Court Opinion

ID: 9489204
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:08:55.55646+00
Date Added: 2024-06-11T17:53:23.735671
License: Public Domain

WINTER, Circuit Judge,
dissenting:
Respectfully, I disagree with my colleagues as to the sufficiency of the evidence that Simon knew that structuring cash deposits to avoid reporting requirements was illegal. I therefore dissent.
The parties and all members of the panel are in agreement that Simon triggered the obligation of Citibank to report cash transactions exceeding $10,000. 31 U.S.C. § 5313; 31 C.F.R. § 103.22(a) (1995). Indeed, Citibank duly reported Simon’s transactions. We also agree that Simon knowingly made separate deposits of under $10,000 in an attempt to evade the daily reporting requirements. 31 U.S.C. § 5324. Simon concedes that he wanted to conceal the aggregate size of the transactions from the government. He readily admitted to that purpose when arrested. What is at issue is whether Simon knew that the structuring of deposits to avoid reporting requirements itself was illegal.
The government paints Simon as a sophisticated stockbroker with knowledge of reporting requirements for currency transactions in excess of $10,000. In its view, Simon conceived of a clever scheme to make separate cash deposits of slightly under that amount at different Citibank branches on the days in question. The very nature of the scheme, the government argues, supports an inference of Simon’s knowledge that structuring was illegal. See Ratzlaf v. United States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994).
The scheme was anything but clever, however, and Simon’s understanding of the laws regarding the reporting of cash transactions was hardly sophisticated. Simon’s fourteen deposits were all made to a single account in his own name. For Simon to have expected that daily deposits totalling over $10,000 would not be detected — the government’s, and evidently the jury’s, view of his purpose — he must have been ignorant of the elementary fact that banks tally all deposits during and at the end of the day in order to determine the balance in an -account. In short, the government’s position is that Simon’s sophistication extended to knowledge of the illegality of structuring but did not include a familiarity with bank statements. Discovery of the fact that he had made cash deposits in excess of $10,000 on each of the days in question was thus as inevitable as the sunset. Indeed, the total of the daily cash deposits was reported by the bank, and the government conceded at oral argument that *912the reports were precisely what caused Simon’s arrest. Far from being a nascent Professor Moriarty, Simon might as well have faxed his deposit receipts to the United States Attorney.
Simon’s status as a licensed stockbroker adds nothing to the proof regarding his knowledge of the laws regulating structuring. The government’s evidence was only that financial institutions, including stockbrokers, must file reports concerning cash transactions in excess of $10,000. The government offered no evidence as to whether Simon ever received cash from a client, ever filled out such a report, or ever received training as to pertinent statutory or regulatory requirements. The government’s proof, in short, was the law itself.
The government’s entire ease thus rests on inferences to be drawn from Simon’s conduct. What is lacking, however, is an explanation of why someone who knew that structuring deposits was illegal would make several cash deposits on the days in question — on one day totaling over $39,000 — into a single account in his own name, whether or not separate branches were used.
Simon’s conduct is at least as consistent with the lack of knowledge of the illegality of structuring as with that knowledge. Given that his conduct made his arrest inevitable, it is far more consistent with lack of knowledge. When asked at oral argument how Simon’s behavior differed from that of a person lacking knowledge of the illegality of structuring, the government speculated that such a person might make separate deposits at the same branch but at different times during the day. However, such a person might also anticipate that a teller at that branch might recognize the depositor as a repeat customer and ask him to fill out a currency transaction report. Indeed, Simon’s post-arrest statement suggested exactly that fear.
My colleagues suggest that the jury could have logically rejected the inference that Simon hoped through his efforts only to avoid having to fill out currency transaction forms himself because structuring “entailed considerably more effort in time and trouble” than filling out the reports. I may misunderstand my colleagues’ reasoning, but it seems to me unresponsive. Someone who is ignorant of the illegality of structuring but wants to avoid making a currency transaction report might well spend time and effort in going to different branches to achieve that goal.
I realize that Simon’s behavior is more than highly suspicious. He had access to large amounts of cash during very brief periods of time, and the likelihood of some kind of past or future serious criminal activity looms large. However, Ratzlaf, in overruling our precedents, requires proof beyond a reasonable doubt that Simon knew that structuring was illegal. The government’s proof failed to meet this standard. Simon’s conduct, the sole evidence offered to show such knowledge, demonstrates at best a belief that form — deposits just under $10,000 at separate branches — would prevail over substance — the aggregate deposits in one day— for purposes of the currency transaction rules. This is not an unreasonable or uncommon belief given our tax or regulatory laws. For example, splitting a large monetary gift between two tax years alters the tax consequences, as does the use of relatively meaningless trusts for estate purposes.
Finally, it ill behooves the government to seek a conviction based on flimsy inferences regarding a defendant’s knowledge of the details of currency reporting and structuring laws. The government has refused to adopt proposals that the requirements of these laws be posted in banks. 53 Fed.Reg. 7,948 (1988); 54 Fed.Reg. 20,398 (1988). Such ignorance is presumably fostered in order to identify the depositors and to put them under surveillance in order to locate the sources of cash. The government’s failure to post such requirements is surely no defense. Nevertheless, the lack of such notices undermines any assumption that the details of the laws are widely known.
I respectfully dissent.