United States of America, Libelant-Appellee v. United States Coin and Currency in the Amount of $8,674.00, Donaldangelini, Claimant-Appellant

393 F.2d 499

68-1 USTC P 15,837

UNITED STATES of America, Libelant-Appellee,
v.
UNITED STATES COIN AND CURRENCY In the AMOUNT OF $8,674.00,
Respondent, DonaldAngelini, Claimant-Appellant.

No. 15502.

United States Court of Appeals Seventh Circuit.

April 9, 1968.

Edward V. Hanrahan, U.S. Atty., Chicago, Ill., for libelant-appellee, John Peter Lulinski, Edward J. Murray, Asst. U.S. Attys., of counsel.

Anna R. Lavin, Richard E. Gorman, Chicago, Ill., for claimant-appellant.

Before KILEY, FAIRCHILD and CUMMINGS, Circuit Judges.

PER CURIAM.

1

When our opinion was released herein, the Supreme Court had not yet decided Marchetti v. United States, 390 U.S. 39, 88 S. Ct. 697, 19 L. Ed. 2d 889, and Grosso v. United States, 390 U.S. 62, 88 S. Ct. 709, 19 L. Ed. 2d 906, so that we decided claimant's constitutional argument on the authority of United States v. Kahriger, 345 U.S. 22, 73 S. Ct. 510, 97 L. Ed. 754, and Lewis v. United States, 348 U.S. 419, 75 S. Ct. 415, 99 L. Ed. 475. See 379 F.2d 946.

2

After the Supreme Court's opinions were announced in the Marchetti and Grosso cases, certiorari was granted and our judgment was vacated. 390 U.S. 204, 88 S. Ct. 899, 19 L. Ed. 2d 1035. Grosso does not involve Sections 4411 and 4412 of the Internal Revenue Code, the provisions involved here. In Marchetti, the Court concluded with this admonition (390 U.S. at p. 61, 88 S.Ct. at p. 709):

3

'We emphasize that we do not hold that these wagering tax provisions (26 U.S.C. 4411 and 4412) are as such constitutionally impermissible; we hold only that those who properly assert the constitutional privilege as to these provisions may not be criminally punished for failure to comply with their requirements.'

4

Because this is not a criminal case in which an individual's liberty is at stake, there is a question as to whether Marchetti is applicable.

5

The respondent monies were declared forfeit pursuant to 26 U.S.C. 7302, which provides that 'no property rights shall exist in * * * property' used 'in violating the provisions of the internal revenue laws.' The only provisions of the internal revenue laws which can support forfeiture here are 26 U.S.C. 4411 and 4412.1

6

Marchetti holds that compliance with 4411 and 4412 subjects the taxpayer to

7

"real and appreciable,' and not merely 'imaginary and unsubstantial,' hazards of self-incrimination' (390 U.S. at p. 48, 88 S.Ct. at p. 702).

8

Claimant Angelini would have subjected himself to exactly the same hazards by complying. In this respect, Marchetti and this case are the same. But the consequences of non-compliance are not the same in the two cases. The prospect of a felony conviction involved in Marchetti of course has a greater coercive effect than the possible loss of money involved herein. On the other hand, the prospect of losing in excess of $8,000 has a substantial coercive effect. In this respect, the landmark case of Boyd v. United States, 116 U.S. 616, 6 S. Ct. 524, 29 L. Ed. 746, is controlling. Boyd was a civil forfeiture action in which the claimant was given a choice between producing a possibly incriminating document and forfeiting the property. The Court held that such a choice was impermissible under the Fourth and Fifth Amendments. See Garrity v. State of New Jersey, 385 U.S. 493, 496-497, 87 S. Ct. 616, 17 L. Ed. 2d 562, which reaffirms and follows Boyd.

9

The only apparent purpose of 26 U.S.C. 7302, as applied here, is to punish violators of Sections 4411 and 4412 of the Internal Revenue Code by taking away money used in committing the violations. See One 1958 Plymouth Sedan v. Com. of Pennsylvania, 380 U.S. 693, 700, 85 S. Ct. 1246, 14 L. Ed. 2d 170. As a practical matter, Marchetti means that such violations are no longer punishable directly. It follows that they should not be punished indirectly through forfeiture.

10

Accordingly, the judgment of the District Court is reversed and the cause is remanded for the entry of an appropriate judgment for claimant-appellant.

1

The applicability of 26 U.S.C. 4901, which was cited by the District Court, is dependent solely on the 4411 and 4412 violations. Therefore, it need not be considered separately