14-360-cr

United States v. Taylor



## In the 1 

# United States Court of Appeals 2



## For the Second Circuit 3

4

5

August Term, 2014 6

No. 14

‐ 360

‐ cr 7

8

U NITED S TATES OF A MERICA

, 9

Appellee

, 10

11

v. 12

13

D EWEY T AYLOR

, AKA Road Rash, 14

Defendant

‐ Appellant

, 15

16

J OHN S MITH

, AKA Kazoo, R ICKY A LLEN

, T ERRANCE H ALL

, AKA Bam, 17

J OHNNIE G IBSON

, AKA Goldie, W ILLIA S ZYMANSKI

, E MANUEL E. B ELL

, 18

J EFFERY A CHATZ

, D ALE L OCKWOOD

, A NTHONY B URLEY

, 19

F RANK O WENS

, V AN M ILLER

, 20

Defendants

. * 21

22

23

Appeal from the United States District Court 24

for the Western District of New York. 25

No. 11

‐ cr

‐ 85

‐ 1

― Richard J. Arcara, Judge

. 26

27

28

29

* The Clerk is directed to amend the caption to conform to the caption above.2 A RGUED : M AY 29, 2015 1

D ECIDED : M ARCH 2, 2016 2

3

4

Before: P OOLER

, L OHIER

, and D RONEY

, Circuit Judges

. 5

6

7

Appeal from a judgment of the United States District Court 8

for the Western District of New York (Arcara, J. ), convicting 9

Defendant

‐ Appellant Dewey Taylor, following a jury trial, of one 10

count of conspiracy to distribute cocaine in violation of 21 U.S.C. 11

§§ 841 and 846, and seven counts of transaction structuring for the 12

purpose of evading currency reporting requirements in violation of 13

31 U.S.C. § 5324. We AFFIRM the judgment of conviction as to the 14

conspiracy to distribute cocaine, REVERSE the judgment of 15

conviction as to the transaction structuring counts, and REMAND 16

for resentencing. 17

18

19

L AWRENCE D. G ERZOG

, New York, 20

NY, for Defendant

‐ Appellant

. 21

22

J OSEPH J. K ARASZEWSKI

, Assistant 23

United States Attorney, for William J. 24

Hochul, Jr., United States Attorney 25

for the Western District of New York, 26

Buffalo, NY, for Appellee

. 27

28

29

30

31

323 D RONEY

, Circuit Judge : 1

Defendant

‐ Appellant Dewey Taylor appeals from a judgment 2

entered in the United States District Court for the Western District of 3

New York (Arcara, J. ), following a jury trial, convicting him of one 4

count of conspiracy to distribute or possess with the intent to 5

distribute 500 grams or more of cocaine in violation of 21 U.S.C. 6

§§ 841(a)(1), 841(b)(1)(B), and 846, and seven counts of transaction 7

structuring for the purpose of evading currency reporting 8

requirements in violation of 31 U.S.C. § 5324(a)(1) and (a)(3). 9

Taylor argues that his conviction for the cocaine conspiracy 10

must be vacated because it constituted a constructive amendment of 11

the indictment, which charged a conspiracy involving a larger 12

amount

— five kilograms or more

— of cocaine. Taylor also argues 13

that there was insufficient evidence to allow a jury to reasonably 14

infer an intent to evade the currency reporting requirements because 15

the evidence did not establish a pattern of structured transactions 164 sufficient to indicate that intent. 1

We AFFIRM the judgment of conviction as to the cocaine 2

conspiracy count, but REVERSE as to the transaction structuring 3

counts, and REMAND for resentencing. 4

BACKGROUND 5

Taylor was a member of the Afro Dogs Motorcycle Club, a 6

national motorcycle and social club. Taylor, along with his co

‐ 7

defendants John Smith and Ricky Allen, held various leadership 8

positions in the Buffalo, New York chapter of the club. 9

In the fall of 2009, the Government began investigating Smith 10

for his suspected involvement in trafficking cocaine, setting up a 11

series of controlled buys at Smith’s residence and the Afro Dogs’ 12

Buffalo clubhouse after a cocaine dealer was arrested and informed 13

the police that Smith was his supplier of cocaine. The Government 14

presented evidence at trial that Smith regularly packaged and stored 15

cocaine in Allen’s house, where Smith also counted and stored cash 165 ranging in amounts from $40,000 to more than $100,000. 1

The Government also presented evidence of Taylor’s 2

involvement in the drug operation. At Smith’s request, Taylor 3

delivered to Allen’s house a package that contained a kilogram of 4

powder cocaine and crack cocaine. Taylor stored the package in 5

Allen’s basement. On two or three other occasions, Taylor helped 6

Smith count money from drug proceeds in Allen’s kitchen. 7

Taylor was charged, along with Smith, Allen, and nine others, 8

in a November 2010 indictment with conspiracy to distribute and 9

possess with the intent to distribute five kilograms or more of 10

cocaine in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(A), and 846. 1 11

Taylor alone was charged with thirteen counts of transaction 12

structuring for the purpose of evading currency reporting 13

1 The indictment also charged Smith, Allen, and co

‐ defendant Terrance Hall with

various other drug crimes. Smith, Allen, and several other co

‐ defendants pled

guilty prior to trial. Smith died before trial.

Four other defendants went to trial with Taylor, all of whom were charged with

the same drug conspiracy count. Three of the four other defendants were

acquitted, and the jury deadlocked as to the remaining defendant.6 requirements under 31 U.S.C. §§ 5313(a), 5324(a)(1), and 5324(a)(3). 1

At the defendants’ trial, the Government called seventeen 2

witnesses, including Allen, to testify about the drug conspiracy. 3

Allen had pled guilty and was a cooperating witness for the 4

Government. The Government also presented evidence of the drug 5

conspiracy obtained through wiretaps authorized on Smith’s 6

phones, including conversations between Smith and Taylor. Taylor 7

called no witnesses. 8

In support of the structuring counts, the Government called 9

two witnesses and introduced Taylor’s credit union records. 10

Following the close of evidence, Taylor moved pursuant to 11

Federal Rule of Criminal Procedure 29(a) for a judgment of acquittal 12

on the drug conspiracy count as well as the structuring counts. The 13

Government moved to dismiss six of the structuring counts, as it 14

conceded it had presented no evidence as to those counts. The court 15

granted the Government’s motion as to those six counts and denied 167 Taylor’s motion as to the drug conspiracy count and the remaining 1

seven structuring counts. 2 2

The jury convicted Taylor of the drug conspiracy count for the 3

amount of 500 grams or more of cocaine and of all seven structuring 4

counts. 3 The court sentenced Taylor to 144 months’ imprisonment 5

on the drug conspiracy count and to sixty months’ imprisonment on 6

each of the transaction structuring counts, to be served concurrently 7

with one another and with the 144 month sentence on the drug 8

conspiracy count. 9

DISCUSSION 10

I. Constructive Amendment of the Drug Conspiracy 11

Count 12

The district court instructed the jury that to prove the drug 13

conspiracy charge against Taylor, the Government must establish 14

2 The Government filed a redacted indictment which included only the drug

conspiracy count ( c ount one) and the seven remaining structuring counts

directed only at Taylor ( c ounts two through eight).

3 Pursuant to Federal Rule Criminal Procedure 29(c), Taylor renewed his motion

for a judgment of acquittal after the jury verdict, but it was denied.8 beyond a reasonable doubt the following elements: (1) “that two or 1

more persons entered into an unlawful agreement charged in the 2

indictment,” and (2) that Taylor “knowingly became a member of 3

the conspiracy.” App. 101. As to the quantity of drugs involved in 4

the conspiracy, the court instructed the jury as follows: 5

If you find that the Government has proven 6

beyond a reasonable doubt the two elements [of 7

conspiracy] that I have just described, then there is one 8

more issue that you must decide. I will provide you 9

with a special verdict form asking you to fill in the type 10

and amount of drugs that the defendants conspired to 11

possess with intent to distribute. The burden is on the 12

Government to establish the type and amount of drugs 13

beyond a reasonable doubt. 14

15

App. 106

‐ 07. This portion of the charge was based on the proposed 16

jury instructions of the Government and two of Taylor’s co

‐ 17

defendants, which Taylor adopted. 18

The district court also instructed the jury that: 19

[C]ount one charges the defendant with a conspiracy to 20

distribute and to possess with the intent to distribute 21

five kilograms or more of a mixture or substance 22

containing cocaine. Now, there’s a verdict sheet

. . . 239 which will be given to you and will require you to 1

specify, in the event of a guilty verdict on count one, 2

whether the conspiracy proven involved cocaine. You 3

must then unanimously agree upon which controlled 4

substance or substances were involved in the 5

conspiracy. 6

7

You must also determine the weight of the 8

controlled substances involved in the conspiracy. And 9

I’ll go over that verdict sheet with you in a few minutes. 10

Specifically, should you determine that the conspiracy 11

charged in count one involved a mixture or substance 12

containing cocaine, you must determine whether the 13

weight of that mixture or substance was five kilograms 14

or more, or if it was 500 grams or more, or if it was less 15

than 500 grams. 4 16

App. 114

‐ 15. Taylor’s counsel did not object to this portion of the 17

charge or the special verdict form. 18

The jury found Taylor guilty of “conspir[acy] to possess with 19

intent to distribute and to distribute a mixture or substance 20

containing cocaine.” App. 127. As to the quantity options, the jury 21

determined the amount of cocaine to be “500 grams or more.” 22

4 The three quantity amounts set forth on the verdict form reflect the threshold

amounts of cocaine triggering different mandatory minimum periods of

incarceration and related penalties in 21 U.S.C. § 841(b).10 District Ct. Docket No. 237, at 2. 1

Taylor argues that this conviction based on an amount of 2

cocaine less than that charged in the indictment constituted an 3

unlawful constructive amendment of the indictment. 5 4

An indictment has been constructively amended “[w]hen the 5

trial evidence or the jury charge operates to broaden[] the possible 6

bases for conviction from that which appeared in the indictment.” 7

United States v. Rigas

, 490 F.3d 208, 225 (2d Cir. 2007) (alterations in 8

original) (quoting United States v. Milstein

, 401 F.3d 53, 65 (2d Cir. 9

2005)). Constructive amendment is “a per se violation” of the Fifth 10

Amendment’s Grand Jury Clause, “sufficient to secure relief without 11

any showing of prejudice.” United States v. Agrawal

, 726 F.3d 235, 12

259

‐ 60 (2d Cir. 2013). Nevertheless, “this court has proceeded 13

cautiously in identifying such error, ‘consistently permitt[ing] 14

significant flexibility in proof, provided that the defendant was 15

5 Taylor does not challenge the sufficiency of the evidence as to this count on

appeal.11 given notice of the core of criminality to be proven at trial.’” Id. at 260 1

(alteration in original) (quoting United States v. D ʹ Amelio

, 683 F.3d 2

412, 417 (2d Cir. 2012)). 3

“To prevail on a constructive amendment claim, a defendant 4

must demonstrate that ‘the terms of the indictment are in effect 5

altered by the presentation of evidence and jury instructions which 6

so modify essential elements of the offense charged that there is a 7

substantial likelihood that the defendant may have been convicted 8

of an offense other than that charged in the indictment.’” D’Amelio

, 9

683 F.3d at 416 (quoting United States v. Mollica

, 849 F.2d 723, 729 (2d 10

Cir. 1988)). This Court generally reviews a constructive amendment 11

challenge de novo. Agrawal

, 726 F.3d at 259. However, where, as 12

here, the claim was not raised in the district court, this Court 13

reviews the claim for plain error. United States v. Bastian

, 770 F.3d 14

212, 219 (2d Cir. 2014). To correct an error under this standard, there 15

must be “(1) ‘error,’ (2) that is ‘plain,’ and (3) that ‘affect[s] 1612 substantial rights.’ If all three conditions are met, an appellate court 1

may then exercise its discretion to notice a forfeited error, but only if 2

(4) the error ‘seriously affect[s] the fairness, integrity, or public 3

reputation of judicial proceedings.’” Johnson v. United States

, 520 4

U.S. 461, 467 (1997) (alterations in original) (citation omitted) 5

(quoting United States v. Olano

, 507 U.S. 725, 732 (1993)). 6

Federal Rule of Criminal Procedure 31(c)(1) provides, 7

however, that “[a] defendant may be found guilty of

. . . an offense 8

necessarily included in the offense charged.” We have made clear 9

that an “indictment need not charge the defendant with the lesser 10

[included] offense in order for the trial court to submit that offense 11

to the jury.” United States v. Dhinsa

, 243 F.3d 635, 674 (2d Cir. 2001). 12

Taylor concedes that his offense of conviction, conspiracy to 13

distribute and possess with intent to distribute 500 grams or more of 14

cocaine in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(B), and 846, is 15

a lesser included offense of the crime charged in the indictment, 1613 conspiracy to distribute and possess with intent to distribute five 1

kilograms or more of cocaine in violation of §§ 841(a)(1), 2

841(b)(1)(A), and 846. Other than the quantity of drugs, the 3

elements of those offenses are identical. But Taylor argues that Rule 4

31(c) does not apply because “neither the defense nor the 5

government sought or obtained an instruction on the lesser included 6

offense,” 6 Appellant Br. 13

‐ 14, and the jury was not instructed that 7

finding a drug quantity less than 5 kilograms “could be a basis for a 8

finding of guilt.” Appellant Reply Br. 4. 9

In support of the latter argument, Taylor relies on United 10

States v. Dhinsa

, 243 F.3d at 673

‐ 76, in which we vacated a Violent 11

Crime in Aid of Racketeering (“VICAR”) conviction under 18 U.S.C. 12

§ 1959. The VICAR offense charged in the indictment was based on 13

the New York state offense of coercion in the first degree. Id. at 672. 14

6 As discussed above, the portion of the jury charge relating to amounts was based on proposed

jury instructions from the Government and two of Taylor’s co-defendants, which Taylor adopted.

Thus, Taylor agreed to the charge which included the determination of amount, although it was

not identified by the district court as a “lesser included offense” determination.14 We concluded that the Government had failed to meet its burden of 1

establishing that the defendant engaged in coercion, but the 2

Government argued that we should nonetheless affirm the 3

conviction because the evidence was sufficient to establish that the 4

defendant committed the lesser offense of attempted coercion. See 5

id. at 672

‐ 73. The jury was never charged on attempted coercion, 6

however. Id. at 673. We held that we could not affirm the 7

conviction “based on the lesser offense of attempted coercion in the 8

first degree where there is sufficient evidence to sustain a conviction 9

on the lesser offense, but where the district court failed to charge the 10

jury on that offense.” Id. at 673. 11

Dhinsa is of no help to Taylor. Unlike in Dhinsa

, the district 12

court here properly charged the jury on the lesser included offense 13

of conspiracy to distribute and possess with intent to distribute 500 14

grams or more of cocaine. The court instructed the jury on the two 15

essential elements of conspiracy

— the existence of a conspiracy and 1615 Taylor’s willfully joining it. See United States v. Story

, 891 F.2d 988, 1

992 (2d Cir. 1989). The court also instructed the jury on the drug 2

quantity element required for narcotics offenses under 21 U.S.C. 3

§ 841(b), see United States v. Gonzalez

, 420 F.3d 111, 129 (2d Cir. 2005), 4

as requested by the Government, Taylor, and two of his co

‐ 5

defendants. Finally, the court explained that “should you determine 6

that the conspiracy charged in count one involved a mixture or 7

substance containing cocaine, you must determine whether the 8

weight of that mixture or substance was five kilograms or more, or if 9

it was 500 grams or more, or if it was less than 500 grams.” App. 10

115. The special verdict form separated the issue of conspiratorial 11

liability from quantity, expressly giving the jury the option of 12

finding Taylor guilty of a conspiracy involving five kilograms or 13

more of cocaine, or of the lesser included offenses of a conspiracy 14

involving 500 grams or more or less than 500 grams. Having been 15

properly charged on the lesser included offenses, the jury 1616 determined that Taylor conspired to distribute and possess with 1

intent to distribute “500 grams or more” of cocaine. App. 127. 2

Taylor’s conviction of conspiracy to distribute and possess 3

within intent to distribute cocaine involving a quantity specified in 4

21 U.S.C. § 841(b)(1)(B) was therefore not a constructive amendment 5

of the indictment charging him with conspiracy involving a quantity 6

specified in § 841(b)(1)(A). As other courts have recognized, such a 7

conviction is simply a conviction for a lesser included offense of the 8

offense charged in the indictment, which is entirely appropriate 9

under Federal Rule of Criminal Procedure 31(c). See, e.g.

, United 10

States v. Martinez

, 430 F.3d 317, 339

‐ 40 (6th Cir. 2005). Trial courts 11

need not use the actual words “lesser included offense” in the jury 12

charge or explicitly explain the concept of a lesser included offense 13

to the jury, so long as the defendant is given notice of the “ core of 14

criminality to be proven at trial” and the presentation of evidence 15

and jury instructions do not “modify [the] essential elements of the 1617 offense charged.” See D’Amelio

, 683 F.3d at 416

‐ 17 (internal 1

quotation marks omitted). 2

Thus, the jury was properly charged on the lesser included 3

offense that was the basis for his conviction on count one, and 4

Taylor’s conviction on that count is affirmed. 5

II. Sufficiency of the Evidence to Support the 6

Transaction Structuring Convictions 7

In addition to the drug conspiracy offense in count one, the 8

redacted indictment charged Taylor with seven counts of transaction 9

structuring for the purpose of evading currency reporting 10

requirements. Under 31 U.S.C. § 5313(a) and implementing 11

regulations, domestic financial institutions must file Currency 12

Transaction Reports (“CTRs”) with the Financial Crimes 13

Enforcement Network (FinCEN) of the Treasury Department 14

whenever they are involved in transactions for the exchange of 1518 currency exceeding $10,000 during one business day. 7 See 31 U.S.C. 1

§ 5313(a); 31 C.F.R. §§ 1010.311, 1010.313(b). Section 5324 of the 2

same subchapter makes it a crime to cause, or attempt to cause, a 3

financial institution to not file a required CTR. 31 U.S.C. § 5324(a). 4

As to the seven structuring counts, the Government presented 5

evidence that Taylor owned D.T. Liquor, 8 a liquor store that 6

operated as a “cash business” in Buffalo, New York. App. 69. See 7

District Ct. Docket No. 313, at 133. D.T. Liquor maintained a 8

business checking account at Erie Metro Federal Credit Union (“Erie 9

Metro”). Taylor was a signatory for that account. Taylor also had a 10

personal bank account at Erie Metro, and was a frequent customer at 11

7 Previously, these forms were filed directly with the Internal Revenue Service.

Their purpose, as described in FinCEN’s educational pamphlet, is to “safeguard

the financial industry from threats posed by money laundering and other

financial crime.” FinCEN, Notice to Customers: A CTR Reference Guide (2009),

http://www.fincen.gov/whatsn ew/pdf/CTRPamphletBW.pdf.

8 Although Taylor contends that his father owned the store, viewing the evidence

in the light most favorable to the Government

— as we must do on review of the

sufficiency of the evidence to support a criminal conviction, see Jackson v. Virginia

,

443 U.S. 307, 319 (1979)

— the record supports the conclusion that Taylor owned

the store.19 a branch office of the credit union in Buffalo. 1

Taylor made dozens of deposits into D.T. Liquor’s account 2

and his personal account from March 2008 to November 2009. 3

Relevant to this appeal are three categories of transactions in that 4

period. These transactions were contained in Erie Metro records 5

that were introduced into evidence by the Government at trial. The 6

first category consists of the seven so

‐ called “split” cash deposits 7

that the indictment charged as structured transactions for the 8

purpose of evading CTR requirements, App. 22, 23, 25, 28

‐ 29, 32

‐ 33, 9

37

‐ 38, 41

‐ 42, 45

‐ 46: 10

Count Date Amount of

Deposits Account

2 3/4/2008 $10,000

$2,050 D.T. Liquor’s account

D.T. Liquor’s account

3 3/7/2008 $6,300

$4,000 D.T. Liquor’s account

Taylor’s account

4 5/9/2008 $9,100

$2,000 D.T. Liquor’s account

Taylor’s account

5 6/24/2008 $9,550

$655 D.T. Liquor’s account

Taylor’s account20 6 9/15/2008 $9,800

$1,000 D.T. Liquor’s account

Taylor’s account

7 10/27/2008 $9,700

$1,000 D.T. Liquor’s account

Taylor’s account

8 11/03/2009 $3,200

$4,000

$3,000 Taylor’s account

Taylor’s account

Taylor’s account

The second category includes transactions during the same period 1

that involved deposits exceeding $10,000, App. 24, 30, 34, 39, 40, 43, 2

47: 9 3

Date Amount Account

3/10/2008 $14,500 D.T. Liquor’s account

3/19/2008 $10,100 D.T. Liquor’s account

5/13/2008 $15,000 D.T. Liquor’s account

5/27/2008 $10,100 D.T. Liquor’s account

6/20/2008 $14,557 D.T. Liquor’s account

6/27/2008 $15,950 D.T. Liquor’s account

7/1/2008 $13,150 D.T. Liquor’s account

7/7/2008 $23,000 D.T. Liquor’s account

8/27/2008 $17,600 D.T. Liquor’s account

9 The Government did not submit deposit receipts for these deposits; rather, it

submitted general account statements that do not include a notation as to

whether these deposits were in cash. Two Government witnesses testified,

however, that to the best of their knowledge D.T. Liquor was a cash business. It

seems certain, therefore, that most if not all of these deposits were also in cash.21 9/12/2008 $12,550 D.T. Liquor’s account

9/22/2008 $12,961 D.T. Liquor’s account

10/20/2008 $11,000 D.T. Liquor’s account

11/03/2008 $12,800 D.T. Liquor’s account

12/01/2008 $16,500 Taylor’s account

11/02/2009 $12,000 Taylor’s account

11/10/2009 $23,000 Taylor’s account

11/25/2009 $17,800 Taylor’s account

The third category consists of transactions where, in at least a few 1

instances in May and November of 2008, multiple separate deposits 2

were made in one day totaling less than $10,000, which would not 3

have generated CTRs. 4

Of the seven “split” transactions charged as structured 5

transactions, Taylor presented every pair of deposits to a single 6

teller at the same branch of Erie Metro in Buffalo, generally within 7

seconds or minutes of each other. 10 Evidence showed that cash 8

deposits were often used, sometimes immediately after being 9

10 The one exception involves the deposits on November 3, 2009, where the first

two amounts were deposited simultaneously but the third was deposited two

hours later, although with the same teller.22 deposited, to pay expenses for the liquor store, such as insurance, 1

payroll, and gasoline. 2

In addition to presenting the bank records of these deposits, 3

the Government called two witnesses to testify relating to the 4

structuring charges, Ramon Gallardo, Jr., the CEO of Erie Metro, and 5

David Turri, a special agent of the Criminal Investigation Division of 6

the Internal Revenue Service. Gallardo testified that he was 7

“[s]omewhat” familiar with Taylor and that his staff had an 8

“ongoing relationship” with Taylor “because of his frequent visits to 9

the credit union.” District Ct. Docket No. 313, at 65, 76. Gallardo 10

also testified that it was Erie Metro’s policy for tellers to inform 11

customers that the credit union was obligated to file CTRs whenever 12

a customer deposited more than $10,000 in cash, and that CTRs were 13

required even if a customer made multiple cash deposits at 14

approximately the same time

— even into different accounts

— and 15

the total exceeded $10,000. Turri similarly testified that CTRs were 1623 required for split cash deposits exceeding $10,000 and that there 1

were CTRs “filed concerning D.T. Liquor[] prior to the 2

[Government’s] investigation” into Taylor. App. 68. 3

Taylor argues that there was insufficient evidence to allow a 4

jury to reasonably infer his intent to evade the currency reporting 5

requirements because the evidence did not establish a sufficient 6

pattern of structured transactions. 7

We review challenges to the sufficiency of the evidence de 8

novo

. United States v. Leslie

, 103 F.3d 1093, 1100 (2d Cir. 1997). “A 9

defendant challenging the sufficiency of the evidence bears a heavy 10

burden, because the reviewing court is required to draw all 11

permissible inferences in favor of the government and resolve all 12

issues of credibility in favor of the jury verdict.” United States v. 13

Kozeny

, 667 F.3d 122, 139 (2d Cir. 2011). A judgment of acquittal can 14

be entered “only if the evidence that the defendant committed the 15

crime alleged is nonexistent or so meager” that no ”rational trier of 1624 fact could have found the essential elements of the crime beyond a 1

reasonable doubt.” United States v. Espaillet

, 380 F.3d 713, 718 (2d 2

Cir. 2004) (internal quotation marks omitted). 3

Viewing the evidence in the light most favorable to the 4

Government, we hold that no rational jury could conclude beyond a 5

reasonable doubt that Taylor intended to structure the transactions 6

in Counts Two through Eight for the purpose of evading currency 7

reporting requirements. 8

As discussed above, under 31 U.S.C. § 5313(a) and an 9

accompanying regulation, domestic financial institutions generally 10

must file CTRs for cash transactions exceeding $10,000. See 31 U.S.C. 11

§ 5313(a); 31 C.F.R. § 1010.311. Section 5324 prohibits individuals 12

from structuring transactions to evade this reporting requirement, 13

providing that: 14

No person shall, for the purpose of evading the 15

reporting requirements of section 5313(a)

. . . cause or 16

attempt to cause a domestic financial institution to fail 17

to file a report required under section 5313(a)

. . . [or] 1825 structure or assist in structuring, or attempt to structure 1

or assist in structuring, any transaction with one or 2

more domestic financial institutions. 3

31 U.S.C. § 5324(a). To violate § 5324, “(1) the defendant must, in 4

fact, have engaged in acts of structuring; (2) he must have done so 5

with knowledge that the financial institutions involved were legally 6

obligated to report currency transactions in excess of $10,000; and (3) 7

he must have acted with the intent to evade this reporting 8

requirement.” United States v. MacPherson

, 424 F.3d 183, 189 (2d Cir. 9

2005). 10

As to the first element, Taylor stipulated at trial that he made 11

at least some of the deposits reflected in the credit union records. 12

Moreover, Taylor retained control over and was signatory to both 13

his personal account and the D.T. Liquor account. Taylor 14

frequented Erie Metro to make transactions involving these 15

accounts, and there is no evidence that anyone else had access to the 16

accounts. Finally, the Government presented evidence of deposit 17

slips containing signatures from deposits into the D.T. Liquor 1826 account and Taylor’s personal account that were virtually identical. 1

The evidence presented at trial was more than sufficient to support 2

the jury’s inference that Taylor made all the deposits. 3

As to the second structuring element, Taylor concedes that the 4

jury could reasonably infer that he was aware of the reporting 5

requirements for deposits exceeding $10,000. 6

It is the third element, acting with the intent to evade the 7

currency reporting requirements, which requires vacating the 8

structuring counts of conviction. Congress included an intent 9

requirement in § 5324 in order to “shield[] innocent conduct from 10

prosecution.” United States v. Scanio

, 900 F.2d 485, 491 (2d Cir. 1990) 11

(quoting The Drug Money Seizure Act and the Bank Secrecy Act 12

Amendments: Hearing on S. 571 and S. 2306 Before the S. Comm. on 13

Banking, Housing, & Urban Affairs

, 99th Cong. 137 (1986) (“ Senate 14

Hearings ”) (statement of James Knapp, Deputy Assistant Att’y 15

General, Department of Justice, and Brian A. Sun, Assistant United 1627 States Attorney of the Central District of California)), abrogated by 1

Ratzlaf v. United States

, 510 U.S. 135 (1994). 11 Individuals who 2

“inadvertently divide a currency transaction in excess of $10,000 into 3

smaller transactions [are] not

. . . subject to structuring liability since 4

[§ 5324] ‘requires proof beyond a reasonable doubt that the purpose 5

of the “structured” aspect of a currency exchange was to evade the 6

reporting requirements.’” Id. (quoting a Justice Department 7

response to a written question at Senate hearings on the bill 8

amending § 5324). 9

Most appellate decisions upholding structuring convictions 10

11 Ratzlaf held that a defendant could be held criminally liable under 31 U.S.C.

§ 5324 only if the defendant “acted with knowledge that his conduct was

unlawful.” Ratzlaf

, 510 U.S. at 137. To reach this conclusion, the Supreme Court

looked to 31 U.S.C. § 5322(a) (1992), which described penalties for “willful[]”

violations of the subchapter, including § 5324. See Ratzlaf

, 510 U.S. at 139

‐ 41.

Soon after Ratzlaf was decided, however, “Congress amended § 5324 by giving it

its own criminal penalty provision so that reliance on § 5322 is no longer

necessary. This new provision does not include a separate requirement that the

defendant act “willfully” to be convicted. United States v. Vazquez

, 53 F.3d 1216,

1218 n.2 (11th Cir. 1995); see Riegle Community Development and Regulatory

Improvement Act of 1994, Pub. L. No. 103–325, § 411, 108 Stat. 2160, 2253

(codified as amended at 12 U.S.C. §§ 93, 1464, 1772d, 1786, 1818, 1821; 18 U.S.C.

§ 984, 986, 1956; 31 U.S.C. §§ 5321(a)(4)(A), 5322(a), (b), 5324(c)).28 involve transactions that were accompanied by other evidence of 1

intent to evade the reporting requirements in addition to the 2

transactions themselves. See 1 John K. Villa, Banking Crimes: Fraud, 3

Money Laundering & Embezzlement § 6:57 n.13 (2015) (collecting 4

cases). However, in United States v. MacPherson

, we held that “a 5

pattern of structured transactions

. . . may, by itself

, permit a rational 6

jury to infer that a defendant had knowledge of and the intent to 7

evade currency reporting requirements.” 424 F.3d at 195 (emphasis 8

added); see also United States v. Nersesian

, 824 F.2d 1294, 1309, 1314

‐ 15 9

(2d Cir. 1987) (finding intent to cause the currency transaction 10

reporting requirements to be violated where a defendant and his co

‐ 11

conspirators used $117,000 in cash to purchase more than seventy 12

$1,000 money orders at numerous banks throughout New York City 13

over a one

‐ month period). In MacPherson

, the defendant “chose to 14

deposit a quarter

‐ million dollars through a series of thirty

‐ two small 15

transactions all under $10,000” with “twenty

‐ three deposits [made] 1629 in amounts of $9,000

‐ $9,200” at multiple different banks over a short 1

period of time. 424 F.3d at 191. The evidence showed that “the cash 2

was a long

‐ held asset that [the defendant] had shielded for some 3

years from a possible tort judgment,” which

— following settlement 4

of the tort case

— the defendant “deliberately decided not to 5

deposit

. . . in one lump sum,” but rather through “the more 6

burdensome technique of thirty

‐ two separate transactions, no one of 7

which exceeded $10,000.” Id. We concluded that the defendant’s 8

“willingness to sacrifice efficiency and convenience in depositing a 9

quarter

‐ million dollars through multiple small transactions 10

structured to ensure that no one exceeded $10,000,” id.

, made it 11

“unlikely, to the point of absurdity, that it was pure coincidence” 12

that the defendant was innocently and inadvertently making 13

separate deposits. Id. (quoting United States v. Cassano

, 372 F.3d 868, 14

879 (7th Cir. 2004), vacated on other grounds, 543 U.S. 1109 (2005)). 15

Other Courts of Appeals have called upon similar logic in 1630 upholding certain structuring convictions. See United States v. Van 1

Allen

, 524 F.3d 814, 820 (7th Cir. 2008) (noting that “[t]he sheer 2

volume of the transactions almost compels the conclusion reached 3

by the jury” that the defendant engaged in illegal transaction 4

structuring and that “[t]he fact that [the defendant] was willing to 5

sacrifice efficiency and convenience and pay[] the exorbitant 6

transaction fees by going to separate banks in the same day to make 7

almost identical deposits supports the inference that he knew of and 8

intended to avoid the reporting requirements”); United States v. 9

Gibbons

, 968 F.2d 639, 644

‐ 45 (8th Cir. 1992) (“Not until the bank 10

informed Gibbons that currency transactions exceeding $10,000 had 11

to be reported did Gibbons request the bank to issue six checks, each 12

for less than $10,000, in place of the single check for more than 13

$52,000 he originally requested.

. . . Since the receipt and cashing of 14

six checks would have been less efficient and convenient than 15

receiving and cashing one, it is difficult to explain this change except 1631 that Gibbons sought to evade the reporting requirements.”). 1

In this case, the Government presented evidence at trial that, 2

on seven occasions over a twenty

‐ month period, Taylor made 3

multiple separate cash deposits totaling over $10,000 at the same 4

time at the same credit union branch office. No evidence of intent 5

other than the bank transactions was presented. Rather, the 6

Government contends that these represent a pattern of structured 7

transactions demonstrating Taylor’s intent to evade the currency 8

reporting requirements. 9

Based on our review of the record, however, we must 10

conclude that no rational jury could reach such a conclusion. First, 11

the Government never argued at trial and presented no evidence 12

that Taylor believed that CTRs would not have been generated for 13

split deposits. Gallardo testified that the policy of Erie Metro was 14

that tellers were to file a CTR when customers made either a single 15

deposit of more than $10,000 or a split deposit that totaled over 1632 $10,000, even if those deposits were made into two separate 1

accounts. 12 Gallardo also testified that tellers were to inform 2

customers of the CTR filing requirement. Although Gallardo 3

conceded that he was not present during any of the conversations 4

that Taylor had with the tellers when he made his transactions, the 5

Government never argued, and there was no basis for the jury to 6

conclude, that the tellers who processed Taylor’s transactions did 7

not follow Erie Metro’s policies. 8

Second, no evidence was presented at trial that Taylor had 9

any reason to believe that CTRs were not filed for the seven “split” 10

transactions. To the contrary, Gallardo testified that whether or not 11

a form was filed would not necessarily be known by a customer, as 12

no action is required by the customer concerning the filing of the 13

form, and the teller could file a CTR even if he or she had not 14

12 Two of the seven structuring counts concerned “split” deposits made to the

same account, while five counts concerned deposits made to the personal and

business accounts.33 complied with the bank policy of informing the customer about the 1

bank’s need to do so. Indeed, there was no evidence as to whether 2

CTRs were or were not filed for the seven “split” transactions at 3

issue, or whether they were filed for any of Taylor’s many single cash 4

deposits of over $10,000; no records of CTRs were submitted into 5

evidence. 13 6

Third, the evidence in the record does not otherwise evince 7

intent to evade the reporting requirements through Taylor’s making 8

the seven “split deposits.” In reviewing the sufficiency of the 9

evidence, we consider the evidence “in its totality, not in isolation.” 10

United States v. Anderson

, 747 F.3d 51, 59 (2d Cir. 2014) (quoting 11

United States v. Huezo

, 546 F.3d 174, 178 (2d Cir. 2008)). Gallardo’s 12

testimony and the credit union’s records showed that Taylor made 13

multiple single deposits exceeding $10,000 during the same period 14

13 Special Agent Turri testified that CTRs should have been filed for all the “split”

transactions in Counts Two through Eight, even though some of the deposits

were made to different accounts.34 in which Taylor was supposedly structuring transactions to avoid 1

CTR filings. As summarized in the second table above, the evidence 2

showed that Taylor deposited amounts over $10,000 in single 3

transactions often only days before and after he was allegedly trying 4

to avoid CTRs being filed by making split deposits. For example, 5

the Government contends that Taylor structured transactions on 6

March 4 and March 7, 2008, but Taylor deposited $14,500 in a single 7

account only three days later, on March 10. About a week after that, 8

on March 19, Taylor deposited $10,100, a mere $100 above the 9

threshold needed to trigger a CTR, in a single transaction. Similarly, 10

the Government contends that Taylor structured a transaction on 11

May 9, 2008. Yet Taylor deposited $15,000 on May 13 and made 12

another deposit of $10,100 on May 27, again only $100 over the CTR 13

threshold. The Government also claims that Taylor structured a 14

transaction on June 24, 2008, even though four days prior, on June 15

20, Taylor deposited $14,557 into this account, and three days later, 1635 on June 27, Taylor deposited $15,950. Indeed, there are more than 1

twice as many instances in which Taylor made deposits exceeding 2

$10,000 than instances in which he purportedly split his transactions 3

for the purpose of avoiding the reporting requirements. 14 4

Thus, this case is unlike MacPherson

. There was no evidence 5

that Taylor’s deposits on the dates of the alleged structured 6

transactions were part of a single lump sum that was split into 7

multiple deposits. With respect to the seven purportedly structured 8

transactions, Taylor presented every pair of deposits to a single 9

teller at a single branch of Erie Metro, generally within seconds or 10

minutes of each other

— not to different banks on the same day or 11

on multiple days close in time to one another, as the defendant in 12

MacPherson did. As Taylor queries, “[w]ho would believe that 13

someone seeking to evade the reporting requirement would present 14

the paired deposits

. . . to the same teller virtually simultaneously?” 15

14 Furthermore, the last claimed structuring deposit in November 2009 occurred

more than a year after the next most recent structuring deposit.36 Appellant Br. 20. Moreover, D.T. Liquor was a cash business that 1

routinely dealt in large amounts of cash, and Taylor made separate 2

deposits on multiple occasions

— sometimes totaling less than 3

$10,000, sometimes exceeding $10,000

— which were often 4

immediately used to pay business and personal expenses such as 5

insurance and telephone bills. Finally, as discussed above, there 6

were seventeen instances in the same time period in which Taylor 7

made single deposits exceeding $10,000. 15 8

The evidence was insufficient for the jury to conclude that 9

Taylor’s transactions constitute “a pattern of structured 10

transactions” intended to evade currency reporting requirements. 11

MacPherson

, 424 F.3d at 195. A pattern necessarily implies consistent 12

behavior, which would allow a rational jury to infer beyond a 13

reasonable doubt that the behavior is not coincidence but rather 14

15 The Government contended at oral argument that it could be that the deposits

exceeding $10,000 were related to legitimate business at D.T. Liquor, but that the

seven structured transactions derived from illegal drug proceeds. However, the

Government did not present this theory as to the distinction between the types of

deposits to the jury at trial, or in its brief on appeal.37 demonstrates the defendant’s intent to evade the reporting 1

requirements. No jury could reasonably conclude that such a 2

pattern existed here. Taylor’s convictions on the transaction 3

structuring counts are thus vacated. 4

We remand, though, for resentencing on the affirmed 5

conspiracy conviction. Generally, there is “no need

. . . for 6

remanding to the district court for the purpose of reconsidering [a] 7

concurrent” sentence on a conviction we have affirmed if “we are 8

quite sure that the conviction on the reversed count could not have 9

affected the concurrent sentences,” United States v. Ruffin

, 575 F.2d 10

346, 361

‐ 62 (2d Cir. 1978). Here, however, the district court took the 11

“currency that was the subject of the currency structuring [c]ounts” 12

into consideration when imposing a sentence on the conspiracy 13

count. District Ct. Docket No. 320, at 8

‐ 9. Thus, we cannot say that 14

the vacated counts did not affect the sentence imposed on the drug 15

conspiracy count. 1638 CONCLUSION 1

For the foregoing reasons, we AFFIRM the judgment of 2

conviction as to the conspiracy to distribute and possess with intent 3

to distribute a controlled substance count, VACATE the judgment of 4

conviction as to the transaction structuring counts, and REMAND 5

for resentencing on the remaining count of conviction. 6