February 28, 2023

Supreme Court Decides Bittner v. United States

On February 28, 2023, the U.S. Supreme Court decided Bittner v. United States, No. 21-1195, holding that the Bank Secrecy Act (BSA) treats the failure to file a legally compliant report as one violation carrying a maximum penalty of $10,000, regardless of how many bank accounts are at issue.

Petitioner Alexandru Bittner immigrated to the United States from Romania and became a naturalized United States citizen. After several years, Bittner returned to Romania, where he held various bank accounts. Under 31 U.S.C. § 5314, those who possess foreign accounts with an aggregate balance of more than $10,000 must file an annual report to help the government trace funds and identify unreported income. Bittner did not learn of this reporting obligation until returning to the United States many years later. After he returned, he filed the required reports, but not in time to avoid violations.

Section 5321 authorizes the Secretary to impose a civil penalty of up to $10,000 for “any violation” of § 5314. The government argues that a penalty be applied to each account not accurately or timely reported. Because Bittner had 272 accounts, the government issued a fine of $2.72 million.

The Supreme Court disagreed and held that the BSA’s $10,000 penalty for nonwillful violations applies per report, not per account. The Court began its analysis with the most immediately relevant statutory provisions, 31 U.S.C. §§ 5314, 5321. In these sections, Congress specifically provided that penalties for certain willful violations may be measured on a per-account basis. Congress included no similar language, however, for nonwillful penalties. The Court also considered that the government’s public statements about the BSA likewise indicated that a penalty “not to exceed $10,000” could accompany a failure to file a report. Looking to the BSA’s drafting history, the Court noted that when Congress amended the BSA to authorize penalties for nonwillful violations, it did not include language resembling the per-account penalties used for certain willful violations.

Justice Gorsuch delivered the opinion of the Court except as to Part II-C, which relied on the rule of lenity. Justice Jackson joined the opinion in full, and Chief Justice Roberts and Justices Alito and Kavanaugh joined except for Part II-C. Justice Barrett filed a dissenting opinion, in which Justices Thomas, Sotomayor, and Kagan joined.

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