Second Circuit Holds that False Statements Contained in Customs Forms Warrant Forfeiture of Ancient Gold Phiale - Hotly Contested Foreign Patrimony Issue not Reached by the court: United States v. An Antique Platter of Gold

International Journal of Cultural Property

Volumn 9, Issue 1, 2000, Pages 49-137

  Shapreau, Carla J ^a  

^a Giancarlo Gnazzo   (United States)

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EID: 85010651624     PISSN: 09407391     EISSN: None     Source Type: Journal    
DOI: 10.1017/S0940739100770949     Document Type: Article

References (218)

1. 184 F.3d 131 (2d Cir. 1999).
2. Paulo Prada, Ancient Art Stirs Landmark Court Battle, Wall Street Journal, October 9, 1998, at W14.
3. Id.
4. See, e.g., Threadgill v. Armstrong World Indus., Inc., 928 F. 2d 1366, 1371 (3d Cir. 1991).
5. AIA Br. at 112–113.
6. Id. at 112.
7. Id.
8. Id. at 113.
9. Gold Phiale, 184 F.3d at 133.
10. Id.
11. Id. This term was handwritten on the Terms of Sale and replaced a sentence that read: “A letter is to be written by Dr. Manganaro which is an unconditional guarantee of the authenticity and Swiss origin of the object.” Id. at n.1.
12. Contrary to this statement, in 1980 Dr. Manganaro, who is a professor of Greek history and numismatics, had examined the Phiale in Sicily and had concluded that it was authentic and of Sicilian origin. Id. at 133.
13. Id.
14. Exercising his Fifth Amendment rights against self-incrimination, Haber refused to give details about the Phiale's purchase and importation when questioned by the U.S. Attorney and Steinhardt's attorney during his deposition. Id. at 134 n.2.
15. Apparently, Steinhardt claimed that Jet Air listed the Phiale's country of origin as Switzerland because of the letterhead on the Stedron invoice. Steinhardt Br. at 14.
16. Jet Air testified at deposition that where the invoice does not specifically indicate country of origin, Jet Air would determine country of origin from the contextual information on the commercial invoice or obtain information from the importer. United States Br. at 6.
17. Gold Phiale, 184 F.3d at 133.
18. Id. at 134.
19. Id.
20. Gold Phiale, 991 F. Supp. 222, 227 (S.D.N.Y. 1997). On November 17, 1995, Steinhardt filed a motion, pursuant to Federal Rule of Criminal Procedure 41(e), seeking return of the Phiale. Before the court ruled on the motion, the government filed its in rem civil forfeiture complaint. Six days later the court denied Steinhardt's Rule 41(e) motion as moot.
21. United States Br. at 9
22. The NSPA provides, in part: “Whoever transports, transmits, or transfers in interstate or foreign commerce any goods, wares or merchandise, securities or money, of the value of $5,000 or more, knowing the same to be stolen, converted or taken by fraud; … Shall be fined under this title or imprisoned not more than ten years, or both.” 18 U.S.C. § 2314.
23. Gold Phiale, 184 F.3d at 134. The government provided the district court with a translation of Italian law as well as an analysis of the law by Avv. Giuliano Berrutti, an Italian attorney and expert on cultural property. Gold Phiale, 991 F. Supp. at 227 n.25. Steinhardt proffered no expert opinion on Italian law to controvert Berruti's interpretation of it. Id.
24. The district court found it unnecessary to rule on issues relating to 18 U.S.C. § 981(a)(1)(C)
25. in light of the court's findings under 18 U.S.C. § 545
26. 19 U.S.C. § 1595 a(c).
27. Gold Phiale, 991 F. Supp. at 232 n.35
28. Section 981(a)(1)(C) provides, in part: “(a)(1) the following property is subject to forfeiture to the United States: (C) Any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of section … 542, 545 … of this title….” 18 U.S.C. § 981(a)(1)(C).
29. 991 F. Supp. at 228
30. citing United States v. Two Parcels of Property Located at 19 & 25
31. Castle Street, 31 F.3d 35, 39 (2d Cir. 1994)
32. Id., quoting United States v. One Parcel of Property Located at 15 Black Ledge Drive, Marlborough, Conn., 897 F.2d 97, 101 (2d Cir. 1990).
33. 991 F. Supp. at 228
34. citing United States v. All Assets of G.P.S. Automotive Corp., 66 F.3d 483, 487 (2d Cir. 1995)
35. 18 U.S.C. § 545.
36. Gold Phiale, 991 F. Supp. at 230. The district court rejected as frivolous Steinhardt's argument that the listing “CH” was not a false statement.
37. Steinhardt's rationale was that customs received an invoice describing the Phiale as “one gold bowl-classical” and dating the object as “c. 450 B.C.” and because Switzerland did not exist in 450 B.C., the Customs Service was “on notice as to the true origin of the Phiale.” Id. at 229 n.28
38. Id. at 228
39. citing United States v. Holmquist, 36 F.3d 154, 157 (1st Cir. 1994)
40. cert. denied, 514 U.S. 1084 (1995)
41. United States v. Bagnall, 907 F.2d 432, 435 (3d Cir. 1990)
42. United States v. Teraoka, 669 F.2d 577, 578 (9th Cir. 1982).
43. Gold Phiale, 991 F. Supp. at 228
44. citing Teraoka and United States v. Meldish, 722 F.2d 26 (2d Cir. 1983)
45. cert. denied, 465 U.S. 1101 (1984)
46. 36 F.3d 154, 157 (1st Cir. 1994)
47. cert. denied, 514 U.S. 1084 (1995)
48. 907 F.2d 432, 435 (3d Cir. 1990).
49. Gold Phiale, 991 F. Supp. at 229
50. quoting Bagnall, 907 F.2d at 436
51. citing Holmquist, 36 F.3d at 159 (holding that a false statement is material “if it has the potential significantly to affect the integrity or operation of the importation process as a whole”)
52. Gold Phiale, 991 F. Supp. at 229
53. quoting Holmquist, 36 F.3d at 160
54. citing Bagnall, 907 F.2d at 436
55. Gold Phiale, 991 F. Supp. at 229.
56. Id. at 230 (emphasis added).
57. Id.
58. Id.
59. Id.
60. Id.
61. Id.
62. Id., citing Bennis v. Michigan, 516 U.S. 442 (1996)(noting “well-established authority rejecting the innocent-owner defense”).
63. 991 F. Supp. at 231.
64. 19 U.S.C. § 1595(c).
65. 18 U.S.C. § 2314.
66. 593 F.2d 658, 664–65 (5th Cir.)
67. cert. denied, 444 U.S. 918 (1979)
68. 495 F.2d 1154, 1155–56 (9th Cir. 1974).
69. 991 F. Supp. at 231.
70. 545 F.2d 988 (5th Cir. 1977).
71. Id. at 996.
72. See, e.g., Richard Upton, Art Theft: National Stolen Property Act Applied to Nationalized Mexican Pre-Columbian Artifacts: United States v. McClain, 10 Int'l L. and Pol. 569, 600 (1978)(“A legislative declaration of ownership of unpossessed objects may be a legitimate expression of a nation's desire to regulate them, but such declaration does not create the degree of ownership required as a prerequisite to theft under United States law.”)
73. see also Peru v. Johnson, 720 F. Supp. 810, 814 (C.D. Cal. 1989), aff'd sub nom.
74. Peru v. Wendt, 933 F.2d 1013 (9th Cir. 1991) (wherein the district court noted that a foreign declaration of ownership in artifacts may be nothing more than an export restriction if possession of the artifacts at issue is allowed to remain in private hands, if such objects may be transferred by gift or bequest or intestate succession, and if there is no evidence that the foreign nation has sought to exercise its ownership rights in such property absent removal from that country. Such export restrictions, which constitute an exercise of police power of a state, do not create ownership of those artifacts in the state)
75. Paul M. Bator, An Essay on the International Trade in Art, 34 Stan. L. Rev. 275, 350–51 (1982).
76. 545 F.2d at 992.
77. Id. at 994
78. citing United States v. Gardner, 516 F.2d 334, 349 (7th Cir. 1975)
79. cert. denied, 423 U.S. 861
80. United States v. Bolin, 423 F.2d 834, 838 (9th Cir. 1970)
81. cert. denied, 398 U.S. 954
82. Id. at 994
83. citations omitted relying in part on United States v. Hollinshead, 495 F.2d 1154 (9th Cir. 1974)).
84. Id. at 1000–1001 n.28
85. citing United States v. Hollinshead, 495 F.2d 1154 (9th Cir. 1974)
86. Id. at 1001.
87. Id. at 1002 n.30.
88. 593 F.2d 658 (5th Cir)
89. cert. denied, 444 U.S. 918 (1979)
90. Id. at 663.
91. Id. at 664.
92. Id. at 670–672.
93. 495 F.2d 1154 (9th Cir. 1974)
94. cited by Gold Phiale, 991 F. Supp. at 231
95. 593 F.2d at 659 n.1 (“Only one other reported conviction has resulted from application of the National Stolen Property Act to dealings in pre-Columbian artifacts. In United States v. Hollinshead … Clive Hollinshead … was successfully prosecuted for transporting into the United States a known and catalogued Guatemalan stela….”).
96. 495 F.2d at 1156.
97. In contrast to the McClain and Hollinshead cases, in Peru v. Johnson, 720 F. Supp. 810 (C.D. Cal. 1989), aff'd sub nom.
98. Peru v. Wendt, 933 F.2d 1013 (9th Cir. 1991), the court was unable to determine the country of origin of the artifacts at issue, nor was it able to determine when the artifacts were found, which precluded an adjudication that the objects were stolen from Peru.
99. Peru's foremost archaeologist in pre-Columbian artifacts concluded that the objects at issue came from Peru but admitted that they may have come from Ecuador, Columbia, Mexico, or even Polynesia. 720 F. Supp. at 812.
100. The court also found that Peru's alleged ownership laws were not sufficiently clear so as to be binding upon American citizens. Id. at 814–815
101. See also The Republic of Croatia v. The Trustee of the Marquess of Northampton 1987 Settlement, 203 A.D.2d 167
102. 610 N.Y.S.2d 263 (1st Dep't 1994)
103. Iv. to appeal denied, 84 N.Y.2d 805
104. 642 N.E.2d 325 (1994)
105. compare United States v. Pre-Columbian Artifacts and the Republic of Guatemala, 845 F. Supp. 544, 547 (N.D. Ill. 1993) the court denied interpleader defendants' motion to strike, or, alternatively, for judgment on the pleadings, on the grounds that Guatemala had sufficiently alleged facts under which the artifacts at issue would be subject to seizure as “stolen” in violation of the NSPA because “[t]he NSPA ‘protects ownership derived from foreign legislative pronouncements, even though the owned objects have never been reduced to possession by the foreign government,’”
106. quoting McClain III, 593 F.2d at 664.
107. The district court merely stated that “having reviewed the relevant Italian law and the submissions of the parties, including the expert opinion of Avv. Giuliano Berrutti … the Court concludes that the Phiale belongs to Italy pursuant to Article 44 of Italy's law of June 1, 1939, No. 1089.” Gold Phiale, 991 F. Supp. at 231.
108. However, Steinhardt did not present any expert opinion or other evidence in the district court to controvert Berrutti's interpretation of Italian law. United States Br. at 33–34.
109. AAM Amici contended that Italy's cultural patrimony laws are insufficient to support a NSPA claim and that Italy's patrimony laws are “merely declarations of a reservation of the right to assert property rights, or an option to acquire property from private citizens … Italy's law, in fact, assumes private ownership of cultural objects,” failing to vest true ownership in Italy's government. AAM Amici Br. at 91
110. See also Steinhardt Br. at 38–46.
111. Gold Phiale, 991 F. Supp. at 231–232.
112. Id. at 232.
113. Id. citing Bennis, 116 S. Ct. at 999–1000.
114. Id. at 232.
115. U.S. Const., Amendment VIII.
116. Id.; 991 F. Supp. at 233.
117. 991 F. Supp. at 232
118. citing Austin v. United States, 509 U.S. 602, 610, 621 (1993)
119. Id. at 233
120. citing One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 237 (1972)
121. Id. at 233
122. citing United States v. Milbrand, 58 F.3d 841, 847–48 (2d Cir. 1995)
123. Id. at 233.
124. The district court's decision under the NSPA may be cited in subsequent litigation for its holding, but it has no binding precedential impact. See ID.
125. 184 F.3d 134.
126. The Second Circuit pointed out that it previously has held that section 542 includes a materiality requirement. Id. at 135
127. citing United States v. Avelino, 967 F.2d 815, 817 (2d Cir. 1992)(“[F]alse statements under Section 542 are necessarily material because the importation must be ‘by means of [the] false statement’”)
128. Id. at 135.
129. See United States v. Corcuera-Valor, 910 F.2d 198, 199–200 (5th Cir. 1990)
130. United States v. Teraoka, 669 F.2d 577, 579 (9th Cir. 1982).
131. See United States v. Holmquist, 36 F.3d 154, 158–61 (1st Cir. 1994).
132. Gold Phiale, 184 F.3d at 136.
133. Id., citing Kungys v. United States, 485 U.S. 759, 770 (1988).
134. Id., citing Bagnall, 907 F.2d at 436.
135. Id.
136. Id., quoting Holmquist, 36 F.3d at 159.
137. Id.
138. Id. at 137. The Second Circuit found it unnecessary to examine whether the misstatement of value was material. Id.
139. Id. The Second Circuit held that the misstatement of the country of origin was material as a matter of law and proper grounds for summary judgment. Therefore, the court did not need to examine the misstatement of value of the Phiale.
140. Id
141. Id.
142. Id.
143. Id. at 137
144. quoting Holmquist, 36 F.3d at 159.
145. The Second Circuit also dispensed with Stein-hardt's argument that the country of origin was immaterial because the Customs Service had no policy of relying on this information, pointing out that information that is not required but volunteered to the Customs Service can affect the importation process. Id. at 137–138
146. Id. at 138–139.
147. Id. at 139
148. citing Bennis v. Michigan, 516 U.S. 442 (1996)
149. United States v. Bajakajian, 524 U.S. 321 (1998)(“Historically, the conduct of the property owner [in an in rem proceeding] was irrelevant; indeed the owner of forfeited property could be entirely innocent of any crime.”)
150. Caldero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 683 (1974)
151. Origet v. United States, 125 U.S. 240, 246 (1888).
152. Gold Phiale, 184 F.2d at 139
153. quoting United States v. Bajakajian, 118 S.Ct. at 2035
154. Id. at 140
155. citing Taylor v. United States, 44 U.S. (3 How.) 197, 210 (1845)(Story, J.)(“stating that laws providing for in rem forfeiture of goods imported in violation of customs laws, although in one sense ‘imposing a penalty or forfeiture[,] … truly deserve to be called remedial’”)
156. Id. at 140
157. citing Bennis, 516 U.S. at 459 (Stevens, J., dissenting)(describing “smuggled goods” as “pure contraband”)
158. Steinhardt v. United States, 120 S. Ct. 978 (2000).
159. See S. Ct.
160. Compare 19 U.S.C. § 2609(c)(1)(This section of the CPIA contains provisions under which good-faith purchasers who suffer forfeiture of cultural property may obtain compensation from the foreign nation).
161. The party seeking to recover stolen property in a replevin claim bears the burden of proving that it owns, or has a possessory interest in, the property. See, e.g., Guggenheim v. Lubell, 77 N.Y.2d 311, 321 (1991)
162. Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg et al., 917 F.2d 278, 291 (7th Cir. 1990). This would require that a foreign nation prove that the cultural object was found within that nation's current borders, that its patrimony laws truly vest ownership of the object in the government, and that such foreign patrimony laws are not void for vagueness under American standards.
163. AAM Amici Br. at 103 n.28 citing Italian Civil Code, art. 1153: “He to whom movable property is conveyed by one who is not the owner acquires ownership of it through possession, provided that he be in good faith at the moment of consignment…. Ownership is acquired free of rights of others in the thing, if … the acquirer is in good faith.”
164. See, e.g., John H. Merryman, The Retention of Cultural Property, 21 U.C. Davis L. Rev. 477, 509 (1988).
165. AAM Amici give as an example of this Turkey, which has made claims to classical antiquities found within its borders. The AAM points out that “the first Turks did not migrate to Asia Minor until the late eleventh century-centuries after the artifacts that Turkey claims as its patrimony were created by the Greek, Roman, and other ancient cultures.” AAM Amici Br. at 100 n.7
166. citing Amal Kafadar, Between Two Worlds: Construction of the Ottoman State 2–3 (1995)
167. see also The Republic of Croatia v. The Trustee of the Marquess of Northampton 1987 Settlement, 610 N.Y.S.2d 263 (1st Dep't 1994), lv. to appeal denied
168. 84 N.Y.2d 805 (1994).
169. See Andre Emmerich, Importing Antiquities: A Moral Issue? Washington Post, February 6, 1978, at A23.
170. Responding to this argument, AIA stated that American museums have similar problems, for example, “barely 20% of European paintings have been fully catalogued at the Chicago Art Institute,” citing Walter V. Robinson, Museums' Stance on Nazi Loot Belies Their Role in Key Case, Boston Globe, February 13, 1998, at A1.
171. See John H. Merryman, The Public Interest in Cultural Property, 77 Cal. L. Rev. 339, 362 n.86 (1989)
172. Leonard D. Duboff, Proceedings of the Panel on the U.S. Enabling Legislation of the [UNESCO Convention], 4 Syracuse J. Int'l L. & Com. 97, 110 (1978)
173. Turkish, Mexican, Egyptian, and Peruvian museum basements “filled to overflowing with repetitive artifacts”
174. See, e.g., Jeanneret v. Vichey, 693 F.2d 259, 267 (2d Cir. 1982), wherein the court stated that “‘illegal export does not itself render the importer … in any way actionable in a U.S. court
175. the possession of an art object cannot be lawfully disturbed in the United States solely because it was illegally exported from another country,’” quoting Bator, F.2d, at 287.
176. AAM Amici Br. at 82
177. citing the Archaeological Resources Protection Act (“ARPA”), 16 U.S.C. §§ 470aa et seq. (1994)
178. the Native American Graves Protection and Repatriation Act (“NAGPRA”), 25 U.S.C. §§ 3001 et seq. (1994)
179. The United States responded to this argument stating that [b]ecause the Government proceeds in rem against the allegedly tainted property in a civil forfeiture proceeding, it is not necessary to show that the owner of the forfeited property was aware of the illegality of the transaction that serves as the basis for forfeiture (citations omitted). Absent a knowledge requirement, courts in civil forfeiture proceedings therefore have declined to adopt the vagueness and fair notice analysis that might otherwise be applicable to a criminal case (citations omitted). (The United States Br. at 32–33).
180. See 19 U.S.C. §§ 2601–2613.
181. 19 U.S.C. §§ 2607, 2609.
182. Several nations have obtained approval of their requests for protection under the CPIA, including Bolivia (expired), Guatemala, Mali, Peru, Canada, and “the [a]rchaeological material representing Prehispanic cultures of El Salvador.” Italy has never sought protection under the CPIA. Steinhardt Br. at 28–29, n.11. Subsequent to this litigation, emergency import restrictions for particular categories of archaeological objects were granted for Cyprus and Cambodia, and Italy and Bolivia have brought requests for import restrictions.
183. 19 U.S.C. §§ 2602–2606, 2607.
184. See, e.g., Bator, U.S.C.
185. This concern is undermined by the existence of 22 U.S.C. section 2459, which provides immunity from seizure of cultural objects imported for temporary exhibition or display.
186. AIA Amici Br. at 125 n.9
187. citing P. Boylan, Illicit Trafficking in Antiquities and Museum Ethics, in Antiquities Trade or Betrayed: Legal, Ethical, and Conservation Issues 95 (K. Tubb ed., 1995)
188. J. Walsh, It's a Steal, Time, November 25, 1991, at 86–88
189. Peter Watson, Sotheby's: The Inside Story 290–93 (1997).
190. AIA Amici Br. at 110. “The archaeologist excavates such sites by ‘peeling back’ each layer in reverse chronological order, regarding all remains of human activity as potentially valuable sources of knowledge.” Id.
191. See, e.g., Andrus v. Allard, 444 U.S. 51, 66–67 (1979).
192. AIA Amici Br. at 117
193. citing to the McClain cases and Hollinshead. AIA stated that “the CPIA's legislative history explicitly states that the Act ‘neither pre-empts State law in any way, nor modifies any Federal or State remedies that may pertain to articles to which [the Act's] provisions … may apply,’” quoting S. Rep. 97–564, 97th Cong., 2d Sess. 25 (1982), reprinted in 1982 U.S.C.C.A.N. 4078, 4099.
194. See also Republic of Italy Br. at 19–20
195. AIA Amici Br. at 117
196. quoting S. Rep. 97–564, 97th Cong., 2d Sess. 25 (1982)
197. reprinted in 1982 U.S.C.C.A.N. 4078, 4099
198. AIA Amici Br. at 119
199. citing the Antiquities Act of 1906, 16 U.S.C. §§ 431–433m (1998)
200. ARPA, 16 U.S.C. §§ 470aa-470mm(1998).
201. See also the Native American Graves Protection and Repatriation Act, 25 U.S.C. §§ 3001–3013 (1998)
202. Abandoned Shipwreck Act, 43 U.S.C. §§ 2101 et seq.
203. AIA Amici Br. at 123.
204. Using the United States as an example, the AIA remarked that modern-day Americans have a significant link both to the colonial settlers as well as Native American communities and that the “majority culture in the United States today is no less the product of conquest than is the modern Turkish population in Turkey.” Id. at 130 n.45
205. Gold Phiale, 184 F.3d at 137.
206. Prada, F.3d.
207. Id.
208. See, e.g., Autocephalous Greek-Orthodox Church of Cyprus v. Goldberg and Feldman Fine Arts, Inc., 917 F.2d 278, 294 (7th Cir. 1990) (the Seventh Circuit pointed out that “dealers can (and probably should) take steps such as a formal IFAR search; a documented authenticity check by disinterested experts; a full background search of the seller and his claim of title; insurance protection and a contingency sales contract; and the like”)
209. Guggenheim, 77 N.Y.2d at 318, 320–21 (N.Y. Ct. App. 1991) (“the burden of investigating the provenance of a work of art [should be] on the potential purchaser”).
210. See also Ralph Lerner and Judith Bresler, Art Law-The Guide For Collectors, Investors, Dealers, and Artists, Practicing Law Institute 100, 556 (2d ed. 1998) (“[i]f an art dealer, on buying a work of art, fails to inquire into the nature of the seller's authority to sell that artwork, the dealer is not deemed to be a buyer in the ordinary course of business and, accordingly, is no better than a converter…. [A]n art dealer … is held to a greater duty of care in checking provenance than is a collector who buys from a reputable art dealer in the usual or normal course of business. The professional art dealer has at his or her disposal sources of information that may not be readily available to the collector”)
211. Erisoty v. Rizik, 1995 WL 91406, at ∗11 (E.D. Pa. 1995) (the court noted that an amateur art collector purchased “without inquiring as to the painting's prior ownership or the identity of the consignor, or making any inquiry of art or law enforcement agencies, and with the knowledge that the Painting was in five pieces-suspicious circumstances to say the least. They took the risk that an original owner could appear at any time”).
212. Immunity from seizure for international loans of cultural objects may be obtained pursuant to 22 U.S.C. § 2459.
213. Report of the AAMD Task Force on the Spoliation of Art During the Nazi/World War II Era (1933–1945), June 4, 1998. The full the text of the AAMD report can be found on the Internet at: http://www.aamd.org/guideln.html.
214. Id. at section II.B.3.
215. See, e.g., Guggenheim, 77 N.Y.2d at 318, 320–21.
216. The issue of delay or a lack of due diligence by the theft victim in locating stolen art goes solely to whether the defense of laches is available under New York law. Accord Republic of Turkey v. Metropolitan Museum of Art, 762 F. Supp. 44, 46–47 (S.D.N.Y. 1990).
217. For further discussion of the defense of laches, see Greek Orthodox Patriarchate of Jerusalem v. Christie's, 1999 U.S. LEXIS 13257 (S.D.N.Y. 1999).
218. Suits for the forfeiture of property accruing under the customs law must be brought within five years of the discovery of the alleged offense. 19 U.S.C. § 1621 (1999).