Page 9 - United States v Edward Flume, Jr., Civ. 5:16-CV-73 (August 22, 2018)

Case 5:16-cv-00073 Document 56 Filed in TXSD on 08/22/18 Page 9 of 19

2017) (quoting Ratzlaf v. United States, 510 U.S 135, 142 (1994)), appeal dismissed for lack of

appellatejurisdiction, 2017 WL 6879994 (9th Cir. Nov. 16, 2017).

At this stage, the Court need not decide whether willfulness includes only knowing

violations or whether it also includes reckless violations, since genuine disputes of material fact

remain either way. The Court will first address Flume’s alleged knowing disregard of his FBAR

filing obligations. It will then addresshisalleged recklessdisregard of thoseobligations.

A. Flume’sAlleged Knowing Disregard of HisFBAR Obligations

The Government argues that Flume knowingly disregarded his FBAR reporting

obligations because he had either actual knowledge or “constructive” knowledge of those

obligations. (Dkt. 51 at 18–21.) But as explained below, the Government is not entitled to

summary judgment on this ground because genuine disputes remain about whether Flume had

actual knowledge of the FBAR requirements, and “constructive” knowledge does not suffice to

show willfulness. TheCourt will addresseach argument in turn.

1. Actual Knowledge

To show willfulness based on an actual-knowledge theory, the Government must prove

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that Flumeknew about theFBAR requirements. SeeSafeco Ins. Co. of Am. v. Burr, 551 U.S. 47,

56–57 (2007) (assuming that when willfulness is alleged, actual knowledge requires acts “known

to violate” a statute); United States v. Wynn, 61 F.3d 921, 928 (D.C. Cir. 1995) (“[W]hile

ignorance of the law generally is no excuse, Congress may decree otherwise . . . by requiring

proof of ‘willfulness’ . . . .”); McBride, 908 F. Supp. 2d at 1208 (holding the defendant liable

9 TheGovernment must also show that Flumeknew therequirementsapplied to him. But
Flumedoesnot disputethat heknew about theUBSaccount and that it had morethan $10,000.

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