Wednesday, March 2nd, 2016

A Rare Sufficiency Win, On Transaction Structuring Counts

United States v. Taylor, No. 14-360-cr (March 2, 2016) (Droney, with by Pooler and Lohier)

The Circuit affirmed a cocaine conspiracy conviction over a constructive amendment claim, but vacated a conviction for transaction structuring on sufficiency grounds, holding that no rational juror could have found the requisite intent to evade currency reporting requirements just from the handful of suspicious transactions introduced at trial.

Taylor, a leader of the Buffalo chapter of the Afro Dogs Motorcycle Club, was charged with a conspiracy involving 5+ kilograms of cocaine — 21 U.S.C. § 841(b)(1)(A) quantity — and several counts of transaction structuring. The jury found him guilty of conspiracy, but indicated on the special verdict form that the conspiracy involved only 500+ grams of cocaine — 21 U.S.C. § 841(b)(1)(B) quantity.  On appeal, Taylor argued that “this conviction, based on an amount of cocaine less than that charged in the indictment, constituted an unlawful constructive amendment of the indictment.” (slip op. at 10).  The Circuit disagreed, explaining that the (b)(1)(B) offense of conviction was a lesser included-offense of the (b)(1)(A) charge, and that FRCP 31(c) permits conviction on “an offense necessarily included in the offense charged.”  (slip op. at 12).

As to the structuring counts: Federal law requires a bank to file a report with the Treasury Department whenever a customer engages in a transaction involving more than $10,000 in currency in a single day.  Here, the government’s only proof of structuring was evidence that on seven occasions over a 20-month period, Taylor, split cash deposits of more than $10,000 into smaller deposits (for example, $9,550 and $655).  On appeal, Taylor argued that “there was insufficient evidence to allow a jury reasonably to infer his intent to evade the currency reporting requirements” — an element of a 31 U.S.C. § 5324(a) offense — “because the evidence did not establish a sufficient pattern of structured transactions.”  (slip op. at 23).

The Circuit agreed. Although prior Circuit precedent held that “a pattern of structured transactions … may, by itself, permit a rational jury to infer that a defendant had knowledge of and the intent to evade currency reporting requirements,” slip op. at 28 (quoting United States v. MacPherson, 424 F.3d 183, 195 (2d Cir. 2005)), that rule was inapplicable, for three reasons.  First, there was no evidence that Taylor believed that reports would not have been generated for the split deposits.  To the contrary, a bank executive testified that tellers were required to report such split deposits, and to tell customers that they were doing so.  Second, there was no evidence that Taylor had any reason to believe that reports were not filed.  And third, other evidence negated the inference of intent.  Specifically, Taylor made many single deposits of more than $10,000 in the same time frame, triggering reports, and also presented his split deposits to the same teller on the same day.  As the Circuit wondered: “Who would believe that someone seeking to evade the reporting requirement would present the paired deposits … to the same teller virtually simultaneously?” (slip op. at 35).


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