United States v. Alain Cyr , 764 F.3d 1055 ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 12-56988
Plaintiff-Appellee,
D.C. No.
ALAIN CYR, 2:11-cv-07180-
Claimant-Appellant, R-CW
v.
OPINION
$132,245.00 IN U.S. CURRENCY,
Defendant.
Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted
April 10, 2014—Pasadena, California
Filed August 21, 2014
Before: A. Wallace Tashima, N. Randy Smith,
and Mary H. Murguia, Circuit Judges.
Opinion by Judge N.R. Smith
2 UNITED STATES V. CYR
SUMMARY*
Civil Forfeiture
The panel affirmed the district court’s decision forfeiting
$132,245 for failure to report the currency when crossing the
United States border in violation of 31 U.S.C. § 5316, and for
bulk cash smuggling, in violation of 31 U.S.C. § 5332.
The panel compared the gravity of the claimant’s offense
with the amount to be forfeited, and held that forfeiture of all
$132,245 did not violate the Excessive Fines clause of the
United States Constitution.
COUNSEL
Richard Kaplan (argued), Kaplan Marino, P.C., Beverly Hills,
California; Eric Honig, Law Office of Eric Honig, Marina del
Rey, California, for Claimant-Appellant.
Steven Reuben Welk (argued), Assistant United States
Attorney, Chief, Asset Forfeiture Section; André Birotte Jr.,
United States Attorney; Robert E. Dugdale, Assistant United
States Attorney, Chief, Criminal Division; P. Greg Parham,
Assistant United States Attorney, Asset Forfeiture Section;
Office of the United States Attorney, Los Angeles, California,
for Plaintiff-Appellee.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
UNITED STATES V. CYR 3
OPINION
N.R. SMITH, Circuit Judge:
Alain Cyr appeals the district court’s decision forfeiting
$132,245 for failure to report the currency when crossing the
United States border in violation of 31 U.S.C. § 5316, see 31
U.S.C. § 5317(c), and for bulk cash smuggling, id. § 5332.
Cyr argues the forfeiture constitutes an excessive fine under
the Eighth Amendment.
Congress’s enactment of 31 U.S.C. § 5332, which
prohibits the act of bulk cash smuggling, affects the
excessiveness analysis in bulk cash smuggling cases. A
violation of § 5332, when connected with illegal activity,
constitutes a serious crime that inflicts significant harm. See
United States v. Del Toro-Barboza, 673 F.3d 1136, 1154 (9th
Cir. 2012). “Congress has thus tipped the forfeiture equation
in favor of the [government] in bulk cash smuggling cases.”
United States v. Jose, 499 F.3d 105, 111 (1st Cir. 2007).
Accordingly, we affirm the district court.
FACTS
Cyr is a Canadian resident. On March 12, 2011, he flew
from Montreal to Los Angeles carrying $132,245 in United
States currency. Upon arrival in the United States, Cyr failed
to report the cash on a customs declaration form. Nine days
later, as Cyr drove from Palm Springs to Los Angeles, a
deputy sheriff pulled Cyr over for speeding. The deputy
sheriff observed that Cyr was “extremely nervous, squirming
in his seat.” Upon the deputy sheriff’s request, Cyr allowed
the deputy sheriff to search Cyr’s car; the deputy sheriff
found a bag containing the $132,245. With Cyr’s consent, a
4 UNITED STATES V. CYR
drug dog (Jasper), inspected the cash and alerted a positive
response, meaning that the cash was contaminated with the
odor of a narcotic substance.
The deputy sheriff summoned an investigator to the
scene. The investigator interviewed Cyr. At the start of the
interview, the investigator noticed that Cyr “appeared to be
very nervous” and that “Cyr’s hands were shaking.” Cyr told
the investigator that he had just come from a casino, but Cyr
could not remember the name of the casino and was unable
to tell the investigator where the casino was located.
Cyr informed the investigator that “he had inherited the
money from his father,” who had recently passed away.
When the investigator asked Cyr if he could prove he had
inherited the money, Cyr stated that he could not provide any
documentation. Instead, he stated that he had actually found
the money in his father’s house after his father had died. Cyr
also stated that no one could corroborate his story, because he
had not told anyone about finding the money. Cyr told the
investigator that he was in California for vacation and
intended to use the money for gambling.
The officers seized the cash and arrested Cyr. The
officers also seized two sheets of notepad paper and two
cellular phones from Cyr’s person. The government filed a
civil forfeiture action for the entire $132,245. Cyr stipulated
that the defendant currency was subject to forfeiture under
31 U.S.C. §§ 5316, 5317, and 5332. However, the stipulation
allowed Cyr the right to move to mitigate the forfeiture
amount pursuant to the Eighth Amendment’s bar on excessive
fines. The district court found that, under the totality of the
circumstances, Cyr failed to show that the forfeiture of
$132,245 was unconstitutional.
UNITED STATES V. CYR 5
STANDARD OF REVIEW
We “review the district court’s determination of
excessiveness de novo,” but we “accept the district court’s
findings of fact in conducting the excessiveness inquiry
unless they are clearly erroneous.” United States v.
$100,348.00 in U.S. Currency, 354 F.3d 1110, 1121 (9th Cir.
2004). “A finding is clearly erroneous if we are ‘left with the
definite and firm conviction that a mistake has been
committed.’” Ruiz v. Affinity Logistics Corp., 754 F.3d 1093,
1100 (9th Cir. 2014) (quoting Twentieth Century Fox Film
Corp. v. Entm’t Distrib., 429 F.3d 869, 879 (9th Cir. 2005)).
DISCUSSION
Ordinarily, “[i]n a civil forfeiture action, the government
bears the burden of proving by a preponderance of the
evidence that the property is subject to forfeiture.” United
States v. $11,500.00 in U.S. Currency, 710 F.3d 1006, 1013
(9th Cir. 2013) (citing 18 U.S.C. § 983(c)(1)). By stipulating
that the defendant currency is subject to forfeiture for failure
to report in violation of 31 U.S.C. § 5316, see 31 U.S.C.
§ 5317(c), and for bulk cash smuggling, see 31 U.S.C.
§ 5332, Cyr has relieved the government of this burden.
Thus, we answer solely the question of whether Cyr’s
forfeiture of $132,245 violates the Eighth Amendment’s bar
on excessive fines.
“If the amount of the forfeiture is grossly disproportional
to the gravity of the defendant’s offense, it is
unconstitutional.” United States v. Bajakajian, 524 U.S. 321,
337 (1998). Cyr carries “the burden of establishing that the
forfeiture is grossly disproportional by a preponderance of the
evidence.” 18 U.S.C. § 983(g)(3). While we are not
6 UNITED STATES V. CYR
restricted to “any rigid set of factors,” United States v.
Mackby, 339 F.3d 1013, 1016 (9th Cir. 2003), we have
typically “considered four factors in weighing the gravity of
the defendant’s offense: (1) the nature and extent of the
crime, (2) whether the violation was related to other illegal
activities, (3) the other penalties that may be imposed for the
violation, and (4) the extent of the harm caused.”
$100,348.00, 354 F.3d at 1122. In light of these factors, we
conclude that Cyr failed to meet his burden under 18 U.S.C.
§ 983(g)(3).
1. Nature and Extent of the Crime
A violation of 31 U.S.C. § 5316 is “solely a reporting
offense” and does not constitute a serious crime under the
Excessive Fines Clause. See Bajakajian, 524 U.S. at 325,
337. In contrast, § 5332 criminalizes the act of bulk cash
smuggling into or out of the United States. Thus, transporting
more than $10,000 of unreported currency across the border
in violation of § 5332 is more than a reporting offense.
Congress highlighted that it intended to criminalize the
act of bulk cash smuggling when it enacted § 5332:
The current penalties for violations of the
currency reporting requirements are
insufficient to provide a deterrent to the
laundering of criminal proceeds. In particular,
in cases where the only criminal violation
under current law is a reporting offense, the
law does not adequately provide for the
confiscation of smuggled currency. In
contrast, if the smuggling of bulk cash were
UNITED STATES V. CYR 7
itself an offense, the cash could be confiscated
as the corpus delicti of the smuggling offense.
USA Patriot Act, Pub. L. No. 107-56, § 371(a)(6), 115 Stat.
272, 337. Congress also attached purposes to § 5332, which
included the need “to emphasize the seriousness of the act of
bulk cash smuggling.” Id. § 371(b)(3). We refuse to second-
guess Congress’s determination that bulk cash smuggling is
a serious crime. Such a determination is better left to the
legislature than to the courts. See Bajakajian, 524 U.S. at 336(“[J]udgments about the appropriate punishment for an
offense belong in the first instance to the legislature.”).
2. Other Illegal Activities
Based on the evidence before it, the district court did not
clearly err in finding that “the currency was probably
connected to drug trafficking.”1 Cyr was carrying a
substantial sum of cash. See United States v. U.S. Currency
$83,310.78, 851 F.2d 1231, 1236 (9th Cir. 1988)
(“[P]ossession of a large amount of cash is strong evidence
that the money was furnished or intended to be furnished in
return for drugs.” (internal quotation marks omitted)). A
drug dog alerted to the defendant currency. See United States
v. $22,474.00 in U.S. Currency, 246 F.3d 1212, 1216 (9th Cir.
2001) (“[A] drug detection dog’s positive alert to a large sum
1
We disagree with Cyr’s assertion that the district court’s use of the
word “probably” somehow alters the effect of the district court’s finding.
Cyr has the burden of showing that the money is not connected to other
illegal activity by a preponderance of the evidence. See 18 U.S.C.
§ 983(g)(3). The district court’s finding that the money was probably
connected to drug trafficking logically precludes Cyr from meeting this
burden. See Merriam-Webster Third New International Dictionary 1806
(2002) (defining probably as “very likely” or “with practical certainty”).
8 UNITED STATES V. CYR
of money” constitutes “‘strong evidence’” of a connection to
drug trafficking.). Cyr originally told officers that he brought
the money with him to California to gamble; after the
government sought forfeiture, Cyr asserted that he had the
money to invest in an RV business. See id. at 1217(“[Claimant’s] inconsistent statements about the money . . .
tended to support an inference that the money was drug-
related.”). The deputy sheriff stated that Cyr “appeared to be
extremely nervous,” and the investigator stated that Cyr
“appeared to be very nervous.” See United States v.
$49,576.00 U.S. Currency, 116 F.3d 425, 428 (9th Cir. 1997)
(“[Claimant’s] general nervous behavior [is] indicative of
some illegal activity.”). Finally, text messages recovered
from Cyr’s cell phone, and sent within a day of when Cyr was
arrested, reveal an inquiry about “the money” and the
statement that “Tom wants to give (it) to him tomorrow
morning at 8 AM.”2 Viewing all of this evidence and the
reasonable inferences that arise from it, we cannot say that
the district court’s finding was clearly erroneous.
Cyr argues that the drug-dog alert is irrelevant, because
Jasper is not a sophisticated drug dog—a dog that alerts only
to currency that has recently been in contact with drugs. See
$22,474.00, 246 F.3d at 1216. However, Jasper’s handler
submitted a declaration stating that Jasper “does not alert to
the odor of currency unless that currency has been in recent
close proximity to a narcotic substance for which he has been
trained to detect.” This undisputed declaration suffices to
qualify Jasper as a sophisticated drug dog. See United States
v. Currency, U.S. $42,500.00, 283 F.3d 977, 982 (9th Cir.
2002) (finding drug dog sophisticated where the dog’s
2
The text messages were originally sent in French; the government
subsequently translated them into English.
UNITED STATES V. CYR 9
“handler submitted a declaration stating that [the dog] does
not alert to cocaine residue found on currency in general
circulation”).
Cyr also contends that the government’s failure to charge
him with a crime combined with the other evidence he put
forward to show the money’s legitimacy sufficiently
demonstrates that the money is not connected to other illegal
activity. See $100,348.00, 354 F.3d at 1122 (weighing the
fact that the claimant had not been charged with other
criminal activity and had submitted an affidavit explaining
the legitimate source of the money in an excessiveness
analysis). The government does not dispute that it did not
charge Cyr with an offense. Cyr also offers as evidence a
distribution of property form from Quebec and affidavits
from two of his friends all indicating that Cyr received money
from his father.
However, the date on the distribution of property form
reveals that Cyr did not complete the form until February of
2012, almost a full year after the government seized the
money. Further, the affidavits from Cyr’s friends merely
mention that Cyr received money from his father; they lack
even the most basic details, such as how the friends knew
about the money or the amount of money Cyr’s father
provided. This evidence, while not negligible, falls short of
leaving us with a “definite and firm conviction” that the
district court made a mistake. See Ruiz, 754 F.3d at 1100.
3. Other Penalties
“‘In considering an offense’s gravity, the other penalties
that the Legislature has authorized are certainly relevant
evidence,’ as are the maximum penalties that could have been
10 UNITED STATES V. CYR
imposed under the Sentencing Guidelines.” United States v.
3814 NW Thurman St., 164 F.3d 1191, 1197 (9th Cir. 1999)
(quoting Bajakajian, 524 U.S. at 339 n.14) (alteration and
citation omitted). “[T]he maximum penalties under the
Sentencing Guidelines should be given greater weight than
the statutory maximum because the Guidelines take into
account the specific culpability of the offender.”
$100,348.00, 354 F.3d at 1122. We consider both the term of
imprisonment and the fine suggested by the Sentencing
Guidelines. See Mackby, 339 F.3d at 1018.
Cyr stipulated that the defendant currency is subject to
forfeiture as a violation of both 31 U.S.C. § 5316 and
31 U.S.C. § 5332. Because the government could have
charged Cyr with both offenses, United States v. Tatoyan,
474 F.3d 1174, 1182 (9th Cir. 2007), our relevant inquiry
must focus on the penalties that could have been imposed for
both offenses. Congress authorized a statutory maximum of
five years imprisonment and/or a $250,000 fine for a
violation of § 5316, 31 U.S.C. § 5322(a), and a maximum of
five years imprisonment for a violation of § 5332, 31 U.S.C.
§ 5332(b). Under the Sentencing Guidelines, Cyr’s offense
level would have been 16.3 See U.S. Sentencing Guidelines
3
We calculate Cyr’s offense level as follows: 6 levels for failure to file
a currency report; a 10-level increase for the $132,245 value in currency;
a 2-level increase for bulk cash smuggling; and a 2-level decrease for
acceptance of responsibility. Acceptance of responsibility typically goes
to defendants who plead guilty to a criminal offense, which Cyr has not
done. Nevertheless, Cyr stipulated that the defendant currency is subject
to forfeiture, which saved the government from having to prepare for trial.
Out of an abundance of caution, we award Cyr the 2-level decrease. Cyr’s
remaining arguments as to the appropriate offense level are foreclosed by
the plain language of the Sentencing Guidelines. We also assume a
Criminal History Category of I.
UNITED STATES V. CYR 11
Manual § 2S1.3 (2012). The maximum fine in Cyr’s case
would have been $50,000, and—without any criminal
history—the maximum term of imprisonment would have
been 27 months for each offense.
Thus, the forfeiture of all $132,245 falls far below the
maximum statutory fine but exceeds the fine under the
Sentencing Guidelines. However, forfeiture does not per se
violate the Eighth Amendment simply because the amount to
be forfeited exceeds the maximum fine under the Sentencing
Guidelines. See, e.g., $100,348.00, 354 F.3d at 1122–24
(upholding forfeiture of $10,000 where maximum fine under
Sentencing Guidelines could be as little as $5,000); Mackby,
339 F.3d at 1018 (holding that a $729,454 fine did not violate
the Eighth Amendment when the maximum fine under the
Sentencing Guidelines was $75,000). Considering that the
forfeiture amount here is only 2.6 times the maximum fine
under the Guidelines and that Cyr’s hypothetical criminal
sentence could have also included a 27-month term of
imprisonment for each offense, Cyr has failed to show that
the amount of forfeiture is out of line with the maximum
penalty under the Sentencing Guidelines.
Bajakajian supports this conclusion. In Bajakajian, the
Supreme Court held that the maximum penalties under the
Sentencing Guidelines, a 6-month sentence and a $5,000 fine,
weighed against the forfeiture of $357,144 because they
“confirm[ed] a minimal level of culpability.” 524 U.S. at338–39. The Court also acknowledged that the respondent
“[did] not fit into the class of persons for whom the statute
was principally designed,” because the respondent was not a
money launderer, drug trafficker, or tax evader. Id. at 338.
12 UNITED STATES V. CYR
Here, Cyr’s hypothetical maximum 27 months of
imprisonment for each offense and $50,000 fine do not
“confirm a minimal level of culpability” when compared to
the 6 months’ imprisonment and $5,000 fine in Bajakajian.
Id. at 339; cf. Mackby, 339 F.3d at 1018 (holding hypothetical
$75,000 fine and 46-month term of imprisonment do not
confirm a minimal level of culpability). Moreover, the
forfeiture amount here is only 2.6 times the fine under the
Sentencing Guidelines, whereas in Bajakajian the forfeiture
amount was 70 times the fine under the Sentencing
Guidelines.
Furthermore, Cyr’s admission that the defendant currency
is subject to forfeiture for bulk cash smuggling, coupled with
the district court’s finding that the defendant currency was
probably connected to drug trafficking, places Cyr squarely
“into the class of persons for whom the statute was
principally designed.” See Bajakajian, 524 U.S. at 338; see
also USA Patriot Act, Pub. L. No. 107-56, § 371(a)(3), (5),
115 Stat. 272, 337 (indicating § 5332 is principally directed
toward money launderers, drug traffickers, tax evaders,
terrorists, and their couriers).
4. Harm
For the fourth factor, we must determine “the extent of
the harm caused” by Cyr’s violation of §§ 5316 and 5332.
See $100,348.00, 354 F.3d at 1122. The harm caused by
Cyr’s violation of § 5316 was “minimal.” Bajakajian,
524 U.S. at 339. “Had his crime gone undetected, the
Government would have been deprived only of the
information that [$132,245] had [come into] the country.”
See id.UNITED STATES V. CYR 13
However, his violation of the bulk cash smuggling statute
constitutes a far greater harm. In the sentencing context, we
have observed that “by enacting the bulk cash smuggling
statute, Congress was demonstrating its view that [a
violation] of the bulk cash smuggling statute constitutes a
significant harm.” Del Toro-Barboza, 673 F.3d at 1154(internal quotation marks omitted). Congressional findings
attached to § 5332 state that the “intentional transportation
into or out of the United States of large amounts of currency
or monetary instruments, in a manner designed to circumvent
the mandatory reporting provisions . . . is the equivalent of,
and creates the same harm as, the smuggling of goods.”
USA Patriot Act, Pub. L. No. 107-56, § 371(a)(4), 115 Stat.
272, 337 (emphasis added). Congress found that “the
movement of large sums of cash is one of the most reliable
warning signs of drug trafficking, terrorism, money
laundering, racketeering, tax evasion and similar crimes.” Id.§ 371(a)(3). It also found that enforcement of § 5332
effectively combats these various types of serious criminal
activity. Id. § 371(a)(5).
We need not decide whether every violation of § 5332
constitutes a significant harm for purposes of an excessive-
fine analysis; here, the defendant currency “was probably
connected to drug trafficking.” Accordingly, had Cyr’s
offense gone undetected, it would have undermined the
Government’s efforts to “break the cycle of criminal activity
of which the laundering of bulk cash smuggling is a critical
part.” See id. § 371(a)(5). Cyr’s violation of § 5332 thereby
constitutes a significant harm. Accord Jose, 499 F.3d at 112(“We adhere to Congress’s view that defendant’s violation of
the bulk cash smuggling statute constitutes a significant
harm.”).
14 UNITED STATES V. CYR
CONCLUSION
These factors lead us to the conclusion that Cyr’s offense
leans more toward the high end of the gravity spectrum.
Comparing the gravity of Cyr’s offense with the amount to be
forfeited, we find that forfeiture of all $132,245 does not
violate the Excessive Fines clause of the United States
Constitution.
AFFIRMED.