Daily Journal: February 7, 1996
By Thom Mrozek Daily Journal Staff Writer

Hosep Krikor Bajakajian was boarding a plane with $357,144 in cash, when a money sniffing dog discovered the currency that was carefully hidden in his luggage. When the Syrian-American refused to admit that he was carrying the cash, officials confiscated every cent. Now, Bajakajian is fighting to have the money returned, contending that the use of criminal forfeiture laws to take all of his money is a violation of his constitutional rights. Stressing that Bajakajian’s only crime was failing to report his possession of the cash, defense attorneys James E. Blatt and Michael G. Raab believe that seizure of all the money is a violation of the Excessive Fines Clause of the Eighth Amendment. . Last year, a federal judge agreed and ordered Bajakajian to turn over only $15,000 and to pay a $5,000 fine. “This wasn’t drug money; this wasn’t gambling money; this wasn’t stolen money; this wasn’t money that was being laundered for any reason – that’s been proven,” U.S. District Judge John G. Davies said last year when he departed from federal sentencing guidelines that call for a defendant in this type of case to lose all their property. “There is little doubt that forfeiting the entire amount would certainly be extraordinarily harsh and would violate the Eighth Amendment” Davies continued. Notwithstanding Davies’ ruling, the government still has all of the money. When Bajakajian asked the U.S. Customs Service to return the confiscated cash, he learned that prosecutors had appealed Davies’ decision. The matter came before the 9th U.S. Circuit Court of Appeal on Tuesday when attorneys appeared before a three judge panel in Pasadena to argue United States v. Bajakajian, 95-50094.

Responding to Bajakajian’s contention that it just isn’t fair to take all of his money, two judges appeared sympathetic to the claims of the gas station owner, who borrowed about half of the $357,144 to pay a loan from a relative in Syria. Assistant U.S. Attorney Ronald L. Cheng concluded that it was completely appropriate to order Bajakajian to forfeit all of the money for the simple reason that this was the amount the defendant was trying to transport out of the country. This argument prompted Senior judge Warren J. Ferguson and Judge Thomas G. Nelson to blurt out in unison: “But, That’s not illegal [to take money abroad].” On the other side, Blatt was peppered with questions from Chief Judge J. Clifford Wallace, who queried the Encino defense specialist on topics ranging from the standard of review to the lies Bajakajian told customs officials when the money was found. When Blatt asserted that Judge Davies considered all of the factors leading to the crime of failing to report the currency – including the fact that Bajakajian’s cultural background led him to distrust the government – Wallace said nationality or place of birth is not a factor in sentencing. And when Blatt said forfeiture should not be used to destroy his client Wallace shot back “What’s that have to do with the law.” The legal arguments at Tuesday’s hearing focused on two cases dealing with the reasonableness of forfeiture in criminal cases.

Bajakajian’s case is unique because he is not a drug dealer nor the mastermind of a fraud trying to launder ill-gotten profit – the typical defendants charged under federal forfeiture statutes. In fact, Davies determined that the money is lawful and was intended for a lawful purpose, so taking the cash out of the country would not violate any laws. Bajakajian was charged only with failing to provide the information to the government. While Blatt appealed to the judges’ sensibilities, he cited a recent 9th Circuit ruling that set a two-prong standard for analysis of whether a fine or forfeiture violates the Eighth Amendment In United States v. Real Property Located in El Dorado Country, 59 F.3d 974 (1995), the court held that the property must be an “instrumentality of the crime – or there must be sufficient connection between the property in question and a defendant’s conduct. Second, the court said that the value of the property must be ‘proportional’ to the culpability of the owner.” Blatt said there is no nexus between the money and the crime, arguing that failing to report is not related to the money that Bajakajian legally possessed and could legally take out of the country. Furthermore, the defendant’s crime was the result of an “honest mistake because he was frightened,” Blatt said. Addressing the issue of proportionality, Blatt pointed to a government brief which concludes that if the forfeiture is deemed grossly disproportionate to the defendant’s offense, then he should be ordered to give up at least $170,000 because he encouraged a friend to lie to investigators about the source of this portion of the money. “Isn’t that just as arbitrary as what they say the district court did,” he asked.

Responding to Blatt, Cheng said Bajakajian’s business generates a cash flow of $10,000 per month, so forfeiture of the entire amount is “not that harsh of an imposition.” The biggest obstacle Bajakajian will have to overcome is contained in One Lot Emerald Cut Stones and One Ring v United States, 409 U.S. 232 (1972), a U.S. Supreme Court case that upheld the forfeiture of $50,000 worth of gems by a defendant who failed to report that they were coming into the country and failing to pay about $335 in fees. The high court ruled that the forfeiture was a “reasonable form of liquidated damages” and helps reimburse the government for the cost of investigating the crime. Cheng argued that Bajakajian’s cash – just like the illegally imported emeralds – was at the heart of the crime. “It was the money itself which constituted the offense,” he said. Blatt argued with Cheng’s contention that One Lot Emerald is the controlling case. “He’s not here to cheat the government per se, out of money,” Blatt said in response to Judge Wallace, who asked the attorney to distinguish Bajakajian from the person who failed to report the gemstones.

© 2012 Michael G. Raab and Patrick T. Mahoney. All Rights Reserved.