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Ratzlaf v. U.S., 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615, 62 USLW 4037, 94-1 USTC P 50,015

Facts

On October 20, 1988, Waldemar Ratzlaf incurred a $160,000 gambling debt at a casino in Reno, Nevada. To pay off this debt without triggering reporting requirements for cash transactions over $10,000, he purchased multiple cashier's checks, each for less than $10,000, from different banks. Ratzlaf was charged with structuring transactions to evade the banks' reporting obligations, and the trial judge instructed the jury that the government needed to prove Ratzlaf knew of the reporting obligation but not that he knew structuring was unlawful.

On the evening of October 20, 1988, defendant-petitioner Waldemar Ratzlaf ran up a debt of $160,000 playing blackjack at the High Sierra Casino in Reno, Nevada. The casino gave him one week to pay. On the due date, Ratzlaf returned to the casino with cash of $100,000 in hand. A casino official informed Ratzlaf that all transactions involving more than $10,000 in cash had to be reported to state and federal authorities.

Issue

Does a defendant's purpose to circumvent a bank's reporting obligation suffice to sustain a conviction for 'willfully violating' the antistructuring provision?

This case presents a question on which Courts of Appeals have divided: Does a defendant's purpose to circumvent a bank's reporting obligation suffice to sustain a conviction for 'willfully violating' the antistructuring provision?

Rule

To establish that a defendant 'willfully violated' the antistructuring law, the government must prove that the defendant acted with knowledge that his conduct was unlawful.

To establish that a defendant 'willfully violat[ed]' the antistructuring law, the Government must prove that the defendant acted with knowledge that his conduct was unlawful.

Analysis

The Supreme Court analyzed the statutory language and the context of the antistructuring provisions, concluding that the 'willfulness' requirement necessitates proof of the defendant's knowledge of the illegality of structuring. The Court found that the lower courts had erred by treating the 'willfulness' requirement as surplusage and emphasized that the term must be given effect in accordance with its established meaning in criminal law.

The interpretation adopted in this case does not dishonor the venerable principle that ignorance of the law generally is no defense to a criminal charge, for Congress may decree otherwise in particular contexts, and has done so in the present instance.

Conclusion

The Supreme Court reversed the judgment of the Ninth Circuit, holding that the jury must find that Ratzlaf knew the structuring in which he engaged was unlawful. The case was remanded for further proceedings consistent with this opinion.

We therefore reverse the judgment of the Court of Appeals.

Who won?

Waldemar Ratzlaf prevailed in the Supreme Court because the Court determined that the government failed to meet the burden of proving that he knew his structuring was unlawful.

Ratzlaf maintained on appeal that he could not be convicted of 'willfully violating' the antistructuring law solely on the basis of his knowledge that a financial institution must report currency transactions in excess of $10,000 and his intention to avoid such reporting.

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