US Top Court: Fraud Law Covers Smuggling Scheme

[emad]

Tue Apr 26, 2005 11:24 AM ET

By James Vicini

WASHINGTON (Reuters) - A divided U.S. Supreme Court ruled on Tuesday that Americans can be prosecuted under U.S. wire fraud law for scheming to evade foreign taxes, ruling on a case about large quantities of liquor smuggled from the United States into Canada.

By a 5-4 vote, the high court ruled against three convicted defendants, brothers David and Carl Pasquantino and accomplice Arthur Hilts, who argued that such prosecutions exceed the reach of the federal wire fraud law.

In the opinion for the court majority, Justice Clarence Thomas ruled that a plot to defraud a foreign government of tax revenue violated the federal wire fraud law, based on phone calls made.

Prosecutors said the brothers, residents of Niagara Falls, New York, ordered the liquor over the telephone from discount stores in Maryland. Hilts and others drove the shipments in rental trucks to New York for storage.

http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2005-04-26T152435Z_01_N05487318_RTRIDST_0_USREPORT-COURT-LIQUOR-DC.XML

[leveymg]

1. Beware: if you talk to foreign friends about matters that might be illegal

over there, you might just be prosecuted by the Feds if there's a law against it here.

Meaning: violations of foreign law will be punished under US law if there is a similar US statute and the acts occurred in the US and international telecommunications were used.

Possible applications: various foreign sedition statutes, related conspiracies to violate public order (illegal protests, direct action, other political crimes.)

Illustration: If you have a Canadian friend who's planning to travel to Davos, Switzerland to protest, and you discuss tactics on the phone (or on-line) for direct action that involve illegal means (anything from trespassing on up), you might find the FBI at your door.

This ruling appears unconstitutional on its face, and seems to invite abusive and broad interpretation. But, it's here. Anyone have a different take on this?



:bounce: