U.S. v. Ratzlaf
| Citation | 976 F.2d 1280 |
| Decision Date | 06 October 1992 |
| Docket Number | Nos. 91-10392,10429,s. 91-10392 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Waldemar RATZLAF, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Loretta RATZLAF, Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
Kevin O'Connell, O'Connell, Goyak & DiLorenzo, Portland, Or., and Donald Cavin Hill, Reno, Nev., for defendants-appellants.
Jeffrey B. Setness and William M. Welch, Asst. U.S. Attys., Reno, Nev., for plaintiff-appellee.
Appeal from the United States District Court for the District of Nevada.
Before: WALLACE, Chief Judge, and CHOY and POOLE, Circuit Judges.
Defendants Loretta and Waldemar Ratzlaf appeal their convictions for structuring financial transactions to avoid currency reporting requirements, a violation of 31 U.S.C. §§ 5322(a), 5324(3). They argue that Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), overrules our holding in United States v. Hoyland, 914 F.2d 1125 (9th Cir.1990), that the government does not have to prove that the defendants knew structuring is illegal to convict. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.
Defendants Waldemar and Loretta Ratzlaf, residents of Portland, Oregon, are gamblers. To facilitate their enjoyment of such activity, they established lines of credit at fifteen casinos in New Jersey and Nevada. Mr. Ratzlaf, a regular customer and a "high roller" at the casinos, bet, won, and lost large amounts of money. The events that led to this case began on October 20th, 1988, at the High Sierra casino in Reno, Nevada. Mr. Ratzlaf had a bad night, losing $160,000 playing blackjack. Fortunately for him, the casino had increased his credit line from $25,000 to $160,000 earlier that day. When the casino learned about Lady Luck's unkind treatment of Mr. Ratzlaf, it granted him one week to pay back the $160,000 balance.
On October 27, 1988, the Ratzlafs returned to the High Sierra casino carrying enough cash to pay their debt. Shift manager Tony Mercurio informed his boss, casino Vice-President Stephen Allmaras, that Mr. Ratzlaf did not want the casino to fill out any written report of the payment transaction. Allmaras refused to accept cash payment on those terms and informed the Ratzlafs that he would be required to fill out a "currency transaction report" (CTR) since more than $10,000 in currency was involved. Allmaras told Mr. Ratzlaf that he would be happy to accept as an alternative a single cashiers check for the amount due and suggested to Mr. Ratzlaf that he contact his bank in Oregon to make the necessary arrangements. Allmaras also made available to the Ratzlafs a limousine and assigned employee Ron Hunt to transport them to the local bank that would provide the check.
On October 28, 1988, Hunt escorted the Ratzlafs to several banks in and near Stateline, Nevada and South Lake Tahoe, California. At each bank the Ratzlafs used cash to purchase, or attempt to purchase, cashiers checks in amounts less than $10,000. Armed with the cashiers checks thus obtained, the Ratzlafs returned to the High Sierra casino and submitted them as partial payment on their gambling debt. However, not all of the $160,000 debt was eliminated. Accordingly, on November 28, 1988, Mr. Ratzlaf gave Ruby Langston, a former employee at a restaurant owned by the Ratzlafs, $5,000 in currency and asked her to purchase a single cashiers check for that amount. Langston purchased the cashiers check at First Interstate Bank in Portland. On the same day Mr. Ratzlaf also gave Lena Koseniensky $5,000 in currency and asked her to perform a similar errand. Koseniensky did so at the same bank Langston had visited. Two days later, Mr. Ratzlaf gave George Chanouzas $7,500 in cash and asked him to buy a single cashiers check. Chanouzas also performed this transaction at the First Interstate Bank in Portland. Between November 29 and December 5, 1988, the Ratzlafs separately and together used currency to purchase five cashiers checks, each in amounts less than $10,000, from two other Portland banks.
When asked by IRS investigators why they had paid for the cashiers checks with cash, the Ratzlafs asserted that the money was gambling proceeds and that the High Sierra casino asked them to "pay off the marker" with cashiers checks. Mrs. Ratzlaf also stated that the casino management instructed them to purchase cashiers checks in small amounts so that the casino would not be required to complete a CTR. Mr. Ratzlaf testified at trial that the couple kept gambling winnings and cash revenues from their restaurant hidden in a piece of furniture in their bedroom. Allmaras denied suggesting to the Ratzlafs that they visit various banks and purchase cashiers checks in amounts less than $10,000.
On November 20, 1990 a federal grand jury indicted the Ratzlafs and Hunt. The trio was charged with (1) conspiracy to structure and assist in structuring financial transactions for the purpose of evading reporting requirements; (2) four counts of structuring currency transactions to evade reporting requirements; and (3) interstate travel in aid of racketeering. At trial, the district judge instructed the jury as follows on the structuring charges:
The essential elements required to be proven beyond a reasonable doubt ... are as follows:
First: The defendants had knowledge of a financial institution's duty to report currency transactions in excess of $10,000;
Second: With such knowledge, the defendants knowingly and willfully structured or assisted in structuring or attempted to structure or assist in structuring a currency transaction;
Third: The purpose of the structured transaction was to evade the transaction reporting requirement;
Fourth: The structured transaction(s) involved one or more domestic financial institutions.
....
An act is done knowingly and willfully for the purpose of [31 U.S.C. §§ 5322(a), 5324(3) ] if the defendants, with knowledge of a financial institution's duty to report currency transactions in excess or $10,000, voluntarily or intentionally structured or assisted in structuring or attempted to structure or assist in structuring a currency transaction with the purpose of evading the currency reporting requirements.
The government does not have to prove that the defendants knew that structuring was unlawful[,] nor does the government have to prove that the defendants knew of the existence of the law which they are charged with breaking.... However, if a defendant did not have knowledge of a bank's duty to report currency transactions in excess or $10,000, that may be considered a defense.
It is not a defense that the defendants did not know that "structuring" itself is [illegal] or of the existence of [31 U.S.C. §§ 5322(a), 5324(3) ].
The jury convicted Mr. Ratzlaf on all counts and Mrs. Ratzlaf on the conspiracy and interstate travel charges. 1 Mr. Ratzlaf was sentenced to fifteen months in federal prison on each count, to run concurrently three years supervised release; and to pay a fine of $26,300 and a special assessment of $300. Mrs. Ratzlaf was sentenced to five years probation on each count, to run concurrently and to include ten months home detention, and to pay a $7,900 fine and a $100 special assessment. The defendants filed timely notices of appeal on July 10 and August 14, 1991.
We review de novo the question whether the jury instructions in this case misstated the elements of the crime of structuring financial transactions to avoid the currency reporting requirements. United States v. Durham, 941 F.2d 886, 890 (9th Cir.1991). "We review a claim of error in a jury instruction by looking to 'the adequacy of the entire charge ... in the context of the whole trial.' " United States v. Mundi, 892 F.2d 817, 818 (9th Cir.1989), cert. denied, --- U.S. ----, 111 S.Ct. 1072, 112 L.Ed.2d 1178 (1991) (quoting United States v. Marabelles, 724 F.2d 1374, 1382 (9th Cir.1984)).
31 U.S.C. § 5324 provides:
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.
Individuals that engage in such "structuring" activities are subject to criminal penalties. 31 U.S.C. § 5322(a) () (emphasis added). 2
We recently rejected an argument that an individual cannot be convicted of "structuring" unless the government proves that he or she knew such activities are illegal:
Congress had set the reporting requirement for the banks. Congress was aware that several circuits, including ours, had held it no crime to structure deposits so that the reporting requirement would not be triggered. Congress changed the law to make it a crime so to structure with the intent to prevent reporting. To act willfully under the statute is to act with this intent....
United States v. Hoyland, 914 F.2d 1125, 1129-30 (9th Cir.1990) (). In so holding, we agreed with United States v. Scanio, 900 F.2d 485 (2d Cir.1990). There, the Second Circuit concluded that knowledge of illegality is not required to convict for "structuring" because such conduct is "affirmative" and "demonstrate[s] an awareness of the legal framework relative to currency transactions which, it is reasonable to conclude, should ... alert[ ] [the defendant] to the consequences of his conduct." Id. at 490 (). The court...
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