United States Court of Appeals, First Circuit.: Nos. 91-1363, 91-1364 and 91-1574
United States Court of Appeals, First Circuit.: Nos. 91-1363, 91-1364 and 91-1574
United States Court of Appeals, First Circuit.: Nos. 91-1363, 91-1364 and 91-1574
2d 493
61 USLW 2471
A panel of this court initially heard Donovan's appeal and decided it adversely
to him. We subsequently withdrew the panel opinion and granted rehearing en
banc, consolidating the appeal with appeals involving Aversa and Mento, so
that we might settle the meaning of the term "willful" as used in Subchapter II.1
The en banc court now affirms Donovan's conviction while vacating the other
convictions and remanding those cases for further proceedings.
I. BACKGROUND
3
These cases originated in different ways and traveled different paths to reach
our doorstep. We sketch the background and then frame the common issue that
all three appeals present.
4A. Donovan.
5
Donovan, the president and chief executive officer of Atlantic Trust Company,
a Boston-based financial institution, moonlighted as a real estate developer. A
friend, Dr. Edward Saba, gave Donovan substantial sums of cash to deposit at
Atlantic Trust for eventual investment in a New Hampshire housing
subdivision. Eschewing Atlantic Trust's standard protocol for routing deposits
through tellers, Donovan personally deposited Saba's money in five chunks of
$30,000, $92,000, $30,000, $55,000, and $30,000, respectively. Donovan made
the deposits at various times between March 13, 1987 and April 21, 1987.
Although Donovan was the bank's legal compliance officer--a status which
presumptively suggests his familiarity with banking laws--he did not prepare
CTRs for any of these deposits. Indeed, Donovan fended off his subordinates'
concerns about the unorthodox way he was handling Saba's cash.
At trial, Donovan admitted that he was aware of the law requiring him to file
CTRs for cash deposits of $10,000 or more, but insisted that he mistakenly
believed Saba's deposits came within one of the law's exemptions.2 The district
court instructed the jury that it was the government's burden to prove Donovan
"knowingly" and "willfully" failed to file CTRs. The court twice explained
these elements (once during the main charge and once in answering an inquiry
during jury deliberations):
7
Despite Donovan's importuning, the district court refused to tell the jury that
any mistake by Donovan, regardless of its nature, would necessitate acquittal.
The jury found Donovan guilty.
Aversa and Mento were partners in a real estate business. In January 1989, they
sold a parcel of land, splitting the proceeds. At the time, Aversa's marriage was
foundering. In order to conceal his share of the profits from his wife, Aversa
asked Mento to deposit the receipts in Mento's personal bank account rather
than in the partners' joint business account. Mento agreed. Aversa signed a
statement acknowledging his responsibility for one-half of the funds to insulate
Mento from potentially adverse tax consequences.
11
Mento and Aversa knew that Mento's bank was legally required to file CTRs
for all deposits of $10,000 or more. Fearing that the resultant paper trail might
obviate their efforts to hide the cash from Mrs. Aversa, the defendants made
serial deposits and withdrawals in sums under $10,000. Although both men
admitted that they knew about the CTR requirement, they claimed to be
unaware that structuring bank transactions, even if designed to avoid causing
the bank to file CTRs, was itself a crime.
12
II. DISCUSSION
15
We begin with an analysis of the governing statute, exploring its interstices and
explicating its meaning. We then proceed to tackle the knotty mens rea
questions that confront us.
In 1970, concerned about the ease with which criminals, particularly drug
traffickers, were able to exchange ill-gotten profits for "clean" money,
Congress enacted the BRFTA. Among other things, Subchapter II delegated to
the Secretary of the Treasury (the Secretary) the power to require banks and
individuals to file CTRs with the Internal Revenue Service when cash changed
hands.3 See, e.g., 31 U.S.C. 5313. The Secretary did not exercise his
delegated power in respect to individuals, but required banks to file CTRs when
transactions involved $10,000 or more. See 31 C.F.R. 103.22(a)(1) (1989).
18
that, to be found guilty, they must have intentionally traversed a known legal
duty. Consequently, they press a subjective standard of intent and asseverate
that mistake of law necessarily constitutes a complete defense to the charges
laid against them.
19
We start by analyzing the mens rea required with respect to CTR violations.
Under the criminal penalty provision, 31 U.S.C. 5322, violations, to be
culpable, must be "willful." The Court has long recognized that willful "is a
word of many meanings, its construction often being influenced by its context."
Spies v. United States, 317 U.S. 492, 497, 63 S.Ct. 364, 367, 87 L.Ed. 418
(1943). See generally Note, An Analysis of the Term "Willful" in Federal
Criminal Statutes, 51 Notre Dame L.Rev. 786, 786-87 (1976).
22
Courts have coalesced around four definitions of willfulness. The first, which is
most closely aligned with the government's theory here, simply equates
"willful" with "knowing" (i.e., so long as the defendant is aware of his conduct
and the nature of his circumstances, no more is necessary). See, e.g., United
States v. McCalvin, 608 F.2d 1167, 1171 (8th Cir.1979); see also American
Law Institute, Model Penal Code 2.02(8) (1985).5 The second definition of
willfulness, which is most closely aligned with appellants' position, has its roots
in tax-crime cases. This approach equates willfulness with the violation of a
known legal duty. See, e.g., Cheek v. United States, 498 U.S. 192, 200, 111
S.Ct. 604, 610, 112 L.Ed.2d 617 (1991) (discussed infra Part II(D)). To our
knowledge, no court of appeals has applied either of these first two definitions
across the board in connection with the entire array of Subchapter II violations.
23
24
We think that all three of these definitions create needless problems. The
government's theory undervalues the statute's language by reading willfulness
as if it were simply a synonym for general intent.6 In contrast, appellants'
theory, if applied across the board, would allow all mistakes of law, no matter
how unreasonable, to serve as bucklers against prosecution, and, in the bargain,
would vitiate the general principle that "deliberate ignorance and positive
knowledge are equally culpable." United States v. Jewell, 532 F.2d 697, 700
(9th Cir.), cert. denied, 426 U.S. 951, 96 S.Ct. 3173, 49 L.Ed.2d 1188 (1976).
Last, while Scanio and its progeny adopt a flexible definition of willfulness,
they neither speak to the mens rea for CTR violations nor answer the critical
question of how differing definitions can attach to a single usage of an operative
term in a single statutory section.
25
For our part, we take yet a fourth tack--a tack adumbrated by the course we set
in United States v. Bank of New England, 821 F.2d 844 (1st Cir.), cert. denied,
484 U.S. 943, 108 S.Ct. 328, 98 L.Ed.2d 356 (1987). In that case, we plotted
the intersection between section 5322's willfulness criterion and section 5313's
CTR requirements. See id. at 854-59. Bank of New England had failed to
prepare CTRs when a customer repeatedly withdrew cash aggregating over
$10,000 by means of multiple checks, each written for slightly under $10,000.
The bank argued that it had not engaged in willful misconduct because it had
not "violated a known legal duty." Id. at 856. We rejected the bank's plea
because the evidence revealed that the bank's professed unawareness about
whether the reporting requirements applied to the transactions was a product of
the bank's deliberate blindness. See id. at 856, 857.
26
We adhere today to the teachings of Bank of New England and build upon that
foundation. We believe that, in respect to alleged violations of the BFTRA's
CTR provisions, section 5322's willfulness criterion demands that the
government prove either the violation of a known legal duty or the reckless
disregard of the same. See Bank of New England, 821 F.2d at 866. We move
forward from that point, therefore, to consider a question not present in Bank of
New England: the significance of section 5322 in the antistructuring context.
Section 5322 provides criminal sanctions for both CTR and structuring
offenses. As we determine the mens rea requirement for the latter group of
crimes, it is axiomatic that the plain words and structure of the statute must be
paramount. See, e.g., Pennsylvania Dep't of Pub. Welfare v. Davenport, 495
U.S. 552, 557-58, 110 S.Ct. 2126, 2130-31, 109 L.Ed.2d 588 (1990); Stowell v.
Ives, 976 F.2d 65, 69 (1st Cir.1992). Ordinarily, "identical terms within an Act
bear the same meaning." Estate of Cowart v. Nicklos Drilling Co., --- U.S. ----,
----, 112 S.Ct. 2589, 2596, 120 L.Ed.2d 379 (1992); accord Sullivan v. Stroop,
496 U.S. 478, 484, 110 S.Ct. 2499, 2506, 110 L.Ed.2d 438 (1990). In the case
at hand, the Cowart presumption is particularly strong. We explain briefly.
30
While courts have found on infrequent occasion that Congress intended a word
to have different connotations when used in different provisions of the same
Act, see, e.g., Greenwood Trust Co. v. Massachusetts, 971 F.2d 818, 830 n. 10
(1st Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 974, 122 L.Ed.2d 129
(1993); New Eng. Tel. & Tel. Co. v. Public Utils. Comm'n, 742 F.2d 1, 8 (1st
Cir.1984), cert. denied, 476 U.S. 1174, 106 S.Ct. 2902, 90 L.Ed.2d 988 (1986),
those instances almost always involve, at a bare minimum, multiple uses of a
term or phrase within a panoramic statutory scheme. Here, however, we are not
dealing with repetitions of a word at diverse points in a statute, but with a single
32
33
We must respectfully disagree with these courts. The distinction that they draw
simply does not justify the transmogrification of the word "willfully" into a
statutory chameleon. We are, moreover, particularly chary about adopting so
pleochroic an approach in light of the more consistent, less complicated
alternative offered in Bank of New England, 821 F.2d at 856. That alternative,
which derives great vitality from the Supreme Court's language, see
McLaughlin, 486 U.S. at 133, 108 S.Ct. at 1681; Trans World Airlines, 469
U.S. at 126, 105 S.Ct. at 624, provides a fair, workable, mistake-of-law defense
to those accused of currency-related crimes and at the same time ensures that
defendants who know of the law's requirements in a general sense, but
recklessly or intentionally fail to investigate the legality of structuring or other
proscribed activity, will be found guilty.
34
We hold, therefore, that the plain language of section 5322 governs; that the
unitary willfulness standard of section 5322 should be given an identical
meaning with respect to structuring and CTR violations;8 and that, therefore, an
unintentional, nonreckless mistake of law is a complete defense to a structuring
charge.
In an effort to read the word "willfully" in a more charitable manner, all three
appellants urge that the Court's recent decision in Cheek v. United States, 498
U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), signifies that federal courts
should apply a purely subjective standard to virtually all white-collar crimes
that require a mens rea of willfulness as an element of the offense. Such a
standard differs from the standard we endorse today because it would allow
mistakes born of intentional or reckless ignorance to insulate defendants from
criminal liability. Donovan's case illustrates the practical effect of this
suggestion: had the trial judge defined willfulness exclusively in terms of a
subjective intent to disobey the law, the jury might have exonerated the
defendant on the basis of a genuine, albeit reckless, misunderstanding about the
law's requirements.
37
We do not think that Cheek can carry the cargo that appellants load upon it. 9
Cheek was a criminal tax case. The Court noted that the term "willfully," as
used in criminal tax statutes, had long been interpreted "as carving out an
exception to the traditional rule" that ignorance of the law affords no defense to
a criminal prosecution. Id. at 200, 111 S.Ct. at 609. Nowhere in Cheek, or in
the Court's earlier opinions involving criminal prosecutions under the tax laws,
see, e.g., United States v. Pomponio, 429 U.S. 10, 97 S.Ct. 22, 50 L.Ed.2d 12
(1976) (per curiam); United States v. Bishop, 412 U.S. 346, 93 S.Ct. 2008, 36
L.Ed.2d 941 (1973); United States v. Murdock, 290 U.S. 389, 54 S.Ct. 223, 78
L.Ed. 381 (1933), is there any indication that courts should use a purely
subjective standard in evaluating state-of-mind defenses under other federal
statutes. Rather, the Cheek Court repeatedly qualified its discussion of the point
by referring to the special context--criminal tax prosecutions--from whence the
discussion proceeded. See, e.g., Cheek, 498 U.S. at 200, 201, 111 S.Ct. at 609,
610. The Court's earlier opinions stressed the same point. See, e.g., Pomponio,
39
40
For these reasons, we join the courts of appeals that have found the Cheek
doctrine inapplicable to criminal prosecutions under the currency reporting
laws.10 See, e.g., United States v. Beaumont, 972 F.2d 91, 94-95 (5th Cir.1992);
Brown, 954 F.2d at 1569 n. 2; Caming, 968 F.2d at 241; Dashney, 937 F.2d at
539-40. The currency statutes are comparatively few in number, target a much
narrower range of conduct, and under the current regulations affect a
considerably smaller constituency. The regulatory scheme, overall, is not
intricate or even especially subtle. We think these distinctions are dispositive.
Accordingly, we reaffirm Aitken and continue to hold that the Cheek exception
is restricted to tax crimes. In a prosecution brought under Subchapter II, as we
have explained, the criminal intent required for conviction is either the
violation of a known legal duty or reckless disregard of the law. Consequently,
appellants' requests for the application of a wholly subjective standard were
properly denied by Judges Loughlin and Devine.
41
All that remains is for us to apply the fruits of our analysis to each appellant's
situation.
A. Donovan.
42
43
In Donovan's case, the trial judge instructed the jury that Donovan's actions
were willful if he had the "bad purpose to disobey or to disregard the law."
While Judge Devine did not give the exact instruction which Donovan
requested, the instruction he gave was almost identical to the instruction which
we approved for CTR violations in Bank of New England, 821 F.2d at 855.
Moreover, Donovan's requested instruction focused on bad motive--and the
Cheek Court made clear that a showing of bad motive is more restrictive than
necessary, even under the tax-crime standard. See Cheek, 498 U.S. at 200, 111
S.Ct. at 610; see also Pomponio, 429 U.S. at 13, 97 S.Ct. at 24. Finally, the
judge allowed the parties to introduce evidence pertaining to Donovan's state of
mind regarding the law and the facts.
44
The trial court--which, in instructing the jury, had no obligation to parrot the
precise language favored by either side--gave a charge that, viewed in its
entirety, adequately explained the legal issues, including every legitimate
theory upon which Donovan's defense could rest. No more was exigible. See
United States v. McGill, 953 F.2d 10, 13 (1st Cir.1992); United States v.
Nivica, 887 F.2d 1110, 1124 (1st Cir.1989), cert. denied, 494 U.S. 1005, 110
S.Ct. 1300, 108 L.Ed.2d 477 (1990). This is especially true where, as here, the
defendant's subjective mistake-of-law proposal went well beyond what the law
requires in its insistence upon proof of evil motive. See, e.g., United States v.
David, 940 F.2d 722, 738 (1st Cir.1991) (holding that the district court may
appropriately refuse to give a proposed jury instruction "which is incorrect,
misleading, or incomplete in some material respect"), cert. denied, --- U.S. ----,
112 S.Ct. 605, 116 L.Ed.2d 628, --- U.S. ----, 112 S.Ct. 908, 116 L.Ed.2d 809, -- U.S. ----, 112 S.Ct. 1298, 117 L.Ed.2d 520, --- U.S. ----, 112 S.Ct. 2301, 119
L.Ed.2d 224 (1992).
IV. CONCLUSION
48
49
50
In Appeals Nos. 91-1363 and 91-1364, the judgments of conviction are vacated
and the cases remanded for further proceedings not inconsistent herewith.
51
52
I believe that criminal prosecutions for "currency law" violations, of the sort at
issue here, very much resemble criminal prosecutions for tax law violations.
Compare 26 U.S.C. 6050I, 7203 with 31 U.S.C. 5322, 5324. Both sets of
laws are technical; and both sets of laws sometimes criminalize conduct that
would not strike an ordinary citizen as immoral or likely unlawful. Thus, both
sets of laws may lead to the unfair result of criminally prosecuting individuals
who subjectively and honestly believe they have not acted criminally. Cheek v.
United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), sets forth
a legal standard that, by requiring proof that the defendant was subjectively
aware of the duty at issue, would avoid such unfair results. Were I writing on a
blank slate, the similarity of the two sets of criminal laws might well lead me to
conclude that the same standards should apply in both sets of cases. Other
circuits, however, have distinguished "currency reporting" cases from Cheek.
See en banc opinion, supra at p. 501. Moreover, Supreme Court opinions have
strongly suggested that criminal tax cases constitute a separate enclave in the
law. See en banc opinion, supra at p. 500.
53
In addition, the court today announces a standard that does not threaten to allow
conviction of a defendant with an innocent state of mind. Under the court's
standard, the government must prove that the defendant either subjectively
knew of his legal duty, or that he was "reckless" in respect to the existence of
that duty. Cf. McLaughlin v. Richland Shoe Co., 486 U.S. at 135 n. 13, 108
S.Ct. at 1682 n. 13 (even objectively unreasonable failure to determine correct
legal obligation is not "willful," as long as such failure falls short of
recklessness). One can imagine how a person frequently in contact with these
laws, such as a financial officer or drug-fund courier, could be found to have
been "reckless" in failing to learn relevant legal data. However, it is difficult to
see how one could convict an ordinary citizen on this basis, i.e., in the absence
of actual, subjective knowledge of the legal duty, for "recklessness" involves
the conscious disregard of a substantial risk. See Model Penal Code 2.02(2)
(c) (1985); cf. United States v. Murdock, 290 U.S. 389, 395, 54 S.Ct. 223, 225,
78 L.Ed. 381 (1933) (conduct is "willful" in the context of a criminal statute if
it is "marked by careless disregard [for] whether or not one has the right to
act").
54
55
56
Although I agree with much of what is stated by the majority, and even more
with Chief Judge Breyer's concurrence, I write separately because I believe
neither opinion goes far enough. In my view the prosecution of these cases is
defective on two grounds: (1) As clearly reflected in the legislative history of
these statutes, appellants are improper targets of money laundering accusations,
and (2) even if the charges are within statutory scope, the standard of scienter
in Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617
I need not repeat the facts as stated by the majority. I will only emphasize that
appellants are neither the recipients of illegal drug funds or engaged in
laundering money proceeds from criminal ventures, nor are they income tax
evaders. In fact, particularly in the case of appellants Aversa and Mento, they
did nothing prior to the alleged "structuring" actions that even approximates the
commission of a criminal offense. I focus on the Bank Secrecy Act and its more
recent amendment, the Money Laundering Control Act, to determine whether
appellants' actions are within the purview of the conduct that Congress
intended to criminalize by this legislation.
59
The Bank Secrecy Act, enacted in 1970, was part of the Bank Records and
Foreign Transaction Act.13 The unequivocal concern of this complex legislation
was to prohibit the use of foreign banks to "launder" the proceeds of illegal
activity or evade federal income taxes.14 It became apparent, however, that
these enactments had little impact on large-scale money laundering related to
illegal drug transactions, and that illicit funds were flowing in ever-increasing
amounts into financial institutions in the United States.15 As a result, Congress
enacted the Anti-Drug Abuse Act of 1986,16 Title I, subtitle H of which was the
Money Laundering Control Act of 1986. This subtitle included an antistructuring provision.17
60
One thing clearly emerges from the legislative history of this statute: Congress
wished to attack money laundering associated with organized crime or related
criminal activity, particularly the illicit drug trade. See S.Rep. No. 433, 99th
Cong., 2d Sess. (1986) (accompanying S. 2683). A casual review of the Senate
Report accompanying this Act reveals that the term "money laundering," or its
equivalent, is used more than 100 times, and that it refers to organized crime
and criminal activity on no less than 53 occasions. Id. The House Report
displays a similar preoccupation. See H.R.Rep. No. 746, 99th Cong., 2d Sess.
(1986) (accompanying H.R. 5176). The first major heading of this report is
"Drug Trafficking and Money Laundering." Id. at p. 16. The report refers to
"money laundering" approximately 73 times, and to organized crime and illegal
drug trafficking 53 times.
61
64
I derive additional guidance from the Senate Report that discusses what later
became 18 U.S.C. 1956(a)(1), which is entitled Laundering of Monetary
Instruments. See S.Rep. No. 433 at 9. The report calls section 1956 "the basic
money laundering offense." Id. That section, which in effect defines
"laundering," provides:
65
Whoever
knowing that the property involved in a financial transaction represents the
proceeds of some form of unlawful activity, conducts or attempts to conduct such a
financial transaction which in fact involves the proceeds of specified unlawful
activity--(B) knowing that the transaction is designed in whole or in part--(i) to
conceal or disguise the nature, the location, the source, the ownership, or the control
of the proceeds of specified unlawful activity; or (ii) to avoid a transaction reporting
requirement under State or Federal law.... [will be liable for conviction under this
section].
66
67
68 person shall for the purpose of evading the reporting requirement of 103.22
No
with respect to such transaction:
.....
69
70
(c) Structure (as that term is defined in 103.11(n) of this part) or assist in
structuring, or attempt to structure or assist in structuring, any transaction with
one or more domestic financial institutions.
71
72
31 C.F.R. 103.53.
Regulation 31 C.F.R. 103.11(n) (1989) defines "structure" or "structuring" as:
73
74
31 C.F.R. 103.11(n) (1989); see also S.Rep. No. 433 at 22, 25 ("structuring"
is "breaking up of what is really one financial transaction into several smaller
ones to evade reporting requirements").
75
76
The situation presented by these charges is not unlike that in McNally v. United
States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), in which the
Supreme Court reversed a unanimous litany of circuit court decisions18
condoning the extension of the federal mail fraud statute19 beyond the scope of
Congress' intended coverage. In charging appellants under the money
laundering statutes the government similarly overlooked that "[i]n considering
the scope of [a] statute it is essential to remember Congress' purpose in enacting
it." Id. at 365, 107 S.Ct. at 2885 (Stevens, J., dissenting).
77
While it could have been possible to leave Cheek v. United States, 498 U.S.
192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), out of this appeal altogether, the
majority opinion seeks to restrict its present and future use by preemptive
action. I believe it would be more appropriate to consider one case at a time.
Furthermore, lest there be any doubt, I certainly am not of the view that the
Cheek standard should apply in blanket fashion "to virtually all white collar
crimes that require a mens rea of willfulness as an element of the offense."
Ante at 500. In my view each legislative scheme must be separately pondered
to determine whether Cheek applies. But I cannot agree that because Cheek
was an income tax case that the principle espoused therein regarding mens rea
is necessarily limited to such tax cases. I can find nothing in Cheek to justify
such a conclusion or limitation. Logic and fundamental fairness dictate that
some traditional legal maxims, up to now blindly accepted, make little sense in
the context of some of today's complex regulatory environments. Ultimately
Cheek stands for the proposition that at some point a legal fiction may so
depart from reality as to be untenable as a basis for criminal responsibility.
79
80
At trial, Cheek presented as his defense that "he sincerely believed that the tax
laws were being unconstitutionally enforced and that his actions during 19801986 period were lawful." Cheek, 498 U.S. at 196, 111 S.Ct. at 607. During
deliberations, the jury was divided on whether Cheek honestly and reasonably
believed that he was not required to pay income taxes. However, the district
court instructed the jury "that a good-faith misunderstanding of the law or a
good faith belief that one is not violating the law, if it is to negate willfulness,
must be objectively reasonable." 498 U.S. at 201, 111 S.Ct. at 610. With this
instruction in hand, the jury found Cheek guilty on all counts. Cheek appealed
on the ground that this instruction was erroneous. The Seventh Circuit affirmed.
81
The Supreme Court, relying on its prior criminal tax precedents interpreting the
Cheek establishes that the government must prove in a criminal tax case a
"willful" violation, which requires proof that a defendant voluntarily and
intentionally violated a known legal duty. 498 U.S. at 201, 111 S.Ct. at 611.
More in point with the present appeals, however, the Court stressed that
83 proliferation of statutes and regulations has sometimes made it difficult for the
[t]he
average citizen to know and comprehend the extent of the duties and obligations
imposed by the tax laws. Congress has accordingly softened the impact of the
common-law presumption by making specific intent to violate the law an element of
certain federal criminal tax offenses.
84
498 U.S. at 199-200, 111 S.Ct. at 609. The Court could well have been talking
about the arcane money laundering regulatory scheme presented by these
appeals.
85
It is pointed out that the application of Cheek to the anti-structuring statute was
rejected by the Tenth Circuit in United States v. Dashney, 937 F.2d 532 (10th
Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 402, 116 L.Ed.2d 351 (1991), and that
other courts have followed Dashney's analysis. See United States v. Brown,
954 F.2d 1563 (11th Cir.1992); United States v. Rogers, 962 F.2d 342 (4th
Cir.1992).
86
In Dashney, the court concluded that the anti-structuring act did not require, as
an element of the offense, proof of a specific intent to violate the act because,
the provisions of the anti-structuring act are "straightforward" when compared
to the criminal tax statutes at issue in Cheek. Dashney, 937 F.2d at 540. After
spending a considerable amount of time studying these statutes and regulations,
as well as their legislative history, I must confess to a different view.
87
tax return.22 The statutes criminalizing the conduct of failing to file an income
tax return have been around for more than 70 years whereas the antistructuring
act did not clearly criminalize the conduct of structuring transactions until 1986,
when Congress enacted 31 U.S.C. 5324 and 5522.23 If nothing else emerges
from a study of this byzantine labyrinth of legislation and regulation, it is that
an unsuspecting common citizen can easily fall prey to this uncommon area of
the law. Apparently, with this in mind the Treasury Department proposed, but
failed to adopt, regulations aimed at publicizing the criminal offense underlying
5324. See 54 Fed.Reg. 20,398 (1989). It is obvious that our Anzalone opinion
had little effect on bureaucratic thinking. See Anzalone, 766 F.2d at 681-82.
88
I recognize, as has the majority, that not all appellants are in the same legal
position on this last issue. In my opinion, in case No. 91-1574, appellant
Donovan received substantially the jury charge that he was entitled to under
Cheek. Appellants Aversa and Mento in cases Nos. 91-1363 and 91-1364 did
not. The problem is, nevertheless, that in my view none of the appellants should
have been charged because, as previously explained, the government
overstretched its anti-moneylaundering net. Consequently, I must dissent.
An exchange between Judge Learned Hand and the reporter for the Model
Penal Code, Professor Herbert Wechsler, indicates that the Code's principal
architects thought that the term "willfully" added very little to statutory
meaning:
Judge Hand: [Willfully is] an awful word! It is one of the most troublesome
words in a statute that I know. If I were to have the index purged, "wilful"
would lead all the rest in spite of its being at the end of the alphabet.
Professor Wechsler: I agree with you Judge Hand, and I promise you
unequivocally that the word will never be used in the definition of any offense
in the Code. But because it is such a dreadful word and so common in the
regulatory statutes, it seemed to me useful to superimpose some norm of
meaning on it.
American Law Institute, Model Penal Code 2.20, at 249 n. 47 (1985).
In fact, Congress chose precisely this course for the provision requiring reports
on foreign currency transactions, 31 U.S.C. 5315, leaving only civil penalties
available for enforcement of that provision. See 31 U.S.C. 5322(a)-(b)
Because this issue is susceptible to resolution in terms of the plain meaning and
structure of the statute, we need not probe the legislative history. See United
States v. Charles George Trucking Co., 823 F.2d 685, 688 (1st Cir.1987) (one
should "resort to the legislative history and other aids of statutory construction
only when the literal words of the statute create ambiguity or lead to an
unreasonable interpretation") (citation and internal quotation marks omitted);
accord Barnhill v. Johnson, --- U.S. ----, ----, 112 S.Ct. 1386, 1391, 118 L.Ed.2d
39 (1992); Stowell, 976 F.2d at 69. We note in passing, however, that while the
legislative history with regard to section 5322 and the antistructuring
amendments in no way contradicts our analysis of how the word "willfully"
should be construed, this is yet another case where the legislative history of a
statute "is more conflicting than the text is ambiguous." Wong Yang Sung v.
McGrath, 339 U.S. 33, 49, 70 S.Ct. 445, 454, 94 L.Ed. 616 (1950)
The report issued by the House of Representatives in conjunction with the bill
which included the criminal sanctions section now codified as 31 U.S.C. 5322
merely recapitulated the Act's criminal provisions. And, although the House
and Senate issued seventeen reports dealing with a salmagundi of proposed
bills, features of which were amalgamated into the Anti-Drug Abuse Act of
1986 (the bill which contained the antistructuring provision now codified as 31
U.S.C. 5324), there was no House or Senate report accompanying the Act.
See 1986 U.S.C.C.A.N. 5393 (noting the absence of a report but listing related
reports). To be sure, the House considered--and rejected--several alterations to
section 5322 that would have changed the term "willfully" to "knowingly." See,
e.g., H.R.Rep. No. 855, 99th Cong., 2d Sess. 7, 27 (1986). The Senate likewise
considered legislation designed to make section 5322 read "knowingly" instead
of "willfully." See S. 2683, 99th Cong., 2d Sess. (1986). The purpose of this
proposed change was to eliminate the possibility of antistructuring liability
premised upon "reckless disregard" of the law. See S.Rep. No. 99-433, 99th
Cong., 2d Sess. 1, 8 (1986). The amendment failed.
We see no point in reciting additional book and verse. The most serviceable
conclusion that can be woven from the language in the sundry reports attached
to ultimately unsuccessful legislation is that, during the extended drafting and
redrafting of various bills respecting currency transactions, Congress, or at least
some of its members, reconsidered the mens rea of section 5322, assessed its
relationship with the proposed antistructuring provision, and elected not to act.
Our dissenting brother suggests that it is unnecessary for us to discuss the range
of Cheek. See post at 505. We disagree. If the Cheek rationale extended beyond
the boundaries of the tax code, as appellants claim it does, the result we reach
today would be altered, at least as to appellant Aversa. Moreover, it is essential
to any careful understanding of section 5322's willfulness standard that we
consider, and account for, the Court's explication of a parallel problem arising
under the tax code
10
Attempts to expand Cheek's horizons have been regularly rejected in most other
contexts as well. See, e.g., United States v. Hollis, 971 F.2d 1441, 1451 (10th
Cir.1992) (rejecting extension of Cheek to loan fraud context); United States v.
Gay, 967 F.2d 322, 327 (9th Cir.) (same; mail fraud case), cert. denied, --- U.S.
----, 113 S.Ct. 359, 121 L.Ed.2d 272 (1992); United States v. Chaney, 964 F.2d
437, 446 n. 25 (5th Cir.1992) (same; bank fraud case); United States v.
Dockray, 943 F.2d 152, 156 (1st Cir.1991) (same; mail and wire fraud
prosecution). A few courts, however, particularly those faced with cases
involving the willful destruction of government property, have applied a Cheeklike standard. See, e.g., United States v. Mills, 835 F.2d 1262, 1265 (8th
Cir.1987); United States v. Moylan, 417 F.2d 1002, 1004 (4th Cir.1969), cert.
denied, 397 U.S. 910, 90 S.Ct. 908, 25 L.Ed.2d 91 (1970)
11
12
13
14
15
16
17
18
Including some from this circuit. See, e.g., United States v. Silvano, 812 F.2d
754 (1st Cir.1987)
19
18 U.S.C. 1341
20
21
22
23
In fact, until the enactment of the Money Laundering Act, a conflict among the
circuits existed as to whether it was a crime to structure deposits for the purpose
of preventing the bank from reporting. Compare United States v. Larson, 796
F.2d 244, 246-47 (8th Cir.1986); United States v. Varbel, 780 F.2d 758, 760-63
(9th Cir.1986); United States v. Denemark, 779 F.2d 1559, 1561-64 (11th
Cir.1986); United States v. Anzalone, 766 F.2d 676, 679-83 (1st Cir.1985) with
United States v. Heyman, 794 F.2d 788, 790-93 (2d Cir.), cert. denied, 479 U.S.
989, 107 S.Ct. 585, 93 L.Ed.2d 587 (1986); United States v. Cook, 745 F.2d
1311, 1314-16 (10th Cir.1984), cert. denied, 469 U.S. 1220, 105 S.Ct. 1205, 84
L.Ed.2d 347 (1985); United States v. Tobon-Builes, 706 F.2d 1092, 1096-1101
(11th Cir.1983)