U.S. v. Besmajian

• Decision Date: 09 August 1990
• Docket Number: No. 89-3775,89-3775
• Citation: 910 F.2d 1153
• Parties: The UNITED STATES v. Arthur G. BESMAJIAN, Jr., William J. Amwake. Appeal of UNITED STATES of America, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 1153

910 F.2d 1153

The UNITED STATES v. Arthur G. BESMAJIAN, Jr., William J. Amwake Appeal of UNITED STATES of America, Appellant.

No. 89-3775.

United States Court of Appeals Third Circuit.

Argued May 15, 1990.

Decided Aug. 9, 1990.

Thomas W. Corbett, Jr., U.S. Atty., Constance M. Bowden (argued), Asst. U.S. Atty., Pittsburgh, Pa., for appellant.

Frank H. Wright, Allison Manning (argued), Wright, Manning & Rips, New York City, for appellee, William Amwake.

Alfred C. DeCotis, William R. Lundsten, DeCotis, Frino and Lundsten, Roseland, N.Y., for appellee, Arthur Besmajian, Jr.

Before MANSMANN, SCIRICA and WEIS, Circuit Judges.

OPINION OF THE COURT

MANSMANN, Circuit Judge.

The government brings this appeal from a district court order dismissing three counts of an indictment for failure to allege a prosecutable offense against a bank's customers under the currency transaction reporting laws of the United States. Specifically, we must decide whether a statutory duty was imposed upon a financial institution in 1986 to report a customer's daily transactions occurring at its different branches, which, when aggregated, total in excess of $10,000.

The indictment charged Arthur Besmajian and William Amwake, employees of the Pittsburgh office of First Jersey Securities, with thirteen violations arising from the currency reporting requirements of the Currency Transaction Reporting Act, 31 U.S.C. Secs. 5313 (as amended 1982). On appeal, we are concerned with counts 11, 12 and 13 of the indictment which charge the defendants with causing a financial institution, Horizon Financial Bank, to fail to file currency transaction reports ("CTRs") with the Internal Revenue Service in violation of 31 U.S.C. Secs. 5313 and 5322(a) and 18 U.S.C. Sec. 2. The district court dismissed these counts, concluding that they failed to state a prosecutable offense.

We decide this question of law to the contrary. The counts of the indictment which charge the defendants with intentionally structuring reportable cash transactions to avoid the statutory filing requirements sufficiently allege facts which constitute a crime against the United States. Our decision in United States v. American Investors of Pittsburgh, Inc., 879 F.2d 1087 (3d Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 368, 107 L.Ed.2d 354 (1989), does not compel a different result. We, accordingly, will vacate the decision of the district court and remand for trial on counts 11, 12 and 13 of the indictment.

I.

In considering a defense motion to dismiss an indictment, the district court accepts as true the factual allegations set forth in the indictment. See Boyce Motor Lines v. United States, 342 U.S. 337, 343 n. 16, 72 S.Ct. 329, 332 n. 16, 96 L.Ed. 367 (1952). On our review of the dismissal of an indictment on a legal basis, we read the indictment as it was construed by the district court. United States v. International Union United Automobile Aircraft and Agricultural Implement Workers of America, 352 U.S. 567, 584, 77 S.Ct. 529, 537, 1 L.Ed.2d 563 (1957). We set forth the facts with that scope of review in mind.

In the spring of 1986, Arthur Besmajian and William Amwake were employees of the Pittsburgh office of First Jersey Securities, a retail brokerage house registered with the Securities and Exchange Commission. Amwake was employed as the regional vice president and Besmajian was the branch manager. The indictment also alleged that both defendants were account executives involved in the purchase of securities by customers of First Jersey Securities.

The Internal Revenue Service began investigating Besmajian in January of 1986 in connection with suspected federal currency reporting laws violations. On March 20, 1986, an undercover agent for the Internal Revenue Service, using the alias Samuel Russo, met with Besmajian and represented that he had a large sum of money, obtained from an illegal gambling operation, which he wished to invest through Besmajian. The agent gave Besmajian $30,000 in cash in exchange for a receipt signed by Besmajian on behalf of First Jersey Securities. The receipt indicated that Russo had provided Besmajian with a cashier's check for $30,000, rather than the cash actually received.

On the following day money orders in the amounts of $5,000 and $4,900 were purchased at Horizon Financial Bank. On March 25, 1986, an identical transaction occurred. On March 26, 1986, two bank checks in the amounts of $5,100 each, made payable to First Jersey Securities, were purchased again at Horizon Financial Bank. On March 26, 1986, these cashier's checks and bank checks were entered into the Russo account established at First Jersey Securities in Pittsburgh. Then, on or about March 27, 1986, a monthly statement from First Jersey's New York office was sent to the agent indicating check payments of $4,900, $5,000, $5,100, $5,100, $5,000 and $4,900 into his account. A few days later, copies of the checks and money orders purchased from Horizon Financial on the three dates in March and made payable to First Jersey Securities were sent to the agent at the address which he provided to Besmajian.

Three similar transactions between Besmajian and the undercover agent occurred. On April 4, 1986, the agent met again with Besmajian, providing him with $40,000 in cash for the purchase of securities. Then, on May 22, 1986, a different undercover agent met with Besmajian, exchanging $45,000 in cash for securities. The two agents met with both Besmajian and Amwake on April 17 when $40,000 in cash was paid for securities.

In a typical transaction, the cash received from the undercover agents was converted by Besmajian and Amwake into money orders and bank checks purchased from various financial institutions. These negotiable instruments were then deposited into the agent's account and entered into the daily transaction records of the Pittsburgh branch of First Jersey Securities. The money orders, checks and records were then sent to the New York branch of First Jersey Securities with copies of the checks sent to the undercover agent. The ledger account statements from the New York office reflect that the securities were purchased by check. ¹ Currency transaction reports ("CTRs"), required by 31 U.S.C. Sec. 5313(a) and 31 C.F.R. 103.22(a)(1) in instances when cash transactions in excess of $10,000 occur, were not filed by either First Jersey Securities or Horizon Financial Bank in connection with the cash received by Besmajian and Amwake from the undercover agents.

On September 7, 1989, a thirteen-count superseding indictment was returned against the defendants. Count 1 charged Besmajian and Amwake with conspiring to obstruct the lawful function of the Internal Revenue Service; Counts 2 through 5 charged Besmajian and Amwake with failing to file and causing a financial institution, First Jersey Securities, to fail to file CTRs; Counts 6 through 10 charged Besmajian and Amwake with causing false statements to be made on the records of First Jersey Securities.

Counts 11 through 13, the concern of our inquiry today, charge Besmajian and Amwake with causing another financial institution, Horizon Financial Bank, to fail to file CTRs with the Internal Revenue Service in violation of 31 U.S.C. Secs. 5313 and 5322(a) and 18 U.S.C. Sec. 2. Specifically, count 11 alleges that on April 9, 1986, two American Express money orders, with a value of $4,900 and $5,000 respectively, were purchased at Horizon Financial's Fox Chapel (a suburb of Pittsburgh) branch. Two additional American Express money orders, for $4,900 and $5,000 each, were purchased at Horizon Financial's Oakmont (also a Pittsburgh suburb) branch that same day. Thus, each Horizon Financial branch transacted purchases in currency for $9,900 on the same day. For the aggregate amount of $19,800, the government claims Horizon Financial had a statutorily imposed reporting obligation for that day--April 9, 1986--which was not fulfilled.

Count 12 alleges that on April 21, 1986, two American Express money orders, made payable to First Jersey Securities, were purchased at each of the two Horizon Financial branches--one for $4,900 and one for $5,000 at each branch. Again, each branch transacted purchases totalling $9,900. In combination, however, Horizon Financial once again received $19,800 in currency on a single day which it failed to report.

In count 13, concerning only Besmajian, the government charges that on May 30, 1986, one check and three American Express money orders were purchased at Horizon Financial branches: money orders for $4,900 and $5,000 at the Oakmont branch, one check for $9,900 at the Fox Chapel branch, and a $5,000 money order at a third branch. No single Horizon Financial branch transacted purchases with currency in excess of $10,000; yet on this day Horizon Financial received a total of $24,800 in cash from Besmajian for these five transactions.

Prior to trial Besmajian and Amwake moved to dismiss counts 1 through 5 and 11 through 13 of the indictment on the ground that those counts failed to allege an offense under the currency transaction reporting laws. The district court denied the motion with respect to counts 1 through 5, but granted the motion concerning counts 11 through 13 which charged Besmajian and Amwake with violating those same transaction laws by willfully causing Horizon Financial Bank to fail to file CTRs.

Germane to the district court's conclusion was its reading of our opinion in United States v. American Investors of Pittsburgh, 879 F.2d at 1099-1106 n. 18, which although not specifically addressing the types of transactions occurring sub judice, did posit in a footnote that multiple transactions under $10,000, which, when aggregated exceed $10,000, may not be subject to the reporting laws if they occur at different branches of the same bank. The district court construed this footnote as compelling a holding that same day/same bank/different branch transactions...