United States v. Aversa ( 1993 )


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  • January 13, 1993
    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT
    No. 91-1363
    UNITED STATES OF AMERICA,
    Appellee,
    v.
    DANIEL F. AVERSA,
    Defendant, Appellant.
    No. 91-1364
    UNITED STATES OF AMERICA,
    Appellee,
    v.
    VINCENT MENTO,
    Defendant, Appellant.
    APPEALS FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF NEW HAMPSHIRE
    [Hon. Martin F. Loughlin, Senior U.S. District Judge]
    No. 91-1574
    UNITED STATES OF AMERICA,
    Appellee,
    v.
    WILLIAM J. DONOVAN,
    Defendant, Appellant.
    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF NEW HAMPSHIRE
    [Hon. Shane Devine, U.S. District Judge]
    Before
    Breyer, Chief Judge,
    Coffin and Bownes, Senior Circuit Judges,
    Torruella, Selya, Cyr and Boudin, Circuit Judges.
    Robert V. Johnson II, for appellant Aversa.
    David A. Ross,  with whom Eaton, Solms,  McIninch & Phillips
    was on brief, for appellant Mento.
    Jonathan R. Saxe, with  whom Twomey & Sisti Law  Offices was
    on brief, for appellant Donovan.
    Peter E. Papps, First Assistant United States Attorney, with
    whom Jeffrey  R. Howard, United  States Attorney, and  Richard A.
    Friedman, Attorney, Department of Justice, were on brief, for the
    United States.
    OPINIONS EN BANC
    SELYA, Circuit  Judge.  The government  charged each of
    SELYA, Circuit  Judge.
    these appellants with criminal violations of the Bank Records and
    Foreign Transactions  Act (BRFTA), Pub.  L. No. 91-508,  
    84 Stat. 1114
     (1970)  (codified  as  amended in  various  sections  of  12
    U.S.C., 15 U.S.C., and 31 U.S.C.).  Appellant Donovan was charged
    with,  and convicted  of,  failure to  file currency  transaction
    reports (CTRs).   See 31 U.S.C.   5313 (1988).  Appellants Aversa
    and Mento were  charged with, and convicted of,  structuring bank
    deposits  to  avoid  triggering  currency  transaction  reporting
    requirements.   See 31 U.S.C.    5324 (1988).  In  each case, the
    underlying legal  requirement comprises part of  Subchapter II of
    the BRFTA.  Subchapter II's criminal penalty provision, 31 U.S.C.
    5322(a),   proscribes  only   "willful"   violations  of   the
    subchapter's provisions.
    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.
    1The   government   filed   cross-appeals  challenging   the
    relatively mild sentences imposed  on Mento and Aversa.   In view
    of our disposition  of the issue  before the en  banc court,  the
    cross-appeals  (Nos. 91-1615 and  91-1616) are moot.   They will,
    therefore, be dismissed without prejudice.
    3
    I. BACKGROUND
    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.
    A. Donovan.
    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
    2"Deposits  or  withdrawals  of currency  from  an  existing
    account by an established  depositor who . . .  operates a retail
    type of  business" are  exempted from the  reporting requirements
    4
    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):
    An act or a  failure to act is knowingly
    done   if  it   is   done   voluntarily   and
    intentionally and  not because of  mistake or
    accident or other innocent reason.  An act or
    a failure  to act  is done willfully  if done
    voluntarily  and  intentionally and  with the
    specific  intent  to  do  something  the  law
    forbids,  that is  to  say with  bad purpose,
    either to disobey or disregard the law.
    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.
    B. Aversa and Mento.
    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.
    Mento  and Aversa  knew that  Mento's bank  was legally
    required  to file  CTRs  for all  deposits  of $10,000  or  more.
    under  31 C.F.R.     103.22(b)(2)(i) (1987).    Donovan does  not
    contend  that  Saba was  an exempt  customer  under this,  or any
    other, section of the regulations.
    5
    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.
    Following the  return  of indictments,  the  government
    moved  in   limine  to  prevent  the   introduction  of  evidence
    supporting the defendants' mistake-of-law theory.  Judge Loughlin
    granted  the motion.  Aversa then pled guilty to structuring, but
    did so  conditionally, see Fed.  R. Crim. P.  11(a)(2), reserving
    his mistake-of-law defense  for appeal.   Mento opted for  trial.
    At  the  trial,  the   district  court,  over  timely  objection,
    instructed  the jury  that mistake  of law was  not a  defense to
    structuring.  The jury found Mento guilty.
    C. The En Banc Issue.
    Although these appellants breached different regulatory
    provisions  of  Subchapter  II,  each  was  convicted  under  the
    subchapter's criminal  penalty provision,  31 U.S.C.    5322, and
    each  raised a mistake-of-law defense.   We convened  the en banc
    court specifically to  examine the efficacy  of such defenses  in
    the CTR  and  antistructuring contexts.    At bottom,  this  task
    requires us to elucidate the state of mind that Congress required
    when it limited such violations to willful misconduct.
    II. DISCUSSION
    6
    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.
    A. The Statutory Scheme.
    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).
    Although Subchapter II's transaction report requirement
    expanded the armamentarium of  federal law enforcement agents, it
    was too easily circumvented.   Individuals who wished to  avoid a
    paper trail for  any reason  could simply segment  large sums  of
    money  into several  transactions of  less than  $10,000.   In an
    apparent   effort  to   plug  this  loophole,   Congress  amended
    3Subchapter II has a  number of other regulatory provisions,
    including  reporting  requirements  for importing  and  exporting
    currency and for foreign currency transactions.  See 31 U.S.C.
    5313-17.  Congress did  not require that an individual  be guilty
    of  some related  infraction  (say, drug  trafficking) before  he
    could run afoul of these  currency regulations.  Rather, Congress
    provided  that individuals who  violate the  currency regulations
    while  involved in some other criminal  activity are eligible for
    harsher penalties than those who violate the currency regulations
    alone.  Compare 31 U.S.C.   5322(a) with 31 U.S.C.   5322(b).
    7
    Subchapter II  in  1986.   Pub.  L. No.  99-570,  
    100 Stat. 3207
    (1986),  codified at 31 U.S.C.    5324.   The new antistructuring
    provision  limited  an  individual's  ability to  dodge  the  CTR
    requirement.4  At  the time, Congress considered, but decided not
    to  alter, section  5322's  criminal provisions.   Thus,  section
    5322,  which  criminalizes   conduct  undertaken  by   a  "person
    willfully violating  [subchapter II  or a regulation  promulgated
    under Subchapter II]," applies  to the antistructuring section as
    well as to  the balance  of Subchapter II.   Although  appellants
    stand convicted of different offenses   Donovan was found  guilty
    4The amendment read in pertinent part:
    No person  shall for  the purpose  of evading
    the reporting requirements of section 5313(a)
    with respect to such transaction --
    . . .
    (3)   structure    or   assist   in
    structuring,    or    attempt    to
    structure or assist in structuring,
    any  transaction  with one  or more
    domestic financial institutions.
    31 U.S.C.     5324.   The  regulations implementing  the  statute
    explained that:
    a person  structures  a  transaction  if  that  person,
    acting alone, or in conjunction with,  or on behalf of,
    other persons,  conducts or attempts to  conduct one or
    more transactions in currency, in any amount, at one or
    more financial  institutions, on  one or more  days, in
    any manner,  for the  purpose of evading  the reporting
    requirements . . . .  "In any manner" includes, but  is
    not  limited to, the breaking  down of a  single sum of
    currency exceeding $10,000 into smaller sums, including
    sums  at  or  below  $10,000,   or  the  conduct  of  a
    transaction,  or  series   of  currency   transactions,
    including transactions at or below $10,000.
    31 C.F.R.   103.11(n) (1989).
    8
    of  violating the  CTR provision while  the other  two appellants
    were convicted of  structuring infractions   they  all argue that
    section 5322's  willfulness requirement  means 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.
    The government takes a diametrically opposite view.  It
    contends that, because Congress made  no express provision to the
    contrary, ignorance of the law cannot  serve as a defense to  the
    instant charges.  See generally United States v. Dotterweich, 
    320 U.S. 277
    , 284 (1943) (holding that consciousness of wrongdoing is
    not necessary for conviction).  The government's position derives
    some  support  from  an  array  of  appellate  cases  which  have
    disallowed   mistake-of-law   defenses   in   the   transactional
    structuring milieu.   See, e.g.,  United States  v. Ratzlaf,  
    976 F.2d 1280
    , 1283  (9th Cir.  1992); United States  v. Caming,  
    968 F.2d 232
    ,  238-39 (2d Cir.), cert. denied, 
    113 S. Ct. 416
     (1992);
    United  States v.  Gibbons, 
    968 F.2d 639
    ,  644 (8th  Cir. 1992);
    United  States  v. Rogers,  
    962 F.2d 342
    ,  344 (4th  Cir. 1992);
    United  States v. Brown, 
    954 F.2d 1563
    , 1568  (11th Cir.), cert.
    denied, 
    113 S. Ct. 284
     (1992); United States v. Dashney, 
    937 F.2d 532
    , 538 (10th Cir.), cert. denied, 
    112 S. Ct. 402
     (1991); United
    States v.  Scanio, 
    900 F.2d 485
    ,  490 (2d Cir.  1990).   For the
    reasons discussed below, we  think these cases read  section 5322
    in an overly malleable manner.
    9
    B. Mens Rea:  CTR Violations.
    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 (1943).  See
    generally  Note, An  Analysis of  the  Term "Willful"  in Federal
    Criminal Statutes, 
    51 Notre Dame L. Rev. 786
    , 786-87 (1976).
    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
    5An 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!
    Judge Hand
    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
    Professor Wechsler
    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
    10
    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,  
    111 S. Ct. 604
    , 610 (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.
    Several courts,  however, have taken a  hybrid approach
    to the issue  of willfulness  in the purlieus  of Subchapter  II.
    This approach is marked by its protean quality.  Depending on the
    language  of  each  particular  regulatory  provision,  the  word
    "willfully"  as  used  in section  5322  takes  on  a variety  of
    meanings,  allowing mistake of law as a defense to certain crimes
    and not to others.  This viewpoint is best typified by Scanio and
    its progeny.  See Scanio, 
    900 F.2d at 490
     (permitting mistake-of-
    law defense as to  some currency-related crimes while prohibiting
    such a defense vis-a-vis other currency-related crimes); see also
    cases collected supra at p. 9.
    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
    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).
    11
    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
      (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.
    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
    (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
    6It is a common rule of statutory interpretation that courts
    must  give effect  to legislative  terms wherever possible.   See
    Gade  v. National Solid Wastes Management Ass'n, 
    112 S. Ct. 2374
    ,
    2384  (1992);  United States  v. Menasche,  
    348 U.S. 528
    , 538-39
    (1955).  We  cite this  familiar tenet because  there would  have
    been  no need for Congress to include the term "willfully" at all
    if the government's reading of section 5322 were accurate.
    12
    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.
    Our opinion in Bank of New England is not pathbreaking;
    it  merely represents  a particularized  application of  the rule
    defenestrating  mistake-of-law  defenses  when  the  mistakes  in
    question result from intentional or reckless disregard of a legal
    duty.  See  McLaughlin v. Richland Shoe  Co., 
    486 U.S. 128
    , 133,
    135  n.13  (1988) (willfulness  may  be  shown either  by  actual
    knowledge or  by "reckless disregard  for the  matter of  whether
    [defendant's]  conduct  was prohibited  by  the statute");  Trans
    World  Airlines, Inc. v.  Thurston, 
    469 U.S. 111
    ,  126-28 (1985)
    (similar);  see also Bank of  New England, 821  F.2d at 886 ("the
    Supreme Court  has endorsed  defining willfulness, in  both civil
    and  criminal contexts, as 'a disregard for the governing statute
    and an  indifference to its requirements'")  (quoting Trans World
    Airlines, 
    469 U.S. at 127
    ).
    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
    13
    present in Bank of New England:  the significance of section 5322
    in the antistructuring context.
    C. Willful Structuring:  One Word, One Meaning.
    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  (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., 
    112 S. Ct. 2589
    , 2596 (1992);  accord Sullivan v. Stroop, 
    496 U.S. 478
    ,
    484  (1990).   In the  case at  hand, the  Cowart  presumption is
    particularly strong.   We explain briefly.
    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), petition for cert.  filed, 
    61 U.S.L.W. 3382
     (U.S.  Nov. 4,
    1992) (No. 92-794);  New Eng. Tel.  & Tel. Co.  v. Public  Utils.
    Comm'n, 
    742 F.2d 1
    ,  8 (1st Cir.  1984), cert. denied,  
    476 U.S. 1174
     (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 word  in a  single statutory section.   Ascribing  various
    14
    meanings  to a single  iteration of a  single word    reading the
    word  differently for  each code  section to  which it  applies
    would  open Pandora's  jar.   If  courts  can render  meaning  so
    malleable, the  usefulness of  a single  penalty provision for  a
    group  of  related  code  sections will  be  eviscerated  and, by
    extension,  almost any  code section  that references a  group of
    other  code  sections  would become  susceptible  to individuated
    interpretation.
    Furthermore, if Congress wanted  the purposive mens rea
    in  the antistructuring  statute to stand  alone, it  had several
    simple  options.    It  could,   for  example,  have  placed  the
    antistructuring provision somewhere other than in Subchapter  II,
    or amended the criminal sanctions provision to except structuring
    violations.7   It exercised none of the available options.  Thus,
    absent  powerful  evidence to  the  contrary,  we believe  courts
    should presume that Congress intended the mens rea set by section
    5322  to  apply  in equal  measure  to  both  CTR violations  and
    structuring offenses.
    We  recognize,  of course,  that  notwithstanding these
    problems,   several  other   courts  have  scuttled   the  Cowart
    presumption  and  read  the  word  "willfully"  in  section  5322
    differently  as  it applies  to  breaches  of different  currency
    regulations.  Compare, e.g., Brown, 954 F.2d at 1568 (ruling that
    7In  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).
    15
    knowledge of the antistructuring law was not required to ground a
    structuring conviction) and Scanio, 
    900 F.2d at 490
     (same) with,
    e.g., United States v. Eisenstein, 
    731 F.2d 1540
    , 1543 (11th Cir.
    1984)  (upholding mistake-of-law defense  for currency import and
    export violations) and United States v. Dichne, 
    612 F.2d 632
    , 636
    (2d Cir. 1979) (similar), cert. denied, 
    445 U.S. 928
     (1980).  See
    also Dashney,  937 F.2d at 539-40 (declaring mistake of law to be
    a  defense in respect to violations of currency import and export
    regulations  but not  in respect  to structuring  offenses).   To
    warrant  redefining "willfully"  from crime  to crime  within the
    same  statute,  these  courts  generally  attempt to  distinguish
    antistructuring   regulations   from,  say,   currency  importing
    regulations,  on the  basis of  the "reasonable  probability that
    knowledge  [of the  law] might  be obtained"  more easily  in the
    former situation  than in the  latter.  Scanio,  
    900 F.2d at 490
    (citation omitted).
    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
    ; Trans
    World  Airlines,  
    469 U.S. at 126
    , provides  a  fair, workable,
    mistake-of-law  defense  to  those  accused  of  currency-related
    16
    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.
    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
    8Because 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, 
    112 S. Ct. 1386
    , 1391 (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
    (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
    17
    unintentional, non-reckless mistake of  law is a complete defense
    to a structuring charge.
    D. Willfulness in the Tax Code.
    D. Willfulness in the Tax Code.
    In an effort  to read  the word "willfully"  in a  more
    charitable  manner, all  three appellants  urge that  the Court's
    recent decision in United States v. Cheek, 
    111 S. Ct. 604
     (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.
    We do not  think that  Cheek can carry  the cargo  that
    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.
    18
    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 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
     (1976)  (per  curiam); United  States  v.
    Bishop, 
    412 U.S. 346
      (1973); United States v. Murdock,  
    290 U.S. 389
      (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,  
    111 S. Ct. at 609, 610
    .   The
    Court's earlier opinions  stressed the  same point.   See,  e.g.,
    Pomponio, 
    429 U.S. at
    12 & n.3; Bishop, 
    412 U.S. at 360-61
    .  This
    repeated qualification makes  clear that the Court  has crafted a
    narrow  exception,  limited to  tax  cases,  in which  subjective
    mistake of law can constitute an absolute defense.
    Such   a   conclusion   coheres  with   our   long-held
    9Our dissenting brother suggests  that it is unnecessary for
    us to discuss the range of Cheek.   See post at 33.  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.
    19
    understanding of the  tax-crime exception.   In United States  v.
    Aitken,  
    755 F.2d 188
      (1st Cir.  1985),  we  acknowledged  the
    uniqueness of the tax  statutes' mens rea requirements.   See 
    id. at 193
     ("That internal  revenue reporting and filing requirements
    are  an enclave  apart  is  recognized.").    We  read  Cheek  as
    confirming and fortifying the stance that we took in Aitken.
    Moreover,  and finally,  the  rationales  supporting  a
    subjective mistake-of-law defense in tax-crime cases do not apply
    to laws and regulations of the kind at issue here.  As the Second
    Circuit noted, "[o]ne  of the most esoteric  areas of the  law is
    that  of  federal  taxation.   It  is  replete  with  'full-grown
    intricacies,'  and it is rare that a 'simple, direct statement of
    the law can be  made without caveat.'"   United States v.  Regan,
    
    937 F.2d 823
    , 827 (citation omitted), modified, 
    946 F.2d 188
     (2d
    Cir. 1991), cert. denied,  112 St. Ct. 2273 (1992).   The federal
    tax  code is not only enormous, detailed, and technical, but also
    interrelated and highly nuanced.  Simply reading the words of the
    tax  code does  not  always reveal  the  line between  legal  and
    illegal conduct.  And for over sixty years, the Supreme Court has
    held that  Congress does not intend to  punish those who, in good
    faith, stray past that line.
    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.,
    10Attempts 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
    20
    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.
    III. APPLYING THE LAW
    All that remains  is for us to apply the  fruits of our
    analysis to each appellant's situation.
    A.  Donovan.
    In Donovan's case, the  trial judge instructed the jury
    that Donovan's actions were willful if he had the "bad purpose to
    extension  of Cheek to loan fraud context); United States v. Gay,
    
    967 F.2d 322
    , 327  (9th Cir.)  (same;  mail fraud  case), cert.
    denied, 
    113 S. Ct. 359
     (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 Cheek-like 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
     (1970).
    21
    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, 
    111 S. Ct. at 610
    ; see also Pomponio,
    
    429 U.S. at 13
    .    Finally, the  judge  allowed the  parties to
    introduce  evidence  pertaining   to  Donovan's  state  of   mind
    regarding the law and the facts.
    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
      (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, 
    112 S. Ct. 605
    , 908, 1298,
    22
    2301 (1992).
    B.  Aversa and Mento.
    We find the remaining appeals to be cut  from different
    cloth.  Because of restrictive rulings made below, neither Aversa
    nor  Mento ever had a chance to present a mistake-of-law defense.
    Both of them were precluded by the government's successful motion
    in limine from offering any evidence as to their ignorance of the
    antistructuring law.  Additionally,  in Mento's case the district
    judge  charged the  jury  that mistake  of  law was  no  defense,
    declaring:  "It  is not  necessary that the  United States  prove
    that  the defendant  knew that  the structuring  of his  currency
    transactions was unlawful."
    Since  neither  of these  defendants  were afforded  an
    opportunity to develop the  record, and since both of  them claim
    not to have  known that what they did was  illegal, we cannot say
    what a fully amplified  record might show regarding  Aversa's and
    Mento's   familiarity   with,  or   actual   knowledge   of,  the
    antistructuring law.11   Similarly, we  cannot say how  the proof
    might  shape up  in respect to  reckless disregard  or deliberate
    blindness.  It follows inexorably  that, on this scumbled record,
    Aversa's and Mento's convictions cannot stand.
    IV.  CONCLUSION
    We  need  go  no  further.    In  the  context  of  the
    antistructuring and CTR provisions of Subchapter II, we find that
    11We do  know,  however,  that  in the  plea  agreement  the
    government stipulated that it had no evidence of actual knowledge
    on Aversa's part.
    23
    a willful action  is one committed in violation  of a known legal
    duty or  in consequence  of a  defendant's reckless  disregard of
    such a duty.  In Donovan's case, the introduction of evidence was
    not unduly restricted and the district court's charge to the jury
    was  adequate to  comport with  the proper  standard.   Thus, his
    appeal fails.12  Because neither Aversa nor Mento had a chance to
    present  evidence on  a  mistake-of-law theory,  and because  the
    trial  court's jury  instruction  in Mento's  case was  harmfully
    erroneous,  their convictions  must  be vacated  and their  cases
    remanded for further  proceedings.  By the terms of Fed. R. Crim.
    P. 11(a)(2), Aversa  may, if  he so elects,  withdraw his  guilty
    plea in  the court below.   See United States v.  Lyons, 
    898 F.2d 210
    , 214 n.5 (1st Cir.), cert. denied, 
    111 S. Ct. 295
     (1990).
    In Appeal  No. 91-1574,  the judgment of  conviction is
    affirmed.
    In Appeals  Nos. 91-1363 and 91-1364,  the judgments of
    conviction  are  vacated  and  the  cases  remanded  for  further
    proceedings not inconsistent herewith.
    Concurring Opinion follows
    Dissent follows Concurring Opinion
    12Donovan's  remaining  ground  of appeal  was  convincingly
    dispatched  in the prior panel opinion.  Hence, we reinstate that
    opinion in redacted form, expressly adopting Part IV thereof.
    24
    BREYER,  Chief Judge (concurring).  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.   United States v. Cheek, 
    111 S. Ct. 604
     (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.  20.   Moreover,  Supreme Court
    opinions have  strongly  suggested that  criminal tax  cases
    constitute  a  separate enclave  in the  law.   See  en banc
    opinion, supra at pp. 18-19.
    25
    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 (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 (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").
    26
    I  therefore conclude  that the  court's announced
    standard  is  sufficiently  close to  the  purely subjective
    standard set forth  in Cheek  that it will  avoid using  the
    criminal law,  in this technical area, to  punish those with
    an innocent state of mind, those who did not know they  were
    violating the  law and who reasonably  failed to investigate
    the issue.  I therefore join the court's opinion.
    Dissent follows
    27
    TORRUELLA,  Circuit Judge  (Dissenting).    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
    (1991), is applicable to them.
    I.  ACTIVITY  TARGETED  BY  THE  BANK
    SECRECY  ACT,  AS AMENDED  BY THE
    MONEY LAUNDERING CONTROL ACT
    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.
    -28-
    28
    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 anti-structuring provision.17
    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
    13  Pub. L. No. 91-508, 
    84 Stat. 1114
     (1970) (codified as amended
    in scattered sections of 12 U.S.C., 15 U.S.C. and 31 U.S.C.).
    14  S. Rep. No. 433, 99th Cong., 2d Sess. 2-3 (1986).
    15   See The  President's Commission on  Organized Crime, Interim
    Report  to the  President  and  the  Attorney General,  The  Cash
    Connection:  Organized  Crime, Financial Institutions, and  Money
    Laundering (1984); S. Rep. No. 433 (1986).
    16  Pub. L. No. 99-570, 
    100 Stat. 3207
    .
    17  31 U.S.C.A.   5324 (West Supp. 1992).
    -29-
    29
    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.
    Given  the  congressional   preoccupation  with   money
    laundering  it  is  surprising   that  neither  the  term  "money
    laundering," nor  the new crime  created by the  Money Laundering
    Control  Act,   "structuring,"  are  defined   by  the   statute.
    Nevertheless, the House Report states the following:
    Money    Laundering   Defined.    -   The
    President's Commission on Organized Crime
    has  defined  money  laundering   as  the
    "process  by  which   one  conceals   the
    existence,  illegal  source,  or  illegal
    application of income, and then disguises
    that   income   to    make   it    appear
    legitimate."  In other  words, laundering
    involves  the hiding  of the  paper trail
    that  connects  income  or  money  with a
    person in order for such person to  evade
    the payment of taxes,  avoid prosecution,
    or obviate any forfeiture of  his illegal
    drug income or assets. . . .
    Id. at 16 (emphasis supplied).
    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
    -30-
    30
    offense."    Id.     That  section,   which  in  effect   defines
    "laundering," provides:
    -31-
    31
    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].
    18 U.S.C.   1956(a)(1) (emphasis supplied).
    On  the other  hand, "structuring"  is only  defined by
    regulation.      31   C.F.R.     103.53,   entitled   "Structured
    Transactions," provides that:
    No  person  shall   for  the  purpose  of
    evading  the  reporting requirement  of
    103.22 with respect to such transaction:
    . . .
    (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.
    31 C.F.R.   103.53.
    Regulation  31   C.F.R.     103.11(n)   (1989)  defines
    "structure" or "structuring" as:
    (n)    Structure  (structuring).    For
    purposes  of  section  103.53,  a  person
    structures a transaction if  that person,
    acting alone, or in conjunction  with, or
    on  behalf of, other persons, conducts or
    attempts   to   conduct   one   or   more
    transactions in currency, in  any amount,
    at one or more financial institutions, on
    -32-
    32
    one or more days,  in any manner, for the
    purpose   of    evading   the   reporting
    requirements under section 103.22 of this
    Part.  "In  any manner" includes,  but is
    not limited to,  the breaking  down of  a
    single sum of currency  exceeding $10,000
    into smaller sums,  including sums at  or
    below  $10,000,  or   the  conduct  of  a
    transaction,   or   series  of   currency
    transactions,  including  transactions at
    or  below $10,000.    The transaction  or
    transactions need not exceed  the $10,000
    reporting   threshold   at   any   single
    financial institution on  any single  day
    in order to constitute structuring within
    the meaning of this definition.
    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").
    During  the   hearings  preceding  enactment   of  this
    legislation concern  was expressed  that this maze  of interwoven
    regulations and  statutes, although aimed  at crippling organized
    crime, "could lead to  prosecution of people who were not  in any
    way involved in money  laundering."  See  S. Rep. No. 433 at  12;
    see  also John  K. Villa,  A Critical  View of  Bank  Secrecy Act
    Enforcement and the Money Laundering Statute, 37 Cath.  U.L. Rev.
    489  (1988).    The present  appeals  are  living  proof of  that
    prophecy.  Appellants  are being prosecuted for violation  of the
    money laundering  statutes notwithstanding  that they are  not in
    any way involved in such activities.
    The situation presented by  these charges is not unlike
    that in  McNally v. United States, 
    483 U.S. 350
     (1987), in which
    the Supreme Court  reversed a unanimous  litany of circuit  court
    -33-
    33
    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
     (Stevens, J., dissenting).
    In prosecuting appellants under the Bank Secrecy Act as
    amended by the  Money Laundering Control Act, the  government has
    transgressed  Congress'   purpose  in  the  enactment   of  these
    statutes,   which   was   to   detect   and   punish   "financial
    transaction[s]  represent[ing]  the  proceeds  of  some  form  of
    unlawful activity," 18 U.S.C.   1956(a)(1).  We should  not stand
    idly  while  this overreaching  transforms  common citizens  into
    criminals.
    II.  THE CHEEK STANDARD
    While it could  have been  possible to  leave Cheek  v.
    United States, 
    498 U.S. 192
    ,  
    111 S. Ct. 604
     (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
    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.
    -34-
    34
    element  of  the  offense."    Ante  at  18.    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.
    In  Cheek, the  Supreme Court  examined the  meaning of
    "willfully" as used in the income tax statutes.  Defendant Cheek,
    a commercial  airline pilot, refused  to file income  tax returns
    after 1979.   As a  result, Cheek  was indicted and  charged with
    willfully violating 26 U.S.C.    7203 & 7201.20
    At  trial,  Cheek presented  as  his  defense that  "he
    sincerely    believed   that    the    tax   laws    were   being
    unconstitutionally enforced and that his actions during 1980-1986
    period were lawful."  Cheek, 498 U.S. at    ,  
    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
    20  Section  7201 criminalizes  the "willful[]  attempt[] in  any
    manner to  evade or defeat any  tax imposed by this  title or the
    payment thereof."  26  U.S.C.   7201.  Section  7203 criminalizes
    the willful failure to file a return as required under Title 26.
    -35-
    35
    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    ,
    
    111 S. Ct. at 608
    .  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.
    The Supreme  Court, relying  on its prior  criminal tax
    precedents  interpreting the  word "willfully,"  reversed Cheek's
    conviction.   It  held that  no matter  how unreasonable  a judge
    might deem Cheek's beliefs, the jury must have the opportunity to
    hear them and make the final determination as to whether he had a
    good faith misunderstanding  of the  law or a  good faith  belief
    that he was not violating  the law, thus negating the element  of
    willfulness.  498 U.S. at    , 
    111 S. Ct. at 610
    .21
    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    , 
    111 S. Ct. at 611
    .   More in point
    with the present appeals, however, the Court stressed that
    [t]he   proliferation  of   statutes  and
    regulations   has   sometimes   made   it
    difficult for the average citizen to know
    and comprehend  the extent of  the duties
    21   The Court therefore held that  the district court erred when
    it instructed the jury that  Cheek's "asserted beliefs that wages
    are not income and that he was not a taxpayer  within the meaning
    of the Internal Revenue Code should not be considered by the jury
    in determining whether Cheek  has acted willfully."  498  U.S. at
    , 
    111 S. Ct. at 613
    .
    -36-
    36
    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.
    498 U.S. at    ,  
    111 S. Ct. at 609
    .   The Court could  well have
    been talking about the  arcane money laundering regulatory scheme
    presented by these appeals.
    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,
    
    60 U.S.L.W. 3343
     (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, No. 91-5106, slip op.
    (4th Cir. Apr. 24, 1992).
    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.
    The conclusion that engaging in a currency  transaction
    is  more "straightforward" than filing an income tax return is at
    best,   unconvincing.    The  legal duty  at  issue  here --  the
    illegality of  structuring a transaction  in order  to prevent  a
    bank from filing a  currency transaction report -- does  not even
    -37-
    37
    approximate  the general  knowledge of the  duty of  taxpayers to
    file  an income  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 anti-structuring 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
    22  In Cheek, Justice Blackmun, with whom Justice Marshall joined
    in dissent, stated that:
    [I]t  is incomprehensible  to me  how, in
    this day,  more than 70  years after  the
    institution of our present federal income
    tax  system  .   .  .  any   taxpayer  of
    competent  mentality  can  assert as  his
    defense    to   charges    of   statutory
    willfulness the proposition that the wage
    he receives  for his labor is  not income
    . . . .
    498 U.S. at    , 
    111 S. Ct. at 615
    .
    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
     (1986); United
    States  v. Cook, 
    745 F.2d 1311
    , 1314-16 (10th  Cir. 1984), cert.
    denied,  
    469 U.S. 1220
     (1985); United States v. Tobon-Builes, 
    706 F.2d 1092
    , 1096-1101 (11th Cir. 1983).
    -38-
    38
    (1989).    It is  obvious that  our  Anzalone opinion  had little
    effect  on bureaucratic thinking.  See Anzalone, 
    766 F.2d at
    681-
    82.
    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.
    -39-
    39
    

Document Info

Docket Number: 91-1363

Filed Date: 1/13/1993

Precedential Status: Precedential

Modified Date: 12/21/2014

Authorities (44)

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United States v. Charles George Trucking Co., Charles ... , 823 F.2d 685 ( 1987 )

United States v. Edward E. Dockray , 943 F.2d 152 ( 1991 )

United States v. David v. Cook , 745 F.2d 1311 ( 1984 )

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United States v. Oscar De J. Tobon-Builes , 706 F.2d 1092 ( 1983 )

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