United States v. Beidler ( 1997 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 96-4290
NEIL ROGER BEIDLER,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Virginia, at Lynchburg.
Samuel G. Wilson, District Judge.
(CR-95-318)
Argued: January 29, 1997
Decided: April 10, 1997
Before RUSSELL and WILKINS, Circuit Judges, and
HERLONG, United States District Judge for the
District of South Carolina, sitting by designation.
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Affirmed by published opinion. Judge Wilkins wrote the opinion, in
which Judge Russell and Judge Herlong joined.
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COUNSEL
ARGUED: John Fairfax Pyle, Lynchburg, Virginia, for Appellant.
Francis Marion Hamilton, III, Third Year Law Intern, Roanoke, Vir-
ginia, for Appellee. ON BRIEF: Robert P. Crouch, Jr., United States
Attorney, Thomas J. Bondurant, Assistant United States Attorney,
Roanoke, Virginia, for Appellee.
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OPINION
WILKINS, Circuit Judge:
Neil Roger Beidler appeals his conviction and sentence for struc-
turing currency transactions in violation of 31 U.S.C. § 5324(3)
(1988), arguing primarily that the evidence is insufficient to support
a conclusion that he willfully violated that provision. We conclude
that the evidence establishes that Beidler engaged in extensive efforts
to conceal his structuring activity and that the evidence of those
efforts is sufficient to support an inference that he was aware of the
illegality of his conduct. Accordingly, we affirm.
I.
A.
Federal law requires that domestic financial institutions file a cur-
rency transaction report (CTR) for a transaction or series of transac-
tions involving currency in an amount greater than $10,000. See 31
U.S.C. § 5313(a) (1988); 31 C.F.R. § 103.22(a)(1) (1991). Further-
more, it is unlawful to structure, to assist in structuring, or to attempt
to structure or to assist in structuring a currency transaction for the
purpose of avoiding the reporting requirement. See 31 U.S.C.
§ 5324(3). In 1991, however, when the events relevant to this litiga-
tion transpired, an individual could not be convicted of violating the
antistructuring law absent proof that he did so"willfully." 31 U.S.C.
§ 5322(a), (b) (1988) (providing for the imposition of penalties upon
"[a] person willfully violating" the antistructuring laws). And, in
Ratzlaf v. United States, 510 U.S. 135 (1994), the Supreme Court held
that in order to show that a defendant acted "willfully" within the
meaning of § 5322, "the Government must prove that the defendant
acted with knowledge that his conduct was unlawful." Id. at 137.1
Accordingly, under the law in effect when Beidler committed the acts
in question, a conviction for violating the antistructuring laws
required proof that the defendant structured or assisted in structuring
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1 Congress has since amended § 5322 to omit the willfulness require-
ment with respect to violations of § 5324. See 31 U.S.C. § 5322(a), (b)
(1994).
2
(or attempted to structure or to assist in structuring) currency transac-
tions with one or more financial institutions; that he did so for the
purpose of evading the CTR requirement; and that he acted with
knowledge that his conduct was unlawful. See United States v.
Walker, 25 F.3d 540, 548 (7th Cir. 1994).
B.
Viewed in the light most favorable to the Government, the evi-
dence demonstrated the following. Beidler is a real estate agent whose
firm possessed the exclusive right to market townhouses being con-
structed for the Wellington Forest retirement community located in
Amherst, Virginia. In the fall of 1991, the builder of the development,
John Batman, requested assistance from Beidler in procuring financ-
ing for the project. Beidler obtained the names of several potential
investors, including Wendell Wood, from a business associate.
Beidler was introduced to Wood by a mutual acquaintance.
Beidler ultimately obtained Wood's agreement to supply $100,000
in financing for the Wellington Forest project. However, Wood
wished to protect his anonymity by concealing his identity as the
source of funding for the development. Accordingly, Wood provided
Beidler with cash in increments of up to "$20,000 or $30,000" at a
time.2 J.A. 351. Beidler deposited the funds into his own accounts and
then drew checks on those accounts payable to Batman.
It is the manner in which Beidler deposited the funds from Wood
that resulted in his indictment for structuring currency transactions.
Rather than depositing each cash payment from Wood in a lump sum,
Beidler made a total of 34 deposits to four different accounts at three
different banks. Moreover, Beidler travelled to numerous branch loca-
tions to make the deposits. For example, between 9:00 a.m. and 2:00
p.m. on December 18, 1991, Beidler made the following deposits:
Two deposits of $4,000 each at the Madison Heights branch of Cen-
tral Fidelity Bank (each deposit was taken by a different teller; the
record does not reveal the temporal proximity of the deposits); $4,000
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2 Additionally, the deed of trust on the properties that Wood received
in exchange for the funds identified him only as"holder." The parties
agree that this practice, while uncommon, is not illegal.
3
at the Downtown branch of Central Fidelity Bank; $4,000 at the
Amherst branch of Central Fidelity Bank; $4,000 at the Amherst
branch of First Virginia Bank; $4,000 at the Downtown branch of
First Virginia Bank; $4,000 at the Madison Heights branch of First
Virginia Bank; and $5,000 at the Timberlake branch of First Virginia
Bank. In short, Beidler deposited a total of $33,000 in eight deposits
at seven different branches of two banks over the course of a five-
hour period. Although the December 18 transactions were the most
egregious in a consistent pattern, also noteworthy are Beidler's depos-
its totalling $18,500 at five branches of three banks on October 10
and 11, 1991 and his deposits totalling $18,000 at four different
branches of a single bank over the course of two business days, Octo-
ber 18 and 21, 1991.
Beidler subsequently was convicted of one count of structuring
currency transactions.3 He was sentenced to 15 months imprisonment
and ordered to pay a $5,000 fine.
II.
Beidler's primary contention on appeal is that the evidence is insuf-
ficient to support his conviction. A defendant challenging the suffi-
ciency of the evidence to support his conviction bears "a heavy
burden." United States v. Hoyte, 51 F.3d 1239, 1245 (4th Cir.), cert.
denied, 116 S. Ct. 346 (1995). In reviewing the sufficiency of the evi-
dence supporting a criminal conviction, our role is limited to consid-
ering whether "there is substantial evidence, taking the view most
favorable to the Government, to support it." Glasser v. United States,
315 U.S. 60, 80 (1942). We must bear in mind that"[t]he jury, not
the reviewing court, weighs the credibility of the evidence and
resolves any conflicts in the evidence presented." United States v.
Murphy, 35 F.3d 143, 148 (4th Cir. 1994). Further, "if the evidence
supports different, reasonable interpretations, the jury decides which
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3 Beidler was also charged with conspiracy to commit offenses against
the United States, see 18 U.S.C.A. § 371 (West 1966); money launder-
ing, see 18 U.S.C.A. § 1956(a)(1)(B) (West Supp. 1996); and engaging
in monetary transactions in property derived from specified unlawful
activity, see 18 U.S.C.A. § 1957 (West Supp. 1996). The jury acquitted
him of these charges.
4
interpretation to believe." Id. Reversal for insufficient evidence is
reserved for the rare case "where the prosecution's failure is clear."
Burks v. United States, 437 U.S. 1, 17 (1978). In sum, we "may not
overturn a substantially supported verdict merely because [we] find[ ]
the verdict unpalatable or determine[ ] that another, reasonable verdict
would be preferable." United States v. Burgos , 94 F.3d 849, 862 (4th
Cir. 1996) (en banc), cert. denied, 65 U.S.L.W. 3586 (U.S. Feb. 24,
1997) (No. 96-6868).
At trial, Beidler candidly acknowledged that he received currency
from Wood in amounts greater than $10,000 and that he divided the
cash into smaller sums for deposit because he wished to avoid the fil-
ing of a CTR. Nevertheless, Beidler maintained that he was unaware
that structuring transactions to evade the filing of a CTR was unlaw-
ful, instead asserting that he broke up the deposits of money from
Wood in order to avoid small-town gossip. Before us, Beidler argues
that the evidence concerning his acts of structuring does not support
a conclusion that he knew it was unlawful to structure a currency
transaction for the purpose of evading the reporting requirement.4
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4 Beidler also maintains that the district court erred in refusing to give
his proposed instruction on willfulness. We will find error in the refusal
of the district court to give a proffered instruction only if the instruction
was correct, was not otherwise covered by the charge to the jury, and
dealt with a point so important to the trial "that failure to give the
requested instruction seriously impaired the defendant's ability to con-
duct his defense." United States v. Lewis, 53 F.3d 29, 32 (4th Cir. 1995)
(internal quotation marks omitted). The district court gave the following
instruction concerning the "willfulness" element of the structuring count:
In order to prove the defendant guilty of [structuring currency
transactions] the Government must prove the following essential
elements beyond a reasonable doubt. First, the defendant will-
fully structured or attempted to structure a currency transaction
with a financial institution and, second, the defendant structured
or attempted to structure the currency transaction for the specific
purpose of evading the currency transaction reporting require-
ments of the law.
....
. . . [Y]ou are instructed that the Government must prove that
the defendant acted willfully. Willfully means to act with knowl-
5
A.
Before turning to the merits of Beidler's sufficiency argument, we
first must consider a legal issue that we have not previously decided:
Whether evidence that a defendant attempted to conceal the structur-
ing of currency transactions may, with or without other evidence, sup-
port a conclusion that the defendant knew structuring was unlawful.
For the reasons set forth below, we hold that it may.
We begin with the proposition that evidence that a defendant struc-
tured currency transactions, without more, is not sufficient to prove
that the defendant knew his conduct was illegal. See United States v.
Ismail, 97 F.3d 50, 56-58 (4th Cir. 1996) (construing Ratzlaf to hold
that evidence of structuring alone is not sufficient to prove knowledge
of illegality); United States v. Vazquez, 53 F.3d 1216, 1225 (11th Cir.
1995). Rather, the "evidence must suggest knowledge of the antistruc-
turing law as distinct from knowledge of financial institutions' report-
ing requirements." United States v. Wynn, 61 F.3d 921, 928 (D.C.
Cir.), cert. denied, 116 S. Ct. 578 (1995). As the Ratzlaf Court recog-
nized, however, knowledge of illegality may be proven by circum-
stantial evidence: "A jury may, of course, find the requisite
knowledge [that structuring was unlawful] by drawing reasonable
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edge that one[']s conduct is unlawful and with intent to do some-
thing the law forbids, that is to say, with bad purpose to disobey
or disregard the law.
The defendant's conduct was not willful if it was due to negli-
gence, inadvertence, mistake or the result of good faith and mis-
understanding of the requirements of the law. In this connection
it is up to you to decide whether the defendant acted in good
faith, that is, whether he sincerely misunderstood the require-
ments of the law or whether he knew what he was required to do
and deliberate[ly] did not do so.
J.A. 435-36. We conclude that the district court adequately instructed the
jury that in order to conclude that Beidler "willfully" violated the
antistructuring laws, it had to find that Beidler acted with knowledge that
his conduct was illegal. See United States v. Griffin, 84 F.3d 912, 925-26
(7th Cir.), cert. denied, 117 S. Ct. 495 and 117 S. Ct. 536 (1996).
Accordingly, the court did not err in refusing to give Beidler's proffered
instruction.
6
inferences from the evidence of defendant's conduct." Ratzlaf, 510
U.S. at 149 n.19.
After Ratzlaf, the circuit courts of appeals have struggled with the
quantum of proof beyond mere structuring that is sufficient to estab-
lish knowledge of illegality. There is general agreement that special
knowledge conferred by a defendant's professional status is evidence
that the defendant knew of the illegality of structuring a currency
transaction. See United States v. Simon, 85 F.3d 906, 911 (2d Cir.)
(holding that the defendant's status as a licensed stockbroker who
occasionally was required to file CTRs allowed an inference that the
defendant knew structuring was illegal), cert. denied, 117 S. Ct. 517(1996); United States v. Tipton, 56 F.3d 1009, 1013 (9th Cir. 1995)
(observing that evidence that the defendants were bank employees
and had received training about currency reporting laws would permit
a jury to conclude that they knew it was unlawful to assist others in
structuring transactions), cert. denied, 116 S. Ct. 773 (1996); United
States v. Retos, 25 F.3d 1220, 1231 (3d Cir. 1994) (noting that the
evidence was sufficient to sustain a conviction for structuring when
the evidence included defendant's status as an attorney); see also
Wynn, 61 F.3d at 928 (citing Retos with approval). Additionally, at
least one court has indicated that evidence that the structuring is
designed to conceal some other illegal activity may support an infer-
ence that the defendant knew his conduct was unlawful. See United
States v. Hurley, 63 F.3d 1, 16 (1st Cir. 1995) (holding that sufficient
evidence supported a conclusion that the defendants knew structuring
was illegal when they knew that the money laundering accomplished
through the structured transactions was illegal because a "context . . .
saturated with consciousness of illegality" is relevant to a defendant's
state of mind), cert. denied, 116 S. Ct. 1322 (1996). But see Wynn,
61 F.3d at 927-28 (acknowledging the Government's reliance on evi-
dence that the purpose of the structured transactions was to launder
money but concluding that the evidence did not support a conclusion
that the defendant knew that structuring was illegal).
The circuit courts of appeals are divided, however, with respect to
the question of whether a defendant's attempts to conceal the structur-
ing of transactions may suffice to prove knowledge of illegality. See
Ismail, 97 F.3d at 57-58. The majority of circuit courts of appeals
holds that evidence of concealment is sufficient, alone or in conjunc-
7
tion with other evidence, to support an inference that the defendant
knew that structuring was illegal. For example, in United States v.
Marder, 48 F.3d 564 (1st Cir.), cert. denied , 115 S. Ct. 1441 (1995),
the evidence related to the structuring count established that the
defendant provided his wife with $11,460 in cash and instructed her
to purchase cashier's checks in the amounts of $5,000, $3,960, and
$2,500 from three different banks. Id. at 574. The First Circuit con-
cluded that this evidence, by itself, was sufficient to establish that the
defendant knew structuring was illegal because, by structuring the
transaction to a greater degree than the minimum necessary to avoid
the filing of a CTR, he evinced an intent to conceal his activities:
While it certainly would make sense for a person cognizant
of the reporting requirement but unaware of the illegality of
structuring to make two separate purchases at two separate
banks--e.g., a purchase of $5,000 and a purchase of $6,460
--in order to obtain $11,460 without triggering a report to
the IRS, the fact that defendant instructed his wife to make
three separate purchases at three separate banks suggests
that defendant had a purpose beyond evasion of the report-
ing requirement: concealment of his structuring. And proof
of concealment tends to prove knowledge of illegality.
Id. Similarly, the Second Circuit has held that "when the method of
structuring suggests a significant effort not only to avoid the bank
reporting requirements but to conceal the currency structuring itself
from authorities, Ratzlaf's requirement of[proof that the defendant
knew structuring was illegal] is satisfied." Simon, 85 F.3d at 910.
Other courts have concluded that evidence of a defendant's attempt
to conceal the structuring activity, when considered along with other
evidence, is sufficient to support a conclusion that the defendant knew
structuring was illegal. See Walker, 25 F.3d at 543, 548 n.8 (stating
that evidence of "intricate and odd structuring of transactions"--
including the purchase of a condominium with 76 cashier's checks,
each for less than $10,000, that had been purchased at multiple banks
and currency exchanges--supported a conclusion that the defendants
knew that structuring was illegal when combined with other evi-
dence); see also Tipton, 56 F.3d at 1013 (stating that evidence that the
defendants attempted to conceal their activity, among other factors,
supported conviction for structuring); United States v. Oreira, 29 F.3d
8
185, 187, 188 n.5 (5th Cir. 1994) (concluding that evidence, including
evidence that defendants deposited cash in several different accounts
held at numerous banks, could support a conclusion that the defen-
dants knew structuring was illegal). However, the District of Colum-
bia Circuit has stated that it rejects the rule set forth in Marder and
Walker. See Wynn, 61 F.3d at 928.
We think that the majority rule is the better one. Willfulness is
rarely proven by direct evidence; rather, the factfinder must "`draw[ ]
reasonable inferences from the available facts.'" Marder, 48 F.3d at
574 (quoting United States v. Bank of New England, N.A., 821 F.2d
844, 854 (1st Cir. 1987)); see Ratzlaf, 510 U.S. at 149 n.19. This is
so because willfulness concerns the defendant's state of mind, which
--unless the defendant admits to an intent to violate the law--can
only be inferred from conduct. See Simon, 85 U.S. at 910; Marder,
48 F.3d at 574. Moreover, the Supreme Court has long recognized
that willfulness may be inferred from evidence of attempts to conceal
illegal conduct. See Holland v. United States , 348 U.S. 121, 139
(1954); Spies v. United States, 317 U.S. 492, 499 (1943). Accord-
ingly, we hold that evidence that a defendant has structured currency
transactions in a manner indicating a design to conceal the structuring
activity itself, alone or in conjunction with other evidence of the
defendant's state of mind, may support a conclusion that the defen-
dant knew structuring was illegal.5
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5 Ismail does not require a contrary holding. There, the evidence estab-
lished that the defendants began structuring their transactions only after
they were advised of the currency reporting requirements by a bank
employee. See Ismail, 97 F.3d at 53. Subsequently, the defendants regu-
larly made deposits in amounts just under $10,000, often dealing with the
very bank employee who had informed them of the reporting require-
ment in the first place. See id. at 53, 57 n.1. Moreover, the defendants
"were familiar figures at the bank, and never acted surreptitiously when
they came to make deposits." Id. at 57 n.1. In short, the evidence pres-
ented by the Government in Ismail proved nothing more than that the
defendants knew of the reporting requirements and structured their trans-
actions so as to evade them. Because there was no evidence that the
defendants knew their conduct was illegal beyond the mere acts of struc-
turing, reversal of the convictions was required under Ratzlaf. Thus,
although the majority opinion in Ismail includes an extended discussion
9
B.
We now turn to the question of whether the evidence presented in
this case is sufficient to support Beidler's conviction. The Govern-
ment presented no evidence that Beidler possessed a particular famil-
iarity with currency reporting requirements as a result of his status as
a real estate agent. See Simon, 85 F.3d at 911; Tipton, 56 F.3d at
1013. Additionally, although the record contains evidence that Wood
was involved in illegal activities and that Beidler may have been
aware of those activities, the Government does not argue that this evi-
dence supports Beidler's conviction. Cf. Hurley , 63 F.3d at 16.
Accordingly, the only question is whether the evidence that Beidler
attempted to conceal his structuring is sufficient to support a conclu-
sion that Beidler knew structuring was illegal. We conclude that it is.
Although Beidler admitted that he received large sums of cash
from Wood, he never deposited more than $5,000 at any one time,
and most often made deposits of $4,000 or less. Moreover, Beidler
made the deposits at different branches of multiple banks, often trav-
elling to several different branches in the same day. All in all, the
Government's evidence showed that during the period when Wood
was providing financing for the Wellington Forest project, Beidler
made 34 cash deposits, totalling $116,500,6 at 10 different branches
of three different banks. If Beidler's only intent was to avoid the fil-
ing of a CTR, 12 separate deposits would have served his purpose just
as well. Based upon the fact that Beidler made more deposits than the
minimum necessary to evade the reporting requirements, the jury rea-
sonably could have inferred that Beidler intended to conceal his struc-
turing because he knew structuring was illegal. See Simon, 85 F.3d at
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concerning the type of evidence that may be employed by the Govern-
ment to prove knowledge of illegality, the question presented to us today
was not before the court in that case. See id. at 57 (noting that "[w]e need
not here determine if evidence of elaborate efforts to conceal structuring
is probative of knowledge that structuring violates the law").
6 The parties agree that the amount of financing supplied by Wood was
$100,000. The record does not contain an explanation of the discrepancy
between the Government's evidence of the deposits made by Beidler and
the evidence regarding the amount of funds received from Wood.
10
910; Marder, 48 F.3d at 574. Additionally, the jury--the sole judge
of the credibility of the witnesses--was entitled to reject Beidler's
explanation of the transactions and to consider its rejection of
Beidler's story as positive evidence of his guilt. See Burgos, 94 F.3d
at 868. We conclude that this evidence is sufficient to support a deter-
mination that Beidler knew that structuring of currency transactions
was illegal.
III.
We hold that evidence concerning a defendant's attempt to conceal
the structuring of currency transactions may suffice to prove that the
defendant knew his conduct was illegal. Here, the evidence presented
by the Government of Beidler's efforts to conceal his structuring of
currency transactions was sufficient to justify a determination beyond
a reasonable doubt that Beidler knew his activities were unlawful.
Accordingly, we affirm.7
AFFIRMED
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7 Having carefully considered Beidler's remaining allegations of error,
we conclude that they are without merit.
11