Posted on 04/26/2005 11:34:01 AM PDT by NormsRevenge
WASHINGTON (AP) - The Supreme Court ruled Tuesday that people who cheat foreign governments of tax revenue can be prosecuted under U.S. law for wire fraud.
In a 5-4 decision, the court upheld the fraud convictions for three men accused of sneaking thousands of cases of whisky, vodka and rum into Canada from the United States and avoiding millions of dollars in Canadian taxes. Canada did not pursue the trio for tax evasion, but American prosecutors did and the three were sentenced to prison.
The U.S. wire fraud law bars the use of interstate wires, such as phones and computers, to carry out "any scheme" to defraud. Justices ruled U.S. prosecutors can use the law to pursue charges when a scheme involves defrauding foreign governments, which are barred from using American courts to collect lost revenues.
"It may seem an odd use of the federal government's resources to prosecute a U.S. citizen for smuggling cheap liquor into Canada," Justice Clarence Thomas wrote for the majority. "But the broad language of the wire fraud statute says so."
Chief Justice William H. Rehnquist was the deciding vote in upholding the convictions. He had said he would only vote on cases argued in November - when he was absent from the court while being treated for thyroid cancer - if there was a 4-4 deadlock. He read filings in the case to get caught up on the issues.
Justices John Paul Stevens, Sandra Day O'Connor and Anthony Kennedy also joined the majority opinion.
In a dissent, Justice Ruth Bader Ginsburg argued that U.S. courts have no place enforcing the tax laws of a foreign country, particularly when it chooses not to pursue prosecution.
"Today's novel decision is all the more troubling for its failure to take account of Canada's primary interest in the matter at stake," she wrote, noting that U.S. defendants could have been extradited to stand trial in Canada.
"Canadian courts are best positioned to decide whether, and to what extent, the defendants have defrauded the governments of Canada and Ontario out of tax revenues owed pursuant to their own, sovereign, excise laws," Ginsburg said.
She was joined in her dissent by Justices Stephen G. Breyer, Antonin Scalia and David H. Souter.
The U.S. government contends brothers David and Carl Pasquantino of Niagara Falls, N.Y., headed an operation that shipped about 40,000 cases of liquor from stores in Maryland to the black market in southern Ontario, from 1996 to 2000, avoiding nearly $6 million in taxes. The third man, Arthur Hilts, was accused of being a carrier.
Government filings accuse the men of trying to avoid Canada's high alcohol tax, itself about twice the purchase price of the liquor in the United States.
As part of the operation, according to the filing, Maryland discount liquor stores received telephone orders for alcohol that would be transported to New York for storage, then smuggled into Canada.
The case is Pasquantino v. United States of America, 03-725.
Wow...and Justices Thomas and Scalia were on different sides of the decision?
And I though Clarence Thomas was just some sort of minstrel dancer for Justice Scalia
Isn't that what Harry Reid and Company think?
We are the world
I am a little confused on this one. Some of the justices are talking about "tax evasion" and the others about "wire fraud". It would appear from the article that the issue is wire fraud, and the U.S. prosecuted for same. At the same time, Canada did not choose to pursue tax evasion(?). Strange.
So why are the others talking about "tax evasion" and prosecution for same as a basis, or part of, their opinions?
At least Thomas is consistent. In this case the operative language is "any scheme". In the gun case, it is "any court".
No, she prefers to use laws and opinions of foreign countries only to overturn the will of American voters and duly elected state legislatures.
What an odd lineup of Justices.
"It may seem an odd use of the federal government's resources to prosecute a U.S. citizen for smuggling cheap liquor into Canada," Justice Clarence Thomas wrote for the majority. "But the broad language of the wire fraud statute says so."
The laws says they committed a crime. Unless the law violates the Constitution, the Justices have no reason to intervene. The decision to prosecute them lies with the Executive branch, not the Judicary. Thomas understand this.
Once again Ginsburg blatantly overstepps the authority of the Court.
"In a dissent, Justice Ruth Bader Ginsburg argued that U.S. courts have no place enforcing the tax laws of a foreign country, particularly when it chooses not to pursue prosecution."
They were not charged with tax evasion, they were charged with wire fraud. If the Canadian government chooses to go after them for tax evasion we can let them have them after they've served their time here. The US is responsible for US law, and wether or not the Canadians choose to enforce their laws is none of the court's concern.
"Today's novel decision is all the more troubling for its failure to take account of Canada's primary interest in the matter at stake," she wrote, noting that U.S. defendants could have been extradited to stand trial in Canada.
Canada's interests are none of her concern. Foreign policy is not part of her job description. Canada's choice to to request extradition or not to request it is none of her concern.
"Canadian courts are best positioned to decide whether, and to what extent, the defendants have defrauded the governments of Canada and Ontario out of tax revenues owed pursuant to their own, sovereign, excise laws," Ginsburg said. "
The defendants clearly committed fraud. In wiring the money, the committed wire fraud in the United States.
Ginsburg's opinion that it should be Canada that is addressing this issue is irrevalent. Our prosecutor chose to charge them with breaking US law. The question is did they break US law, and is that law constitutional. The Courts have no authority to impede the prosecution unless the law was not broken or the law was unconstitutional.
Ginsburg is blatantly failing to do her duty as a Supreme COurt Justice. She doesn't even make an attempt to hide her activism. She needs to be removed from the court.
If they had been charged with Smuggling across our borders, I could buy into that.
This crap about prosecuting American citizens in American Courts for crimes committed on Foreign soil however has to stop.
The U.S. prosecution was for wire fraud-- using interstate phone calls to carry out a "scheme to defraud." The issue in the case was whether the words "scheme to defraud" in the wire fraud statute include a scheme to evade Canadian taxes-- no one but the government of Canada was defrauded, and Canada was defrauded of nothing but tax revenue.
Scalia agreed with her.
"Scalia agreed with her."
A very valid and scarry point.
She was joined in her dissent by Justices Stephen G. Breyer, Antonin Scalia and David H. Souter.
I agree with the minority in this case. Are we going to enforce the tax laws of North Korea or Belarus?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.