Court Opinion

ID: 9476066
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:46:56.837845+00
Date Added: 2024-06-11T17:45:06.899517
License: Public Domain

GARWOOD, Circuit Judge,
concurring in part and dissenting in part:
I concur in the result as to the affirmance of the section 371 conspiracy conviction, and dissent as to affirmance of the section 1343 wire fraud convictions.
As to the section 371 offense, the indictment charged a conspiracy including the following:
“It was a part of this conspiracy that defendants devised a scheme to deposit substantial sums of money, ostensibly belonging to the informant and Agent Kent, into a bank in Dallas, Texas in such a way that the bank would not be required to file a Currency Transaction Report (IRS Form 4789) with respect to such a deposit.
“It was further a part of this conspiracy that defendants devised a scheme to secretly transport $500,000.00 in cash outside the United States for the use of Agent Kent without filing a Report of International Transportation of Currency or Monetary Instruments (Customs Form 4790) with the Customs Service as required by law.”
The two above-referenced reports — a Currency Transaction Report, Internal Revenue Service Form 4789 (“CTR”), respecting the Dallas bank and a Report of International Transportation of Currency or Monetary Instruments, Customs Form 4790, respecting the $500,000 in cash to be taken out of the United States — are the only official reports with which the section 371 conspiracy count of the indictment concerns itself.
Concerning the section 371 count, Faul, the sole appellant convicted thereunder, complains on appeal only as to the sufficiency of the evidence. Taking or causing to be taken more than $10,000 in cash out of the United States without filing the report — Customs Form 4790 — required by 31 C.F.R. § 103.23(a) is a criminal offense and a civil wrong. See 31 U.S.C. §§ 5312(a)(3)(A), 5316, 5321, 5322. A conspiracy to do this is a violation of 18 U.S.C. § 371. Faul impliedly so concedes and in this connection claims only that he is exonerated by reason of his last-minute instruction to Green to file the report, an instruction which Green disregarded. But this instruction came after the conspiracy had *1044been entered into and after virtually all the alleged overt acts had taken place. Under this record, the jury was entitled to find either that the instruction was feigned and not intended to be followed or that it represented at most a change of heart after the conspiracy offense had been committed. It is, of course, well settled that the objects of a conspiracy need not be achieved in order for the offense to have been committed. Withdrawal after entering into the agreement and the commission of one or more overt acts pursuant thereto, does not prevent a conspiracy conviction of the withdrawing party. See United States v. Jimenez, 622 F.2d 753 (5th Cir.1980); 2 LaFave & Scott, Substantive Criminal Law § 6.5 at 110-11 (1986).
Accordingly, Faul’s sole ground of appellate complaint as to the section 371 count conviction must be rejected, and his conviction on that count affirmed.1
However, I write separately respecting the section 371 conviction to emphasize my view that section 371 is not violated by a “conspiracy” merely to structure monetary transactions in such a way that one or more of the reports provided for in 31 C.F.R. part 103 — principally currency transaction reports (“CTRs”), reports of transportation of currency or monetary instruments, reports of foreign financial accounts, and reports of transactions with foreign financial agencies, described in 31 C.F.R. §§ 103.22-103.25 — are not required to be filed.2 See, e.g., United States v. Denemark, 779 F.2d 1559 (11th Cir.1986); United States v. Varbel, 780 F.2d 758 (9th Cir.1986); United States v. Espriella, 781 F.2d 1432 (9th Cir.1986). Of course, if, despite the structuring, a report is required and is not filed, then there is an offense. Thus, “structured” transactions have failed of their intended purpose because the transaction has been held one requiring a report. See, e.g., United States v. Cure, 804 F.2d 625 (11th Cir.1986) (individual was a “financial institution” required to report under the definition in 31 C.F.R. § 103.-11(e)(3), and multiple branches of the same bank were a single financial institution for purpose of determining whether the report was required). “Liability, however, depends on whether the bank [or financial institution] was required to file a CTR, for, as previously mentioned, a bank customer is not liable merely for structuring his cash transactions so as to create transactions in which the filing of a CTR is not required.” Id. at 629.3
*1045The majority opinion does not identify what particular transaction or transactions the conspiracy contemplated which would have required, a CTR, but as to which the conspirators intended that a CTR nevertheless not be filed. Faul contends that the plan was to bring the money back from abroad by means of a bank check which would then be deposited in a Dallas bank. This would not be a “transaction in currency” requiring a CTR. See 31 C.F.R. §§ 103.11(c), 103.22. However, such return of the funds from abroad may have required a report, apparently not intended to be filed by the conspirators, under 31 C.F.R. § 103.23. Further, Faul, Herron, or Green may have been financial institutions under the definition in 31 C.F.R. § 103.-11(e)(3) and hence required to file CTRs respecting the $500,000 in cash. See Cure, supra. But, as Faul points out, this theory is not alleged in the indictment. Nevertheless, these contentions need not be determined as the evidence is sufficient to show a conspiracy to take the cash out of the United States without filing the required Customs Form 4790, thus resolving adversely to Faul his sole complaint respecting his section 371 conviction.
I turn now to the convictions of Faul and Herron under 18 U.S.C. § 1343. The “scheme” alleged in all of these counts was the very same scheme alleged in the section 371 count. I cannot agree that this is a “scheme or artifice to defraud” within the meaning of section 1343. No tangible or economic advantage to the participants or detriment to the United States (or anyone else) is alleged,4 nor is there alleged any attempted breach or diversion of fiduciary duty or services. In upholding a prosecution under section 1343 in respect to a scheme involving bribery of governmental officials, we recently remarked that “an interpretation of the statutory term ‘defraud’ that includes deprivation of the public's right to the honest and faithful services of its officials reaches the outer limits of meaning that can be placed on the word ‘defraud.’ ” United States v. Bruno, 809 F.2d 1097, 1105 n. 1 (5th Cir.1987). Now, only a few months later, we have here already transcended those “outer limits.”
I have previously written at length on this general subject in my concurring opinion in United States v. Curry, 681 F.2d 406, 418 et seq. (5th Cir.1982), and no good purpose would be served by simply repeating that analysis.5 However, I call particular attention to the fact that “defraud,” as used in section 371’s prohibition of conspiracy “either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose,” is broader than “defraud” as used in section 1343's reference to “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.” Again, this is explicated in Curry, 681 F.2d at 422-24. Nor is there any principled way to limit the majority’s broad construction of “defraud” under section 1343 to situations where the government is the “victim,” for the language of section 1343 permits of no distinction on that basis. Further, under the majority’s construction almost any offense constitutes a scheme to defraud, within the meaning of section 1343, if it involves misleading of or concealment from government officials. Thus, those who are on their way to a contemplated robbery, carrying their weapons in musical instrument cases, “defraud” the city when they tell its *1046inquiring police officers that they are simply a band going to play at a private party. Or, the city is “defrauded” by a murderer who convinces a witness intending to report him to the city police not to do so by falsely leading the witness to believe his alibi.6
In this respect, I also agree with the conclusions and most of the reasoning in United States v. Richter, 610 F.Supp. 480, 493-95 (N.D.Ill.1985), aff'd on other grounds sub nom United States v. Mangovski, 785 F.2d 312 (7th Cir.), cert. denied, — U.S. -, 107 S.Ct. 191, 93 L.Ed.2d 124 (1986). The contrary result was reached in United States v. Gimbel, 632 F.Supp. 748 (E.D.Wis.1985), appeal pending, No. 86-1808 (7th Cir.1986). However, Gimbel seems to me to be driven by the consideration that “money laundering is a fairly recent area of law enforcement concern,” for which statutes such as section 1343 should serve as a “ ‘first line of defense’ ” or a “ ‘stopgap device to deal on a temporary basis with the new phenomenon, until particular legislation can be developed and passed to deal directly with the evil.’ ” 632 F.Supp. at 759 (quoting from Chief Justice Burger’s dissenting opinion in United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 651, 38 L.Ed.2d 603 (1974)). That approach, it seems to me, is fundamentally at odds with the long-standing rules that federal crimes are all statutory and that criminal statutes are to be strictly construed, and, ultimately, with the basic principle that ours is “a government of laws, and not of men.” Marbury v. Madison, 1 Cranch 137, 163, 2 L.Ed. 60, 69 (1803). It is simply not the business of the federal judiciary to create criminal offenses as a need for them may seem to arise from time to time.
Accordingly, I respectfully dissent from the affirmance of the convictions under section 1343.

. We are not required to scan the record for theories of reversal not urged on appeal. United States v. Johnson, 718 F.2d 1317, 1325 n. 23 (5th Cir.1983).

. In so stating, I do not consider the effect of the Money Laundering Control Act of 1986, subtitle H of Title I of the Anti-Drug Abuse Act of 1986, Public Law 99-570, which was signed by the President on October 27, 1986, well after the instant appeals were filed. The principal provisions of this legislation deal with “laundering” the "proceeds of specified unlawful activity" and engaging in monetary transactions in "property ... derived from specified unlawful activity," now codified at 18 U.S.C. §§ 1956, 1957. These provisions are irrelevant to the point under consideration. The 1986 legislation also provides for a new 31 U.S.C. § 5324 which denounces, inter alia, "structuring ... any transaction with one or more domestic financial institutions” when done "for the purpose of evading the reporting requirements of section 5313(a) [dealing with required currency transaction reports; see 31 C.F.R. § 103.22] with respect to such transactions.” This section is applicable only to transactions “completed after the end of the 3-month period beginning on the date of the enactment of this Act." Public Law 99-570, § 1364(a). Regardless of the precise meaning of "evading” as used in new section 5324, that section bespeaks a congressional recognition in 1986 that existing law did not prohibit the structuring of monetary transactions so that CTRs would not be required, even though this was with "the purpose of evading" that requirement. It also bespeaks an intention to apply the new prohibition only after a three-month prospective waiting period.

. As explained in Denemark and Cure, our decision in United States v. Thompson, 603 F.2d 1200 (5th Cir.1979), is fully consistent with this analysis. Thompson held that the transaction — a large disbursement made at one time by one person with the same bank through its chairman of the board, though documented in different instruments so as to appear as separate transactions — was one requiring a report. “[T]he government’s proof at trial clearly established a violation of the reporting requirements as defined, in that an unreported physical transfer of $45,000 in cash from the Ridglea Bank to Welch occurred on March 9, 1977.” Id. at 1203. To the same effect, see e.g., United States v. Heyman, 794 F.2d 788, 792 (2d Cir.1986).

. Certainly a scheme to defraud the United States of taxes would meet the requirements of section 1343, but that is simply not alleged. There is no allegation respecting taxes or revenues in any of the section 1343 counts. There is no mention whatever of taxes in the "scheme" portion of the section 371 count (see note 7 of the majority opinion), and that is the only portion of the section 371 count incorporated into the section 1343 counts. Further, the bare mention of taxes in a single one of the thirty-seven overt acts alleged in a subsequent portion of the section 371 count (“Faul ... discussed how the informant could deposit a large sum of money into a bank without raising any flags for the IRS”) is plainly insufficient to convert the section 1343 counts into ones charging a conspiracy to defraud the United States of taxes.

. While Curry dealt with 18 U.S.C. § 1341, the meaning of defraud there is the same as in section 1343. See Bruno at 1104-05.

. Of course, section 1343 is not violated unless there is also the required communication, but here we are concerned with the separate element of "scheme or artifice to defraud." The communication element can be satisfied in a number of ways. Thus, in the last example, one of the murderer's conversations with the witness may have been by long distance telephone; similarly, in the former example, the scheme to so mislead the police may have been previously agreed on in a long distance call between those planning the robbery.