United States v. Michael David Alston

77 F.3d 713
CourtCourt of Appeals for the Third Circuit
DecidedApril 29, 1996
Docket94-2195
StatusPublished
Cited by27 cases

This text of 77 F.3d 713 (United States v. Michael David Alston) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Michael David Alston, 77 F.3d 713 (3d Cir. 1996).

Opinions

OPINION OF THE COURT

GARTH, Circuit Judge:

On September 30, 1993, defendant Michael David Alston (“Alston”) was indicted on two counts. Count I charged him with conspiracy under 18 U.S.C. § 371: (i) to defraud the United States and the Treasury and (ii) to structure to avoid the reporting requirements of 31 U.S.C. § 5313(a), in violation of the anti-structuring provisions of 31 U.S.C. § 5324(a)(3) and § 5322. Count II charged him with structuring in violation of 31 U.S.C. § 5324(a)(3), § 5322(b); 31 C.F.R. § 103.11, § 103.22; and 18 U.S.C. § 2(b). Following a non-jury trial, Alston was convicted on both counts.

After Alston was convicted, the Supreme Court rendered its opinion in Ratzlaf v. United States, - U.S.-, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994), in which it held that, in order to obtain a structuring conviction, the government must prove that the defendant “willfully” structured. “Willfulness” was defined as the defendant’s knowledge that structuring was illegal. The government conceded that it had not proven the mens rea (knowledge of illegality) that Rat-[715]*715zlaf required in order to sustain Count II, the substantive count of structuring and that portion of Count I that charged conspiracy to structure. The district court therefore vacated those portions of Alston’s conviction. However, the district court refused to set aside Alston’s conviction under Count I which charged a § 371 conspiracy to defraud, reasoning that Ratzlaf’s mens rea requirement did not apply.

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. We will reverse because the indictment, in charging under the “defraud” clause of § 371, (Indictment ¶ 7(a)), alleges no more than a conspiracy to defraud the United States by structuring, a far different conspiracy than the genre of “Klein conspiracies”2 relied on by the government. In addition, we have such substantial difficulty in understanding how Alston can be convicted of a conspiracy to defraud by structuring when he cannot be guilty of a conspiracy to structure or of structuring itself,3 that we reverse Alston’s conviction.

I.

On July 28, 1988, Alston, operator of an unprofitable convenience store, and his brother Henry each arranged to purchase top-of-the-line BMW automobiles from West German Motor Imports for approximately $70,000 apiece.4 The sales contract on each car provided that a down payment of $41,000 would be paid toward the purchase price of the ear on or before the date of delivery, and that the remainder of the purchase price would be financed. The salesman was eo-defendant Richard Kosa. Alston and his brother each left a personal check for $500 toward their respective down payments.

Alston’s car became available on September 12, 1988. Alston made cash remittals to Motor Imports of $5,000 on September 30, 1988, $2,500 on October 4, 1988, and $1,500 on October 5, 1988, for a total of $9,000 within that week. A single $10,000 cash payment would have triggered Motor Imports’s obligation to file an IRS Form 8300 for cash payments over $10,000.5

On October 5, 1988, Alston paid cash for a $9,000 money order payable to Motor Imports from Therese Drew, the head bank teller at Stenton Avenue Branch of Meridian Bank and a close personal friend of Alston’s, who also kept the books for Alston’s convenience store. At trial, Drew testified that she knew about the currency transaction report (“CTR”) filing requirements imposed by law and had discussed the CTR filing requirements with Alston. On October 7,1988, Alston purchased with cash another $8,000 money order payable to Motor Imports from the Stenton Avenue Branch of Meridian Bank.

A similar pattern was followed for the purchase of Henry Alston’s BMW, and on December 9, 1988, both Michael and Henry Alston took delivery of their new cars.

On September 30, 1993, Alston was charged in two counts of a three count indictment. Count I charged Alston with conspiracy under 18 U.S.C. § 371: (i) to defraud the United States and the Treasury and (ii) to structure to avoid the reporting require[716]*716ments of 31 U.S.C. § 5313(a)6 in violation of the anti-structuring provisions of 31 U.S.C. § 5324(a)(3)7 and § 5322.8 Count II charged Alston with the substantive offense of structuring, that is, evasion of the reporting requirements of 31 U.S.C. § 5313(a), in violation of the anti-structuring provisions of 31 U.S.C. § 5324(a)(3), § 5322(b); 31 C.F.R. § 103.11,9 § 103.22;10 and 18 U.S.C. § 2(b).11

On November 17, 1993, a non-jury trial was held. On November 18, 1993, Alston was convicted of all counts. The district court sustained Alston’s conviction relying on the Third Circuit law in effect at that time. Our jurisprudence then provided that to obtain a structuring conviction, the government need only prove that the defendant knew of the financial institution’s obligation to report financial transactions of over $10,000, and that the defendant structured his transactions in order to avoid triggering such reports. See United States v. Shirk, 981 F.2d 1382 (3d Cir.1992), cert. denied, - U.S. -, 114 S.Ct. 873, 127 L.Ed.2d 70 (1994). The district court concluded that Alston knew of the bank’s reporting requirements from his conversations with Drew, and that he had intentionally structured his transactions to avoid having CTR’s filed with the IRS.

On January 11, 1994, after the trial, but before the district court ruled on Alston’s post-trial motions, the Supreme Court held that in order to obtain a structuring conviction the government must prove that the defendant knew that structuring itself was illegal. Ratzlaf v. United States, — U.S. -, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994).

Aston moved to set aside the verdict and sought the entry of a judgment of acquittal under Rule 29

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United States v. Michael David Alston
77 F.3d 713 (Third Circuit, 1996)

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