.C. 20005.
The Anti-Drug Abuse Act of 1986 contains several amendments and
additions to civil and criminal forfeiture law and procedure. In
addition, the Criminal Law and Procedure Technical Amendments Act of
1986, Pub. L. 99-646 (enacted November 10, 1986), made certain minor
changes to forfeiture law. The RICO criminal forfeiture provisions of
18 U.S.C. Section 1963 have been amended to provide for the forfeiture
of substitute assets. An identical amendment has been made to 21 U.S.
C. Section 853. The civil forfeiture provisions of 21 U.S.C. Section
881 have been amended in five ways: (1) under Subsection 883(b), the
Government may now request the issuance of a warrant authorizing the
seizure of property subject to forfeiture in the same manner as provided
for a search warrant under the Federal Rules of Criminal Procedure; (2)
all references to criminal forfeiture have been deleted from Subsection
881(b); (3) Subsection 881(e) now authorizes the Attorney General to
pay awards to anyone who provides information leading to the arrest and
conviction of a person who kills or kidnaps a federal drug enforcement
agent; (4) Subsection 881(f) authorizes the seizure, summary
forfeiture, and destruction of both Schedule I and Schedule II
controlled substances; and (5) Subsection 881(i) now authorizes stays
of civil forfeiture proceedings based on certain state court
proceedings. The legislation governing the Department of Justice Assets
Forfeiture Fund has been significantly amended to include authorization
to pay from the fund certain program-related expenses of forfeiture.
New Sections 981 and 982 of Title 18 authorize civil and criminal
forfeitures relating to violations of the new Money Laundering Control
Act. The new Mail Order Drug Paraphernalia Control Act authorizes the
forfeiture of certain drug paraphernalia. Various amendments were made
to Title 19, including an increase in the maximum limit of the claim and
cost bond to $5,000. Subsection 5317(c) of Title 31 has been amended to
allow the forfeiture of any monetary instrument or property traceable to
such an instrument transported in violation of the reporting
requirements of 31 U.S.C. Section 5316. There has been an amendment to
49 U.S.C. Section 1972(q) providing for the civil forfeiture of property
involved in certain violations of the Transportation Safety laws.
1. Section 23 of the recently enacted Technical Amendments Act
(which was enacted separately from the Anti-Drug Abuse Act) amends 18
U.S.C. Section 1963 by redesignating Subsections (e) through (m) as
Subsections (d) through (1).
2. Section 1153 of the Anti-Drug Abuse Act amends 18 U.S.C. Section
1963 by adding a new subsection (n). (An identical amendment has been
made to 21 U.S.C. Section 853.) The amendments provide that under
certain conditions the court shall order the defendant to forfeit
substitute assets up to a value equivalent to assets the defendant
derived through drug-related activity which are unavailable for
forfeiture. The amendments address a serious impediment to criminal
forfeitures. Previously a defendant could attempt to avoid the
forfeiture sanction simply by transferring his/her assets to another,
placing them beyond the jurisdiction of the court, or taking other
actions to render his/her forfeitable property unavailable at the time
of conviction.
Forfeiture of substitute assets is authorized if, as a result of any
act or omission of the defendant, the property forfeitable under
Subsection 1963(a): "(1) cannot be located upon the exercise of due
diligence; (2) has been transferred or sold to, or deposited with, a
third party; (3) has been placed beyond the jurisdiction of the court;
(4) has been substantially diminished in value; or (5) has been
commingled with other property which cannot be divided without
difficulty." The provision substantially broadens the Government's
ability to forfeit property under the section.
Virtually identical provisions were originally included in an early
version of what was enacted as the Comprehensive Crime Control Act of
1984, but these were deleted prior to enactment. In the legislative
history to that Act, the provisions were interpreted as providing "that
where property found to be subject to forfeiture is no longer available
at the time of conviction, the court is authorized to order the
defendant to forfeit substitute assets of equivalent value." S. Rep.
225, 98th Cong., 1st Sess. 201 (1983). The provisions and legislative
history are silent as to the procedures for forfeiting substitute
assets.
Section 1153 of the Act amends 21 U.S.C. Section 853 by adding a new
Subsection (p) providing for the forfeiture of substitute assets which
is identical to the amendment made to 18 U.S.C. Section 1963, discussed
supra.
1. Section 1865 of the Act amends 21 U.S.C. Section 881(b) to
provide that the Government may request the issuance of a warrant
authorizing the seizure of property subject to forfeiture in the same
manner as provided for a search warrant under the Federal Rules of
Criminal Procedure. This makes it clear that Rule 41 seizure warrants
are authorized under the section. The provision has also been included
in the civil forfeiture section of the Money Laundering Control Act (18
U.S.C. Section 981(b)). Subsection 881(b) of Title 21 has also been
amended by deleting references to criminal forfeiture.
2. Section 1992 of the Act amends Subsection 881(e) by redesignating
paragraph "(e)" as "(e)(1)", by redesignating paragraphs (1) through (4)
as subparagraphs (A) through (D), and by revising the paragraph
following new subparagraph (D). The revision has eliminated all
references to equitable sharing. However, redesignated subparagraph (A)
still authorizes the Attorney General to transfer the custody or
ownership of any forfeited property to any other federal agency, or to
any state or local law enforcement agency that participated directly in
the seizure or forfeiture of the property, pursuant to the customs laws.
The revised paragraph has retained the other language of the paragraph
but now specifically authorizes the Attorney General to pay awards up to
$100,000 to anyone who provides information leading to the arrest and
conviction of a person who kills or kidnaps a federal drug enforcement
agent.
3. Section 1006 of the Act amends Subsection 881(f) to authorize the
seizure, summary forfeiture, and destruction of both Schedule I and
Schedule II controlled substances.
4. Section 1865 of the Act amends Subsection 881(i) to authorize a
stay of civil forfeiture proceedings based on the filing of a state or
local indictment or information for violations that could have been
charged under the federal drug laws. Absent such a stay, the Government
might be compelled in the context of the civil forfeiture action to
disclose prematurely certain matters relating to a state criminal case.
amendments
Section 1152 of the Act and section 27 of the Technical Amendments
Act made significant amendments to 28 U.S.C. Section 524(c), the law
governing the Department of Justice Assets Forfeiture Fund ("the fund").
Section 27 of the Technical Amendments Act has a later effective date
than the Act, creating a technical problem which will most likely be
cured either by a note in the United States Code or by a technical
amendment.
1. A new clause has been added to Subsection 524(c)(1)(A) providing
that payments from the fund may include those, made pursuant to
regulations promulgated by the Attorney General, that are necessary and
direct program-related expenses for the purchase or lease of automatic
data processing equipment (not less than 90 percent of which use will be
program-related), training, printing, contracting for services directly
related to the processing of and accounting for forfeitures, and the
storage, protection, and destruction of controlled substances. This
language greatly expands the permissible uses of the fund. Now, not
only case-related expenses are payable from the fund, but a wide range
of program-related expenses as well.
2. A new Subsection 524(c)(1)(B) has been added that authorizes the
payment of awards for information or assistance directly relating to
violations of the criminal drug laws of the United States. Formerly,
only payments of awards for information or assistance leading to
forfeiture were permitted. It is hoped that this new provision will
enhance the Government's ability to obtain information from informants
in all drug-related cases, whether leading to forfeiture or not.
3. Subsection 524(c)(1)(F), formerly (c)(1)(E), has been amended in
three ways. First, payments from the fund can be used to retrofit only
conveyances used for "drug law enforcement functions." Second, the
Federal Bureau of Investigation and the United States Marshals Service
have been added to the list of agencies that can seek retrofitting
expenses from the fund. And third, the fund can now be used for
equipping any government-owned or leased conveyance, not just those
acquired by forfeiture.
4. Congress, in amending Subsection 524(c)(1), redesignated
paragraphs (B) through (F) as paragraphs (C) through (G). This has
resulted in an oversight concerning the cap on awards under the section.
Subsection 524(c)(2) specifies that an award paid from the fund for
information concerning a forfeiture cannot exceed the lesser of $150,000
or one-fourth of the amount realized by the United States from the
property forfeited. Furthermore, the subsection provides that amounts
awarded over $10,000 are not delegable except as provided. The
subsection was not amended to comport with new paragraph (B). In
effect, Congress has provided no limits to awards under new paragraph
(B), nor has it limited delegation of the grants of these awards.
5. Similarly, Subsection 524(c)(3) has not been amended to comport
with the redesignation of paragraphs (B) through (F). Subsection 524(
c)(3) should be read as applying to redesignated paragraph (G) rather
than to redesignated paragraph (F).
6. Subsection 524(c)(4) has been amended to make it clear that
expenses for forfeiture and sale authorized by law are payable from the
fund. This provision is now consistent with the first clause of
Subsection 524(c)(1)(A). The subsection has also been amended to make
it clear that proceeds of forfeiture under the Endangered Species Act
(16 U.S.C. System 1540(d)) and the Lacey Act Amendments of 1981 (16 U.
S.C. Section 3375(d)) are not to be deposited in the fund.
7. Subsection 524(c)(8) has been deleted from the section. This
former subsection authorized appropriations for payments from the fund
from 1984 through 1987. It also provided that any amounts in the fund
in excess of $5,000,000, or any lesser appropriated amount, would be
deposited in the general fund of the Treasury at the end of the fiscal
year. This amendment has extended the life of the fund indefinitely and
removed the automatic year-end rollover provisions of the section.
Former paragraph (9) has been renumbered as paragraph (8).
Act of 1986.
Section 1366 of the Act adds a new Chapter 46 to Title 18 of the
Code. The chapter authorizes both civil and criminal forfeitures
relating to, but not necessarily involving, money laundering. It
consists of Sections 981 and 982, which prescribe civil and criminal
forfeitures, respectively.
1. 18 U.S.C. Section 981(a)(1) -- Civil forfeiture
a. Section 981(a)(1) describes three types of property forfeitable
to the United States. Subsection 981(a)(1)(A) makes forfeitable any
real or personal property that represents the gross receipts a person
obtained -- directly or indirectly -- as a result of a violation of 18
U.S.C. Section 1956 or Section 1957 (the new money laundering offenses)
or which is traceable thereto. By use of the word "receipts," the
Senate Judiciary Committee intended that only the commission earned by
the money launderer is subject to forfeiture, and not the corpus
laundered itself. /50/ See S. Rep. No. 433, 99th Cong., 2d Sess. 23
(1986).
b. Subsection 981(a)(1)(B) provides that the United States may
civilly forfeit property in the United States that represents the
proceeds of a violation of a foreign drug law. The offense must also be
one that would be a felony drug violation under United States law had
the offense occurred within the jurisdiction of the United States. The
provision will allow the Government to forfeit the proceeds of a foreign
drug violation and any property derived therefrom (although this is not
explicitly stated, as in 21 U.S.C. Section 853). The provision does not
authorize the United States to forfeit property that was used or
intended to be used in the violation of the drug offense, as is the case
in many of our current forfeiture statutes. (See, e.g., 21 U.S.C.
Section 881.)
c. Subsection 981(a)(1)(C) makes forfeitable any coin or currency
(or other monetary instrument prescribed by the Secretary of the
Treasury), or property traceable thereto, involved in a transaction or
attempted transaction in violation of 31 U.S.C. Section 5313(a)
(currency transaction reporting requirement) or new 31 U.S.C. Section
5324 (prohibiting the structuring of financial transactions), provided
the violation giving rise to forfeiture is not by certain regulated
banks or brokerage firms.
2. Subsection 981(a)(2) sets forth an "innocent owner" exception to
property forfeitable under Section 981(a)(1), which is already contained
in several civil forfeiture statutes. See, e.g., 21 U.S.C. Section
881(a)(6) and (7). The subsection explicitly includes lienholders under
its protections.
3. Subsections 981(b) through 981(h) set forth, with a few minor
modifications, the familiar civil forfeiture provisions contained in 21
U.S.C. Section 881. Subsection 981(b) provides that property subject to
forfeiture under Subsections 981(a)(1)(A) and 981(a)(1)(B) may be seized
by the Attorney General and, in the case of property involved in a
violation of Sections 1956 and 1957 of Title 18 investigated by the
Secretary of the Treasury, may be seized by the Secretary of the
Treasury. Any property subject to forfeiture under Subsection 981(a)(
1)(C) may be seized by the Secretary of the Treasury. Subsection 981(b)
also sets out when property is subject to forfeiture with or without
process, and the appropriate measures which must be taken. It also
mirrors the recent amendments to 21 U.S.C. Section 881(b) which allows
the Government to request the issuance of a warrant authorizing the
seizure of property subject to forfeiture pursuant to the Federal Rules
of Criminal Procedure.
4. Subsections 981(c) and 981(d) relate to the custody and
disposition of forfeited property, respectively. Subsection 981(d)
clarifies that the customs laws are specifically incorporated by the
section. Subsection 981(e) authorizes the Attorney General or Secretary
of the Treasury to transfer forfeited property to any other federal
agency, or to any state or local law enforcement agency that
participated directly in the seizure and forfeiture of the property.
The subsection also authorizes the Attorney General or the Secretary of
the Treasury to discontinue forfeiture proceedings in favor of state or
local proceedings. Subsection 981(f) codifies the familiar "relation
back" doctrine to forfeitures under the section. Subsections 981(g) and
981(h) relate to stays of forfeiture proceedings and venue,
respectively.
5. Subsection 981(i) sets forth additional provisions applicable
only to property subject to forfeiture under Subsection 981(a)(1)(B).
Under the first sentence of Subsection 981(i)(1), property that is
subject to forfeiture under Subsection 981(a)(1)(B) and has been
forfeited under the Controlled Substances Act may be equitably shared
with a foreign country by the Attorney General with the concurrence of
the Secretary of State, to the extent provided by treaty and to a degree
reflecting the contribution of the foreign country to the seizure or
forfeiture. Such property consists of any conveyance, currency, and any
other type of personal property which the Attorney General may designate
by regulation for equitable transfer. Furthermore, any amounts realized
by the United States from the sale of any forfeited real or personal
property may also be equitable shared under this clause.
6. Subsection 981(i)(2) is included to foreclose any argument that
any of the provisions of Subsection 981(i) are intended to supersede or
limit any other authority or procedure whereby the United States can
provide assistance to a foreign country in obtaining property relating
to crimes committed in the foreign country.
7. Subsections 981(i)(3) and 981(i)(4) create rebuttable
presumptions when an order or judgment of forfeiture or conviction by a
foreign court concerning the property or the violation giving rise to
forfeiture is admitted into evidence. Such certified orders or
judgments and any recordings or transcripts or testimony taken in a
foreign judicial proceeding concerning such orders or judgments are
expressly made admissible concerning forfeiture of property of the type
described in Subsection 981(a)(1)(B). Subsection 981(i)(5) makes it
clear that these provisions are not intended to limit the admissibility
of any other evidence otherwise admissible in forfeiture proceedings.
8. Subsection 982(a) sets forth criminal forfeiture provisions by
providing that a court, in imposing sentence on a person convicted of an
offense under 18 U.S.C. Sections 1956 or 1957, shall order that the
person forfeit to the United States any real or personal property that
represents the gross receipts the person obtained, directly or
indirectly, as a result of such offense, or which is traceable to such
gross receipts. This section is the criminal counterpart to civil
forfeiture under Subsection 981(a)(1)(A).
Subsection 982(b) incorporates the familiar criminal forfeiture
provisions contained at 21 U.S.C. Section 853, to the extent they are
not inconsistent with the section. However, Subsection 982(b) does not
incorporate the new substitute assets provisions of 21 U.S.C. Section
853(p).
Paraphernalia Control Act
The new paraphernalia provisions, contained at Section 1821 et seq.
of the Act, reportedly are to be codified at 21 U.S.C. Section 857. The
forfeiture provisions are included at Subsection (c) to that section.
This subsection provides that any drug paraphernalia involved in a
violation of the section is subject to seizure and forfeiture upon the
conviction of a person for such violation. Conviction of a violator is
therefore a prerequisite to seizure and forfeiture. Any such
paraphernalia must be delivered to the General Services Administration
for destruction, law enforcement uses, or educational purposes. The
section is silent as to what forfeiture law and procedure apply.
Section 41 of the Technical Amendments Act has redesignated Sections
3671 and 3672 of Title 18, relating to the special forfeiture of
collateral profits of crime, as Sections 3681 and 3682.
1. 19 U.S.C. Section 1436 -- Penalties for violation of the arrival
reporting and entry requirements
Section 3113 of the Act amends 19 U.S.C. Section 1436 to make any
conveyance used in connection with a violation of Sections 1433, 1434,
1435, or 1644 of Title 19, 49 U.S.C. Section 1509, or any regulations
promulgated thereunder, subject to seizure and forfeiture. These
sections all relate to the reporting requirements concerning the entry
of conveyances into the United States. The section also makes
forfeitable any merchandise in or on board a conveyance which was not
properly reported or which entered in violation of the sections.
2. 19 U.S.C. Section 1497 -- Penalties for failure to declare
Section 3116 of the Act amends 19 U.S.C. Section 1497 with no change to
its existing forfeiture provisions.
3. 19 U.S.C. Section 1590 -- Aviation smuggling
Section 3120 of the Act adds a new Section 1590 to Title 19.
Subsection (e) authorizes the seizure and forfeiture of any vessel or
aircraft used in connection with or in aiding or facilitating any
violation of the section. The section prohibits the pilot of any
aircraft to transport, or for any person on board the aircraft to
possess, merchandise knowing or intending that the merchandise will be
introduced into the United States contrary to law. It also prohibits
certain unauthorized transfers of merchandise between an aircraft and a
vessel on the high seas or within customs waters. The section has a
common carrier exception.
4. 19 U.S.C. Section 1594 -- Seizures of conveyances
Section 3121 of the Act amends 19 U.S.C. Section 1594 to eliminate
the requirement that conveyances seized to secure payment of penalties
(not for forfeiture) be proceeded against in an admiralty proceeding and
permits administrative forfeiture in many instances. In addition, the
exemptions concerning common carriers have been revised. Under prior
law, a common carrier could not be seized or forfeited for violations of
the customs laws unless the owner or master or other person in charge
consented to or was privy to the violation. This protection was given
to shield the common carrier from seizures where dishonest passengers
concealed contraband in baggage or otherwise violated the customs laws
or where a dishonest shipper misdescribed the contents of cargo on a
bill of lading. However, in recent years, common carriers in increasing
and alarming numbers have escaped seizure where large quantities of
drugs were concealed on board the vessel or aircraft by crew members or
other personnel employed by common carriers.
The amendment will continue protection for common carriers where
contraband is contained in the baggage of a passenger being lawfully
transported or in manifested cargo with external marks and quantities
which match the bill of lading, unless the owner, operator, or person in
charge participated in or had knowledge of the violation or was grossly
negligent in preventing or discovering the violations. However, in the
case of prohibited merchandise or controlled substances, common carriers
will be subject to seizures for transporting such items in unmanifested
cargo or for articles concealed on the conveyance, put outside the cargo
area. After investigation, the common carrier would be subject to
forfeiture unless the owner or operator, master, or officers can show
that they did not know, and through the exercise of the highest degree
of care and diligence could not have known, that the contraband was on
board. This standard is identical to the standard contained in 19
U.S.C. Section 1584.
5. 19 U.S.C. Section 1595 -- Search and seizure amendment
Section 3122 of the Act amends 19 U.S.C. Section 1595 to expand the
customs civil search and seizure warrant to cover any article subject to
seizure rather than just imported merchandise. This amendment permits a
civil warrant to be issued to seize conveyances, monetary instruments,
and evidence of violations of the customs laws which are subject to
forfeiture under laws enforced by the Customs Service. Evidence
relating to violations of 19 U.S.C. Section 1592 will only be subject to
seizure under this section if fraud is involved. The standard for
obtaining a warrant is now "probable cause" in accordance with
constitutional requirements.
6. 19 U.S.C. Section 1595a -- Forfeiture and other penalties
Section 3123 of the Act amends 19 U.S.C. Section 1595a to permit the
civil seizure and forfeiture of merchandise introduced or attempted to
be introduced contrary to law. While it is true that most laws which
restrict or prohibit merchandise provide for forfeiture, some, such as
the motor vehicle laws and coffee laws, merely deem the goods to be a
"prohibited importation" but do not provide for a separate forfeiture.
This amendment will close that gap. In order to protect commercial
importations, the provision excludes merchandise which is only in
violation of 19 U.S.C. Section 1952, because that section has its own
forfeiture procedures.
7. 19 U.S.C. Section 1608 -- Claim and cost bond amendment
Section 1862 of the Act amends 19 U.S.C. Section 1608 to extend the
claim and cost bond maximum limit to $5,000. A duplicative 19 U.S.C.
Section 1608, as enacted by Public Law 98-473, has been repealed.
8. 19 U.S.C. Section 1613 -- Disposition of proceeds of forfeited
property amendments
Section 3124 of the Act amends 19 U.S.C. Section 1613 to treat
amounts tendered in lieu of merchandise subject to forfeiture in the
same manner as the proceeds of sale of a forfeited item. Such amounts
may be used to pay expenses of seizure and forfeiture and may be
deposited in the Customs Forfeiture Fund.
The section has also been amended to treat agency seizure expenses in
the same manner as court costs and marshals' expenses. A recent court
decision held that only seizure expenses incurred in custodia legis
after a complaint is filed are priority claims. Under this
interpretation, agency expenses incurred prior to referral for judicial
forfeiture proceedings would not be paid in some instances where the
proceeds of sale are insufficient to cover preferred mortgage liens and
all the expenses incurred by the seizing and custodial agencies. The
amendment remedies this situation by putting agency expenditures on an
equal footing with marshals' fees and court costs.
9. 19 U.S.C. Sections 1613a and 1613b -- Customs Forfeiture Fund
In 1984, Congress inadvertently enacted two somewhat different
provisions creating a Customs Forfeiture Fund. One was eancted by Pub.
L. 98-473 and codified as 19 U.S.C. Section 1613a. The other was
enacted by Pub. L. 98-573 and codified as 19 U.S.C. 1613b. Section
1613a was repealed by Section 1888 of the Tax Reform Act of 1986, Pub.
L. 99-514, effective October 22, 1986. The legislation governing the
fund has become even more confused by the passage of the Anti-Drug Abuse
Act. Section 1142 of the Act amends 19 U.S.C. Section 1613a, while
Section 3142 of the Act amends 19 U.S.C. Section 1613b. However,
Section 1142 of the Act, by its terms, repeals Section 1613b. It is not
clear, however, that Section 1613b has been repealed by the Act, because
its original enactment and subsequent amendments represent a later
expression of congressional will. See generally Sutherland, Statutory
Construction Section 23.17. As a consequence, Section 1613b is arguably
still in force, possibly along with Section 1613a. Clarifying
legislation is being sought in this area. The amendments to both
sections will be discussed on the assumption that both are still in
force.
Section 1152 of the Act amends 19 U.S.C. Section 1613a. Subsection
(a)(3) has been amended to authorize the equipping for law enforcement
functions of any government-owned or leased conveyances available for
official use by the Customs Service. Subsection (h) has been deleted
from the section. This subsection authorized appropriations for
payments from the fund from 1984 through 1987. It also provided that
any amounts in the fund in excess of stated appropriations were required
to be deposited in the general fund of the Treasury at the end of the
fiscal year. This amendment has extended the life of the fund
indefinitely and removed the automatic year-end rollover provisions of
the section. Both of these amendments are analogous to amendments of
the Department of Justice Assets Forfeiture Fund, discussed supra.
Section 3142 of the Act amends 19 U.S.C. Section 1613b (as enacted by
Pub. L. 98-573). The amendments extend the life of the fund through
Fiscal Year 1991, change the year-end rollover amounts from ten to
twenty million dollars, and supplement the permissible uses of the fund
for the payment of certain expenses.
10. 19 U.S.C. Section 1616a -- Transfer of forfeited property
Section 1863 of the Act amends 19 U.S.C. Section 1616a so that
forfeited property may be transferred to "any other Federal agency" as
well as to any state or local law enforcement agency which participated
directly in the seizure of the forfeited property. The amendment also
repeals Section 1616 (as enacted by Pub. L. 98-473) so that there is now
only one Section 1616.
11. 19 U.S.C. Section 1619 -- Award of compensation to informers
Section 3125 of the Act amends 19 U.S.C. Section 1619 to allow
customs officers to exercise some discretion in determining the
percentage of an informant's award, subject to stated limitations.
forfeitures
Section 1355 of the Act amends 31 U.S.C. Section 5317(c) to allow
forfetiure of any monetary instrument transported in violation of the
reporting requirements of 31 U.S.C. Section 5316 to include forfeiture
of the monetary instrument "and any interest in the property, including
a deposit in a financial institution traceable to such instrument." The
Government will thus be able to seize not only unreported or misreported
instruments, put any property traceable to such instruments.
amendments
Section 3401 of the Act amends 49 U.S.C. App. Section 1472(q) to
provide for the civil forfeiture of any fuel tanks, fuel systems, and
aircraft involved in a violation of 49 U.S.C. App. Section 1472(q)(1)(
F). That provision prohibits the operation of an aircraft with a fuel
tank or fuel system that has been installed or modified without
complying with all applicable rules, regulations, and requirements of
the Administrator of the Federal Aviation Administration. The
forfeiture provisions specifically incorporate customs law and
procedure.
The United States Attorneys' Offices are required to consult with the
Asset Forfeiture Office prior to moving for the forfeiture of any
substitute assets under 18 U.S.C. Section 1963(n) or 21 U.S.C. Section
853(p). As discussed in Part A.2, supra, these provisions are silent as
to the procedures for forfeiting substitute assets. The Asset
Forfeiture Office will work to develop consistent policies and
procedures relating to the seizure and forfeiture of substitute assets.
U.S.C. Section 981(a)(1)(B)
The United States Attorneys' Offices are required to consult with the
Asset Forfeiture Office prior to seeking forfeiture of property
representing the proceeds of foreign controlled substance violations
pursuant to 18 U.S.C. Section 981(a)(1)(B) or prior to enforcing or
implementing any of the provisions of 18 U.S.C. Section 981(i).
Actions
18 U.S.C. Section 981(e) provides for the discontinuance of federal
forfeiture actions in favor of proceedings under state or local law.
The policy outlined in the Department of Justice's Handbook on the
Comprehensive Crime Control Act of 1984 (December, 1984), Paragraph
III.C., at page 56, and Part V, Section A, of the Attorney General's
Guidelines on Seized and Forfeited Property are specifically
incorporated with respect to discontinuance of federal forfeiture
actions under this section.
Paraphernalia Control Act
The forfeiture provisions of the new Mail Order Drug Paraphernalia
Control Act are silent as to what forfeiture law and procedure apply.
The section provides that any drug paraphernalia involved in a violation
of the section is subject to seizure and forfeiture upon the conviction
of a person for such violation. Conviction of a violator is therefore a
prerequisite to seizure and forfeiture. The section incorporates
neither the customs laws, supplemental rules, nor any criminal
forfeiture procedures.
Based on the lack of legislative guidance in this matter, the United
States Attorneys' Offices are required to consult with the Asset
Forfeiture Office prior to seeking seizure or forfeiture of property
under the Mail Order Drug Paraphernalis Control Act. The Asset
Forfeiture Office will work with the seizing agencies to develop
consistent policies and procedures relating to the seizure and
forfeiture of drug paraphernalia.
Questions concerning the provisions outlined in this discussion of
Subtitled D and Q of Title I should be directed to Brad Cates, Director,
Asset Forfeiture Office (272-6420) or members of his staff.
Subtitle E of Title I of the Anti-Drug Abuse Act of 1986, at Section
1202, amends the Controlled Substances Act by creating a new section
proscribing certain conduct with regard to controlled substance
analogues -- popularly referred to as "designer drugs" (although this
term is to be discouraged because of its supposed allure to youths and
young adults). This subtitle -- also known as the "Controlled Substance
Analogue Enforcement Act of 1986" -- accomplishes this effect by
creating a new section 203 of the Controlled Substances Act ("Treatment
of Controlled Substance Analogues"), which should be codified at 21
U.S.C. 813.
As the proscriptions of the Controlled Substances Act had, prior to
this law, been tied exclusively to the precise chemical description of
the substances under control, professional and amateur chemists were
able to create substances which were just slightly different from the
chemical structures of controlled substances and which, therefore, were
legal to manufacture, distribute, etc. under the terms of the Controlled
Substances Act. As noted in a Senate report concerning this provision:
The problem is heightened because current law provides such a
powerful incentive for profiteers to experiment with conventional
chemical structures. Seeking to produce narcotics that do not
fall within the exact definitions of the CSA schedules, marginal
chemists may manufacture novel compounds of unknown
pharmacological properties. The resulting products, whether
marketed as counterfeits of the drugs they imitate or as new
"synthetic drugs," can have unintended effects: witness the 1982
outbreak of Parkinson's disease in California users of the
analog(ue)s.
S. Rep. No. 196, 99th Cong., 1st Sess. 3 (1985). /51/
Amendments to the Controlled Substances Act in the Comprehensive
Crime Control Act of 1984 provided for the emergency scheduling of such
substances, but this process still allowed a significant period of time
to elapse between the initial discovery of the new substance, the
determination of the substance's dangers, and the emergency scheduling
action (which required at least 30 days prior notice). Under the new
law, newly produced substances which meet the definition of a
"controlled substance analogue" are proscribed as of their creation
without any further requirement with regard to notice or otherwise. The
early-stage research of legitimate chemists into controlled substance
analogues would be protected because of the limitation on the
proscription of such conduct "to the extent intended for human
consumption," as well as the ability of the legitimate chemist to apply
for a new drug application.
U.S.C. Section 813)
The new 21 U.S.C. Section 813 provides that a "controlled substance
analogue," to the extent intended for human consumption, shall be
treated as a controlled substance in Schedule I pursuant to the
provisions of both the Controlled Substances Act and the Controlled
Substances Import and Export Act. Thus, a prosecution for the unlawful
manufacture, distribution, or possession (with intent to manufacture or
distribute) of a controlled substance analogue would be pursuant to 21
U.S.C. Section 841(a)(1) and defendants convicted of such offenses would
be punished in accordance with the penalties set forth in 21 U.S. C.
Section 841(b). Importation offenses involving analogues would be
prosecuted pursuant to the applicable provisions of the Controlled
Substances Import and Export Act (e.g., 21 U.S.C. Sections 952, 963),
and defendants convicted of these offenses would be punished in
accordance with the penalties set forth in 21 U.S.C. Section 960.
Because new 21 U.S.C. Section 813 applies only for the purposes of the
Controlled Substances Act and the Controlled Substances Import and
Export Act, it might not be applicable to the provisions of the Act of
September 15, 1980 (which, prior to the ADAA'S amendment was contained
at 21 U.S.C. Section 955a et seq., but which will now be moved out of
Title 21 and, reportedly, into Title 46 Appendix, at Sections 1901 et
seq.). This does not appear to be a significant problem.
By operation of this subtitle, many of the enhancement provisions of
the Controlled Substances Act have been automatically made applicable to
analogue offenses, such as offenses involving distribution to persons
under the age of 21 (21 U.S.C. Section 845), distribution or manufacture
of controlled substances within 1,000 feet of a school (21 U.S.C.
Section 845a), use or employment of a minor drug activity (21 U. S.C.
Section 845b), and second or subsequent offenses (21 U.S.C. Section
841(b)). This is also true with regard to many of the enhancement
provisions in the Controlled Substances Import and Export Act. However,
because the enhancements relating to offenses involving large quantities
of certain controlled substances (21 U.S.C. Sections 841(b)(1)(A) and
(B) and 960(b)(1) and (2)), only provide such enhanced penalties for
analogues of N-phenyl-N-(1-(2-phenylethyl)-4-piperidinyl) propanamide,
i.e., fentanyl, only the non-enhanced penalties of 21 U.S. C. Section
841(b)(1)(C) and 960(b)(3) are applicable to non-fentanyl analogues. It
is becase non-fentanyl analogues are not included in the list of
substances which receive enhanced penalties in 21 U.S.C. Section
841(b)(1)(B) that they are not also proper predicates for the new
"principal administrator . . ." provision of 21 U.S.C. Section 848( b).
Section 1203 of the Anti-Drug Abuse Act defines "controlled substance
analogue" in new subsection (A) of 21 U.S.C. Section 802(32) to mean any
substance: "(i) the chemical structure of which is substantially
similar to the chemical structure of a controlled substance in schedule
I or II; (ii) which has a stimulant, depressant, or hallucinogenic
effect on the central nervous system that is substantially similar to or
greater than the stimulant, depressant, or hallucinogenic effect on the
central nervous system of a controlled substance in schedule I or II;
or (iii) with respect to a particular person, which such person
represents or intends to have a stimulant, depressant, or hallucinogenic
effect on the central nervous system that is substantially similar to or
greater than the stimulant, depressant, or hallucinogenic effect on the
central nervous system of a controlled substance in schedule I or II."
Subsection (B) of 21 U.S.C. Section 802(32) explicitly indicates that
the term "controlled substance analogue" does not include: "(i) a
(currently scheduled) controlled substance; (ii) any substance for
which there is an approved new drug application; (iii) with respect to
a particular person any substance, if an exemption is in effect for
investigational use, for that person, under section 505 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. Section 355) to the extent
conduct with respect to such substance is pursuant to such exemption;
or (iv) any substance to the extent not intended for human consumption
before such an exemption takes effect with respect to that substance."
PROSECUTION FOR ANY ANALOGUE OFFENSE REQUIRES PRIOR CONSULTATION WITH
THE NARCOTIC AND DANGEROUS DRUG SECTION OF THE CRIMINAL DIVISION.
In interpreting the provisions of this bill, it is important to make
note of one of the major compromises effected during the debate between
members of the House and Senate on the coverage of the bill. As finally
resolved, in defining the term "analogue," any one of the three
definitional elements will suffice. The original House version would
have required the first element (viz., substantially similar chemical
structure) to always be present, with any of the other two conditions
(viz., effect of the drug or representations concerning the drug) also
being required to trigger the bill's proscriptions.
As noted above, because of the structure of the Controlled Substance
Analogue Enforcement Act of 1986, no conforming amendments to other
provisions of the Controlled Substances Act or the Controlled Substances
Import and Export Act were believed necessary. Likewise, no amendments
were believed necessary to other titles of the United States Code to
allow for analogue offenses to be permissible predicate offenses, such
as for the wiretap provisions (18 U.S.C. Section 2510, et seq.),
Interstate Transportation in Aid of Racketeering (18 U.S.C. Section
1952), Racketeer Influenced and Corrupt Organizations (18 U.S. C.
Section 1961, et seq.), and the new money laundering offenses (18 U.
S.C. Sections 1956 and 1957), as well as the air-drop provisions (new
Section 590 of part V or title IV of the Tariff Act of 1930).
This should hold true notwithstanding the language in 21 U.S.C.
Section 813 (viz., "for the purposes of this title and Title III") that
appears to limit the applicability of this provision to the Controlled
Substances Act and the Controlled Substances Import and Export Act.
Section 813 should be applicable to the Title 18 offenses listed above
and other provisions which would use analogue offenses as predicates
because they refer to the CSA and CSIEA. Section 813 was intended to
ensure applicability of the analogue provision to both the CSA and the
CSIEA, rather than to restrict the applicability of this provision to
any non-Title 21 offenses (e.g., Title 18 offenses). The Department may
be seeking an amendment to clarify this matter.
We anticipate that most prosecutions for violation of this statute
will be undertaken pursuant to the definition of analogue contained at
21 U.S.C. Section 802(32)(A)(i), based upon the substantial similarity
between the chemical structure of the suspect substance and a schedule I
or II controlled substance. In such cases, the proof presented will
most likely be expert testimony concerning the chemical structure of the
suspect substance. The Forensic Sciences Section of the Drug
Enforcement Administration's Office of Science and Technology, in
conjunction with DEA'S Office of Diversion Control, is prepared to
provide witnesses who will present such testimony.
In cases in which the prosecution is premised on the definition
contained at 21 U.S.C. Section 802(32)(A)(iii), we anticipate that the
Government would seek to introduce evidence from undercover agents,
informants, or cooperating codefendants that the defendant held the
substance out as having an effect on users similar to or greater than
the effect of a schedule I or II substance.
The third definitional basis for a prosecution -- that the substance
has an actual effect like or greater than that of schedule I or II
substances (21 U.S.C. Section 802(32)(A)(ii)) -- will be used when that
information is available. In the case of newly synthesized substances,
this will infrequently or never be used because very lengthy animal
studies are required to prove the actual effect of a suspect substance.
In these latter cases, one of the other two definitional elements should
be available to establish the violation.
Questions concerning the provisions of the Controlled Substance
Analogue Enforcement Act should be directed to Gary Schneider (786-4700)
in the Narcotic and Dangerous Drug Section.
Subtitle F of Title I of the Anti-Drug Abuse Act of 1986 amends the
Continuing Criminal Enterprise (CCE) statute, 21 U.S.C. Section 848, to
(1) increase the maximum fine levels for CCE offenses, and (2) provide
for mandatory life imprisonment for the "principal administrator,
organizer, or leader" of a CCE in certain instances.
As revised by the new Act, 21 U.S.C. Section 848(a) provides
substantial maximum penalties for a first CCE conviction. While the
maximum term of imprisonment remains life imprisonment without the
possibility of parole (with a mandatory-minimum term of 10 years in
prison), the fine has been modified to allow a fine of not more than the
greater of that authorized in 18 U.S.C. Section 3623 (which allows for a
fine of twice the gross gain derived through the CCE) or $2 million if
the defendant is an individual (or $5 million if the defendant is other
than an individual, such as a corporation or other business entity).
The forfeiture provided in 21 U.S.C. Section 853 is still mandated. In
the case of a second or subsequent conviction under the CCE statute,
these penalties are doubled, with the mandatory-minimum term of
imprisonment also doubled to 20 years in prison.
Under the Anti-Drug Abuse Act, former 21 U.S.C. Section 848(b)
("Continuing criminal enterprise defined") and (c) ("Suspension of
sentence and probation prohibited") have been redesignated as new 21 U.
S.C. Section 848(d) and (e), respectively.
A new Subsection (b) has been created by the Act in 21 U.S.C.
Section 848 to provide a mandatory term of life imprisonment for the
"principal administrator, organizer, or leader" of a CCE in either of
two instances: (1) (Subsection 848(b)(2)(A)) -- where the violation
referred to in 21 U.S.C. Section 848(d) "involved at least 300 times the
(minimum) quantity" of a controlled substance allowing for an enhanced
penalty in 21 U.S.C. Section 841(b)(1)(B) (the five-year
mandatory-minimum provision also created by this Act), or (2)
(Subsection 848(b)(2)(B)) -- where "the enterprise, or any other
enterprise in which the defendant was the principal or one of several
principal administrators, organizers, or leaders, received $10 million .
. . in gross receipts during any twelve-month period of its existence
for the manufacture, importation, or distribution of a substance
described in (21 U.S.C. Section 841(b)(1)(B)." Because of the
requirement in both subsections of 21 U.S.C. Section 848(b) that the
controlled substances involved in the predicate offenses for the CCE
must be contained in the penalty provision of 21 U.S.C. Section 841(b)(
1)(B), the enhancement in Subsection (b) will not be applicable where
the CCE violation involves non-included schedule I or II controlled
substances, such as methamphetamine and non-fentanyl analogues, as well
as all schedule III, IV, and V controlled substances.
Prosecutors should note that there is no 21 U.S.C. Section 848(c)
under this new statutory hierarchy. As this was obviously an oversight
which occurred in the drafting process, it may be addressed in a note --
"21 U.S.C. Section 848(c) -- Reserved" when 21 U.S.C. Section 848 is
reprinted.
"Principal administrator, organizer, or leader" is not defined in the
Act. Therefore, these terms should be given their common-sense meaning:
a person in "a position of organizer, a supervisory position, or any
other position of management," as previously (and currently) used in
defining a CCE candidate, but limited to the most major person or
persons. "Gross receipts" should be given a broad interpretation.
In general, prosecution for a CCE offense requires that a violation
of 21 U.S.C. Section 848 be specifically pleaded and proved (except
where it is being used to demonstrate a prior CCE to establish the
double penalty for a second or subsequent CCE). Although it may not be
required under the statute, it is recommended that the facts
establishing the applicability of the enhanced penalty contained in 21
U.S.C. Section 848(b) also be pleaded and proved.
Because of the severe nature of the penalties provided in new 21 U.
S.C. Section 848(b), there has been imposed a requirement (consistent
with Sections 9-2.120 and 9-2.131 of the United States Attorneys'
Manual) that, prior to any information, indictment, or grand jury
proceedings relating to this provision, as well as any disposition of
such charge other than by trial, a United States Attorney must obtain
approval for such action from the Assistant Attorney General of the
Criminal Division, with requests for such authorization being directed
to the Narcotic and Dangerous Drug Section.
Questions concerning 21 U.S.C. Section 848 should be directed to
Jeffrey Russell (786-4708), John Kuray (786-4721), or Gary Schneider
(786-4700) in the Narcotic and Dangerous Drug Section.
The Money Laundering Control Act creates a federal money laundering
offense; authorizes forfeiture of assets earned by launderers; creates
a Title 31 offense which prohibits the structuring of currency
transactions; enhances the civil and criminal penalty provisions of
Title 31; and amends the Right to Financial Privacy Act. All of these
topics are discussed in this section with the exception of the
forfeiture provisions, which are discussed in Subtitle D, supra.
18 U.S.C. Sections 1956 and 1957 create new offenses which have been
generically designated as "money laundering." These new crimes differ
greatly from the Title 31 offenses which have traditionally been thought
of as money laundering. Thus, even a prosecutor experienced in the
Title 31 area should carefully evaluate the elements of the new Title 18
offenses before utilizing them. Sections 1956 and 1957 became effective
on October 27, 1986.
Section 1956 criminalizes virtually any dealings with the proceeds of
a wide range of "specified unlawful activities" when those dealings are
aimed at furthering the same "specified unlawful activities" or at
concealing or disguising the source, ownership, location or nature of
the proceeds. Subsections 1956(a)(1) and 1956(a)(2) lay out the core of
this provision. Subsection (a)(1) deals with violations in a domestic
context. Subsection (a)(2) involves violations which occur when
monetary instruments or funds are transported between the United States
and a foreign country. Both sections have three alternative grounds for
liability.
Section 1957 effectively criminalizes any knowing "monetary
transaction" or attempted monetary transaction in criminally derived
property when three factors exist: (1) over $10,000 is involved, (2) a
financial institution is utilized, and (3) the property is derived from
specified unlawful activity. The statute does not require that the
property be used for any additional criminal purpose.
Newly created 31 U.S.C. Section 5324 adds a new crime to the Bank
Secrecy Act entitled "structuring to evade reporting requirements." This
section is specifically intended to overrule the line of cases initiated
by United States v. Anzalone, 766 F.2d 676 (1st Cir. ,985). Under the
terms of this statute, it is unlawful to cause or attempt to cause a
domestic financial institution to fail to file a CTR or file a CTR with
material omissions or misstatements. Further, and most significantly,
it is now unlawful to "structure," "assist in structuring," or attempt
to do either of the above with one or more domestic financial
institutions. This provision became effective January 28, 1987.
The Money Laundering Control Act also contains numerous miscellaneous
provisions affecting the Right to Financial Privacy Act and civil and
criminal aspects of Title 31. The most significant of these changes are
discussed in the last section of this chapter. /52/
Section 1956, "laundering of monetary instruments," is divided into
Subsections 1956(a) and (b). Subsection 1956(a) is further divided into
Subsection (a)(1) (domestic financial transactions) and Subsection
(a)(2) (the international transportation of monetary instruments or
funds). Subsection 1956(b) provides a civil penalty for violations of
the above subsections. Subsection 1956(c) defines several of the terms
used in Section 1956 (as well as in Section 1957). Subsections 1956(
d), (e), and (f) address, respectively, the effects of other statues,
agency investigative responsibilities, and extraterritorial
jurisdiction.
or international transportation
The three alternative violations of Subsection 1956(a)(1) are
contained within Subsections (a)(1)(A) and (a)(1)(B), the latter of
which has two subsections of its own, (i) and (ii). All Subsection
1956(a)(1) prosecutions have two elements in common: (1) the
prospective defendant must "knowingly" "conduct or attempt to conduct" a
"financial transaction" "knowing that the property involved in the
financial transaction represents the proceeds of some form of unlawful
activity" and (2) the property involved in the financial transaction
must in fact actually be derived from "specified unlawful activity."
Section 1956(a)(1) provides:
Whoever, knowing that the property involved in a financial
transaction represents the proceeds of some form of unlawful
activity, conducts or attempts to conduct such a financial
transaction which in fact involves the proceeds of specified
unlawful activity. . . .
An analysis of Subsection 1956(a)(1) requires reference to the
definition section of the Act, contained at Section 1956(c). As
explained in a Senate report, these definitions form the heart of the
Act. the report provides as follows:
Section 1956(c)(1) sets out the definition of the phrase
"knowing that the property involved in a financial transaction
represents the proceeds of some form of unlawful activity" as used
in section (a)(1). The significance of this phrase is that the
defendant need not know exactly what crime generated the funds
involved in a transaction, only that the funds are the proceeds of
some kind of crime that is a felony under Federal or State law.
This will eviscerate the defense that a defendant knew the funds
came from a crime, but thought the crime involved was a crime not
on the list of "specified" crimes in Section (c)( 7).
Section 1956(c)(2) defines the term "conducts" to include
initiating, concluding or participating in a transaction. This
ensures that section (a) applies not only to a person who deposits
cash in a bank knowing that the cash represents the proceeds of
crime, put also to a bank employee who accepts the cash if the
employee knows that the money represents the proceeds of crime.
Section 1956(c)(3) defines the term "transaction" to include
various activities involving financial institutions such as a
deposit, an exchange of funds, a transfer between accounts, and
the purchase of stock or certificates of deposit. The term also
includes activities not involving banks, such as the purchase,
sale, or other disposition of property of all kinds. It should be
noted that each transaction involving "dirty money" is intended to
be a separate offense. For example, a drug dealer who takes $1
million in cash from a drug sale and divides the money into
smaller lots and deposits it in 10 different banks (or in 10
different branches of the same bank) on the same day has committed
10 distinct violations of the new statute. If he then withdraws
some of the money and uses it to purchase a boat or condominium,
he will have committed two more violations, one for the withdrawal
and one for the purchase. /53/
Section 1956(c)(4) defines the term "financial transaction"
very broadly. Because of the broad definition of the term
"transaction" in section (c)(3), the term "financial transaction"
is not limited to transactions involving financial institutions.
It includes all forms of commercial activity. The only
requirement is that the transaction must "affect interstate or
foreign commerce" or be conducted through or by a financial
institution which is engaged in or the activities of which affect
interstate or foreign commerce, "in any way or degree." /54/ The
term "affect commerce in any way or degree" is derived from the
Hobbs Act, 18 U.S.C. 1951, and is intended to reflect the full
exercise of Congress' powers under the Commerce Clause of the U.
S. Constitution. Thus, for example, the use of the proceeds of
unlawful activity to purchase a residence would be covered if any
of the materials could be shown to have come from out of State.
/55/
Section 1956(c)(6) defines the term "financial institution" as
that term is defined in 31 U.S.C. section 5312(a)(2) and the
regulations promulgated thereunder as they may be amended from
time to time.
Section 1956(c)(7) sets out the list of crimes encompassed in
the term "specified unlawful activity." The term does not include
every State or Federal crime, but rather those crimes most
commonly associated with organized crime, drug trafficking, and
financial misconduct. This last category includes crimes such as
embezzlement, bank bribery, and illegal arms sales. The prior
categories include continuing criminal enterprise offenses covered
under 21 U.S.C. section 848 and the RICO predicate offenses listed
in 18 U.S.C. section 1961(e), with the notable exception of Bank
Secrecy Act offenses. The reason for this exception is that there
were not identifiable "proceeds" of a Bank Secrecy Act violation
as there are for other RICO predicates. In the view of the Senate
Judiciary Committee, violations of the reporting requirements of
the Bank Secrecy Act were more appropriately covered by inclusion
directly in the operative language of subsection (a), where they
now appear. /56/
In order to prevent international jurisdictional conflicts,
this section also clarifies that a specified offense must occur in
whole or in part within the United States or be directed at the
U.S. Government. The one exception is foreign drug offenses,
defined as offenses against the law of a foreign nation involving
the manufacture, sale, or distribution of a controlled substance.
Such offenses are the subject of an international crackdown and
thus are appropriately covered here.
S. Rep. No. 433, 99th Cong., 2d Sess. 12-14 (1986).
In order to prove the first common element in all Subsection 1956(
a)(1) prosecutions ("knowing that the property . . . represents the
proceeds of some form of unlawful activity"), it must be established
that the defendant knew, by direct or circumstantial proof, that the
property involved in the financial transaction was the proceeds of some
state or federal felonious activity. It need not be proven that the
defendant knew the specific unlawful activity from which the proceeds
were derived.
While Justice Department efforts to build a "reckless disregard"
standard into the statute failed, the Senate Judiciary Committee Report
makes it clear that in the committee's view, the knowledge requirement
would embody a standard of "willful blindness":
The "knowing" scienter requirements are intended to be
construed, like existing "knowing" scienter requirements, to
include instances of "willfull blindness." See United States v.
Jewel, 532 F.2d 697 (9th Cir.), cert. denied, 426 U.S. 951 (1976).
Thus a currency exchanger who participates in a transaction with
a known drug dealer involving hundreds of thousands of dollars in
cash and accepts a commission far above the market rate, could not
escape conviction, from the first tier of the offense, simply by
claiming that he did not know for sure that the currency involved
in the transaction was derived from crime. On the other hand, an
automobile car dealer who sells a car at market rates to a person
whom he merely suspects of involvement with crime, cannot be
convicted of this offense in the absence of a showing that he knew
something more about the transaction or the circumstances
surrounding it. Similarly, the "intent to facilitate" language of
the section is intended to encompass situations like those
prosecuted under the aiding and abetting statute in which a
defendant knowingly furnishes substantial assistance to a person
whom he or she is aware will use that assistance to commit a
crime. See e.g., Backun v. United States, 112 F.2d 635 (4th Cir.
1940).
Id., at 9-10.
The knowledge standard also received considerable attention by the
House Judiciary Committee. While it was agreed that the term
"knowledge" did not encompass "should have known," "might have known,"
or "a reasonable person would have known," it was agreed that the
Committee was particularly concerned about merchants and other
businessmen who willingly receive and invest drug proceeds. The
transcript of the markup by the Subcommittee considering the Money
Laundering Control Act contained the following comment:
A person who engages in a financial transaction using the
proceeds of a designated offense would violate this section if
such person knew that the subject of the transaction were the
proceeds of any crime. The Subcommittee is aware that every
person who does business with a drug trafficker, or any other
criminal, does so at some substantial risk if that person knows
that they are being paid with the proceeds of a crime and then use
that money in a financial transaction. As argued by Mr. Shaw, "I
am concerned about a broker who might take a quarter million
dollars of cash down to Fort Lauderdale taking that as payment. I
am concerned about the realtor who is going to make a $50,000 or
$100,000 commission on a deal by knowingly doing it. I am sick and
tired of watching people sit back and say, "I am not part of the
problem, I am not committing the crime, and, therefore, my hands
are clean even though I know the money is dirty I am handling.
The only way we will get at this problem is to let the whole
community, the whole population, know they are part of the problem
and they could very well be convicted of it if they knowingly take
these funds. If we can make the drug dealers' money worthless,
then we have really struck a chord, and we have hit him where he
bruises, and that is right in the pocketbook. . . . You have
outstanding business people who are otherwise totally moral who
are accepting these funds and profiting greatly from drug
trafficking that is going on throughout this country, and this
will put a stop to it."
H.R. Rep. No. 855, 99th Cong., 2d Sess. 13 (1986).
Determinations as to whether sufficient facts and circumstances exist
to properly indict an individual for violating this Act will have to be
made on a case-by-case basis. The Narcotic and Dangerous Drug Section
should be consulted prior to indictment. Prosecutors must carefully
scrutinize their evidence with respect to this aspect of the statute
when merchants and businessman not known to have dealings in unlawfully
generated currency are involved. In the case of attorneys, the greatest
degree of caution is urged because of the delicate balance that must be
drawn to protect the attorney-client privilege and defendant's Sixth
Amendment rights. Prosecutors should refer to Section 9-111.000 of the
United States Attorneys' Manual for guidance in this area. /57/
Finally, where a defendant is alleged to be acting solely as a
conduit for illegal money, prosecutors should anticipate a defense
strategy that argues that the defendent did not know whether the money
was the product of illegal activity or private business activity or, if
criminal, from felonies or misdemeanors. While this defense raises a
question of fact that will be decided by the jury, prosecutors should
carefully evaluate their evidence with an eye toward establishing the
degree to which the property involved has indicia of illegitimate
origins and the manner in which the defendant dealt with the property.
The fact that prosecutors need not prove that a defendant knew the
particular origin of the property will, however, effectively eliminate
defenses the gist of which are "I thought it was gambling proceeds, not
drug money."
Proof of the second common element in all Subsection 1956(a)(1)
prosecutions is a more difficult proposition. This element requires
proof that the proceeds of the unlawful activity were in fact "proceeds
of specified unlawful activity." (as defined in 18 U.S.C. Section 1956(
c)(7)). Thus, while the Government must only establish that a defendant
knew that the property was derived from some form of a felonious
activity under state or federal law, the Government must, nonetheless,
prove that the proceeds were in fact derived from specified unlawful
activity.
It is well documented in money laundering prosecutions that while
money laundering organizations are intimately connected to the criminal
organizations they are servicing, they tend to run parallel to these
organizations with few, if any, direct bridges running between the two.
Accordingly, only individuals within or intelligence concerning the
criminal organizations actually generating the illegal proceeds will be
able to provide proof of the generation of these proceeds through
"specified unlawful activity." Indeed, it is often true that the
highest-level money launderer paid to launder illegal proceeds may not
"know" the specific unlawful origin of the money. Thus, even with
cooperation from individuals within the laundering organizations or from
undercover agents planted within the laundering organization,
prosecutors may lack sufficient facts to supply the proof necessary to
establish the "specific unlawful activity" nexus which is an element of
Section 1956. Consequently, it is suggested that substantive Section
1956 charges be considered as a means to prosecute money generating
corrupt organizations or individuals. The money laundering groups
conspiring with these organizations can be charged as co-conspirators
under 18 U.S.C. Section 371 and Pinkerton liability will attach for the
underlying substantive offenses. Absent conspiracy proof, however, the
new structuring prohibition in Section 5324 of Title 31 should be looked
to as the primary statute with which to charge traditional money
laundering outfits where the specified unlawful activity nexus can not
be established.
A second problem presented by this element of proof arises in the
area of Government sting operations. Sting operations involving
Government money would not appear to be viable substantive counts
because the money to be laundered is not proceeds of some form of
unlawful activity. /58/ Therefore, if a sting operation is the only
investigative device available, Section 5324 will prove to be the most
useful substantive statute. However, prosecutors should, under
appropriate facts, be able to prosecute sting operation targets using a
charge of conspiracy or attempt to violate either Section 1956 or
Section 1957. Cf. United States v. Ospina, 798 F.2d 1570 (11th Cir.
1986); United States v. Goldberg, 756 F.2d 949, 953 (2nd Cir. 1985);
United States v. Richter, 610 F. Supp. 480 (D.C. Ill., 1985); United
States v. Puerto, 730 F.2d 627 (11th Cir. 1984), cert. enied, U.S.C.,
105 S Ct. 162 (1985); and United States v. Elledge, 723 F.2d 864, 866
(11th Cir. 1984).
An example of the interaction of these first two elements is a
prosecution of codefendants A and B, here A is a cocaine dealer and B
has served as an investor of A's drug profits. The proof at trial that
A was dealing cocaine and obtained the funds involved from those sales
proves the first element, knowledge of an illegal source, as to A. For
B, the evidence at trial may show actual knowledge that the money being
invested was from the drug activity, or, alternately, that the
circumstances of B's dealings with the funds, while not demonstrating
knowledge that the money was specifically derived from cocaine sales,
are such that B knew that the source of the funds was some form of
illegal activity. Evidence of either type will prove the first element
as to B. Independent proof that the money was cocaine profits is
adequate to prove the second element (viz., that the proceeds were in
fact derived from specified unlawful activity) as to both A and B,
whether B was actually aware of the source of the funds or not.
Each of the three subparagraphs of Subsection 1956(a)(1) -- (A),
(B)(i), and (B)(ii) -- add distinct alternative third elements of proof
to a Section 1956 offense.
Subsection 1956(a)(1)(A) provides:
Whoever, knowing that the property involved in a financial
transaction represents the proceeds of some form of unlawful
activity, conducts or attempts to conduct such a financial
transaction which in fact involves the proceeds of specified
unlawful activity --
(A) with the intent to promote the carrying on of specified
unlawful activity.
The element added by this subsection is that the defendant conducted
or attempted to conduct a financial transaction "with the intent to
promote the carrying on of specified unlawful activity." The "intent to
promote" language is quite similar to that used in 18 U.S.C. Section
1952(a)(3) (ITAR). Under case law interpreting Subsection 1952(a)(3),
it has been held that the Government is not required to prove that an
accused intended to violate a specific statute but only that he/she
intended to promote or facilitate a general activity which he/she knew
to be illegal. See United States v. Polizzi, 500 F.2d 856 (9th Cir.
1974), cert. denied, 419 U.S. 1121 (1975). Reference is, thereafter,
made to state and federal laws to identify the types of activities which
are unlawful. See United States v. Nardello, 393 U.S. 286 (1969).
Further, ITAR case law does not require that the underlying crime have
been actually committed or fully completed because Section 1952 only
proscribes the use of interstate/foreign travel/facilities in
furtherance of unlawful activity, not actual violations of law. See
United States v. Briggs, 700 F.2d 408, 717 (7th Cir. 1982), cert.
denied, 103 S.Ct. 2129 (1983); McIntosh v. United States, 385 F.2d 274,
277 (8th Cir. 1967) (attempt to extort sufficient for Travel Act
conviction); United States v. Loucas, 629 F.2d 989 (4th Cir. 1980)
(intent to violate, not actual violation of gambling laws, as sufficient
for conviction). See also United States v. Davanzo, 699 F. 2d 1097
(11th Cir. 1983), and United States v. Griffin, 699 F.2d 1102 (11th Cir.
1983).
It is suggested that the same theories used to prosecute ITAR
violations be employed in prosecutions under Subsection 1956(a)(1)(A).
Thus, if a prospective defendant can be shown to have promoted unlawful
activity which in fact is shown to be specified unlawful activity, a
viable Subsection 1956(a)(1)(A) prosecution would exist. This
prosecution, in turn, would remain viable whether the defendant or, if
pertinent, his/her co-conspirators, actually committed or fully
completed the underlying crime. (It is noteworthy to remember that
Section 1956 also contains an attempt provision which could be used to
form the basis of a charge for an aborted Section 1956 violation.)
To continue the example used above, if the prosecution can show that
cocaine dealer A was using profits from his/her drug dealings to buy
additional cocaine, or to purchase a cigarette boat to be used in
transporting that cocaine, a violation of this subsection as to A may be
established. As to codefendant B, one who is acting as a conduit for
the money A's cocaine business is generating, if B had no knowledge
whatever of what the boat was for, he/she could not be convicted of
intending to promote unlawful activity by buying the boat for A.
However, if B intended to promote A's illegal activity by buying a boat
with money he/she knew was proceeds of illegal activity for use in
violating the law, it would be unnecessary to show whether B knew, for
example, that the boat was to be used for unlawfully smuggling legal
goods to avoid paying duty or for importing drugs.
Section 1956(a)(1)(B)(i) provides:
Whoever, knowing that the property involved in a financial
transaction represents the proceeds of some form of unlawful
activity, conducts or attempts to conduct such a financial
transaction which in fact involves the proceeds of specified
unlawful activity --
(B) knowing that the transaction designed in whole or in part
--
(i) to conceal or disguise the nature, the location, the
source, the ownership, or the control of the proceeds of specified
unlawful activity.
The element added by this subsection is that the defendant conducted
or attempted to conduct a financial transaction "knowing that the
transaction was designed in whole or in par . . . to conceal or disguise
the nature, the location, the source, the ownership, or the control of
the proceeds of specified unlawful activity." Again, as in Subsection
(a)(1)(A), the statute does not require knowledge that the concealment
was of the proceeds of specified unlawful activity. Rather, it must only
be proven that the defendant knew that the transaction was designed to
conceal the nature, location, source, or ownership/control of proceeds
of some form of unlawful activity and that in fact the proceeds were
from a specified unlawful activity.
Turning again to the example, in the prosecution of A, the cocaine
dealer, there would be no difficulty in showing that he/she was aware
that the funds were derived from a specified unlawful activity, drug
dealing. As to codefendant B, if he/she did not know that the purpose
in buying the boat was to launder proceeds of crime, he/she could not be
convicted, but if he/she knew the purpose for purchasing the boat was to
disguise the nature of the proceeds of unlawful activity but did not
know the specific unlawful activity giving rise to the proceeds, he/she
could still be convicted under Subsection 1956(a)(1)(B)(i).
Section 1956(a)(1)(B)(ii) provides:
Whoever, knowing that the property involved in a financial
transaction represents the proceeds of some form of unlawful
activity, conducts or attempts to conduct such a financial
transaction which in fact involves the proceeds of specified
unlawful activity --
(B) knowing that the transaction is designed in whole or in
part --
(ii) to avoid a transaction reporting requirement under State
or Federal law.
The element added by this subsection is that the defendant conducted
or attempted to conduct a financial transaction "knowing that the
transaction is designed in whole or in part . . . to avoid a transaction
reporting requirement under State or Federal law." The additional
element added by this subsection is that the financial transaction be
designed in whole or in part to avoid the filing of CTRs or any other
transaction reporting requirement under state or federal law, such as 26
U.S.C. Section 6050I (relating to cash transactions over $10,000 in a
trade or business). There is no requirement that the defendant know
that the money involved was in any way connected or destined for a
"specified unlawful activity." Thus, if A was taking his/her cocaine
profits and giving them to B, who was directing a network of "smurfs"
(splitting up the proceeds before depositing them in banks to avoid the
filing of CTRs), B would be guilty of a violation of the statute even if
he/she was unaware that the funds involved were actually derived from
one of the specified criminal activities; provided, however, that it
could be shown that B knew that the money was derived from some form of
unlawful activity.
Subsection 1956(a)(2) provides:
Whoever, transports or attempts to transport a monetary
instrument or funds from a place in the United States to or
through a place outside the United States or to a place in the
United States from or through a place outside the United States --
(A) with the intent to promote the carrying on of specified
unlawful activity; or (B) knowing that the monetary instrument or
funds involved in the transportation represent the proceeds of
some form of unlawful activity and knowing that such
transportation is designed in whole or in part -- (i) to conceal
or disguise the nature, the location, the source, the ownership,
or the control of the proceeds of specified unlawful activity; or
(ii) to avoid a transaction reporting requirement under State or
Federal law
This subsection is designed to proscribe international money
laundering transactions. It covers sitations in which a person
transports or attempts to transport "monetary instruments" (as defined
in Subsection 1956(c)(5)) or funds /59/ into or out of the United States
for certain illicit purposes. As in Subsection 1956(a)(1), there are
three separate bases upon which a violation can occur. All permutations
have a common first element: There must be a transportation or
attempted transportation of a monetary instrument or funds into or out
of the United States.
The Senate Judiciary Committee explained the definition of monetary
instrument as follows:
Section 1956(c)(5) defines the term "monetary instruments" to
include coin or currency of the United States or of any other
country, traveler's checks, personal checks, bank checks, money
orders, investment securities 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 definition would include cashier's checks. The phrase "coin
or currency" is also intended to include gold or other precious
metal coins, which are the legal tender of a country but which do
not normally circulate as such, or whose value is determined by
the worth of their metallic content rather than by the operation
or normal currency exchange markets. "Monetary instruments" are a
subset of the term "property" as used in section (a), a term that
is intended to be construed liberally to encompass any form of
tangible or intengible assets.
S. Rep. No. 433, 99th Cong., 2d Sess. 13 (1986).
Once it has been established that there was a transportation or
attempted transportation of a monetary instrument or funds into or out
of the United States, one of the three following alternative elements of
proof must be met:
Section 1956(a)(2)(A) provides:
Whoever transports or attempts to transport a monetary
instrument or funds from a place in the United States to or
through a place outside the United States or to a place in the
United States from or through a place outside the United States --
(A) with the intent to promote the carry on of specified
unlawful activity.
This element requires that the transportation or attempted
transportation be carried out "with the intent to promote the carrying
on of specified unlawful activity." Unlike Subsection 1956(a)(1)(A),
there is no requirement in this subsection that the monetary instrument
or funds be the product of unlawful activity. Prosecutors must only
establish that the defendant transported or attempted to transport the
monetary instrument or funds with the "intent to promote the carrying on
of specified unlawful activity." Again, this phrase is analogous to that
used in the ITAR statute. Case law interpreting ITAR would appear to
apply to Subsection 1956(a)(2)(A) prosecutions.
The absence of a requirement that the monetary instruments or funds
be the proceeds of unlawful activity would allow for the use of
Government funds in "sting operations. Thus, if an individual or
domestic money laundering organization was willing to launder its money
through outbound currency transportation then the use of Government
funds would not preclude a viable Subsection 1956(a)(2)(A) prosecution
if it could be established that the purpose of the transportation was to
promote the carrying on of specified unlawful activity (Section 1956
(c)(7)).
Subsection 1956(a)(2)(B)(i) provides:
Whoever transports or attempts to transport a monetary
instrument or funds from a place in the United States to or
through a place outside the United States or to a place in the
United States from or through a place outside the United States --
(B) knowing that the monetary instrument or funds involved in
the transportation represent the proceeds of some form of unlawful
activity and knowing that such transportation is designed in whole
or in part --
(i) to conceal or disguise the nature, the location, the
source, the ownership, or the control of the proceeds of specified
unlawful activity. . . .
This subsection adds two distinct elements of proof to a Subsection
1956(a)(2) prosecution. First, it mirrors the language of Subsection
1956(a)(1) in requiring that the monetary instrument or funds involved
in the transportation or attempted transportation represent the proceeds
of some form of unlawful activity. The analysis under Subsection
1956(a)(1) would apply with equal force to Subsection 1956( a)(2)(B)(i)
prosecutions. Second, like Subsection 1956(a)(1)(B)(i), it must be
proven that the transportation was designed in whole or part "to conceal
or disguise the nature, the locations, the source, the ownership, or the
control of the proceeds of specified unlawful activity." The knowledge
and proof requirements under this subsection are identical to the
Subsection 1956(a)(1)(B)(i) counterparts. As the Senate Judiciary
Committee comments:
As with the prior section, the knowledge requirement of this
section should be construed to encompass instances of "willful
blindness"; and the "intent to facilitate" language should also
be construed in accord with Backun v. United States, supra.
Id., at 11.
Finally, as to the requirement that the transportation be undertaken
to conceal or disguise, etc., it would seem that the easiest hook on
which to hang this element of proof, in the event a CMIR is filed, would
be the "conceal the . . . proceeds" phrase. For, when an individual
fails to file a CMIR he/she has, a fortiori, concealed the location of
the monetary instrument.
Section 1956(a)(2)(B)(ii) provides:
Whoever transports or attempts to transport a monetary
instrument or funds from a place in the United States to or
through a place outside the United States or to a place in the
United States from or through a place outside the United States --
(ii) to avoid a transaction reporting requirement under State
or Federal law. . . .
This element, like Subparagraph (B)(i) above, requires proof that the
monetary instruments or funds involved in the transportation or
attempted transportation represent the proceeds of some form of unlawful
activity. In addition, Subsection (a)(2)(B)(ii) adds the element of
proof that such transportation be designed in whole or part "to avoid a
transportation reporting requirement under State or Federal law."
Although this subsection requires knowledge that the funds involved are
the product of some unlawful activity, there is no requirement that the
funds be the proceeds of specified unlawful activity. Thus, all that
has to be proven in addition to the transportation or attempt to
transport is that: (1) the funds are known to be the product of some
kind of unlawful activity; and (2) that the movement in or out of the
country was to avoid a reporting requirement.
In essence, Subsection (a)(1)(B)(ii) is a CMIR count (31 U.S.C.
Section 5316) with the added burden of proving that the defendant knew
that the proceeds represented some form of unlawful activity.
Finally, under the terms of Subsection (d) of Section 1956, 18 U.S.
C. Section 1956 does not supersede any provision of federal or state law
imposing criminal or civil penalties in addition to those provided in
Subsection 1956(d). Thus, a person could be charged with both a
violation of Section 1956 and a violation of the Bank Secrecy Act for
causing a financial institution to fail to file a CTR or CMIR or for
filing a false CTR or CMIR.
The criminal penalty for a violation of either Subsection (a)(1) or
(a)(2) of Section 1956 is a maximum sentence of twenty years'
incarceration for each offense and a maximum fine of $500,000, or twice
the value of the monetary instruments or funds involved, whichever is
greater.
Under the terms of Subsection 1956(b), violators of Subsections
1956(a)(1) and (a)(2) are also liable to the United States for a civil
penalty of not more than the greater of the value of the property,
funds, or monetary instruments involved in the transaction or $10,000.
(Although "or transportation" does not follow "transaction" as it does
earlier, fines should be imposeable relating to the property, etc.
involved in the Subsection 1956(a)(2) transportation offense and should
not be limited to the minimum $10,000 fine.) "Such civil penalty is
intended to be imposed in addition to any fine imposed for the criminal
offense." S. Rep. No. 433, 99th Cong., 2d Sess. 12 (1986).
Consequently, typical pleas for mitigation of fine at the time of
sentencing to the effect "IRS will punish the defendant enough in this
respect via civil fines or a jeopardy assessment" should be to no avail
in light of the clear intent of Congress to provide for double monetary
penalties. Moreover, it should also be noted that the forfeiture
provisions of this act may be applied in addition to civil and criminal
penalties.
As stated in the Senate Judiciary Committee Report:
Thus, a person who violates section 1956 by laundering $250,000
might have the funds civilly forfeited, be subject to a fine of
another $250,000 if convicted of the criminal offense, and pay a
civil penalty of another $250,000. For payment of the criminal
fine and civil penalty, the Government may look to other assets of
the defendant not involved in the offense.
Id., at 12.
Subsection 1956(f) defines the jurisdiction of United States courts
over extraterritorial acts which fall within the scope of Section 1956.
The two preconditions for extraterritorial jurisdiction are: (1) The
conduct was committed by a United States citizen or, in the case of a
non-United States citizen, the conduct occurred in part in the United
States, and (2) the transaction or series of transactions involved funds
or monetary instruments of a value exceeding $10,000.
The legislative history contained in Senate Report 99-433 described
the intended reach of this section:
Section 1956(f) is intended to clarify the jurisdiction of U.
S. courts over extraterritorial acts that could be construed to
fall within the scope of Section 1956. It is not the Committee's
intention to impose a duty on foreign citizens operating wholly
outside of the United States to become aware of U.S. laws.
Section (f) avoids this by limiting extraterritorial jurisdiction
over the offense to situations in which the interests of the
United States are involved, either because the defendant is a U.
S. citizen or because the transaction occurred in whole or in part
in the United States. An example of the latter is a situation in
which a person transfers by wire the proceeds of a drug
transaction from a bank in the United States to a bank in a
foreign country; another example is a situation in which a person
telephones instructions from the United States to one foreign bank
to transfer such proceeds to another foreign bank. The section
also specifies that there will only be extraterritorial
jurisdiction over a transaction or series of related transactions
involving more than $10,000, thus ensuring that Federal
extraterritorial jurisdiction is confined to significant cases.
S. Rep. No. 433, 99th Cong., 2d Sess. 14 (1986) (emphasis added).
It is clear from the foregoing that an individual, whether or not a
U.S. citizen, who conducts business in the United States is subject to
the jurisdiction of the United States. A more difficult problem arises
with respect to the foreign institutions through which the proscribed
conduct was transacted. While it is apparent that the Senate did not
endeavor to impose an obligation on these institutions to become aware
of United States currency laws, the broad language of this section
would, nonetheless, appear to subject foreign institutions to United
States jurisdiction provided they have legally sufficient contact with
the United States. Accordingly, the Department reads this section to
confer jurisdiction over foreign institutions which participate in
conduct occurring in whole or part in the United States. Decisions
whether to exercise the jurisdictional prerogative granted by this
section, however, will be made on a case-by-case basis taking into
consideration the nature of the underlying contact, participation by the
defendant in the underlying criminal scheme, and the possibility of
prosecution in the foreign country, as well as practical problems of
proof.
The Criminal Division may be providing additional guidance as to this
matter in the future.
Remember that approval of the Assistant Attorney General in charge of
the Criminal Division is necessary before any grand jury investigation
may be commenced, an indictment returned, or a complaint filed whenever
estraterritorial jurisdiction under Subsection 1956(f) is asserted
against any defendant.
property derived from specified unlawful activity
Section 1957 creates a new offense entitled "engaging in monetary
transactions in property derived from specified unlawful activity." The
actual proscription is contained in Subsection 1957(a), whose elements
are: (1) an individual must "knowingly" engage or attempt to engage in
a "monetary transaction" in "criminally derived property"; (2) the
value of the property must be "greater than $10,000"; and (3) the
property must in fact be derived from "specified unlawful activity."
An analysis of Section 1957 requires reference to the definitions
contained in Subsection 1957(f).
Subsection 1957(f)(1) defines the term "monetary transaction" to
include the deposit, withdrawal, transfer, or exchange of "funds" or a
"monetary instrument" by, through, or to a "financial institution"
(defined in 31 U.S.C. Section 5312(a)(2)) which affects "interstate or
foreign commerce" (see case law interpreting 18 U.S.C. Section 1952
("ITAR")).
Subsection 1957(f)(2) defines criminally derived property to mean any
property constituting, or derived from, proceeds of a criminal offense.
Subsection 1957(f)(3) defines "specified unlawful activity" in
accordance with the definition contained at Subsection 1956(c)(7). See
discussion, supra.
The knowledge requirement contained in Section 1957 is only that the
individual know that the monies involved are derived from some kind of
criminal activity. There is no requirement of knowledge that the funds
are derived from any particular kind of crime or, indeed, that the funds
were derived from a felony rather than a misdemeanor. While there is a
proof requirement of the actual origins of the money or funds involved
in the transaction, this is not a knowledge requirement on the part of
the defendant. See 18 U.S.C. Section 1957(c).
The penalty for violation of this section is ten years' imprisonment
and/or a fine as provided for in Title 18 (viz., $250,000 pursuant to 18
U.S.C. Section 3623) or a fine of not more than twice the amount of the
criminally derived property involved in the transaction. Jurisdiction
for a Section 1957 offense is based upon the offense taking place in the
United States or the special maritime and territorial jurisdiction of
the United States. Additionally, Jurisdiction for offenses occurring
outside the United States is available if the defendant is a United
States person (18 U.S.C. Section 3077) except those persons who are
employees or contractors of the United States, regardless of
nationality, who are the victim or intended victim of an act of
terrorism by virtue of that employment. 18 U.S.C. Section 3077(2)(D).
(Note: It is not clear why 18 U.S.C. Section 1957 has a broader
extraterritorial reach than 18 U.S.C. Section 1956, which is limited by
Subsection 1956(f).) See Section C of the discussion concerning Section
1956, supra, for a discussion of the policy concerning the use of
extraterritorial jurisdiction.
In essence, Subsection 1957(a) effectively proscribes any knowing
receipt of criminally derived funds when over $10,000 is involved and a
financial institution is utilized at some point. The statute does not
require that these funds be used for any additional criminal purpose.
For example, the deposit in a bank of the proceeds of a house sale by a
seller who knows that these proceeds were funds derived from drug
dealing would constitute a violation of this statute.
In a related discussion, the House Committee offered guidance as to
the types of offenses and offenders they were contemplating by passing
statutes like the presently enacted Sections 1956 and 1957:
The following example, discussed at the markup, illustrates the
potential problem that an expansive reading of the state of mind
would have in extending the reach of the offense beyond that
intended by the Committee. The corner grocer in a small community
is aware of the reputation of a person who is the local drug
trafficker. That person comes to the store and buys five pounds
of hamburger. The grocer takes the cash and deposits it in
his/her bank account with his/her other receipts. The financial
transaction is the act of the grocer depositing his day's receipts
in his/her bank account. The question is whether the grocer is
guilty of violating this branch of the offense.
As Mr. McCollum observed, "You (the grocer) have to know what
he is coming in to buy groceries with is indeed the money derived
from the particular designated crimes; and to get to that point,
you would have to prove to a jury (that the grocer knew that) the
fellow had no other source of income or that (if) he had -- the
grocer had some more direct knowledge this fellow was just
standing outside on that street corner before he came in peddling
drugs, like if (the grocer) saw him doing it. (Under those
circumstances) I don't have any problem whatsoever holding the
grocer accountable if he sees the guy (the trafficker) outside
dealing in drugs and takes cash and walk into his store.
Mr. Lungren stated his understanding of the Committee's use of
the term "knowingly", "It is a 'knowing' standard. I think it is
repetitive of what he (Mr. McCollum) said, but I think that is
extremely important. It is not 'should have known, might have
known, a reasonable person would have known,' it is 'this person
knew the source of the income'." Mr. Lungren, in reiterating the
importance of this branch of the offense said, "It is time for us
to tell the local trafficker and and everyone else, 'If you know
that person is a trafficker and has this income derived from the
offense, you better beware of dealing with that person."
H.R. Rep. No. 855, 99th Cong., 2d Sess 13-14 (1986).
These remarks, as well as those referenced in the discussion on the
knowledge requirements of Section 1956, emphasize that it was the intent
of Congress to ensure that all classes of individuals who knowingly deal
with drug traffickers were subject to prosecution. /60/ Obviously, the
key aspect in assessing the viability of a Section 1957 prosecution is
that knowledge. If substantial evidence exists to prove that an
individual knowingly violated the terms of this statute, then
prosecution is warranted. A forthcoming bluesheet for the United States
Attorneys' Manual will discuss this issue in greater detail. This
bluesheet may also address whether the monetary transaction required by
Section 1957 is an event which should reasonably be foreseen by the
defendant (see 18 U.S.C. Section 1341 et seq. ("mail fraud")), and thus
need not have been directly done or caused by the defendant, as well as
the need, vel non, to establish the identity of the funds used in the
monetary transaction.
Prosecutors are again directed to Section 9-111.000 of the United
States Attorneys' Manual for guidance in exercising the discretion
vested them by this section. Remember, however, that no prosecution may
be brought under Section 1957 without first obtaining the concurrence of
the Narcotic and Dangerous Drug Section. In addition, remember that
approval by the Assistant Attorney General of the Criminal Division is
required before a prosecution may be initiated where the defendant is an
attorney and the property represents bona fide attorneys' fees.
evade reporting requirements
Section 1354 of the Anti-Drug Abuse Act has created 31 U.S.C.
Section 5324, a new offense entitled "structuring transactions to evade
reporting requirements prohibited." This provision supplements 31 U.S.
C. Section 5313(a) by authorizing the imposition of civil and criminal
penalties on a person who, "for the purpose of evading the reporting
requirements," commits any of the three alternative acts: (1) causes or
attempts to cause a domestic financial institution (31 U.S.C. Section
5312; 31 C.F.R. 103.11) /61/ to fail to file a currency transaction
report; (2) causes or attempts to cause a domestic financial
institution to file a CTR that contains a material omission or
misstatement of fact; or (3) "structures" or assists in structuring, or
attempts to structure or attempts to assist in structuring, any
transaction with one or more domestic financial institutions.
As a threshold matter, prosecutors must establish that an individual
conducted or attempted to conduct any of the types of transactions
alternatively set forth "for the purpose of evading the reporting
requirements of (31 U.S.C. Section) 5313(a)." This element of proof is
essentially the same as that which now exists for traditional Section
5313 prosecutions. That is, prosecutors must establish that an
individual knew of the reporting requirements and set out thereafter to
evade such requirements. Factors typically giving rise to a finding of
intent to evade are: use of false payee or remitter names on checks or
money orders; false information on account opening documents;
artificially structuring single deposits; numerous artificial
withdrawals or exchanges of currency in order to create a false
appearance that multiple unrelated transactions were made; employment
of runners to surreptitiously make deposits, withdrawals, or exchanges;
payment or receipt of a percentage for conducting deposits, withdrawals,
or exchanges for which a bank would have charged no fee; and,
maintenance of multiple accounts for moving money among several banks or
within one bank.
Once it has been proven that the transaction was conducted for the
purpose of evading the reporting requirements, one of the three
alternative provisions of 31 U.S.C. Section 5324 must be met.
Subsections 5324(1) and (2) are, essentially, restatements of Section
5313 and 18 U.S.C. Section 1001 prohibitions with a much needed attempt
provision. Under current law, a financial institution is not required
to report a currency transaction until 15 days after the transaction has
taken place; therefore, a reporting violation does not occur until 15
days have passed from the time of the transaction and the financial
institution has failed to file a report. This situation creates two
problems for prosecutions of persons who have structured their
transactions to avoid the reporting requirements of the Bank Secrecy
Act. First, after 15 days the money launderers may have fled and the
investigative trail may be cold. Second, an individual who has
attempted to avoid the reporting requirements may escape liability if
the financial institution, despite the efforts of the money launderer,
files a timely, correct report. The attempt provision authorizes an
earlier seizure of individuals and funds and subject individuals who
attempt to frustrate the reporting requirements of the Bank Secrecy Act
to potential criminal liability at the time of their attempt and not 15
days later.
In essence, Subsection 5324(1) makes it clear that a person who
engages in a financial transaction in excess of $10,000 in a single day
with a single financial institution whether at the same or different
branches of that financial institution, in a manner that causes the
financial institution to fail to file a CTR, is guilty of a Subsection
5324(1) offense. Similarly, that subsection also encompasses conduct
such as a single defendant engaging in multiple transactions each less
than $10,000 with different tellers or in different branches of the same
bank or more than one defendant each taking a total of more than $10,000
to different tellers at the same time or at least on the same day, with
less than $10,000 being taken by any one defendant to any one teller.
Subsection 5324(2) is essentially a false statement provision that
authorizes the prosecution of a individual for causing or attempting to
cause a financial institution to file a false CTR. Reference should be
made to 18 U.S.C. Section 1001 case law for analysis of materiality.
See, e.g., United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.
1983); United States v. Puerto, 730 F.2d 627 (11th Cir. 1984); United
States v. London, 550 F.2d 206 (5th Cir. 1977); and United States v.
Fitzgibbon, 619 F.2d 874 (10th Cir. 1980).
Subsections 5324(1) and (2) can also be effectively utilized in
circumstances in which an individual is charged as a financial
institution and his/her co-conspirator customers are paying a percentage
to either not file reports or file or cause to be filed false reports.
The act of giving the individual money launderer (charged as a financial
institution) currency for the purpose of depositing or exchanging it at
secondary financial institutions (e.g., banks) in such a way as to cause
the bank not to file or to falsely file triggers the liability of the
co-conspirator customer. See United States v. Cure, 804 F.2d 625 (11th
Cir. 1986).
Subsection 5324(3) creates a new offense of structuring or attempting
to structure or assisting in structuring a financial transaction with
one or more financial institutions with the intent to evade the CTR
reporting requirements. This subsection is the only one of the three
that presents any significant problems of interpretation because the
statute does not define "structuring." This definitional problem is
hardly insurmountable if care is taken in bringing cases that Congress
clearly intended to be covered by this section. As the Senate Judiciary
Committee points out:
Under present law, money launderers are successfully prosecuted
in some judicial circuits for causing financial institutions not
to file reports on multiple currency transactions totaling more
than $10,000 or causing financial institutions to file incorrect
reports. In such cases, the actual money launderers are charged
with violations of 18 U.S.C. 2 (aiding and abetting or causing
another to commit an offense) and Section 1001 (concealing from
the Government a material fact by a trick, scheme, or device).
For example, in United States v. Tobon-Builes, 706 F.2d 1092
(11th Cir. 1983), the Eleventh Circuit Court of Appeals upheld a
conviction under 18 U.S.C. 1001 where the defendants had engaged
in a money laundering scheme in which they had structured a series
of currency transactions, each one less than $10,000 but totaling
more than $10,000, to evade the reporting requirements. See also
United States v. Massa, 740 F.2d 629, 645 (8th Cir. 1984), cert.
denied, sub nom Skinner v. United States, U.S. . . ., . . . 105
S.Ct. 2357 (1985); United States v. Sanchez Vazquez, 585 F. Supp.
990, 993 (N.D. Ga. 1984); United States v. Konefal, 566 F. Supp.
698 (N.D.N.Y. 1983) (prosecution for structuring upheld under
Title 3,). In contrast, the First Circuit Court of Appeals, in
United States v. Anzalone, 766 F.2d 676 (1st Cir. 1985), the
Eleventh Circuit Court of Appeals in United States v. Denemark,
779 F.2d 1559 (11th Cir. 1986), and the Ninth Circuit Court of
Appeals in United States v. Varbel, 780 F.2d 758 (9th Cir. 1986)
have held that structuring currency transactions to avoid the
reporting requirements did not violate 18 U.S.C. Section 1001.
(Subsection 3) would codify Tobon-Builes and like cases and
would negate the effect of Anzalone, Varbel and Denemark. It
would expressly subject to potential liability a person who causes
or attempts to cause a financial institution to fail to file a
required report or who causes a financial institution to file a
required report that contains material omissions or misstatements
of facts. In addition, the proposed amendment would create the
offense of structuring a transaction to evade the reporting
requirements, without regard to whether an individual transaction
is, itself, reportable under the Bank Secrecy Act. For example, a
person who converts $18,000 in currency to cashier's checks by
purchasing two $9,000 cashier's checks at two different banks or
on two different days with the specific intent that the
participating bank or banks not be required to file Currency
Transaction Reports for those transactions, would be subject to
potential civil and criminal liability. A person conducting the
same transactions for any other reasons or a person splitting up
an amount of currency that would not be reportable, if the full
amount were involved in a single transaction (for example,
splitting $2,000 in currency into four transactions of $500 each),
would not be subject to liability under the proposed amendment.
Id. at 21-22
The House Committee on Banking, Finance and Urban Affairs, in
reporting a virtually identical version of the money laundering
provisions, clearly intended the same results. It reported:
In some judicial circuits, money launderers have been
successfully prosecuted for causing financial institutions not to
file reports on such multiple currency transactions. In such
cases, defendants are charged with violations of 18 U.S.C. 2
(aiding and abetting or causing another to commit an offense) and
Section 1001 (concealing from the Government a material fact by a
trick, scheme, or device) (citing Tobon-Builes, supra).
In contrast, other cases have held that the Act and its
regulations impose no duty on the customer to inform the financial
institution of the structured nature of the transactions, that the
reporting duties are placed solely upon the financial institution,
and therefore, only a financial institution can directly violate
the reporting requirements (citing, inter alia, Anzalone, supra,
and Varbel, supra).
The Committee believes that Section 2 of H.R. 5176 would
resolve the legal issues raised by the various circuit courts by
expressly subjecting to potential liability a person who causes or
attempts to cause a financial institution to fail to file a
required report or who causes a financial institution to file a
required report that contains material omissions or misstatements
of fact. In addition, it would create the offense of structuring
a transaction to evade the reporting requirements, without regard
for whether an individual transaction is, itself, reportable under
the Bank Secrecy Act.
H.R. Rep. No. 746, 99th Cong., 2d Sess. 18-19 (1986)
The House floor debate on H.R. 5484, which contains the same language
as in 31 U.S.C. Section 5324 as was finally passed, see Cong. Rec.
H6620 (daily ed. Sept. 11, 1986), contains extensive legislative history
regarding the money laundering provisions. See Cong. Rec. H6556-H6563,
H6599 (daily ed. Sept. 10, ,986). Included in the discussion are
extensive remarks by Congressman St. Germain, Chairman of the House
Committee on Banking, Finance and Urban Affairs, the Committee that
reported the money laundering provisions. As to the "structuring"
provisions, Congressman St. Germain said, "it creates an offense of
struct(ur)ing a transaction to evade the reporting requirements without
regard for whether an individual transaction is, itself, reportable
under the Bank Secrecy Act." Id. at H 6558. Similarly, Congressman J.
J. Pickle, sponsor of an earlier money laundering bill, H.R. 4573, twice
described the provisions as enabling successful prosecution not only of
"smurfs" but also of "those who mastermind money laundering" schemes.
Id., at H6599.
Thus, as the legislative history makes certain, Congress clearly
intended to cover the splitting up of more than $10,000 in cash into
multiple transactions, each totalling less than $10,000, at the same or
different banks or branches of the same bank and on the same or
different days, with the intent of avoiding the filing of CTRs. Where
the sum of money in excess of $10,000 is "structured" on the same day or
in a fairly short period of time, there is no doubt under the
legislative history that Congress intended to cover the conduct. A
problem of proof will arise where the structuring occurs over a period
of time, although even there the problem will be one of insufficient
evidence to prove the offense rather than the kind of problem that might
result in bad precedent for other cases.
Section 5324 does not provide for penalties separate from those
contained in 31 U.S.C. Section 5322. Thus, each transaction or
attempted transaction carries a five-year maximum. Note, however, that
Subsection 1357(g) of the Anti-Drug Abuse Act amends Section 5322 to
provide for a ten-year penalty if a pattern of illegal activity
involving more than $100,000 in a 12-month period is found to exist.
If prosecutors cannot prove the specific unlawful origin of the
proceeds, thereby rendering prosecutions under 18 U.S.C. Section 1956 or
Section 1957 difficult, Section 5324 should provide rather
straightforward cases. With a ten-year penalty -- as most money
laundering cases will involve in excess of $100,000 within 12 months --
the risk of bringing a marginal Title 18 case will weigh in favor of
bringing a Section 5324 prosecution.
Finally, with respect to all Section 5322 sentences, newly created
Subsection 5321(d) provides that a civil money penalty may be imposed
under Subsection 5321(a) with respect to any violation of Title 31
notwithstanding the fact that a criminal penalty is imposed with respect
to the same violation. Again, as indicated in the penalty section of
Section 1956, prosecutors are now well-equipped to argue for substantial
fines in criminal cases and against arguments that civil fines or
jeopardy assessments sufficiently cover any need for the imposition of a
fine in the related criminal matter.
Section 1353 of the Money Laundering Control Act amends the Right to
Financial Privacy Act of 1978 (Privacy Act), (12 U.S.C. Section 3401) in
two respects. Each change is designed to remedy problems that have
arisen in past money laundering investigations.
Subsection (a) amends Subsection 1103(c) (12 U.S.C. Section 3403(c))
of the Privacy Act. Currently, Section 1103(c) provides that nothing in
the Privacy Act shall preclude a financial institution from notifying
proper Government authorities that it has information which may be
relevant to a possible violation of statute or regulations affecting a
financial institution. Questions have arisen among financial
institutions pertaining to the quantum of information which may be
properly released without simultaneous notice to the affected customer.
This amendment, while not authorizing complete disclosure of a
customer's financial records, authorizes the financial institution to
give to the appropriate governmental authority sufficient information
concerning the nature of the suspected violation and the parties
involved to allow that authority to obtain a summons, subpoena, or
search warrant for additional information.
Subsection (a) makes it clear that a financial institution may
disclose three specific pieces of information: (1) the name or names of
the individual(s) conducting the suspected transaction and other
identifying information pertaining to these individuals; (2) the
account number or other identifying information about the account; and
(3) the nature of the suspected illegal activity.
The Senate Judiciary Committee, in addressing this amendment, offered
the following elaboration on the type of information which may be
disclosed under amended Subsection 3403(c):
The name or names that may be disclosed under this Section
includes the name of any corporate entity, partnership, or other
organization in which an account is listed, as well as the names,
if known of any individuals involved in a suspected transaction.
Other identifying information that may be disclosed about
individuals includes the individual's home or business addresses
or social security number, if known.
Other identifying information that may be disclosed about
accounts includes, in addition to account number, the type of
account (checking, savings, securities) or the interest rate paid
on the account. It also includes the location of the branch or
office at which the account is maintained.
The nature of suspected illegal activity that may be disclosed
includes a specification of the offense that the financial
institution believes is being violated, if known, or a description
of the activities giving rise to the bank's suspicions. Thus, for
instance, if a customer of a bank comes into the bank with
regularity, every Monday, Wednesday, and Friday, to obtain a
cashier's check with $5,000 in small denomination bills, the bank
could describe this pattern in the information it submits to law
enforcement officials, even if the bank does not know precisely
what law might be violated.
S. Rep. No. 433, 99th Cong., 2d Sess. 15 (1986).
(It should be pointed out that any disclosure under this section is
entirely voluntary on the part of the disclosing bank. However, under
certain circumstances a financial institution or an employee thereof who
ignores obvious patterns of criminal activity may be subject to
liability under Section 5324).
Section 3(a) also establishes a limited "good faith" defense for
financial institutions that provide such voluntary disclosure. Under
existing Section 1117(c) of the Right to Financial Privacy Act (12 U.S.
C. Section 3417(c)), if a financial institution provides information to
a Government authority in good-faith reliance on a certification by that
authority that it has complied with the applicable procedures of the
Right to Financial Privacy Act, the institution may not be held liable
for such disclosure in a civil suit by the customer whose records have
been disclosed. Section 3(a) provides parallel protection for a
financial institution that voluntarily provides the information listed
above.
The section also specifies that this limited good-faith defense
applies to suits against any officers of an institution that is involved
in a voluntary disclosure, as well as against the institution itself.
Suits affected by this defense include suits brought under any theory of
federal, state, or local law. This includes suits brought under common
law as well as statutory or regulatory provisions. It also includes
suits brought under constitutional provisions, to the extent it may
constitutionally affect such suits.
The Senate Judiciary Committee offers the following caution to those
institutions which prosecutors are trying to encourage to cooperate:
However, because there is no Government certificate that
changes hands in a voluntary disclosure by a financial
institution, the only way an institution can assure itself of
protection from civil suit under this Section is if it limits its
disclosures to the above information.
Id., at 16.
Finally, the section effects a limited preemption of state and local
privacy laws. It preempts such laws to the extent they prohibit
voluntary disclosure of the information specified above. It does not
preempt state or local privacy laws in any other respect. As in the
case of the good-faith defense, this preemption applies to common law as
well as state constitutional, statutory, and regulatory law, as provided
for in the Supremacy Clause of the U.S. Constitution, Article 6. This
change should be helpful to prosecutors in states such as California
which have privacy rights specifically provided for in their state
constitutions.
Subsection (b) modifies Section 1113(i) of the Privacy Act (12 U.S.
C. Section 3423(i)). Subsection 3413(i) presently exempts grand jury
subpoenas and related court orders from Privacy Act disclosure. Yet,
while the exemption embodied in Subsection 3413(i) was designed to free
the grand jury investigative process from the customer notice and other
protections of the Act, several courts have construed the provision in a
manner that ensures more notice to customers. These courts have refused
Government requests to order a financial institution that receives a
grand jury subpoena to produce customer records to delay notifying its
customer of the receipt of the subpoena. See, e.g., In re Grand Jury
Subpoena Duces Tecum, 628 F. Supp. 580 (W.D. Ark. 1986); In re Grand
Jury Subpoena Duces Tecum, 575 F. Supp. 1219 (E.D. Pa. 1983). The
effect of these decisions has been to jeopardize many significant
organized crime investigations because financial institutions that have
received record subpoenas have proceeded to notify their customers of
the pendency of investigations against them.
Subsection (b), in an effort to redress this problem, amends
Subsection 3413(i) to authorize delayed notification for grand jury
subpoenas issued to financial institutions to obtain customer records.
The Senate Judiciary Committee clarified the effect of this amendment
by observing:
A court may order such delayed notification under the
circumstances specified and pursuant to the procedures already
provided in Section 1109, 12 U.S.C. 3409, for judicial and
administrative subpoenas. That Section clarifies, for instance,
that there must be reason to believe that there will be serious
jeopardy to an investigation before a court will order delayed
notification and that such an order is to be periodically reviewed
by the issuing court. It also ensures, however, that delayed
notification can be ordered in appropriate circumstances.
Id., at 17.
(1) Section 1355 of the Anti-Drug Abuse Act amends 31 U.S.C. Section
5317(b). In its present form, Subsection 5317(b) requires a customs
officer seeking to conduct a warrantless border stop and search to have
"reasonable cause to believe" that a monetary instrument is being
transported in violation of 31 U.S.C. Section 5316. Understandably,
questions have arisen as to the meaning of this phrase. Some courts
ruled that it actually implied probable cause while others maintained it
meant reasonable suspicion.
The amendment embodied in Subsection 1355(a) of the Anti-Drug Abuse
Act eliminates this phrase altogether. As amended, Subsection 5317(b)
now reads:
"(b) SEARCHES AT BORDER. -- For purposes of ensuring compliance
with the requirements of section 5316, a customs officer may stop
and search, at the border and without a search warrant, any
vehicle, vessel, aircraft, or other conveyance, any envelope or
other container, and any person entering or departing from the
United States."
Under its terms, customs officers may now, without warrant search any
entering or departing passenger for the purpose of ensuring compliance
with the requirements of Section 5316. The border exception to the
warrant requirement serves as the justification for the intrusion. This
subsection was effective as of the signature of the President on October
27, 1986.
(2) Section 1355 of the Anti-Drug Abuse Act also amends 31 U.S.C.
Section 5317(c). Previously Subsection 5317(c) provided for the seizure
and forfeiture of a monetary instrument when a CMIR pertaining to that
monetary instrument had not been filed or contained a material omission
or misstatement. Under the terms of amended Subsection 5317( c), the
Government may seize and forfeit the monetary instrument for which no
CMIR or a false CMIR has been filed but also "any interest in property,
including a deposit in a financial institution, traceable to such
instrument." Thus, amended Subsection 5317(c) allows agents to trace the
proceeds of the seized monetary instruments. Agents would, for example,
be able to seize currency in a bank account which represents the corpus
of a bearer instrument seized at the border as a consequence of a
failure to file or falsely filed CMIR. (Note, under Subsection
981(a)(1)(C) of the forfeiture provisions of this Act, agents are also
empowered to seize, forfeit and trace any interest in property
pertaining to a violation or attempted violation of 31 U.S.C. Sections
5313(a) and 5324). This new seizure/forfeiture authority applies to
violations committed on or after January 28, 1987.
(3) Section 1356 amends 31 U.S.C. Section 5318 in such a way as to
entrust to the Secretary of Treasury new authority to summon both
testimonial and documentary evidence in connection with civil
enforcement violations to Title 31.
Newly added Subsection 5318(a)(3) authorizes the Secretary of the
Treasury to "examine any books, papers, records or other data of
domestic financial institutions relevant to the record keeping or
reporting requirements of this subchapter."
Newly added Subsection 5318(a)(4) authorizes the Secretary of the
Treasury to "summon a financial institution, /62/ an officer or employee
of a financial institution (including a former officer or employee), or
any person having possession, custody, or care of the reports and
records required under this subchapter, to appear before the Secretary
of the Treasury or his delegate at a time and place named in the summons
and to produce such books, papers, records, or other data, and to give
testimony, under oath, as may be relevant or material to an
investigation described in Subsection (b)." (Subsection (b) limits the
powers under Subsections (a)(3) and (a)(4) to civil enforcement
violations of this subchapter.)
The reasons for passage of these new sections were carefully
explained by the Senate Judiciary Committee:
This section amends 31 U.S.C. 5318 to give the Secretary of the
Treasury new authority to summon both testimonial and documentary
evidence. It is imperative to the effectiveness of the Bank
Secrecy Act that the Secretary have the ability to summon
witnesses and documents both to investigate violations of the act
and to assess the appropriate level of civil penalties for
violations of the Act. This authority is especially critical with
respect to the estimated 3,000 miscellaneous financial
institutions such as casinos and foreign currency brokers, whose
compliance with the Bank Secrecy Act is monitored by the Internal
Revenue Service. Currently, IRS must rely on the voluntary
cooperation of these institutions to insure compliance, since the
IRS summons authority does not extend beyond tax matters under
Title 26.
Under the new Section 5318(a)(4) this summons authority may be
used against any financial institution, whether foreign or
domestic, regulated by the Treasury Department. Concerns have
been raised about the application of this authority to obtain
records of foreign financial activity through the issuance of a
subpoena to a U.S. branch of a predominantly offshore financial
institution. The primary concern is that compliance with such a
subpoena may force the institution to violate the strict financial
privacy laws of other nations, such as the Bahamas or the Cayman
Islands, from which records may be sought. It is the Committee's
intention that efforts should be made, at least in the first
instance, to resolve any conflicts that may arise between U.S. law
enforcement interests and foreign secrecy laws through diplomatic
efforts. If diplomatic efforts prove to be unsuccessful, however,
the Committee expects such conflicts to be resolved by a careful
balancing of the competing interests, in accordance with the
decision of the U.S. Court of Appeals for the Eleventh Circuit in
United States v. Bank of Nova Scotia, 691 F. 2d 1384 (11th Cir.
1982), and United States v. Bank of Nova Scotia, 740 F.2d 817
(11th Cir. 1984). See also United States v. First National Bank
of Chicago, 699 F.2d 341 (7th Cir. 1983).
While these sections only empower the Secretary of the Treasury to
obtain such information in connection with civil enforcement actions,
there is nothing in the Act which can be read to restrict the use of
information developed from a civil summons from being used in a
subsequent or collateral criminal investigation or proceeding relating
to the Bank Secrecy Act or any other matter. Indeed, the Senate
Judiciary Committee stated: "The Committee intends that procedures that
Treasury currently uses to convey information with respect to
corresponding civil and criminal Bank Secrecy Act cases will not be
affected." Id., at 18.
(4) Section 5318 is further amended by the addition of new Subsection
(f). This subsection provides that no person shall qualify for an
exemption from the reporting requirements of Title 31 unless the
relevant financial institution prepares and maintains a statement which
describes in detail the reasons why such person qualifies for the
exemption and containing the signature of such person. On December 17,
1986, the Department of the Treasury promulgated a regulation
implementing this provision. See 51 Fed. Reg. 45108 (December 17,
1986).
This amendment is a further effort to tighten control over improper
use of exempt lists by financial institutions. These added elements of
signature and bank employee statement may allow for false statement (18
U.S.C. Section 1001) and false bank entry (18 U.S.C. Section 1005)
prosecutions in the event that material information provided to or by
the financial institution to gain or attempt to gain exempt list status
is proven to be false.
(5) Subsection 5322(b) is amended by Subsection 1357(g) of the
Anti-Drug Abuse Act to provide for enhancement of the criminal penalty
for violations of the Bank Secrecy Act that occur in conjunction with
violations of other laws of the United States or with other illegal
activities involving more than $100,000 in a 12-month period. Section
5322(b) is amended so as to raise the maximum term of imprisonment under
this enhancement from five to ten years. It also changes the language
of Section 5322 to correct the problem of interpretation that arose in
the case of United States v. Dickinson, 706 F.2d 88 (2d Cir. 1983). In
that case, the court held that the requirement of other illegal
activities in excess of $100,000 referred only to reporting violations
under the Bank Secrecy Act. This section now makes explicit that
illegal activities involving more than $100,000 are not restricted to
violations under the Bank Secrecy Act itself, but to any illegal
activity involving the requisite amount.
And, as the Senate Judiciary Committee points out:
Illegal activities mean activities constituting an offense
whether or not the person has been charged with or was convicted
of the offense.
Id., at 20.
(6) Under the terms of Subsection 5316(a)(1), an individual is
obligated to file a CMIR when he/she knowingly "transports or attempts
to transport or has transported monetary instruments of more than
$10,000 at one time." Section 1358 of the Anti-Drug Abuse Act amends
Section 5316 in two important respects: First, new Subsection 5316(d)
authorizes the Secretary of the Treasury to prescribe regulations
defining "at one time" for the purposes of Subsection 5316(a)(1). Such
regulations may permit the cumulation of closely related events in order
that such events may collectively be considered to occur at one time for
the purposes of Subsection 5316(a). Obviously, these regulations will
head off a "structuring" debate in the context of a failure to file or a
false filing of CMIRs. Second, the phrase "or attempts to transport or
have transported" has been stricken from Subsection 5316(a)(1). In its
place, the phrase "is about to transport" is substitted. Thus, in its
new form, Subsection 5316(a)(1) reads: an individual is obligated to
file a CMIR when he/she knowingly "transports or is about to transport
monetary instruments of more than $10,000 at one time., This change
appears to be a difference without distinction.
(7) Section 1365 sets forth the predicate offenses created by this
Act. In sum, this section provides:
(A) Violations of 18 U.S.C. Sections 1956 and 1957 qualify as
predicate offenses for the issuance of a wiretap (18 U.S.C.
Section 2510 et seq.).
(B) Violations of 18 U.S.C. Sections 1956 and 1957 are ITAR
predicates (18 U.S.C. Section 1952).
(C) Violations of 18 U.S.C. Sections 1956 and 1957 are
predicate offenses for RICO (18 U.S.C. Section 1961 et seq.).
(8) 31 U.S.C. Section 5312, which defines the term "financial
institution" for Title 31 purposes, has been modified in Subpart (a)(
2)(U) to include the United States Postal Service. Under the terms of
this amendment, postal money order purchases will not be covered by
Section 5313 reporting requirements until the Secretary of the Treasury
promulgates regulations designating the Postal Service as a financial
institution subject to the reporting requirements.
Sections 1956 and 1957 of Title 18 and Section 5324 of Title 31
vastly expand the prosecutive options in money laundering cases. Yet,
because these statutes have broad parameters which have the potential to
implicate sensitive issues, consultation with the Narcotic and Dangerous
Drug Section is advised for all prosecutions under any of these
statutes. Therefore, written prosecution memoranda and, if possible,
proposed indictments should be sent to the Narcotics Section for review
in all cases arising under these statutes.
DUE TO THE POTENTIAL INTERNATIONAL SENSITIVITES, AS WELL AS PROOF
PROBLEMS, INVOLVED IN UTILIZATION OF THE ESTRATERRITORIAL PROVISIONS OF
THESE SECTIONS, NO GRAND JURY INVESTIGATION MAY BE COMMENCED, INDICTMENT
RETURNED, OR COMPLAINT FILED WITHOUT THE APPROVAL OF THE ASSISTANT
ATTORNEY GENERAL IN CHARGE OF THE CRIMINAL DIVISION WHEN JURISDICTION TO
PROSECUTE THIS OFFENSE EXISTS AS TO ANY DEFENDANT BECAUSE OF THIS
EXTRATERRITORIAL PROVISION. IF YOU ANTICIPATE A POSSIBLE
"EXTRATERRITORIAL CASE," PLEASE CONSULT THE CRIMINAL DIVISION CONTACT
LISTED BELOW IMMEDIATELY.
APPROVAL BY THE ASSISTANT ATTORNEY GENERAL OF THE CRIMINAL DIVISION
IS REQUIRED IF THE DEFENDANT IS AN ATTORNEY AND THE PROPERTY REPRESENTS
BONA FIDE ATTORNEY'S FEES.
Questions concerning the Money Laundering Control Act should be
directed to Charles S. Saphos, Chief, Narcotic and Dangerous Drug
Section (786-4695) or Michael Zeldin, Deputy Chief (786-4700).
Copies of significant pleadings or decisions regarding the new money
laundering provisions should be sent to the Narcotic and Dangerous Drug
Section, Criminal Division, Department of Justice, 1400 New York Avenue,
N.W., Washington, D.C. 20005.
Subtitle I ("eye") of Title I ("one") of the Anti-Drug Abuse Act of
1986, the "Career Criminals Amendment Act of 1986," amends the Armed
Career Criminal Act of 1984 to include the terms "serious drug offense"
and "violent felony" in the category of offenses covered by the Armed
Career Criminal Act.
In 1968, as Title VII of the Omnibus Crime Control and Safe Streets
Act of 1968, Pub. L. 90-351, Congress banned the possession of firearms
by persons previously convicted of a felony, as well as other groups of
persons deemed unfit to carry firearms. See 18 U.S.C. App. Section 1201
et seq. ("Unlawful possession or receipt of firearms"). In 1984, as
part of the Comprehensive Crime Control Act of 1984, Pub. L. 98-473,
these sections were amended to incorporate the Armed Career Criminal
Act, which mandated at least a fifteen-year term of imprisonment for a
new category of weapons offender -- the "armed career criminal" -- "a
person who receives, possesses, or transports in commerce or affecting
commerce any firearm and who has three previous convictions (in state or
federal court) for robbery or burglary, or both."
This Act was designed to provide a means by which serious, repeat
offenders could be effectively deterred from committing further crimes,
or, if deterrence failed, to effectively incapacitate those persons for
a substantial period of time. As part of the Firearms Owners'
Protection Act, Pub. L. 99-308, the Armed Career Criminal Act was
rewritten and moved, effective November 15, 1986, to 18 U.S.C. Section
924(e).
offenses
As part of the Anti-Drug abuse Act, Congress has now enlarged the
Armed Career Criminal Act (18 U.S.C. Section 924(e)) to include as part
of the three predicate offenses leading to an enhanced federal weapons
charge any convictions involving a "violent felony" or a "serious drug
offense." (Specific reference to convictions for robbery or burglary has
been deleted, although such convictions should still be included in the
definition of "violent felony.",
felony"
"Serious drug offense" is defined as federal offenses under the
Controlled Substances Act, the Controlled Substances Import and Export
Act, or the first or third sections of the Act of September 15, 1980,
Pub. L. 96-350 (formerly at 21 U.S.C. Section 955a and 955(c), but
reportedly to be recodified at 46 U.S.C. App. Section 1901 et seq.), for
which a maximum term of imprisonment of ten years or more is prescribed
by law. It also includes state offenses involving the manufacture or
distribution of a controlled substance for which a maximum term of
imprisonment of ten years or more is prescribed by law.
A "violent felony" is defined as "any crime punishable by
imprisonment for a term exceeding one year that -- (i) has as an element
the use, attempted use, or threatened use of physical force against the
person of another; or (ii) constitutes burglary, arson, or extortion,
involves use of explosives, or otherwise involves conduct that presents
a serious potential risk of physical injury to another."
Prosecutors should note the recent Court of Appeals decision in
United States v. Davis, 801 F.2d 754 (5th Cir. 1986), in which a panel
of the Fifth Circuit ruled that the Armed Career Criminal Act (as
previously contained at 18 U.S.C. App. Section 1202(a)) is a totally new
offense and is not just a sentence-enhancement provision. This opinion,
in effect, disagreed with the Criminal Division's advice that 18 U.S.C.
App. Section 1202(a) was merely an enhancement provision which could be
triggered by notice procedures similar to 18 U.S.C. Section 3575 or 21
U.S.C. Section 851. In United States v. Gregg, 803 F.2d 568 (10th Cir.
1986), however, the Tenth Circuit reached the same conclusion as the
Criminal Division and ruled that 18 U.S.C. App. Section 1202(a) was a
penalty-enhancement provision and did not create a new federal crime.
Moreover, because of the statutory format in which Congress has
rewritten the Armed Career Criminal Act, it is even clearer that the new
18 U.S.C. Section 924(e) is a sentence-enhancement provision.
Therefore, the Fifth Circuit's ruling in Davis is not anticipated to be
a significant problem in the future.
As noted in the Criminal Division's earlier Handbook on the
Comprehensive Crime Control Act of 1984, because of the concerns with
the proper role of the Federal Government in this area, the Armed Career
Criminal Act should not be viewed as a substitute for local prosecution,
but rather as a supplement to the options available to law enforcement
officials in dealing with career criminals. A mechanism within the
various Law Enforcement Coordinating Committees should have been set up
following the 1984 Act to identify offenders subject to the application
of this major federal proscription by which they could be referred, when
appropriate, for federal prosecution. These, of course, should be
modified to reflect the present coverage of the Act.
It should be noted that the Firearm Owners' Protection Act also
amended the penalty provisions of 18 U.S.C. Section 924(c) (not part of
the Armed Career Criminal Act) to extend the mandatory punishment for a
person who used or carried a firearm during and in relation to a crime
of violence. Because various courts had determined that "crime of
violence" did not include drug offenses, Congress has amended this
provision to include the term "drug trafficking crime" (viz., "any
felony violation of federal law involving the distribution, manufacture,
or importation of any controlled substance"). The mandatory penalty was
also increased from five years in prison to ten years in prison. (A
comprehensive discussion of the myriad provisions of the Firearm Owners'
Protection Act has been prepared by the General Litigation and Legal
Advice Section of the Criminal Division.)
Questions concerning this subtitle should be directed to Gary
Schneider (786-4700) in the Narcotic and Dangerous Drug Section.
Questions relating to the Firearm Owners' Protection Act and related
firearms provisions should be directed to Ezra H. Friedman (724-6971) or
Arthur Norton (724-7526) in the General Litigation and Legal Advice
Section.
This Subtitle amends the Immigration and Nationality Act to enlarge
the class of aliens who are ineligible to receive visas, who will be
excluded from entry into the United States, and who may be deported.
This Subtitle also provides a procedure for prompt determination by the
Immigration and Naturalization Service as to whether to issue detainers
on aliens arrested by federal, state, or local law enforcement officers
for controlled substances violations.
Subsection 1182(a)(23) of Title 8, United States Code, has been
amended by Section 1751 of the Anti-Drug Abuse Act to increase the class
of aliens who are ineligible to receive a visa and who will be excluded
from entry into the United States. The former law listed those
narcotics violations for which a prior conviction would cause a denial
of entry. Under the revised law, any conviction of any state, federal,
or foreign substantive or conspiracy offense relating to any controlled
substance as defined by 21 U.S.C. Section 802 will cause the offender to
be denied entry. This provision applies to convictions occurring before
or after the date of enactment of the statute.
Section 1751 of the Act further enlarges the class of aliens who will
be deported -- as provided in 8 U.S.C. Section 1251(a) -- to include any
alien who after entry into the United States is addicted to narcotic
drugs or who has at any time before or after entry been convicted of any
state, federal, or foreign substantive or conspiracy offense relating to
any controlled substance as defined by 21 U.S.C. Section 802. This
provision applies to convictions occurring before or after enactment of
this statute.
Incorporating the above modification, 8 U.S.C. Section 1251(a)(11)
presently reads that all controlled substance violations -- not just
those involving specifically listed controlled substances -- are
included within that provision of Subsection (b) of 8 U.S.C. Section
1251 which removes the trial judge's ability to make a binding
recommendation on the Government regarding deportation.
In Janvier v. United States, 793 F.2d 449 (2d Cir. 1986), the Second
Circuit, after ruling that a trial judge's recommendation as to
deportation was part of the sentencing process, remanded the case to the
district court to determine whether the defendant could demonstrate
ineffective assistance of counsel because his counsel (1) failed to
request such a recommendation against deportation or (2) failed to
inform the defendant as to the effect the failure to request such a
recommendation would have on the deportation of the defendant. The
amendment to 8 U.S.C. Section 1251(a)(11), by removing the judge's
discretion in this matter, should effectively obviate the decision in
Janvier.
Section 1751 of the Act also provides for prompt determination by the
Immigration and Naturalization Service of whether to issue a detainer on
an alien arrested for controlled substance violations by federal, state,
or local law enforcement officers when the arresting officer has reason
to believe the alien is not legally in the United States and the officer
expeditiously informs INS of the arrest and the facts concerning the
status of the alien.
A detainer may only be placed on an alien if a charge of
deportability or excludability can be sustained at the time the detainer
is placed. While mere arrest may be sufficient to sustain a charge of
excludability, in many cases mere arrest is not sufficient to sustain a
charge of deportability. Close coordination with INS enforcement
personnel is recommended as to the issuance of detainers. Prosecutors
should be aware of detainer limitations and not expect to use INS
detainers in lieu of pre-trail detention.
Questions concerning this subtitle should be directed to John Kuray
(786-4721) in the Narcotic and Dangerous Drug Section or to William P.
Joyce, Associate Chief Counsel, Immigration and Naturalization Service
(633-2895).
Section 1802 of the Anti-Drug Abuse Act amends the exemption sections
of the Freedom of Information Act ("FOIA"), 5 U.S.C. Section 552(b), so
that criminal law enforcement agencies, under certain narrowly defined
circumstances, are not required to acknowledge in response to a FOIA
request the existence of records concerning ongoing and undisclosed
criminal investigations, informant records maintained under an
informant's name or personal identifier, or classified records of the
FBI pertaining to foreign intelligence, counterintelligence, or
international terrorism investigations.
Section 1803 of the Act modifies the fees which can be charged under
FOIA by making fee waivers and fee reductions available to all
requesters when the information released contributes to public
understanding of the Government.
The previous threshold language of the seventh exemption section of
FOIA required that the information sought to be protected be an
"investigatory record" whose disclosure "would" result in one of six
specified harms. The amendment in Section 1802 has broadened the
exemption to include "records or information" compiled for law
enforcement purposes, thus protecting documents that, while not reports,
contain law enforcement information. In addition, the amendment changes
the "would" threshold to a "could reasonably be expected to"
requirement. This is a reasonableness test rather than an objective
test, thereby allowing more information to be protected.
This section also allows law enforcement agencies in certain defined
situations to avoid confirming the investigatory status of specific
individuals or incidents in responding to FOIA requests. This is a
narrow exception to be used sparingly to protect informants and open
investigations from being exposed to public scrutiny.
This section changes the availability of fee waivers and fee
reductions to certain requesters of information.
The legislative history is clear that Congress intended to "remove
the roadblocks and technicalities" which purportedly have been used by
various federal agencies to deny fee waivers or fee reductions under
FOIA to news media or other public interest users of such information.
There are no major prosecutive policy considerations with regard to
these new provisions.
Questions concerning Subtitle N of Title I may be directed to L.
Jeffrey Ross, Jr., Chief, FOI/PA Unit, Office of Enforcement Operations
(724-7026).
and Transportation of Drug Paraphernalia
Subtitle O of the Anti-Drug Abuse Act of 1986 creates the "Mail Order
Drug Paraphernalia Control Act." This Act creates a new offense by which
it is unlawful for persons "(1) to make use of the services of the
Postal Service or other interstate conveyance as part of a scheme to
sell drug paraphernalia; (2) to offer for sale and transportation in
interstate or foreign commerce drug paraphernalia; or (3) to import or
export drug paraphernalia."
The origin of this legislation can be found in congressional hearings
which were held in the late 1970s, when the drug paraphernalia problem
-- with its inherent encouragement of drug abuse -- became obvious. In
response to a call from some federal action, but to avoid the enactment
of a federal law in this area (which the Justice Department felt would
spread existing federal drug resources too thin), the Drug Enforcement
Administration drafted a model drug paraphernalia statute to assist
state and local governments in addressing the problem of so-called "head
shops." These shops were sending a message to young persons -- both
through the availability of such devices and the advertisements and
displays attached thereto -- that drugs were okay. Those states and
communities which enacted and enforced this type of law were able to
decrease the availability of such products and thereby reduce the
incorrect message of drug acceptability. Still, several states were
unwilling to enact or enforce laws that would address this problem. The
planned effect of Subtitle O -- reportedly to be codified at 21 U.S.C.
Section 857 -- is to ensure that the availability of drug paraphernalia
in a state or community which has not chosen to proscribe such
substances within its own borders does not "spill over" into a community
or state which has so acted.
By proscribing use of the mails or any interstate attempt to spread
drug paraphernalia, the mail-order drug paraphernalia industry should be
substantially curtailed, with hard-core drug paraphernalia (bongs,
cocaine freebase kits, carburetion masks, etc.) becoming increasingly
harder to acquire.
In defining the term "drug paraphernalia," Subsection (d) of the new
statute provides a broad definition to the effect that "drug
paraphernalia" means "any equipment, product, or material of any kind
which is primarily intended or designed for use in manufacturing,
compounding, converting, concealing, producing, processing, preparing,
injecting, ingesting, inhaling, or otherwise introducing into the human
body a controlled substance in violation of the Controlled Substances
Act. . . . It includes items primarily intended or designed for use in
ingesting, inhaling, or otherwise introducing mari(h)uana, cocaine,
hashish, hashish oil, PCP, or amphetamines into the human body. . . ."
Subsection (d) continues with a lengthy list of examples of "drug
paraphernalia": "(1) metal, wooden, acrylic, glass, stone, plastic, or
ceramic pipes with or without screens, permanent screens, hashish heads,
or punctured metal bowls; (2) water pipes; (3) carburetion tubes and
devices; (4) smoking and carburetion masks; (5) roach clips: meaning
objects used to hold burning material, such as a marihuana cigarette,
that has become too small or too short to be held in the hand; (6)
miniature spoons with level capacities of one-tenth cubic centimeter or
less; (7) chamber pipes; (8) carburetor pipes; (9) electric pipes;
(10) air-driven pipes; (11) chillums; (12) bongs; (13) ice pipes or
chillers; (14) wired cigarette papers; or (15) cocaine freebase kits."
Subsection (e) of the new statute provides guidance for determining
whether something should be considered "drug paraphernalia." Pursuant to
that subsection, all logically relevant factors may be considered,
including: "(1) instructions, oral or written, provided with the item
concerning its use; (2) descriptive materials accompanying the item
which explain or depict its use; (3) national and local advertising
concerning its use; (4) the manner in which the item is displayed for
sale; (5) whether the owner, or anyone in control of the item, is a
legitimate supplier of like or related items to the community, such as a
licensed distributor or dealer of tobacco products; (6) direct or
circumstantial evidence of the ratio of sales of the item(s) to the
total sales of the business enterprise; (7) the existence and scope of
legitimate uses of the item in the community; and (8) expert testimony
concerning its use."
Specifically excluded from coverage of this new statute are any
persons authorized by local, state, or federal law to manufacture,
possess, or distribute such items, as well as any item that, in the
normal lawful course of business, is primarily intended for use with
tobacco products, including any pipe, paper, or accessory.
Violations of this new provision carry a maximum penalty of three
years in prison and a fine of not more than $100,000. As the penalty
provision does not make specific reference to the alternative fines
provision of Title 18 (presently at 18 U.S.C. Section 3623), the
alternative fines in Title 18 are most likely not applicable to
paraphernalia offenses. See Appendix B, infra.
Subsection (c) of the new statute provides that drug paraphernalia
involved in any violation of Subsection (a) shall be subject to seizure
and forfeiture upon the conviction of a person for such violation, with
any property so forfeited being delivered to the General Services
Administration for destruction or use for law enforcement or educational
purposes by federal, state, or local authorities. A further discussion
of this topic may be found in the discussion of Subtitle D of Title I,
supra, which pertains to the Assets Forfeiture Amendments Act of 1986.
There are some questions as to the effectiveness of the language used
in defining "drug paraphernalia," particularly the use of the qualifier
"primarily intended." Therefore, prosecutors utilizing this statute
should make particular note of the means by which an intentional
violation will be proven.
All of the provisions of Subtitle O had a delayed effective date of
90 days after the date of enactment of the Anti-Drug Abuse Act of 1986.
This time period was probably designed to give persons and companies
involved in this formerly legitimate industry a chance to "retool" for
some other activity.
Questions concerning Subtitle O of Title I should be directed to Gary
Schneider (786-4700) or John Kuray (786-4721) in the Narcotic and
Dangerous Drug Section.
Section 1841 of the Anti-Drug Abuse Act has created a new Section 416
of the Controlled Substances Act, to be codified as Section 856 of Title
21, United States Code, which proscribes the maintaining or making
available of any place for the purpose of manufacturing, distributing,
or using a controlled substance.
Section 856 makes it a federal crime to knowingly open or maintain a
place to manufacture, distribute, or use a controlled substance. In
addition, Section 856 also prohibits a person or other legal entity
which manages or otherwise controls a building, room, or enclosure from
knowingly making the building, room, or enclosure available, with or
without compensation, for manufacturing, storing, distributing, or using
a controlled substance. A natural person convicted under this section
is subject to twenty years' imprisonment and a fine of $500,000. If a
corporation or other legal entity is convicted under this section, the
fine is quadrupled to $2,000,000.
Although there is no official legislative history behind Section 856,
it appears to be aimed at "crack houses" and "shooting galleries."
Section 856 is modeled after California Health and Safety Code Sections
11365 et seq., and, in particular, new Section 11366.5.
The word "place" should be broadly construed. It may designate a
location or space other than that which is ordinarily referred to as a
room in a building or structure and can include an automobile or other
similar "place." People v. Lee, 260 Cal. App. 2d 836 (1968).
The term "open or maintain any place for the manufacturing,
distributing, or using" a controlled substance describes a "purpose"
which contemplates continuity in pursuit of such objectives. Thus, a
single or isolated instance of drug use, distribution, or manufacture,
while sufficient to criminally forfeit a property, is probably not
sufficient to convict a person for a violation of this section. People
v. Horn, 187 Cal. App. 2d 68, cert. denied, 368 U.S. 846 (1961).
Knowledge by the property manager of the illegal activity is an
essential element of this offense. Providing notice to the potential
defendant of the prohibited criminal activity taking place on the
property in question should be sufficient to defeat a defense of lack of
knowledge.
In addition, challenges to the constitutionality of the section may
arise premised on the argument that the section impermissibly interferes
with the right of an owner to rent or lease his/her property as he/she
wishes. The requirement of proving knowledge of the illegal activity
should be sufficient to defeat such a challenge. People v. Cressey, 2
Cal. 3d 836 (1970).
Vagueness challenges can be answered by pointing out that the plain
language of the section shows that it is designed for the person who
knowingly, willfully, and intentionally gets involved in certain illegal
activity by making a place under his/her control available for such
illegal uses. People v. Brim, 257 Cal. App. 2d 839 (1968).
Questions concerning this subtitle should be directed to John Kuray
(786-4721) in the Narcotic and Dangerous Drug Section.
Subtitle T of the Anti-Drug Abuse Act creates a new offense, that of
operating a common carrier under the influence of alcohol or drugs. The
subtitle consists of three new sections to be added to Title 18, United
States Code. Section 341 defines "common carrier" to include all major
forms of public transportation. Section 342 establishes the offense and
the penalty. Section 343 establishes certain conclusive presumptions to
be used in prosecuting violations of Section 342.
New Section 342 of Title 18, United States Code, makes it a federal
crime to operate a common carrier while under the influence of alcohol
and/or drugs. Prior to the enactment of Section 342, there was no
federal criminal statute to deal with this problem.
The term "common carrier" is defined in Section 341. It includes
rail carriers, sleeping car carriers, water common carriers, air common
carriers, and buses transporting passengers in interstate commerce. It
does not include trucks.
Section 343 creates two conclusive presumptions relating to proving
the element of "under the influence." The first conclusive presumption
is that a common carrier operator with a blood alcohol content of .10 or
more is under the influence of alcohol. The second conclusive
presumption is that a common carrier operator with enough drugs in his
or her system to impair the average individual is under the influence of
drugs.
The penalty for a violation of Section 342 is imprisonment for not
more than five years, a fine of not more than $10,000, or both.
Section 342 does not provide exclusive federal jurisdiction for all
common carrier operation under the influence of alcohol or drugs. For
example, Section 341 limits applicability to buses which carry
passengers in interstate commerce. Bus drivers on purely intra-state
routes do not violate this statute if they perform their duties under
the influence of drugs or alcohol. Federal prosecution of rail, air, or
water common carrier operators on purely intra-state routes should be
evaluated on a case-by-case basis to ensure that federal intervention is
the most appropriate prosecutorial approach. Coordination with state
and local authorities through the Law Enforcement Coordinating
Committees is strongly encouraged.
Section 343 creates two conclusive presumptions intended for use when
prosecuting violations of Section 342. Statutes which create
irrebuttable presumptions have been found to violate the Due Process
Clauses of the Fifth and Fourteenth Amendments. See Vlandis v. Kline,
412 U.S. 441, 446 (1973); Heiner v. Donnan, 285 U.S. 312, 329 (1932).
Similarly, jury instructions which create a mandatory, rebuttable
presumption which shifts the burden of persuasion to the defendant as to
an element of an offense are also unconstitutional. See Francis v.
Franklin, . . . U.S. . . ., 105 S.Ct. 1965, 1973 (1985); Sandstrom v.
Montana, 442 U.S. 510, 524 (1979); Patterson v. New York, 432 U.S.
197, 215 (1977); Mullaney v. Wilbur, 421 U.S. 684, 698-701 (1975).
Additionally, there is a technical flaw in the ".10" presumption
contained in Section 343(1). The phrase "per cent" was inadvertently
omitted after the ".10" figure. The commonly used standard for being
under the influence of alcohol is a blood alcohol content of 0.10 per
cent. A person having a blood alcohol content of .10 (ten per cent)
would usually be dead. Furthermore, the conclusive presumption
contained in 18 U.S.C. Section 343(2) relating to being under the
influence of drugs may be susceptible to legal challenge because it
appears to be imprecise and not based upon any fixed empirically
accepted standard. Corrective legislation for both presumptions may be
sought in the 100th Congress. Consequently, when prosecuting violations
of Section 342, prosecutors should not rely on either of the
presumptions created by Section 343. In addition, prosecutors should
specifically request instructions which explain how drawing an inference
from facts in evidence does not shift the burdens of proof or
persuasion.
Questions relating to this subtitle should be directed to Ezra H.
Friedman (724-6971) of the General Litigation and Legal Advice Section.
Prior to the Anti-Drug Abuse Act of 1986, the Mansfield Amendment, 22
U.S.C. Section 2291(c), prohibited an employee of the United States from
engaging or participating in any direct police action in any foreign
country with respect to narcotics control efforts. Section 2009 of the
Anti-Drug Abuse Act amends the Mansfield Amendment prohibition to the
extent that U.S. employees may not directly effect an arrest in any
foreign country as part of any foreign police action with respect to
narcotics control efforts.
Prior to the 1986 Anti-Drug Abuse Act, the Mansfield Amendment, 22
U.S.C. Section 2291(c), stated in pertinent part:
(1) . . . no officer or employee of the United States may
engage or participate in any direct police arrest action in any
foreign country with respect to narcotic control efforts . . . .
(emphasis added)
22 U.S.C. Section 2291 allowed the law enforcement officer to be
present during direct police arrest actions if the Secretary of State
and the foreign country had agreed and the agreement had been
transmitted to Congress.
The Chief Counsel of the United States Coast Guard provided two
opinions construing the above language. By memorandum 16210 of 1
February 1978, the Chief Counsel considered joint boardings and
transportation of foreign boarding parties within Colombian waters to be
participating in foreign police operations, and thereby proscribed by
Mansfield. The opinion did find that providing "training, technical
equipment, and intelligence in support of foreign governments'
enforcement efforts" was not prohibited. The impact of this
interpretation has been to limit Coast Guard joint operations, arrests
on behalf of a coastal state, or detentions on behalf of coastal states
when operating within the territorial sea of a foreign nation.
The second memorandum, of 16 Janaury 1980, determined that Mansfield
was intended to limit participation in foreign police actions, not
independent actions by U.S. law enforcement officials. Therefore, it
concluded that enforcement of U.S. law against U.S. vessels and foreign
vessels in foreign territorial waters was not prohibited by Mansfield.
Section 2009 of the Anti-Drug Abuse Act of 1986 amended 22 U.S.C.
Section 2291(c). The statute now reads:
(c)(1) No officer or employee of the United States may directly
effect an arrest in any foreign country as part of any foreign
police action with respect to narcotics control efforts,
notwithstanding any other provision of law. This paragraph does
not prohibit an officer of employee from assisting foreign
officers who are effecting an arrest.
(2) Unless the Secretary of State, in consultation with the
Attorney General, has determined that the application of this
paragraph with respect to that foreign country would be harmful to
the national interests of the United States, no officer or
employee of the United States may engage or participate in any
direct police arrest action in a foreign country with respect to
narcotics control efforts, notwithstanding any other provision of
law. Nothing in paragraph (1) shall be construed to allow United
States officers or employees to engage or participate in
activities prohibited by this paragraph in a country with respect
to which this paragraph applies.
(3) Paragraphs (1) and (2) do not prohibit an officer or
employee from taking direct action to protect life or safety if
exigent circumstances arise which are unanticipated and which pose
an immediate threat to United States officers or employees,
officers or employees of a foreign government, or members of the
public.
(4) With the agreement of a foreign country, paragraphs (1) and
(2) shall not apply with respect to maritime law enforcement
operations in the territorial sea of that country.
(5) No officer or employee of the United States may interrogate
or be present during the interrogation of any United States person
arrested in any foreign country with respect to narcotics control
efforts without the written consent of such person.
(6) This subsection shall not apply to the activities of the
United States Armed Forces in carrying out their responsibilities
under applicable Status of Forces arrangements.
For most Coast Guard operations, the most important provision will be
Paragraph (4). On its face, it removes any restrictions of Paragraphs
(1) and (2) as long as the coastal state has consented to the activity.
Although the legislative history on this amendment to 22 U.S.C. Section
2291(c) is minimal, Senator Murkowski was quite clear in introducing the
language which became Paragraph (4) that he had Coast Guard operations
and restrictions against joint operations in mind. See Cong. Rec. S13991
(daily ed. September 27, 1986). The Senator expressed the view that the
"PD-27 process" was adequate to keep Coast Guard operations "from
becoming inappropriately involved in the internal affairs of foreign
nations." The Chief Counsel's 1978 opinion that Mansfield limited Coast
Guard joint operations was primarily based on the language of
"participating in direct police arrest actions." The opinion appears to
be no longer current to the extent of operations in the territorial
seas. It may, however, still be applicable to operations conducted in
internal waters.
Paragraph (4) does have a geographic reference to the territorial sea
of a consenting foreign country. The term territorial sea has a meaning
in international law. Both the 1958 Convention on the Territorial Sea
and Contiguous Zone and the U.N. Convention on the Law of the Sea
describe the territorial sea as a belt of sea measured from the baseline
which extends the coastal state's sovereignty. Senator Murkowski, in
explaining the amendment, used an undefined term of territorial waters.
Therefore, there is room, albeit small, to press an argument that the
application of Paragraph (4) should not distinguish between territorial
seas and internal waters. However, the more likely interpretation will
be that, absent any express intent to the contrary, the term territorial
sea will have its usual meaning found in the conventions. Assuming this
interpretation, Paragraphs (1) and (2) will be applicable to any law
enforcement activity conducted in the internal waters of a foreign
nation.
The Commandant of the United States Coast Guard, on December 15,
1986, issued a statement providing guidance to U.S. Coast Guard units in
light of the statutory changes to the Mansfield provision in the
Anti-Drug Abuse Act of 1986. The Commandant's statement is attached to
this handbook as Appendix C.
Questions regarding the amendment to the Mansfield Amendment should
be directed to William J. Corcoran (786-4704) of the Narcotic and
Dangerous Drug Section. Also available for assistance is the Chief
Counsel's office (267-1616) or Jon Waldron, Maritime and International
Law Division (267-1527), United States Coast Guard.
Part 1 of the Customs Enforcement Act of 1986 amends the Tariff Act
of 1930 to: (1) add the term "monetary instruments" to the definition
of merchandise and also add "controlled substances," as the latter is
defined in 21 U.S.C. Section 802, to the category of merchandise, the
importation of which into the United States is prohibited, to the
definition of merchandise; (2) require that any vessel, aircraft, or
vehicle arriving into the United States report such arrival to the
nearest customs facility; (3) create penalties for arrival, reporting,
and entry violations; (4) increase penalties for illegally unloading
arriving passengers; (5) require that individuals arriving in the
United States on conveyances other than aircraft, vessel, or vehicle
(e.g., horseback) enter only at designated border crossings and to
impose penalties for violations of such requirement; (6) provide
increased penalties for failure to declare arriving merchandise; (7)
prohibit aviation smuggling; (8) provide additional authority for the
forfeiture of conveyances used or involved in the violation of the
customs laws; (9) permit awards of compensation to informers in
discretionary amounts; (10) to authorize the exchange of information
with foreign law enforcement agencies; (11) authorize inspections and
preclearance in foreign countries, with those countries' consent, of
passengers bound for the United States.
Part 2 of the Customs Enforcement Act of 1986 authorizes the
Secretary of the Treasury to utilize commercial "cover" corporations in
undercover operations in much the same manner as DEA and FBI are
presently authorized.
Part 3 of the Customs Enforcement Act of 1986 provides for funding of
the U.S. Customs Service for Fiscal Year 1987 and for amendments to the
Customs Forfeiture Fund, among other things, extending the expiration
date of the latter to 1991.
Part 4 contains miscellaneous customs provisions regarding
documentation of vessels and assistance to customs officers.
Part 5 amends the Controlled Substances Import and Export Act of
1970, specifically 21 U.S.C. Section 959, to make it a crime to posess a
controlled substance with the intent to distribute aboard an aircraft
bound for the U.S. or to a place within 12 miles of the coast of the
United States.
The Customs Enforcement Act of 1986 strengthens in several ways the
ability of the U.S. Customs Service to protect our borders from
contraband smugglers, particularly drug smugglers.
Of particular importance are the anti-air smuggling provisions of the
act which penalize the recent phenomenon of air drops of contraband to
vessels in international waters.
Section 401 of the Tariff Act of 1930 (hereinafter, "the Act") (19
U.S.C. Section 1401), which contains definitions of various terms, is
amended. The term merchandise is amended to include "monetary
instruments as defined in Title 31." Controlled substances are given the
same definition as they have under the Controlled Substances Act and
they are to be treated as merchandise, the importation of which is
prohibited into the United States, except under license or if authorized
by the Controlled Substances Import and Export Act of 1970. Subsection
(k) of this section ("hovering vessel") is also amended to the effect
that vessels receiving merchandise from aircraft or other vessels on the
high seas or in Customs waters beyond the territorial sea will be
treated in the same manner as vessels which visit hovering vessels or
foreign countries. They will have to report their arrival and make
formal entry. (See also explanation on Section 590 -- new 19 U.S.C.
Section 1590).
Vehicles, and Aircraft
Section 433 of the Act (19 U.S.C. Section 1433) is amended.
Subsection (a) is amended to require the master of a foreign vessel
arriving from a foreign port or place, or of a foreign vessel arriving
from a domestic port, or a vessel of the United States carrying bonded
merchandise or foreign merchandise for which no entry has been made, to
immediately report arrival of the vessel to the nearest customs facility
or such other place as the Secretary of the Treasury may designate by
regulation.
Subsection (b) replaces the existing vehicle reporting requirements
of Section 459 (19 U.S.C. Section 1459) to require crossing only at
designated facilities and immediate reporting of vehicle arrivals.
Subsection (c) provides similar requirements for aircraft and thus
subjects them to specific penalties provided under Section 436 (19 U.S.
C. Section 1436) rather than the more general (and lighter) penalties
contained in 49 U.S.C. Section 1474.
The amendment to Section 433 (19 U.S.C. Section 1433) also authorizes
the Secretary of the Treasury to require the master of a vessel, the
person in charge of a vehicle, or an aircraft pilot to report
immediately (in person or by radio or other means as prescribed in the
regulations), and would also afford greater flexibility in designating
the places where arrival may be reported. The Customs Service would
thus be in a position to concentrate enforcement activities on those
conveyances failing to report immediately to the designated facility, on
the assumption that they are likely to be involved in smuggling.
the Arrival, Reporting, and Entry Requirements
Section 436 of the Act (19 U.S.C. Section 1436) is amended and
establishes, in addition to increased criminal sanctions, civil
penalties for violation of Sections 433, 434, and 435 of the Tariff Act
(19 U.S.C. Sections 1433, 1434, and 1435), and provides for the seizure
and forfeiture of any conveyances used in connection with these
violations. These penalties are subject, in appropriate cases, to
mitigation or remission under Section 618 of the Tariff Act (19 U.S.C.
Section 1618). The amount of the criminal fines which may be imposed
has also been increased.
Unloading of Passengers
Section 454 of the Act (19 U.S.C. Section 1454) is amended to
increase the penalties for discharging a passenger without a permit,
from $500 to $1,000 for the first passenger and $500 for each other
passenger.
Individuals
Section 459 of the Act (19 U.S.C. Section 1459) is amended to require
all persons arriving in the United States as pedestrians or by means
other than vessel, vehicle, or aircraft (horseback, for example) to
immediately report their arrival to a designated Customs facility.
Persons board conveyances are required to remain aboard until authorized
by Customs to depart. Present law only requires the master to report
his/her arrival but imposes no obligations on the passengers or crew
members themselves. An incident at a New York airport involving a near
riot after a delayed landing showed the weaknesses of existing law. In
addition, passengers and crew members arriving aboard conveyances which
did not report arrival in accordance with Section 433 are also required
to notify Customs and report the circumstances of their arrival. The
new law also repeals Section 460 of the Act and, in Subsections (e),
(f), and (g) of Section 3115 of the Anti-Drug Abuse Act, incorporates
the civil and criminal penalties of repealed Section 460 into 19 U.S.C.
Section 1459.
Declare
Section 497 of the Act (19 U.S.C. Section 1497) is amended to make
the person failing to declare liable for a penalty based on the value of
the undeclared merchandise. In the case of controlled substances, the
penalty could reach as much as 200 times the "street price" of the
substance. The price would be established by the Secretary of the
Treasury in consultation with the Attorney General.
Witnesses
Section 509 of the Act (19 U.S.C. Section 1509) is amended to expand
the scope of Customs' administrative summons for documents to conform to
the scope of the summons coverage for testimony. Prior to this
amendment, Section 509 of the Act only allowed a summons to be used to
ascertain the correctness of entries, determine liability for duties and
taxes, fines, and penalties, and to ensure compliance with any law
administered by the Customs Service. Although the summons could be used
to take testimony under oath in connection with an investigation of any
of these areas, it could only be used to obtain those documents which
were "required to be kept" pursuant to Section 508 of the Act. It might
not have been available to obtain documents which were prepared by third
persons, by the importer subsequent to the import transaction, or which
pertained to a law administered by Customs not directly related to
imports, such as drawback shipping records, or currency transactions or
export records. The amendment would facilitate the use of the summons
in these other investigations.
Manifest
Section 584 of the Act (19 U.S.C. Section 1584) is amended to
eliminate the pre-penalty procedures which were added in 1978 but which
have proven to be of little benefit to the public or the Government.
This section would also substantially increase penalties relating to
unmanifested drugs and other merchandise.
The penalties for unmanifested opium of $25 an ounce were first set
in 1922 and the penalties for other controlled substances have been set
at $10-50 an ounce (depending on the drug) since 1935. In order to
increase vigilance on the part of carriers, the bill would raise
penalties to $200-1,000 an ounce.
Departure Before Report or Entry
Section 585 of the Act (19 U.S.C. Section 1985) is amended. This
amendment increased the penalties that can be imposed to a master of a
vessel or on a person in charge of a vehicle who departs after entering
the limits of any collection district without making a report or entry.
The new penalties are $5,000 for the first violation and $10,000 for
each subsequent violation.
Merchandise
Section 586 of the Act (19 U.S.C. Section 1586) is amended. This
section increases the civil and criminal penalties for unlawful
unloading or transshipment. In addition, the geographical limits of the
statute are changed from 12 miles to "customs waters," which terms means
"12 miles" or the distance permitted by treaty or special arrangement
with a foreign country for the boarding of vessels flying its flag. The
criminal penalties have increased from a maximum of two years'
imprisonment to 15 years.
Smuggling
Section 590 is a new section added to the Act (19 U.S.C. Section
1590) which is intended to control aviation smuggling by adopting many
of the provisions contained in 19 U.S.C. Section 1586 and the
Anti-Smuggling Act of 1935 (19 U.S.C. Section 1700 et seq.) which apply
to vessels. In addition, this section is intended to address a
relatively new phenomenon, air drops of contraband to vessels in
international waters.
The statute addresses these problems as follows:
Subsection (a) makes it unlawful for any person to possess restricted
or prohibited merchandise knowing or intending that it be unlawfully
introduced into the United States or its territories or possessions or
within 12 miles of the coast. Subsection (b) makes it unlawful to
transfer any merchandise between an aircraft and a vessel on the high
seas or within customs waters if the plane or boat is of United States
nationality or the circumstances indicate the purpose is to introduce
the merchandise contrary to law unless the transfer has been authorized
by the Secretary of the Treasury.
The section provides civil and criminal penalties and civil
forfeiture. In addition, Subsection (g) contains certain rebuttable
presumptions of an intent to unlawfully transship merchandise which are
applicable for the imposition of civil penalties or forfeiture. These
presumptions expand on the presumptions contained in the Anti-Smuggling
Act of 1935. Customs and other law enforcement officers often discover
suspicious airfraft or vessels without contraband on board, put under
circumstances indicating that they were used or intended to be used for
unlawful purposes, such as smuggling. The presumptions contained in
Subsection (g) would have the effect of shifting the burden of proof to
the claimant of seized property. Thus, the claimant, for example, would
have to explain why his/her aircraft had illegally installed fuel tanks
or false registration markings.
Any person who violates this new section is liable for a civil
penalty equal to twice the value of the merchandise involved (including
controlled substances) but not less than $10,000, and may also be
liable, if the violation is intentional, for a criminal fine of not more
than $10,000 or imprisonment for not more than 5 years, or both, if the
merchandise was not a controlled substance. If the violation involved a
controlled substance, the person may be criminally liable for a fine of
not more than $250,000 or imprisonment for not more than 20 years or
both. This provision creates an exposure of up to 20 years in prison
regardless of the amount of controlled substance involved and should be
kept in mind by prosecutors to be applied whenever appropriate in
drug-smuggling cases.
Section 594 of the Act (19 U.S.C. Section 1594) is amended to
eliminate the expensive and time-consuming requirement that conveyances
seized to secure payment of penalties (not for forfeiture) be proceeded
against in an admiralty court action, and permits administrative
forfeiture in many instances, but protects the rights of individuals by
requiring court proceedings whenever a claim and cost bond are posted.
In addition, the exemptions from common carriers being seized are
revised. Under the law prior to this amendment, a common carrier could
not be seized or forfeited for violations of the Customs laws unless the
owner or master or other person in charge consented to or was privy to
the violation. This protection was given to shield the common carrier
from seizures where dishonest passengers concealed contraband in baggage
or otherwise violated the Customs laws or where a dishonest shipped
misdescribed the contents of cargo on a bill of lading. However, in
recent years, common carriers in increasing and alarming numbers have
escaped seizure where large quantities of drugs were concealed on board
the vessel or aircraft, outside the cargo, by crew members or other
personnel employed by common carriers. In addition, common carriers
have escaped liability where 2,500-3,000 pounds of cocaine were placed
in unmanifested or falsely manifested cargo boxes or containers. A
simple comparison of the bills of lading with the external marks on the
cartons or an actual external count of the cargo by the carrier would
have revealed these discrepancies.
The amendment will continue protection for common carriers where
contraband is contained in the baggage of a passenger being lawfully
transported or in manifested cargo with external marks and quantities
which match the bill of lading, unless the owner, operator, or person in
charge participated in or had knowledge of the violation or was grossly
negligent in preventing or discovering the violation. However, in the
case of prohibited merchandise or controlled substances, common carriers
will be subject to seizures for transporting such items in unmanifested
cargo, in cargo whose external character did not match the documents or
for articles concealed on the conveyance, but outside the cargo. After
investigation, the common carrier would be subject to forfeiture unless
the owner or operator, master, or officers can show that they did not
know and through the exercise of the highest degree of care and
diligence could not have known that the contraband was on board. This
standard is identical to the standard contained in 19 U.S. C. Section
1584 for common carrier penalties for unmanifested drugs and is intended
to encourage greater vigilance by common carriers. Of course, common
carriers can avail themselves of the remission and mitigation procedure
in 19 U.S.C. Section 1618.
Subsection (d) defines "owner or operator," "master," and similar
terms relating to the person in charge to include responsible managerial
and supervisory personnel to reflect modern practices relating to cargo
manifests. Subsection (e) makes the carrier responsible for expenses
arising out of seizures under Subsection (c) which relate to
discoverable, unmanifested drugs and prohibited merchandise.
19 U.S.C. Section 1595(a) is amended to expand the Customs civil
search and seizure warrant in Section 595 of the Tariff Act (19 U.S.C.
Section 1595) to cover any article subject to seizure rather than just
the imported merchandise. This amendment would permit this civil
warrant to be issued to seize conveyances, monetary instruments, and
evidence of violations of the Customs laws which are subject to
forfeiture under laws enforced by Customs.
Section 596 of the Act (19 U.S.C. section 1595(a) is amended to
permit the civil seizure and forfeiture of merchandise introduced or
attempted to be introduced contrary to law. This provision is intended
to fill a gap which was caused when former Section 593 was moved in 1948
to the criminal code as 18 U.S.C. Section 545. In addition, although 19
U.S.C. Section 1592 permits the seizure of prohibited goods, this is in
some cases unsatisfactory. While it is true that most laws which
restrict or prohibit merchandise provide for forfeiture, some, such as
the motor vehicle laws and coffee laws, merely deem the goods to be
"prohibited importation" put do not provide for a separate forfeiture.
Property
Section 613 of the Act (19 U.S.C. Section 1613) is amended to treat
monetary amounts tendered in lieu of merchandise subject to forfeiture
in the same manner as the proceeds of sale. This would permit the
Secretary or his designee to grant relief from the forfeiture in certain
instances but would still permit the deposited funds to be used to pay
expenses of the seizure and to be placed in the Forfeiture Fund to be
used for the same purposes for which forfeiture proceeds may be used.
In addition Section 613(d) would treat agency seizure expenses in the
same manner as court costs and marshal's expenses. A recent court
decision held that only seizure expenses incurred by the custodia legis
after a complaint is filed are priority claims. Thus, under this
interpretation, agency expenses incurred prior to referral for judicial
proceedings would not be paid in some instances where the proceeds of
sale are insufficient to cover preferred mortgage liens and all the
expenses incurred by the seizing and custodial agencies. The amendment
would remedy the situation by putting agency expenditures on an equal
footing with marshal fees and court costs, allowing them to be paid
before liens.
Section 619 of the Act (19 U.S.C. Section 1619) is amended to allow
the Secretary of the Treasury to pay such persons up to 25 percent of
the net amount recovered from the forfeiture of such items, not to
exceed $250,000. It should be noted that this section was only amended
to permit the Secretary to award informants compensation up to 25
percent, hereas in the past the amount of the award was mandated at 25
percent, with no discretion to reduce the award.
Section 622 of the Act (19 U.S.C. Section 1622) is amended to permit
the Secretary of the Treasury to require landing certificates to comply
with international obligations such as bilateral or multilateral
agreements to reduce or prevent smuggling.
Information
Section 628 is a new section added to the Act (19 U.S.C. Section
1628) which clarifies the Secretary's authority to exchange information
with foreign customs and law enforcement authorities.
and Preclearance in Foreign Countries
Section 629 is a new section added to the Act (19 U.S.C. Section
1629) through which the Secretary is granted specific authority to
operate Customs facilities in foreign countries. He is also given the
authority to extend United States Customs laws to foreign locations with
the consent of the country concerned.
Operations of the Customs Service
New Section 1630 of Title 19, United States Code, is expected to be
created by the Act; however, this is not clear from the text of the Act
itself, which does not specify where, if anywhere, in the Tariff Act
this provision should be placed. Section 3131 of the Act authorizes the
Secretary of the Treasury to utilize commercial "cover" corporations,
bank accounts, and to lease property and pay for services without
complying with the normal requirements which would reveal Government
involvement when such activities are needed in authorized investigative
activities. Many of the larger smuggling, export, and currency
investigations require Customs special agents and other officers to
assume commercial "cover" identities and to set up "cover" operations.
At present, Customs officers must often rely on the utilization of
"cover" corporations and businesses established by local and state (or
other federal) enforcement agencies. This has proven awkward and, in
some cases, may have actually compromised the investigation. In
addition, the new section would make it clear that the usual laws
governing bank deposits and space rentals do not apply in such
undercover situations. The proposed authority parallels the authority
of other federal law enforcement authorities such as the FBI and DEA.
As stated above, this section of the Act does not contain codification
directions as in other provisions. It will probably be codified as 19
U.S.C. Section 1630.
Part 3 contains the Customs appropriation bill for Fiscal Year 1987
and amendments to the Customs Forfeiture Fund. A discussion of the
forfeiture amendments are contained in the discussion of Subtitle D of
Title I, supra.
46 U.S.C. Section 12109(b), the documentation laws, are amended to
make it clear that while documented yachts do not have to make formal
entry, they must report their arrival to Customs and declare any goods
on board. Recent changes to the language in the documentation laws have
led to some confusion with some private yacht owners believing that they
were exempt from all Customs regulations. In fact, they are only exempt
from formal entry and clearance procedures.
Officers
19 U.S.C. Section 507, which Customs officers use to request the
assistance of others, is amended by eliminating references to a
three-mile distance and by raising the criminal penalties for failure to
render assistance. Customs officers must frequently rely on assistance
by state and local agencies and civilians in performing their duties.
For example, suspect planes picked up on radar may land before Customs
officers can arrive. Local police or airport authorities are frequently
called upon and asked to detain the pilot and passengers until Customs
can arrive. Subsection (b) would provide immunity to persons other than
federal employees assisting Customs offices in good faith. This
provision is based on various "good Samaritan" laws and is intended to
reassure aid of federal officials. The liability of federal employees
will continue to be governed by existing case law, which permits a
qualified immunity defense to a federal official who was acting in good
faith with a reasonable belief in the validity of his or her action.
See Bivens v. Six Unknown Named Agents, 456 F.2d 1339 (2d Cir. 1972).
Imports of Monetary Instruments
31 U.S.C. Section 5316(a)(2) is amended to raise to $10,000 the
minimum amount which must be reported by a person who receives monetary
instruments. This amendment merely conforms the reporting requirements
to amendments to 31 U.S.C. Section 5316(a)(1) contained in Pub L.
98-473.
Distribution for Purposes of Unlawful Importation
21 U.S.C. Section 959 is amended to make it unlawful for a United
States citizen or any person aboard a United States aircraft to possess
controlled substances with an intent to manufacture or distribute, or
for any person aboard an aircraft to possess with an intent to
manufacture or distribute a controlled substance knowing or intending
that it be unlawfully introduced into the United States or within a
distance of twelve miles from the coast. These provisions close certain
gaps in the law as it related to aircraft.
Government prosecutors handling drug-smuggling cases should be
particularly aware of 19 U.S.C. Section 1590, the new anti-air smuggling
statute.
This new statute provides that it is unlawfl for a pilot to
transport, or for any person on board any aircraft to possess,
merchandise knowing or intending that the merchandise will be introduced
into the United States contrary to law. It also prohibits the transfer
("air drop") of merchandise from an aircraft to a vessel on the high
seas or in the customs waters of the United States where the transfer
has not been authorized by the Secretary of the Treasury and any of the
following are applicable: (1) the aircraft is owned by a citizen of the
United States, (2) the aircraft is registered in the United States, (3)
the vessel is a "vessel of the United States" within the meaning of 19
U.S.C. Section 1703(b), or (4) the transfer is made under circumstances
indicating the intent to make it possible for such merchandise, or any
part thereof, to be introduced into the United States unlawfully. The
criminal penalty where any of the merchandise is a controlled substance
is a fine of not more than $250,000, imprisonment for not more than 20
years, or both, regardless of the amount of drug involved. Otherwise,
the penalty is a $10,000 fine, imprisonment for not more than 5 years,
or both. A civil penalty of twice the value of the merchandise involved
-- but not less than $10,000 -- may be the sole penalty or may be
imposed in addition to the criminal penalty. Additionally, the vessel
or aircraft involved in the act would be forfeitable to the United
States.
To aid in this connection, the statute provides various rebuttable
presumptions that constitute prima facie evidence that the vessel or
aircraft was involved in smuggling merchandise into the United States.
Except for Part 3, which deals with the FY '87 appropriation for the
Customs Service and with the Customs Forfeiture Fund, and which has a
separate effective date, the effective date of the Customs Enforcement
Act of 1986 is October 27, 1986.
Questions regarding the provisions of Subtitle B of Title III may be
directed to William J Corcoran (786-4704) of the Narcotic and Dangerous
Drug Section, or to Ellen McClain, Office of Chief Counsel, U.S.
Customs Service, (566-2482), as well as to Jorge Rios-Torres at the
Office of Enforcement Operations (633-3684).
The Act of September 15, 1980 (Pub. L. 96-350) made it unlawful for
persons on board vessels of the United States or subject to the
jurisdiction of the United States to knowingly or intentionally
manufacture or distribute, or to possess with the intent to manufacture
or distribute, a controlled substance. Subtitle C of Title III of the
new Act (the "Maritime Drug Law Enforcement Prosecution Improvements Act
of 1986") amends that law, previously codified at Sections 955a, 955b,
955c, and 955d of Title 21, and which is reportedly being moved to 46
U.S.C. App. Section 1901 et seq., /63/ to eliminate two prosecutorial
problems which have arisen in the prosecution of criminal cases brought
thereunder.
First, criminal defendants arrested on board foreign or "stateless"
vessels frequently have asserted as a defense at trial that the
boardings which resulted in their arrests were not made in compliance
with international law. It is a well-established principle of
international law, however, that individual citizens do not have
standing to assert legal claims or defenses based on alleged
non-compliance with international law and that such matters are to be
resolved by the governments of the concerned nations through normal
diplomatic channels. Consistent with this principle, the new Act
provides that claims that a boarding was not made in compliance with
international law may only be made by the affected foreign nation, not
by an individual criminal defendant and not in a federal criminal trial.
Second, some federal courts have required federal prosecutors to
prove a vessel's status (viz., domestic, foreign, or stateless), the
consent of a foreign government to a boarding, or the denial by a
foreign state of a claim of registry as an element of the offense at
trial. Prosecutors have experienced numerous problems in obtaining the
documentation necessary to prove such matters from the concerned foreign
government in a timely manner and in a format which renders the
documentation admissible as evidence at trial. Several prosecutions
have been jeopardized as a result. This subtitle eliminates this
problem by providing that such matters may be proved at trial by a
certification obtained from the Secretary of State or his designee.
Counsel should note that the definition of the term "vessel subject
to the jurisdiction of the United States," previously codified at 21 U.
S.C. Section 955b(c), has been substantially expanded and now includes
(i) vessels registered in a foreign nation where the flag nation has
consented or waived objection to the enforcement of United States law by
the United States; (ii) vessels located within the customs waters of
the United States; and (iii) vessels located in the territorial waters
/64/ of another nation where the nation consents to the enforcement of
United States law by the United States. By expanding the definition of
"vessel subject to the jurisdiction of the United States," the subtitle
creates a new offense outlawing the manufacture, distribution, or
possession with intent to manufacture or distribute, of a controlled
substance aboard a vessel located within the "territorial waters" of
another country where that country affirmatively consents to enforcement
action by the United States.
Finally, the new Act expands the definition of "stateless vessels" to
include vessels on which the master fails to respond to Coast Guard
inquiries concerning the vessel's nationality.
It should be emphasized that this subtitle of the Anti-Drug Abuse Act
is not designed to, nor will it, alter the current enforcement practices
of the Coast Guard. It is directed essentially at problems of
prosecution, not enforcement. Therefore, interagency consultation under
Presidential Directive/NSC-27 will continue. That procedure provides an
inherent check upon the enforcement program vis-a-vis non-United States
flag vessels on the high seas. The Coast Guard and the other involved
United States Government departments and agencies have scrupulously
adhered to principles of international law in the maritime drug law
enforcement program, and that policy will remain unchanged.
Questions concerning this Subtitle should be directed to William
Corcoran (786-4704) in the Narcotic and Dangerous Drug Section. In
addition, copies of significant pleadings or decisions regarding the
provisions of this subtitle should be sent to the Narcotic and Dangerous
Drug Section, Criminal Division, Department of Justice, 1400 New York
Avenue, N.W., Washington, D.C. 20005.
Subtitle G of Title III of the Anti-Drug Abuse Act of 1986 amends the
Federal Aviation Act of 1958, Title 49, United States Code; Appendix,
to provide additional federal penalties for certain aviation-related
conduct. It also broadens federal, state, and local ability to
scrutinize, and, for state governments, to proscribe a variety of
aviation-related conduct, most of which may relate to drug-trafficking
activity (although the establishment of such relationship is not a
prerequisite for many of the remedial actions contained in these new
provisions).
The Federal Aviation Act of 1958 has been modified by the Anti-Drug
Abuse Act to: (1) authorize state governments to establish criminal
penalties, including the seizure and forfeiture of aircraft, for various
aviation violations relating to aircraft registration certificates and
false or misleading aircraft marks (new 49 U.S.C. App. Section
1472(b)(3)); (2) provide that the operator of an aircraft shall make
available for inspection an aircraft's certificate of registration upon
request by a federal, state, or local law enforcement officer (new 49
U.S.C. App. Section 1401(g)); (3) provide a maximum penalty of five
years in prison and a fine of $25,000 for a variety of aviation
violations relating to aircraft registration certificates, airman
certificates, navigation or anticollision lights, and fuel-system
modifications (49 U.S.C. App. Section 1472(q), as amended); (4)
incorporate a presumption relating to fuel-system modifications; (5)
modify the rules relating to forfeiture under these provisions; (6)
increase the fine for violations of port of entry or clearance
regulations from $500 to $5,000 (49 U.S.C. App. Section 1474(a), as
amended); and (7) require notification to the Secretary of the Treasury
with regard to the sale, conditional sale, transfer, or conveyance of an
ownership interest in any aircraft for which a certificate or
registration has been issued under the Federal Aviation Act (new 49
U.S.C. App. Section 1509(f)).
As with the provisions of the Aviation Drug-Trafficking Control Act,
Pub. L 98-499 (enacted October 19, 1984) (see the Handbook on the
Comprehensive Crime Control Act of 1984), in order to effectuate the
purpose of these new provisions, all aircraft-related drug convictions
of persons who hold certificates subject to the provisions of the
Federal Aviation Act of 1958 (e.g., aircraft registration certificates,
airman certificates) should be brought to the attention of the
Investigations and Security Division of the Federal Aviation
Administration. Even if criminal charges are not contemplated, or an
acquittal results because of technicalities which would not impede an
administrative proceeding, prosecutors should refer the matter to the
attention of the Federal Aviation Administration.
Questions concerning this subtitle should be referred to Gary
Schneider (786-4700) in the Narcotic and Dangerous Drug Section.
In addition to setting forth the authority of up to 500 officers and
employees of the National Forest Service to investigate federal offenses
with regard to the manufacture (e.g., cultivation), distribution, or
dispensing of marihuana and other controlled substances within the
boundaries of the National Forest System, the "National Forest System
Drug Control Act of 1986" creates a new substantive offense to
specifically proscribe the use of "boobytraps" on federal property in
connection with the manufacture, distribution, or dispensing of
controlled substances. This would include the use of such devices to
protect marihuana being grown in a National Forest.
841(e))
The "Boobytrap" provision of this new law, codified at 21 U.S.C.
Section 841(e)(1), provides that anyone "who assembles, maintains,
places, or causes to be placed a boobytrap on Federal property where a
controlled substance is being manufactured, distributed, or dispensed
shall be sentenced to a term of imprisonment for not more than 10 years
and shall be fined not more than $10,000." /65/ The term of imprisonment
and fine are doubled for a second or subsequent violation of this
subsection through application of 21 U.S.C. Section 841(e)(2).
"Boobytrap" is defined in Subsection (3) of 21 U.S.C. Section 841(e)
to mean "any concealed or camouflaged device designed to cause bodily
injury when triggered by any action of any unsuspecting person making
contact with the device. Such term includes guns, ammunition, or
explosive devices attached to trip wires or other triggering mechanisms,
sharpened stakes, and lines or wires with hoods attached."
With regard to enforcement powers under new 21 U.S.C. Section 841(
e), because of the placement of this new proscription in Title 21 rather
than in the explosives and firearms provisions of Title 18, it would
appear that investigative jurisdiction for this offense would reside in
either the National Forest Service (which has received broadened drug
enforcement powers in an earlier part of Title XV) or the Drug
Enforcement Administration, rather than in the Bureau of Alcohol,
Tobacco and Firearms. Still, because of the provisions of Section 15007
of Title XV, any new drug enforcement authority granted to the National
Forest Service by this title may only be exercised following an
agreement approved by the Secretary of Agriculture and the Attorney
General. Any such agreement may end up limiting the authority of the
National Forest Service with regard to this provision or as to whatever
other drug enforcement authority the National Forest Service would have
received through the provisions of Title XV with regard to enforcement
powers under the Controlled Substances Act. Pursuant to the Act, and to
be incorporated in any memorandum of understanding concerning the Act,
the authorities of the National Forest Service will be restricted in the
exercise of any new authority to the boundaries of the National Forest
System. Any investigation whose scope exceeds these boundaries will
have to be coordinated with the local DEA office.
Until such agreement is in force, only DEA (and the FBI, by an
earlier Attorney General Directive) can enforce the provisions of the
Controlled Substances Act, including this new provision, although the
National Forest Service may continue to exercise whatever inherent
authority it has with regard to such criminal activity, as specifically
provided for in Section 15002(b) of this title.
It is also possible that limited enforcement powers with regard to
new 21 U.S.C. Section 841(e) may be delegated to the Bureau of Alcohol,
Tobacco and Firearms by agreement between the Attorney General and the
Secretary of the Treasury.
As an aside, prosecutors should be aware that last-minute attempts
within the Executive Branch to have Congress change new 21 U.S.C.
Section 841(e) from Title 21 to a section in Title 18, as well as to
change the fine provision of this provision to correspond to the
Criminal Fine Enforcement Act, both proved unproductive, although these
matters were never specifically raised in, or rejected by, Congress.
Questions concerning the provisions of new 21 U.S.C. Section 841(e)
should be directed to Gary Schneider (786-4700) in the Narcotic and
Dangerous Drug Section.
* The effective date of criminal legislation is generally the date of
enactment, whether with or without the President's signature. When the
President has signed the bill, the time of the President's signature is
the true time that the legislation is enacted and, unless some other
date is indicated for the provision to go into effect, effective. Where
a criminal statute is effective as of the President's signature (viz.,
it does not contain a delayed effective date) but the exact time of
signature is both unknown and at issue (because the offense could have
occurred on the date but before this time), it may be necessary to
establish the time of signature by appropriate testimony or affidavit as
part of the criminal proceedings under the new statute. Where a bill is
enacted into law without the signature of the President (viz., at the
end of the 10-day period following the bill's being forwarded to the
President, where the bill has not been vetoed during that time), it is
effective, absent some language to the contrary, at the moment following
the 10-day period, at which time the President loses his ability to veto
the legislation.
Many bills, however, have a delayed effective date which is contained
at the end of the bill or following certain provisions of the bill. For
example, the Criminal Fine Enforcement Act, although enacted on October
30, 1984, provided that the "alternative fine" provisions would only be
effective for offenses occurring after December 31, 1984.
For the bills listed in this chart, the effective date is that of the
bill or the major drug-related portions of the overall bill.
Confirmation of the actual date of enactment of a statute can be
accomplished through reference to the relevant sections of the United
States Code.
Prior to the enactment of the Comprehensive Crime Control Act of 1984
(Pub L. 98-473), the criminal fines to be imposed in drug cases were
those included in the specific penalty sections of Title 21 (viz., 21
U.S.C. Sections 841(b) and 960(b)). With enactment of the CCCA, this
changed because of the creation of a general "alternative fines"
provision -- 18 U.S.C. Section 3571 -- which overrides the maximum fines
authorized by the statute describing the offense if the fines in 18
U.S.C. Section 3571 are greater (up to $250,000 for felonies), as called
for in 18 U.S.C. Section 3559. These provisions are to go into effect
with the rest of the Sentencing Reform Act that was passed as part of
the CCCA. (The effective date for the SRA was to have been November 1,
1986, but this date was delayed one year until November 1, 1987, by
Section 4 of Pub. L. 99-217.) The CCCA also created a specific Title 21
"alternative fine" provision -- 21 U.S.C. Section 855 -- which allowed
for the imposition of an alternative fine of twice the gross profits or
other proceeds derived from the offense. Section 855 was effective as
of the President's signature on the CCCA, October 12, 1984. Not wishing
to wait until the SRA became effective to incorporate the Title 18
alternative fine provision into law, Congress shortly after enactment of
the CCCA, on October 30, 1984, enacted the Criminal Fine Enforcement Act
(Pub. L. 98-596), which provided alternative fines for all federal
offenses occurring after December 31, 1984. This provision, codified at
18 U.S.C. Section 3623, is currently in effect, and should remain in
effect until November 1, 1987, when the SRA is presently expected to
repeal the chapter of Title 18 in which 18 U.S.C. Section 3623 is
placed. /66/
Complicating matters somewhat is the questionable effect these
"alternative fines" provisions -- in either 18 U.S.C. Section 3623 or
Section 3571 -- will have on later-enacted statutes, such as the
Anti-Drug Abuse Act of 1986 (Pub. L. 99-570).
Most of the drug-related statutes enacted as part of the ADAA made
specific reference to the fines provisions in Title 18, thereby
obviating any question as to the applicability of the "alternative
fines" provisions then existing or to go into effect on November 1,
1987. However, several of the new statutes, such as the new penalties
for drug possession (Section 1052 of the ADAA, amending 21 U.S.C.
Section 844), drug paraphernalia (Section 1822 of the ADAA, to be
codified at 21 U.S.C. Section 857), and the use of "boobytraps" on
federal property (Section 15005 of the ADAA, to be codified at 21 U.S.
C. Section 841(e)), have lower fines than otherwise available in the
"alternative fines" provisions, but make no reference to Title 18 fines.
After discussion within the Criminal Division, it is our initial
conclusion that the statutes which were enacted as part of the ADAA
which do not make a specific reference to Title 18 fines do not receive
the enhanced fines allowed for in 18 U.S.C. Section 3623. However, the
effect that the alternative fines contained in the soon-to-be-effective
SRA (viz., 18 U.S.C. Section 3571) will have on these statutes and other
later-enacted statutes is unclear. We anticipate that policy advice
relating to all of these issues will be forthcoming in the near future.
Questions regarding this issue may be referred to the Narcotic and
Dangerous Drug Section or the Appellate Section.
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COMDTNOTE 16247
SUBJ: ENFORCEMENT OF DRUG TRAFFICKING LAWS
A. ANTI-DRUG ABUSE ACT OF 1986, P.L. 99-570
B. MARITIME LAW ENFORCEMENT MANUAL, COMDTINST M16247.1
1. Reference (A) amended 22 USC 2291 (C), "Mansfield Amendment",
resulting in greater flexibility in the enforcement of law against
illicit drug trafficking in foreign territorial waters, and amended 21
USC 955a, the prohibition against drug trafficking. The following
guidance is provided to delineate the limits and requirements for
exercising law enforcement actions consistent with these statutory
changes.
2. 22 USC 2291(c), as amended, now states in part: (1) no officer
or employee of the United States may directly effect an arrest in any
foreign country as part of any foreign policy action with respect to
narcotics control efforts . . . this paragraph does not prohibit an
officer or employee from assisting foreign officers who are effecting an
arrest, (2) unless . . . application of this paragraph . . . would be
harmful to the national interests of the United States, no officer or
employee of the United States may engage or participate in any direct
police action in any foreign country with respect to narcotics control
efforts . . . nothing in paragraph (1) shall be construed to allow
United States officers or employees to engage or participate in
activities prohibited by this paragraph . . . (4) with the agreement of
a foreign country, paragraphs (1) and (2) shall not apply with respect
to maritime law enforcement.
Operations in the territorial sea of that country. The application
of subparagraph (4) is restricted to operations within a consenting
coastal state's territorial sea. This term refers to the belt of sea
measured from the coastal state's baseline as recognized in accordance
with multilateral international conventions and customary international
law. Therefore, it is imperative that units be aware of the precise
location of any suspected violator (i.e., the high seas, territorial
seas, or internal waters) before taking law enforcement action.
3. The following guidelines are applicable to drug related law
enforcement action from USCG units:
A. Enforcement of law, (U.S. or foreign) on the high seas, U.S.
territorial seas and U.S. internal waters. Actions will be conducted in
accordance with reference (b).
B. Enforcement of U.S. law against U.S. vessels in the territorial
sea or internal waters of a consenting foreign country. Reference (a)
is not considered to have affected USCG authority to enforce U.S. law.
Actions will be conducted in accordance with reference (b).
C. Enforcement of U.S. law against foreign vessels in the
territorial sea and internal waters of a consenting foreign country.
Reference (a) removed any question of Mansfield restrictions concerning
enforcement of U.S. law against foreign flag vessels and the individuals
onboard while located in a consenting coastal state's territorial seas.
Mansfield is also considered inapplicable to enforcement of U.S. law by
USCG units in a consenting state's internal waters. Actions will be
conducted in accordance with reference (b). Coastal state consent to
entry of the USCG unit into its territorial waters does not by itself
provide U.S. jurisdiction over foreign flag vessels. A foreign flag
vessel located in a coastal state's territorial waters must be suspected
of violating U.S. law to be subject to USCG law enforcement. In
addition to the COMDT SNO for entry into a coastal state's territorial
waters for law enforcement purposes, a COMDT SNO must be obtained for
non consensual boardings, seizures of foreign flag vessels, and arrests
of individuals on board.
D. Enforcement of foreign law against foreign flag vessels in the
territorial sea of a consenting foreign country. The following actions
on behalf of the consenting coastal state are permitted if conducted in
the coastal state's territorial sea: boardings, searches, seizures,
arrests of individuals, and cooperative law enforcement actions,
including joint boardings, transportation of boarding parties and
suspects, transportation of seized vessles, detentions of individuals,
and technical support.
E. Enforcement of foreign law against foreign vessels in the
internal waters of a foreign country. Subsection (2) of Mansfield
specifically prohibits U.S. officers or employees from participating in
any direct police action in any foreign country. Consistent with past
practice, arrests of individuals, detentions of individuals restricting
freedom of movement until arrival of local police, joint boardings, and
transportation of suspects in the consenting coastal state's internal
waters for violation of foreign law is not permitted. Cooperation such
as providing equipment or information is authorized. Coastal state
requests for cooperative actions requiring the presence of USCG members
or units, such as technical support or transportation of boarding
parties, will be addressed on a case by case basis.
4. A COMDT SNO must be obtained prior to entering a coastal state's
territorial waters for law enforcement purposes. A request for a SNO
must include, when available, the name and governmental position of any
foreign official purporting to grant consent to enter on behalf of the
coastal state. A request for a SNO must indicate whether the suspect
vessel is located in the coastal state's territorial sea or internal
waters.
5. Law enforcement authority of USCG personnel embarked on U.S.
navy vessels is to be exercised only on the high seas and U.S.
territorial waters. Any deviation from this policy must be approved in
advance by G-OLE.
6. Coast Guard members and other U.S. law enforcement personnel may
not interrogate or be present during the interrogation of U.S. citizens
arrested in a coastal state's territorial seas or internal waters for
violation of foreign law without the individual's written permission.
Regardless of the nationality of the arresting officer, arrestees or
detainees will be treated in accordance with Coast Guard policies while
onboard USCG vessels and USN vessles with taclets embarked.
7. Authority to conduct law enforcement in territorial waters of
consenting coastal states does not include authrotiy to pursue suspects
ashore.
8. Reference (a) replaced with four 21 USC 955a prohibitions against
illicit drug trafficking with a single offense. It is unlawful for any
person on board a vessel of the United
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States, or onboard a vessel subject to the jurisdiction of the United
States, to knowingly or intentionally manufacture or distribute, or to
possess with intent to manufacture or distribute a controlled substance.
A "vessel of the United States" includes (a) U.S. documented or
numbered vessels, (b) vessels owned in whole or part by a U.S. citizen,
or commercial or political entity, and (c) U.S. documented vessels sold
or registered in a foreign country in violation of U.S. law. A foreign
flag vessel is a "vessel subject to the jurisdiction of the United
States" if it (a) is located in the customs waters of the United States,
(b) is located on the high seas and the flag state has consented or
waived objection to enforcement of U.S. law, or (c) is located in the
territorial waters of another nation and that coastal state consents to
the enforcement of U.S. law. A vessel without nationality or
assimilated to a vessel without nationality is a "vessel subject to the
jurisdiction of the United States". Therefore, a violation requires
proof that the vessel meets one of the statutory definitions and that
there is intent to distribute or manufacture controlled a substance.
9. The policy contained in this message will be published in the
next available change to reference (b). Suggestions for modifications
should be addressed to COMDT G-OLE.
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New basic offenses of "money laundering" (18 U.S.C. Section 1956) and
"engaging in monetary transactions in property derived from specified
unlawful activity" (18 U.S.C. Section 1957):
(a) Money Laundering: "Financial transaction" type -- 18 U.S.C.
Section 1956(a)(1)
(1) Conducts, or attempts to conduct, a financial transaction
(2) With knowledge that the subject matter represents the
proceeds of some form of U.S., state, or foreign unlawful activity
(3) And the subject matter in fact represents the proceeds of
"specified unlawful activity" --
(a) Any federal felony drug offense
(b) Any foreign felony drug offense
(c) Any RICO predicate except for Title 31
(d) Or any of a series of miscellaneous bank fraud, espionage,
or export offenses
(4) Involving either a transaction that is
(a) In a financial institution, or
(b) That affects interstate or foreign commerce
(5) With knowledge that the transaction is designed (in whole
or in part)
(a) To promote further "specified unlawful activity," or
(b) To --
(i) conceal or disguise the source, origin, location, or
ownership of proceeds of specified unlawful activity, or
(ii) avoid a federal or state reporting requirement
(b) Money Laundering: "Transportation" type -- 18 U.S.C. Section
1956(a)(2)
(1) Transporting, or attempting to transport, a monetary
instrument or funds
(a) From inside the United States to or through a place
outside, or
(b) From outside the United States to or through a place inside
(2) With
(a) The intent to promote the carrying on of "specified
unlawful activity" --
(i) Any federal felony drug offense
(ii) Any foreign felony drug offense
(iii) Any RICO predicate except for Title 31
(iv) Or any of a series of miscellaneous bank fraud, espionage,
or export offenses, or
(b) Inowledge
(i) That the subject matter represents the proceeds of some
form of U.S., state, or foreign unlawful activity, and
(ii) That the transaction is designed to --
-- conceal or disguise the source, origin, location, or
ownership of the proceeds of specified unlawful activity, or
-- avoid a federal or state reporting requirement
(c) Engaging in monetary transactions in property derived from
specified unlawful activity -- 18 U.S.C. Section 1957
(1) Engages, or attempts to engage, in a "monetary transaction"
(i) e.g., deposit, withdrawal, transfer
(ii) by, through, or to a financial institution
(2) In "criminally derived property"
(3) Which is derived from "specified unlawful activity" --
(i) Any federal felony drug offense
(ii) Any foreign felony drug offense
(iii) Any RICO predicate except for Title 31
(iv) Or any of a series of miscellaneous bank fraud, espionage,
or export offenses
(4) And is of a value greater than $10,000
(1) The term "marihuana," as defined in 21 U.S.C. Section 802(15),
encompasses the various forms of the plant as well as such common
marihuana derivatives as hashish and hashish oil. See, e.g., United
States v. Gagnon, 635 F.2d 766, 770 (10th Cir. 1980), cert. denied, 451
U.S. 1018 (1981); United States v. Kelly, 527 F.2d 961, 963-64 (9th
Cir. 1976). Except where hashish and hashish oil are separately treated
in the Controlled Substances Act and Controlled Substances Import and
Export Act -- see, e.g., 21 U.S.C. Sections 841(b)(1)(D), 960(b)(4) --
Government counsel should refer to the penalties applicable to offenses
involving marihuana in determining the penalties applicable to these
marihuana derivatives.
(2) The new Act defines "serious bodily injury" as an injury
involving (i) a substantial risk of death, (ii) protracted and obvious
disfigurement, or (iii) protracted loss or impairment of the function of
a bodily member, organ, or mental faculty. This definition is codified
at 21 U.S.C. Section 802(25).
(3) Subsections 841(b)(1)(A) and 960(b)(1) -- and several other
subsections of 21 U.S.C. Sections 841 and 960 discussed infra -- provide
that a court may impose a fine not to exceed the greater of either (i)
that authorized under Title 18, United States Code (or twice that amount
if the defendant is a "repeat drug offender") or (ii) a specified (often
multi-million-) dollar amount. The reference to Title 18 enables courts
to apply the alternative fine provisions of 18 U.S.C. Section 3623, as
enacted by Section 6(a) of Pub. L. 98-596. The alternative fines
authorized by 18 U.S.C. Section 3623 are generally (but not always)
lower than the "specified dollar amount" fines authorized under the
various fine provisions of Title 21, as amended by the Anti-Drug Abuse
Act of 1986. However, a defendant who has derived pecuniary gain from
an offense may be fined under 18 U.S.C. Section 3623(c)(1) up to twice
the amount of the gain (which amount may again be doubled under certain
provisions of 21 U.S.C. Sections 841(b) and 960(b) if the defendant is a
"repeat drug offender"). Such a fine may occasionally exceed the
"specified dollar amount" fine under the applicable provision of Title
21 and Government counsel should be alert for such cases.
Counsel should note, however, that the fine provisions of the
Sentencing Reform Act of 1984 (18 U.S.C. Sections 3571-3575, as enacted
by Pub. L. 98-473) are currently scheduled to replace existing law
(including 18 U.S.C. Section 3623) on November 1, 1987. The new fine
provisions will include an alternative fine scheme similar to that under
18 U.S.C. Section 3623 (which is to be codified as 18 U.S.C. Section
3571), but will not include a provision comparable to 18 U.S.C. Section
3623(c)(1) authorizing a court to double the amount of pecuniary gain
derived from an offense in determining the maximum fine. The Department
has proposed amendments to the Sentencing Reform Act that will re-enact
the "gain doubling" fine provision in Title 18.
Counsel should also note that 21 U.S.C. Section 855 (which will not
be affected by the new Act) serves the same purpose as 18 U.S.C.
Section 3623(c)(1) by providing that "(i)n lieu of a fine otherwise
authorized by this part, a defendant who derives profits or other
proceeds from an offense may be fined not more than twice the gross
profits or other proceeds." The only drawback in using this provision of
Title 21 instead of 18 U.S.C. Section 3623(c)(1) is that the amount of
gain doubled thereunder cannot again be doubled in the case of "repeat
drug offenders" because the applicable penalty provisions of 21 U.S.C.
Sections 841 and 960 only provide that such "repeat drug offenders" are
subject to "twice (the fine) authorized (under) Title 18." See, e.g., 21
U.S.C. Sections 841(b)(1)(A) and 960(b)(1), as amended. See also
Appendix B.
(4) Such convictions could include: (i) convictions under the
provisions of either 21 U.S.C. Section 841 or 21 U.S.C. Section 960;
(ii) felony convictions under any other provisions of Title II (the
Controlled Substances Act) or Title III (the Controlled Substances
Import and Export Act) of the Comprehensive Drug Abuse Prevention and
Control Act of 1970 or any other federal law relating to narcotic drugs,
marihuana, or depressant or stimulant substances (see, e.g., the Act of
September 15, 1980, Pub. L. 96-530, as amended by Section 3202 of the
Anti-Drug Abuse Act of 1986, formerly codified at 21 U.S.C. Section
955a et seq. and now codified at 46 U.S.C. App. Section 1901 et seq.,;
or (iii) felony convictions under any state or foreign law relating to
narcotic drugs, marihuana, or depressant or stimulant substances.
(5) See note 2, supra.
(6) See note 3, supra.
(7) This argument, which may also be made with respect to several
other fine provisions under 21 U.S.C. Sections 841(b) and 960(b), has
little or no merit. See discussion in subpart "vi", infra.
(8) See note 1, supra.
(9) See note 2, supra.
(10) See note 3, supra.
(11) See note 2, supra.
(12) See note 3, supra.
(13) See note 7, supra.
(14) See note 2, supra.
(15) Id.
(16) See note 3, supra.
(17) See note 3, supra.
(18) See note 7, supra.
(19) Counsel should note that this "work-off" provision applies not
only to any provision of Title 21 requiring imposition of a mandatory
minimum term of imprisonment but also to any other federal law requiring
imposition of mandatory minimum terms of imprisonment. See, e.g., 18
U.S.C. Section 924(c).
(20) The one-year period under the amended rule will extend by
approximately eight months the time in which a motion to reduce sentence
may be filed in cases where the defendant has entered an unconditional
guilty or "nolo" plea because the pre-amendment rule required that
motions in such cases be filed within 120 days of sentencing. In cases
where the defendant either entered a conditional plea or was found
guilty at trial and then appealed his conviction, the pre-amendment rule
permitted the filing of motions to reduce sentence within 120 days of
affirmance of the conviction by either the court of appeals or the
Supreme Court. This latter provision will be eliminated when the
amended rule takes effect and all motions filed pursuant to the amended
rule will have to be filed "within one year after the imposition of . .
. sentence" irrespective of whether an appeal is taken.
(21) If a plea agreement is offered by the Government and "accepted"
by the defendant, it may still be unilaterally revoked by the Government
at any time prior to actual entry of the plea. See Mabry v. Johnson,
467 U.S. 504, 509-11 (1984). Courts will not enforce such revoked
agreements.
(22) See, e.g., United States v. Bullock, 725 F.2d 118 (D.C. Cir.
1984).
(23) See, e.g., United States v. Brummett, 786 F.2d 720, 721 (6th
Cir. 1986); United States v. Vocolla, 600 F Supp. 1534, 1536 (D.R.I.
1985).
(24) See, e.g., United States v. Reardon, 787 F.2d 512 (10th Cir.
1986); United States v. Travis, 735 F.2d 1129 (9th Cir. 1984).
(25) See, e.g., United States v. Quan, 789 F.2d 711, 713 (9th Cir.
1986).
(26) Courts vary in the degree to which they interpret ambiguities in
favor of the defendant and against the Government. Compare In re
Arnett, 804 F.2d 1200, 1204 (11th Cir. 1986) (holding that the
Government breached plea agreement -- providing that defendant would
plead guilty and forfeit $3000 cash found on his person at time of
arrest -- when it sought forfeiture of defendant's house and farm) with
United States v. Fitzhugh, 801 F.2d 1432 (D.C. Cir. 1986) (DEA is not
precluded from pursuing administrative action to revoke appellant's
registration to dispense Schedule III, IV, and V controlled substances
where appellant had pleaded guilty pursuant to a plea agreement in which
he voluntarily agreed to surrender his registration to dispense Schedule
II drugs).
(27) United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972)
(quoted with approval in Russello v. United States, 464 U.S. 16, 23
(1983)). See also J. Ray McDermott & Co., Inc., 409 U.S. 948 (1972)
("Where Congress has carefully employed a term in one place but excluded
it in another, it should not be implied where excluded.").
(28) Conspirators convicted under 21 U.S.C. Section 846 or Section
963 might also be vicariously liable for substantive offenses committed
by their co-conspirators in furtherance of the conspiracy. See
Pinkerton v. United States, 328 U.S. 640 (1946).
(29) However, this rule of presumptive concurrence does not apply and
is, in fact, reversed, where one sentence is imposed by a federal court
and the other by a state court. See, e.g., Causey, 621 F.2d at 693 n.2;
Gomori v. Arnold 533 F.2d 871, 875-76 (3rd Cir.), cert. denied, 429
U.S. 851 (1976) (where federal district judge does not request and
Attorney General does not designate that federal sentence run
concurrently with sentence imposed by state court, federal sentence does
not begin to run until person is received into federal custody).
(30) See note 3, supra.
(31) Id.
(32) Id.
(33) Id.
(34) Id.
(35) Id.
(36) Id.
(37) See note 1, supra.
(38) See note 3, supra.
(39) It should be noted, however, that the effective date of 18 U.S.
C. Section 3583 previously has been, and may again be, postponed. See
Pub. L. 99-217, at Section 4 (effective September 26, 1985).
(40) At least one federal court has ruled that "special parole terms"
may no longer be imposed under 21 U.S.C. Section 841(b)(1)(B), as
amended by the Anti-Drug Abuse Act of 1986. See United States v.
Phungphiphadhana, 640 F. Supp. 88 (D. Nev. 1986). As stated in the
text, the Department agrees with this decision. The Department believes
that "terms of supervised release" -- not "special parole terms" --
should now be imposed under 21 U.S.C. Sections 841(b)(1)(A), (B), and
(C) and 960(b)(1), (2), and (3), as amended, henever a term of
imprisonment is imposed.
(41) The Department is taking the position that the alternative fine
provisions of 18 U.S.C. Section 3623, as enacted by Section 6(a) of Pub.
L. 98-596, which are currently in effect, do not apply to offenses under
21 U.S.C. Section 844. The basis for this position is that where
Congress intended for such fines to apply under the various provisions
of the Anti-Drug Abuse Act of 1986 it expressly provided for imposition
of such fines. However, in amending 21 U.S.C. Section 844, Congress
made no mention of the fines available under Title 18. Application of
the maxim of statutory construction "expressio unius es exclusio
alterius" leads to the conclusion that Congress, by including references
to the fines available under Title 18 in certain provisions of the Act
but omitting them from others (including 21 U.S.C. Section 844), acted
intentionally in the disparate inclusion and exclusion, and, therefore,
that the alternative fine provisions of Title 18 do not apply unless
expressly mentioned in the statutory provision. See, e. g., United
States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972) (quoted with
approval in Russello v. United States, 464 U.S. 16, 23 (1983)). See
also Appendix B.
TITLE I
Subtitle A - Narcotics Penalties and Enforcement
Act and
Subtitle G - Controlled Substances Import and
Export Act Penalties Enhancement Act
Subtitle B - Drug Possession Penalty Act
Subtitle C - Juvenile Drug Trafficking Act
Subtitle D - Assets Forfeiture Amendments Act
(including Money Laundering Forfeiture
Amendments) and
Subtitle Q - Controlled Substances Technical
Amendments
Subtitle E - Controlled Substance Analogue
Enforcement Act
Subtitle F - Continuing Drug Enterprise Act
Subtitle H - Money Laundering Control Act
Subtitle I - Armed Career Criminals
Subtitle M - Narcotics Traffickers Deportation
Act
Subtitle N - Freedom of Information Act
Subtitle O - Prohibition on the Interstate
Sale and Transportation of Drug Paraphernalia
Subtitle P - Manufacturing Operations
Subtitle T - Common Carrier Operation Under
the Influence of Alcohol or Drugs
TITLE II
International Narcotics Control Act
TITLE III
Subtitle B - Customs Enforcement Act
Subtitle C - Maritime Drug Law Enforcement
Prosecution Improvements Act
Subtitle G - Transportation Safety
TITLE XV
National Forest System Drug Control Act
APPENDIX A
Shorthand Chronology of Drug-Related Bills
Enacted Since 1970
APPENDIX B
Present Status of Criminal Fines in Drug Cases
APPENDIX C
Coast Guard Enforcement of Drug Trafficking Laws
APPENDIX D
Outline of New Money Laundering Offenses
eff. date name major provisions
10/15/70 Organized Crime RICO (18 U.S.C.
Control Act of 1961 et seq);
1970 (P.L. 91-452) dangerous special
offender; immunity
5/1/71 Bank Records and reporting requirements
Foreign Transactions for domestic and
Act (P.L. 91-508) foreign currency
transactions (Title
31 -- "Bank Secrecy
Act")
5/1/71 Comprehensive Drug drug provisions
Abuse Prevention and unified in Title
Control Act of 1970 21 -- Controlled
(P.L. 91-513) Substances Act,
Controlled Substances
Import and Export
Act
5/14/74 Narcotic Addict dispensing of narcotic
Treatment Act of drugs for
1974 (P.L. 93-281) maintenance/detoxification
treatment
11/10/78 Psychotropic piperidene reporting
Substances Act of (21 U.S.C. 830);
1978 (P.L. 95-633) enhanced
(certain parts phencyclidine/piperidine
relating to penalties (21 U.".C.
psychotropic 841(b)(5) (since
substances convention repealed) and 841(d);
eff.7/15/80) forfeiture of drug
proceeds (21 U.S.C.
881(a)(6))
9/15/80 Act of 9/15/80 high-seas offenses
(P.L. 96-350) (21 U.S.C. 955a-d)
9/26/80 Infant Formula Act distribution of 1,000
of 1980 (P.L. pounds of marihuana
96-359) (21 U.S.C.
841(b)(6)), now since
incorporated into 21
U.S.C. 841(b)(1)(A)
9/13/82 Act of 9/13/82 (P.L. RECODIFICATION of
97-258) Title 31
5/31/84 Controlled Substance "pharmacy robbery"
Registrant Protection (and burglary) statue
Act (P.L. 98-305) (18 U.S.C. 2118)
10/12/84 Comprehensive Crime enhanced drug
Control Act of 1984 penalties (including
(P.L. 98-473) limited "mixture or
substance" language);
extended forfeiture
provisions; bail
reform; emergency
scheduling;
distribution within
1,000 feet of school
(21 U.S.C. 845a);
sentencing reform;
Title 31 amendments
(attempt, wiretap,
RICO, rewards);
investment of illicit
drug profits (21 U.S.C.
854); cultivation on
federal property;
foreign evidence
10/19/84 Aviation Title 49 amendments
Drug-Trafficking relating to airman
Control Act certificates
(P.L. 98-499)
1/1/85 Criminal Fine provides alternative
Enforcement Act fines for all federal
(P.L. 98-596) offenses (18
U.S.C. 3623)
1/1/85 Deficit Reduction tax returns regarding
Act of 1984 cash transactions in
(P.L. 98-369) trade or business
(26 U.S.C. 6050I)
10/27/86 Anti-Drug Abuse minimum-mandatory
Act of 1986 sentences; controlled
(P.L. 99-570) substance analogues;
drug paraphernalis;
mandatory life
imprisonment for
"principal
administrator" of CCE;
money laundering (18
U.S.C. 1956);
transactions in
criminally derived
property (18 U.S.C.
1957); "mixture or
substance" language
broadened; use or
employment of a
person under 18,
distribution to a
pregnant woman (21
U.S.C. 845b);
forfeiture of
substitute assets (18
U.S.C. 1963(n) and
21 U.S.C. 853(p));
air drops (19 U.S.C.
1590(b)); customs law
amendments;
deportation changes;
Career Criminal Act
expanded to include
serious drug offenses;
maritime improvements
(21 U.S.C. 955a-d);
"boobytrap" on
federal property (21
U.S.C. 841(e));
"Mansfield
Amendment"
revision; revised
drug-possession
penalties (21 U.S.C.
844)
11/10/86 Criminal Law and clarifies the
Procedure Technical definition of cocaine
Amendments Act of and isomer; Authorizes
1986 (P.L. 99-646) the Attorney General
to enter into
cooperative agreements
with state and local
law enforcement
agencies regarding
cooperative
enforcement and
regulatory activities
under the CSA (21
U.S.C. 873(a));
extending the
enforcement powers of
21 U.S.C. 878 to
state and local law
enforcement officers
designated by the
Attorney General;
forfeiture
amendments
11/15/86 Firearm Owners' extends 18 U.S.C.
Protection Act 924(c) to specified
(P.L. 99-308) drug-trafficking
crimes; revises and
moves the Career
Criminal Act (new
18 U.S.C. 924(e))
1/20/87 Electronic extends Title-III
Communications coverage to
Privacy Act of 1986 "electronic
(P.L. 99-508) communications" (18
U.S.C. 2510 et seq.)
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