Pasquantino v. United States, 544 U.S. 349 (2005)
Primary Holding
A scheme to defraud a foreign government of tax revenue constitutes a violation of the federal wire fraud statute, 18 U.S.C. § 1343, as the statute's plain terms criminalize such conduct without infringing upon the common-law revenue rule.
In the case of Pasquantino v. United States, a group of people was caught smuggling liquor into Canada without paying the required taxes, which is considered a form of cheating the Canadian government. The Supreme Court ruled that this kind of scheme is illegal under U.S. law because it involves using communication methods (like phones) to commit fraud, even if it affects a foreign government. This case is important for consumers because it helps enforce honesty in trade and ensures that everyone pays their fair share of taxes, protecting the integrity of both domestic and international markets. If someone is involved in any kind of scheme to avoid taxes, whether in the U.S. or abroad, this case shows that they could face serious legal consequences.
AI-generated plain-language summary to help you understand this case
In Pasquantino v. United States, the petitioners, Carl J. Pasquantino, David B. Pasquantino, and Arthur Hilts, were involved in a scheme to smuggle large quantities of liquor from the United States into Canada between 1996 and 2000. They ordered liquor over the phone from discount package stores in Maryland and employed drivers to transport the liquor across the Canadian border without paying the required excise taxes. The drivers concealed the liquor in their vehicles and failed to declare it to Canadian customs officials. At the time, Canada imposed heavy taxes on imported alcoholic beverages, with taxes amounting to approximately double the purchase price of the liquor. The legal proceedings began when the petitioners were indicted and convicted of federal wire fraud for their smuggling operation. Before the trial, they moved to dismiss the indictment, arguing that it did not constitute a wire fraud offense since the government lacked a sufficient interest in enforcing Canadian revenue laws. The District Court denied their motion, and the case proceeded to trial, resulting in their conviction by a jury. The petitioners subsequently appealed their convictions to the United States Court of Appeals for the Fourth Circuit, contending that their prosecution violated the common-law revenue rule, which they argued barred the court from recognizing foreign tax laws. Initially, a panel of the Fourth Circuit agreed with the petitioners and reversed their convictions. However, the court later granted rehearing en banc, vacated the panel's decision, and ultimately affirmed the convictions. The en banc court concluded that the common-law revenue rule did not prevent courts from recognizing foreign revenue laws in the context of wire fraud, allowing the prosecution to proceed under the federal wire fraud statute.
Whether a plot to defraud a foreign government of tax revenue violates the federal wire fraud statute, 18 U.S.C. § 1343.
The judgment is reversed.
- Court
- Supreme Court
- Decision Date
- November 9, 2004
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Thomas
- Damages Awarded
- N/A
- Data Quality
- high
Regalado Cuellar v. United States, 553 U.S. 550 (2008)
Consumer WonThe federal money laundering statute requires the government to demonstrate that a defendant engaged in conduct beyond merely hiding illicit funds during transport; it must show that the defendant took steps to conceal the illegal nature of the funds in a manner that indicates an intent to promote or conceal unlawful activity.
United States v. Santos, 553 U.S. 507 (2008)
Consumer LostThe term "proceeds" in the federal money-laundering statute, 18 U.S.C. § 1956(a)(1), refers specifically to "profits" from illegal activities rather than merely "receipts.
Whitfield v. United States, 543 U.S. 209 (2005)
Consumer LostConviction for conspiracy to commit money laundering under 18 U.S.C. §1956(h) does not require proof of an overt act in furtherance of the conspiracy.
Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639 (2008)
Consumer WonA plaintiff asserting a RICO claim predicated on mail fraud is not required to plead and prove that it relied on the defendant’s alleged misrepresentations.