Court Opinion

ID: 9488148
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:37:31.764789+00
Date Added: 2024-06-11T17:52:43.291254
License: Public Domain

NOONAN, Circuit Judge,
dissenting:
The statute governing this case is 31 U.S.C. § 5324(a)(3), which provides:
No person shall for the purpose of evading the reporting requirements of section 5313(a) or 5325 or any regulation prescribed under any such section
(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
The statutory crossreferenee to § 5325 does not appear to be relevant here. The statutory crossreference to § 5313 is to authorization of the Secretary of the Treasury to prescribe the reporting of certain monetary transactions by financial institutions; under the authority of this statute, the Secretary has prescribed the reporting of transactions in currency of more than $10,000. 31 C.F.R. § 103.22(a)(1). The regulations specify:
Multiple currency transactions shall be treated as a single transaction if the financial institution has knowledge that they are by or on behalf of any person and result in either cash in or cash out totalling more than $10,000 during any one business day. Id.
The Supreme Court has authoritatively construed the statute in Ratzlaf v. United States, — U.S. -, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994). The holding of this case is that for a defendant to be guilty of violating § 5324(a)(3), “the jury had to find he knew the structuring in which he engaged was unlawful.” Id. at -, 114 S.Ct. at 663. The reasoning that leads to this conclusion makes clear that it is not enough to establish guilt to prove that the defendant knew “that a financial institution must report currency transactions in excess of $10,000 and his intention to avoid such reporting.” Id. at -, 114 S.Ct. at 657. It must be proved that the defendant’s conduct was “willful,” i.e., that “he was aware of the illegality of the ‘structuring’ in which he engaged.” Id. It must be shown that he “knew the structuring he undertook was unlawful.” Id. at -, 114 S.Ct. at 658. It is not enough that, as in Ratzlaf, the defendant “admits that he structured cash transactions, and that he did so with knowledge of, and a purpose to avoid, the bank’s duty to report currency transactions in excess of $10,000.” Id. at -, 114 S.Ct. at 659. There must be “a ‘specific intent to commit the crime,’ i.e. ‘a purpose to disobey the law.’” Id. There must be proof, as the Supreme Court quotes the First Circuit, of a “bad purpose, to disobey the law.” Id.
In the course of its reasoning the Supreme Court observed that “structuring” of financial transactions was not in itself evil and that structuring a transaction to avoid a tax was legitimate. Id. at -, 114 S.Ct. at 661-662. The Supreme Court further observed that the principal purpose of the statute was to give federal agencies additional tools to investigate and curb money laundering “‘by which criminals have successfully disguised the nature and source of funds from their illegal enterprises.’ ” Id. at -, n. 11, 114 S.Ct. at 661, n. 11, quoting S.Rep. No. 94r-443, pp. 1-2 (1986).
Ratzlaf may be read as though it did not really mean what it said when it declared that the prosecution must show that the defendant “knew the structuring in which he was engaged was unlawful.” Ratzlaf, — U.S. at -, 114 S.Ct. at 663. In other *1015words, it may be read as requiring a ritual of recital to the jury of an instruction that the defendant must have acted wilfully but as not requiring any proof of such willfulness in the strong sense defined by the Court. In effect, although not in words, that is what the majority does. Without evidence showing beyond a reasonable doubt that Tipton and Purmort knew that the particular actions in which they engaged constituted illegal structuring, the majority upholds their convictions.
We all agree that the defendants here, like Ratzlaf, knew that there was a law against the structuring of bank deposits and that therefore structuring as defined by the statute was unlawful. We also agree that Had-dad wanted to keep his cash transactions secret, either from fear of the Syrian government or from fear of the IRS. We all agree that the defendants here, like Ratzlaf, wanted to avoid a report of the transactions. The question is whether Tipton and Purmort knew that the transactions they engaged in in September 1988 constituted unlawful structuring.
As proof of their knowledge, the majority opinion cites these facts:
1. That Purmort in June 1988 told Had-dad that if he kept on bringing in this much cash, he would “get the IRS after our asses.”
2. That at some point in the summer of 1988 Tipton told Haddad to limit his visits to the bank.
3. That, according to Haddad, Tipton told him to use different people’s names when purchasing cashier’s checks, “not just my name come up, but different people.”
4. That, after all of the September 1988 transactions were completed, other bank employees obtained photocopies of the cashier’s checks and Tipton asked one of them, “Are you trying to frame me”?
5. That Purmort told Tipton that Pur-mort would deny to investigators that he knew what was going on with the Haddads.
The quoted language from Purmort to Haddad in June expresses colloquially the idea that if the bank handled large cash transactions the IRS would go after the people with the cash. It does not amount to any evidence of specific intent on Purmort’s part to break the law. If anything, it shows a desire not to be associated with lawbreaking. Similarly the comments to Haddad to limit his visits shows an intent not to break the law. The recommendation to Haddad to have “different people” buy cashier’s checks is as consistent with an intent to keep Had-dad technically within the law as it is with a bad purpose to break the law. It is not a crime for a person with a cash business to want to keep the extent of his cash business from the knowledge of the IRS and manage his bank deposits to achieve that result. Ratzlaf v. United States, — U.S. - at -, 114 S.Ct. 655 at 661 (1994) (semble). The statute the bankers are charged with violating is not a statute that makes it a crime to keep a taxpayer’s cash income from knowledge of the IRS and to arrange banking transactions with that end in view. It is startling, to say the least, that the government’s brief treats Tipton’s early 1988 advice to Haddad “to keep his cash transactions below $10,000, so no filing would have to be made to the IRS” as advice to Haddad “to structure his cash transactions.” Appellee’s Brief, p. 5. Plainly, the government uses the verb “structure” to describe what the government views as criminal conduct. It is the same position that the government brief took in Ratzlaf and that the Supreme Court implicitly repudiated.
The other evidence relied on by the majority opinion is evidence of nervousness after the event. Knowing that there was a law against structuring, the bankers could reasonably be nervous when other bank employees questioned what they had done and an investigation was begun. Understandable later nervousness cannot be retroactively converted into proof of specific intent to violate the statute.
We all agree as to the standard of evidence set by Jackson v. Virginia, 443 U.S. 307, 324, 99 S.Ct. 2781, 2791-92, 61 L.Ed.2d 560 (1978): the evidence must be looked at from the government’s perspective, and we must then ask whether any reasonable juror could find the defendants guilty beyond a reasonable doubt. What is sometimes forgotten in *1016applying this standard is that, while we adopt the government’s perspective, we must still ask whether there is proof beyond a reasonable doubt. If adoption of the government’s perspective means the resolution of all doubts in favor of the government, the effect is to eliminate reasonable doubt from the review and to substitute in its place the presumption that the defendant is guilty, a presumption rebuttable only by the defendant producing unimpeachable evidence of his innocence. Such a way of reasoning appears to be what drives the majority opinion to its conclusion of affirmance. It does not appear to me to be consistent with a standard requiring proof beyond a reasonable doubt of each element of the crime charged.
On the basis of the evidence set out in the majority opinion, I find it very difficult to believe that any reasonable person could find the evidence showed that Purmort and Tip-ton, beyond a reasonable doubt, knew that the particular transactions they entered into with the Haddads were unlawful structuring. Setting aside their own testimony that they did not know the transactions to be unlawful, we are still confronted with the fact that they openly carried out the transactions in a bank with the knowledge of a substantial number of the bank’s employees; they made no attempt to hide these transactions from them; and the regulations of the Secretary, remarkably detailed as they are on many points, do not declare that a husband and wife’s cash deposits on a given date must be consolidated for purposes of a report. Proof of the defendants’ willfulness, specific intent to break the law, bad purpose is simply not there beyond a reasonable doubt.
I respectfully disagree.