Pasquantino v. United States
Pasquantino and two other defendants were convicted in federal district court of wire fraud for the purpose of defrauding Canada and the Province of Ontario of excise duties and tax revenues relating to the importation and sale of liquor. Pasquantino moved to dismiss the indictment on the basis of the “common law revenue rule,” which generally provides that courts in the United States are not required to recognize or enforce judgments for the collection of taxes, fines, or penalties rendered by the courts of other states. Pasquantino argued that this rule precludes the United States from using the property interests of a foreign sovereign in its revenue as “property” for purposes of the federal wire fraud statute. The district court denied the motion. The United States Court of Appeals for the Fourth Circuit, en banc, affirmed, holding that the common law revenue rule did not preclude the defendants' prosecution under the wire fraud statute and that tax revenues owed to a foreign sovereign by reason of defendants' fraudulent conduct constituted "property" for purposes of the federal wire fraud statute.
Question Presented:
Whether the federal wire fraud statute, 18 U.S.C. ยง 1343, authorizes criminal prosecution of an alleged fraudulent scheme to avoid payment of taxes
potentially owed to a foreign sovereign, given the lack of any clear statement by Congress to override the common law revenue rule, the interests of both the Legislative and Executive Branches in
guiding foreign affairs, and this Court’s prior rulings concerning the limited scope of the term “property” as used in the wire fraud statute.
