Supreme Court of the United States

“ The Secretary’s regulation also points to some of the anomalies that accompany the government’s per-account theory. On the government’s telling, an individual with, say, three accounts who makes nonwillful errors when providing details about these accounts faces a potential penalty of $30,000. He faces that penalty no matter how slight his errors, and regardless whether his foreign holdings (or even net worth) approach the same amount. Meanwhile, a person with 300 bank accounts runs far less risk of incurring any penalty. ”

“ Each willfully misstated or late-reported account, rather than each deficient or late-filed report, would give rise to a separate criminal violation carrying the possibility of a $250,000 fine and five years in prison. In a case like Mr. Bittner’s, involving 5 reports and 272 accounts, that would mean a person who willfully violates the BSA could face a $68 million fine and 1,360 years in prison rather than a $1.25 million fine and 25 years in prison. In these circumstances, the rule of lenity, not to mention a dose of common sense, favors a strict construction. ”

“ Because the Ninth Circuit read the law one way and the Fifth Circuit the other, we agreed to take this case.
I
The Bank Secrecy Act (BSA) does not make it illegal to hold foreign accounts. Nor does the BSA tax those accounts. To the contrary, the federal government has acknowledged that “U. S. persons maintain overseas financial accounts for a variety of legitimate reasons including convenience and access.” IRS Pub. 5569, Report of Foreign Bank & Financial Accounts (FBAR) Reference Guide, p. 1 (Rev. 3–2022) . ”

“ And if violations of §5314’s recordkeeping obligation accrue on a per-account basis, the same should be true of violations of §5314’s obligation to file reports. The duties are parallel: Each kicks in “when” a citizen “maintains a relation” with a foreign financial agency, and each requires a person to collect the same account-specific information. §5314 (a) . Parallel duties should be susceptible to parallel violations.
The civil penalty provisions in §5321 confirm this reading of the substantive obligations imposed by §5314. ”

“ An actual apples-to-apples comparison shows that willful violators do face a much heavier fine: The maximum penalty for a single willful violation will always be at least 10 times greater than the maximum penalty for a single nonwillful violation. ”

“ Because the application of both provisions depends on the account balance, Congress needed to use account-specific language. The reason why Congress included account-specific language in only two of these three provisions is therefore readily apparent. Regardless, the variation in language does not do much for the Court. These provisions in §5321 explain the varying penalties that the Secretary may assess for a violation of §5314 but do not alter the nature of the underlying conduct that constitutes a violation. ”

“ Bittner) with 25 or more accounts do not need to list each one or provide account-specific details about any of them. 31 CFR §1010.350 (g) (1) . Instead, filers with 25 or more accounts “need only provide the number of financial accounts and certain other basic information.” Ibid. Naturally, an individual must supply more “detailed information” if the “Secretary or his delegate” later chooses to follow up and request it. Ibid. But no detailed account-level information is required in the filer’s initial report. ”

“ Second, the question before us has criminal as well as civil ramifications. Section 5321 outlines civil penalties for nonwillful and willful “violation [s] ” of the BSA. Next door, §5322 provides criminal sanctions for “willfully violating” the Act. ”