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United States District Court for the Eastern District of Texas, Sherman Division
June 29, 2020, Decided; June 29, 2020, Filed
Civil Action No. 4:19-cv-415
[*712] MEMORANDUM OPINION AND ORDER
Pending before the Court are Defendant Alexandru Bittner's Motion for Partial Summary Judgment (Dkt. #28) and United States' Motion for Partial Summary Judgment (Dkt. #29). After consideration, the Court is of the opinion that Defendant Alexandru Bittner's Motion for Partial Summary Judgment (Dkt. #28) should be GRANTED and United States' Motion for Partial Summary Judgment (Dkt. #29) should be GRANTED in part and DENIED in part.
I. Factual Summary
The dispute in this case concerns the proper interpretation of the civil penalty provided by 31 U.S.C. § 5321(a)(5)(A) and (B)(i) for a non-willful violation of the regulations implementing 31 U.S.C. § 5314. The facts giving rise [**2] to this dispute are as follows.
Defendant Alexandru Bittner is a Romanian—American dual citizen. Before emigrating to the United States, Mr. Bittner earned a Master of Science in Engineering from Politechnica University of Bucharest. In December 1982, Mr. Bittner moved to the United States, where he worked as a dishwasher and plumber and earned his master plumbing certificate in California. [*713] Mr. Bittner became a naturalized American citizen in 1987 or 1988.
After living in the United States for eight (8) years, Mr. Bittner moved back to Romania in 1990 and lived there until 2011. He did not renounce his American citizenship. While living in Romania, Mr. Bittner generated a considerable stream of income through a variety of businesses and investments and opened a number of foreign bank accounts. His investment ventures—including, among other things, purchasing shares in hotels, buying apartments in the name of an entity, using holding companies to hold his assets, and negotiating deals with the Romanian government to purchase government assets—indicate that he was and is a sophisticated businessman. In addition, Mr. Bittner demonstrated at least some level of awareness about his tax obligations [**3] as a United States citizen, as he filed United States income tax returns for 1991, 1997, 1998, 1999, and 2000 (Dkt. #29).
From 1990 to 2011, Mr. Bittner generated over $70 million in total income through his various foreign businesses and investment ventures. During those years, Mr. Bittner kept at least some of that income in a number of foreign financial accounts. From 1996-2011, the aggregate high balance in those foreign financial accounts exceeded $10,000. This is important because United States citizens who maintain an aggregate high balance in a foreign financial account or accounts exceeding $10,000 in any given year are required by federal law to report that financial interest to the Treasury Department. The history and framework of that law are central to this case and are worth discussing at length.
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469 F. Supp. 3d 709 *; 2020 U.S. Dist. LEXIS 113416 **; 2020 WL 3498082
UNITED STATES OF AMERICA, Plaintiff, v. ALEXANDRU BITTNER, Defendant.
non-willful, reasonable cause, financial account, violations, civil penalty, lenity, partial summary judgment, summary judgment, regulations, reporting, willful, subparagraph, obligations, aggregate, argues, amicus brief, provisions, annual, words, investigating, interpreting, records, willful violation, nonmovant, taxpayer, advice, courts, costs, genuine issue of material fact, proposed interpretation