The filing of a federal criminal case against Marissa Lapid, the spouse of Senator Lito Lapid, is not an isolated case. There are quite a few Filipino travelers leaving or entering the United States who found themselves subjected to penalties of forfeiture for failure to report monetary negotiable instruments or currencies. Not all were criminally prosecuted. Most of them were able to have their money returned after paying minimal penalties.
Travelers may avoid the severe penalties imposed by federal law by being aware of this reporting requirement and complying accordingly. There are also innocent traveling immigrants like the case of the Filipino senior citizens who had to experience the consequence of failure to report the currencies during their travel to the United States.
Abigail, a U.S. citizen, petitioned her parents, Rosa and Francisco, for an immigrant visa. Both of them are now in their senior years, Rosa is 67 years old while Francisco is 75 years old.
When the couple received their immigrant visas, they were excited to travel and live the rest of their lives in the United States. They withdrew money from their bank account in the amount of $25,000 to bring with them during their trip. Last year, they traveled to the United States and entered through the Los Angeles International Airport. In their customs declaration Form 4790 they failed to write that they were in possession of more than $10,000. Upon being questioned extensively by the Customs and Border Protection (CBP) inspector, Rosa initially denied carrying $25,000. At that moment, their luggage and hand carry bags were searched and the $25,000 was found. The CBP inspector forfeited all their money. Rosa was crying and insisted the return of their money, as she was not aware of the need to declare the money. Francisco was likewise upset and was arguing with the CBP inspector. He asserted the importance of having the money returned to them as they will start a new life in the United States with her daughter.
A few weeks after the incident, Abigail communicated with the CBP and sought to have the money returned to her parents. She argued that her parents were not aware of the requirement, had difficulty communicating in the English language and asked for compassion considering that the money were her parents’ life savings. Abigail filled up a Petition for the return of the money after her parents received their seizure notice letter. After going through the process, Abigail was able to get most of the money back with minimal penalty paid to the government. No criminal charges were filed.
Reporting Requirement
The U.S. law requires declaration of monetary instruments of more than $10,000 when traveling to and from the United States. This includes traveler’s checks, cash, gold coins, negotiable checks, money order, promissory notes and securities or stocks. Negotiable checks include those that may be cashed by the bearer including those that are payable to someone other than the bearer and are endorsed without restrictions. Credit cards with credit lines of over $10,000 are not subject reporting requirements.
For those entering the United States, a declaration form is distributed to all passengers on board the aircraft where the traveler must declare items they are required to report. For negotiable instruments meaning currency or endorsed checks valued at $10,000 or more, a declaration form FinCEN 105 or Currency and Monetary Instrument Report must be filled up and submitted also to the Customs and Border Protection. This may be accomplished during the secondary inspection. This form may be downloaded from the Internet or a CBP officer may provide it to the traveler if requested.
No money is going to be paid to the CBP after declaration. Information on the FinCEN 105 is then forwarded by the CBP to the Internal Revenue Service for determination on whether the money is subject to taxation.
Return of the Forfeited Currencies
In order for the money to be seized, there has to be evidence that the person had knowledge of the reporting requirement and knowingly failed to report it. There are legal ways to get the forfeited money back from the CBP . This will require proof of legitimate source of the money and the proof of the legitimate intended use of the money. A petition may be filed as soon as a formal seizure notice letter is issued by the CBP.
If the legitimate source and legitimate intended use may not be proven, then penalties may be imposed on the traveler. A criminal case may be filed under federal law that prohibits bulk cash smuggling under 31 U.S. Code Section 5332. Once the criminal case is filed, the government must prove beyond reasonable doubt that the traveler ‘knowingly’ violated the reporting requirement. If the government prevails, penalties of imprisonment or civil penalties may be imposed.
Other Options
It is indeed an expensive mistake not to declare currencies of over $10,000 to the CBP and definitely more serious to hide the undeclared monies inside the luggage. To avoid the trouble of having to face forfeiture or criminal charges, one should not hesitate to declare currencies of over $10,000 especially if the money is from a legitimate source. In the alternative, it may be best that a traveling immigrant or visitor wire the money to a reputable bank or a trustee. If there is legitimate forfeiture, the traveler must take diligent step to follow through with the case instead of waiting for a criminal complaint to be served at the unexpected moment.
(Tancinco may be reached at law@tancinco.com or at 8877177 or 721 1963)
