HQ 223908: Employment by a Customs broker of a person who has beenconvicted of uttering an altered bill of lading; 49 U.S.C. App.121; 19 U.S.C. 1641(d)(1)(E); 18 U.S.C. 1; 18 U.S.C. 3559.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                         November 8, 1994


                                        BRO-3-05-CO:R:C:E 
                                        225345 SR

Mr. Elon A. Pollack
Politis, Pollack & Doram
3255 Wilshire Blvd., Suite 1688
Los Angeles, CA 90010

RE: Employment by a Customs broker of a person who has been
convicted of uttering an altered bill of lading; 49 U.S.C. App.
121; 19 U.S.C. 1641(d)(1)(E); 18 U.S.C. 1; 18 U.S.C. 3559.

Dear Mr. Pollack:

    This is in response to your letter dated April 21, 1992,
concerning the employment, by a Customs broker, of a person who
has been convicted of uttering an altered bill of lading.

FACTS:

    Company X is a licensed corporate Customs Broker in the San
Francisco District. An employee entered a guilty plea for
violation of Title 49 U.S.C. App. 121, uttering an altered bill
of lading, in the United States District Court. Apparently in
filling out a document he used the date of delivery of
containerized cargo to a terminal rather than the actual date of
loading on board a vessel. The offense was committed in September
1988. The employee was sentenced on April 8, 1992, to a fine of
five thousand dollars, two years on probation, and 120 hours of
community service.  The court also recommended that this
individual retain his brokers license. Although the statute
provides that a violation of 49 U.S.C. App. 121 is a misdemeanor,
the attorneys for the brokerage company are concerned that the
sentence received by the employee may cause the offense to be
considered a felony under Federal law.

    According to 19 U.S.C. 1641(d)(1)(E), a broker may not
employ anyone who has been convicted of a felony without written
permission of the Secretary of the Treasury. This authority has
been delegated to Customs. See 19 CFR 111.53(e). The brokerage
company wishes to determine if written permission is necessary to
continue the employment of the individual.
                               -2-

    Pursuant to section 625, Tariff Act of 1930 (19 U.S.C. 1625)
as amended by section 623 of the title VI - Customs 
Modernization - of the North American Free trade Agreement
Implementation Act (Pub. L. 103-182, Stat. 2057), a notice was
published in the Customs Bulletin, Volume 28, Number 39/40,
proposing to revoke HQ 223908, issued August 27, 1992, pertaining
to whether a broker may employ a person who has been convicted
and sentenced under the New Federal Sentencing Guidelines of
uttering an altered bill of lading.

ISSUE:
    
     Whether the employee in question has been convicted of a
misdemeanor or a felony for purposes of 19 U.S.C. 1641(d)(1)(E).

LAW AND ANALYSIS:
    
     According to 19 U.S.C. 1641(d)(1)(E) the Secretary may
impose a monetary penalty or revoke or suspend a license or
permit of any customs broker if the broker has knowingly
employed, or continues to employ, any person who has been
convicted of a felony, without the written approval of such
employment from the Secretary.
    
     The employee was convicted of uttering an altered bill of
lading under 49 U.S.C. App. 121 which provides as follows:
     
         Any person who, knowingly or with intent to defraud,    falsely makes, alters, forges, counterfeits, prints or      photographs any bill of lading purporting to represent goods
       received for shipment among the several States or with       foreign nations, or with like intent utters or publishes  as      true and genuine any such falsely altered, forged,           counterfeited, falsely printed or photographed bill of lading, knowing it to be falsely altered, forged, counterfeited, falsely printed or photographed . . . or transfers for value a bill which contains a false statement as to the receipt of the goods, or as to any other matter, or who, with intent to defraud, violates, or fails to comply
     with, or aids in any violation of, or failure to comply with
     any provision of this chapter, shall be guilty of a         misdemeanor, and, upon conviction, shall be punished for    each offense by imprisonment not exceeding five years or by      a fine not exceeding $5000, or both.
     
     The brokerage company is concerned that although the 
statute specifically provides that a person who violates the
statute shall be guilty of a misdemeanor, the severity of the 

                               -3-


sentence may elevate the employee's conviction to a felony. 18
U.S.C. section 1 states that, notwithstanding any Act of Congress
to the contrary, any offense punishable by imprisonment for a
term exceeding one year is a felony. This provision was repealed
(Pub.L. 98-473, Title II, section 218(a), Oct. 12, 1984, 98 Stat.
2027). It applies retroactively only to offenses that were
committed before November 1, 1987. It appears from the documents
submitted that the employee's offense was committed in September
of 1988.

    The provision, 18 U.S.C. l, was replaced by new Federal
Sentencing Guidelines, 18 U.S.C. 3559, which are the same except
that the provision states that the guidelines apply only to an
offense that is not specifically classified by a letter grade.
Although 49 U.S.C. App. 121 specifically states that conviction
under this statute is to be considered a misdemeanor, 
it does not list a letter grade and therefore the new Federal
Sentencing Guidelines apply.

    We are aware from the transcripts that the judge was very
concerned that the employee should keep his job. However, we 
have been instructed by the Customs Office of Chief Counsel,
based on the advice of the Department of Justice, that in spite
of the wishes of the judge and the fact that the statute
specifically states that it is a misdemeanor, under section 3559,
an offense that is not specifically classified by a letter grade
in the section in which it is defined is classified as a Class D
felony if the maximum term of imprisonment authorized is less
than ten years but is 5 or more years. Accordingly, we 
understand that the employee is guilty of a felony under 49
U.S.C. App. 121 and 18 U.S.C. 3559. We have been advised that
there have been no relevant court cases since the new Guidelines
went into effect. The court cases decided under 18 U.S.C. 1,
(See United States v. Schutte, 610 F. 2d 698 (10th Cir. 1979) and
Loos v. Hardwick, 224 F.2d 442 (5th Cir. 1955)), are still
considered to be valid precedent.

HOLDING:

    The offense for which the employee was convicted is a felony
under the new Federal Sentencing Guidelines, 49 U.S.C. App. 121.
Therefore, unless the brokerage company receives special
permission from the Commissioner it may not employ the individual
in question.
                               -4-


    In accordance with section 625, this ruling will become
effective 60 days from its publication in the CUSTOMS BULLETIN. 
Publication of rulings or decisions pursuant to section 625 does
not constitute a change of practice or position in accordance
with section 177.10(c)(1), Customs Regulations (19 CFR 
177.10(c) (1)).

                           Sincerely,
                                
                            John Durant, Director
                            Commercial Rulings Division