U.S. v. Cook

• Decision Date: 09 October 1984
• Docket Number: No. 83-2324,83-2324
• Citation: 745 F.2d 1311
• Parties: 16 Fed. R. Evid. Serv. 1355 UNITED STATES of America, Appellee, v. David V. COOK, Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1311

745 F.2d 1311

16 Fed. R. Evid. Serv. 1355

UNITED STATES of America, Appellee, v. David V. COOK, Appellant.

No. 83-2324.

United States Court of Appeals, Tenth Circuit.

Oct. 9, 1984.

Vicki Mandell-King, Asst. Federal Public Defender, Denver, Colo. (Michael G. Katz, Federal Public Defender, Denver, Colo., with her on the brief), for appellant.

Catharine Goodwin, Asst. U.S. Atty., Denver, Colo. (Robert N. Miller, U.S. Atty., Denver, Colo., with her on the brief), for appellee.

Before BARRETT and DOYLE, Circuit Judges, and BOHANON, District Court Judge. ^*

WILLIAM E. DOYLE, Circuit Judge.

This is an appeal from a criminal prosecution. The indictment charges that the defendant willfully made false representations in the preparation of a Currency Transaction Report, in violation of 31 U.S.C. Secs. 5313, 5322 and its implementing regulations, 31 C.F.R. 103.22(a), 103.49 and on one count of giving a false name and social security number with intent to deceive, in violation of 42 U.S.C. Sec. 408(g)(2). Cook was found guilty by a jury in the United States District Court for the District of Colorado and was sentenced to five years on each count, to run consecutively. In addition, he was fined $10,000 on Count I and $5,000 on Count II.

After his conviction by a jury on Counts I and II, cook waived his right to a jury trial and was tried before the court without a jury on Count III. Count III charged Cook with making false declarations before the grand jury investigating his activities charged in Counts I and II, in violation of 18 U.S.C. Sec. 1623. There was a two day trial which ended in a judgment of acquittal in Count III.

Cook here appeals his convictions on Counts I and II. He also appeals his felony sentence under Count I. It is conceded by the government that the felony pronouncement of sentence under Count I was improper. Therefore this matter has to be remanded with directions to so treat the first Count.

I.

The facts are somewhat intricate in that they show the carrying out of a scheme to conceal from the Internal Revenue Service (IRS) ownership of approximately $90,000. The government maintains that a possible motive behind such a scheme was to avoid payment of taxes on appreciation of that money.

In November 1982, Cook withdrew $85,140.55 from a savings account which he held jointly with three other persons at the Otero Savings Bank in Pueblo, Colorado. He held the account as trustee and was allegedly concerned about the high rate of income taxes he was paying on it. Before withdrawing the money, Cook learned that all banks are required by the IRS to complete and file a form called a Currency Transaction Report (CTR) whenever a transaction, whether it is a withdrawal or a deposit, involves more than $10,000. If the transaction involved $10,000 or less no CTR is prepared or filed. Therefore, Cook requested a cash withdrawal from Otero Savings Bank in the amount of $9,990. No CTR was prepared for this particular transaction. He then requested a bank check for the remaining $85,140.55 and a CTR for that amount was completed and filed with IRS.

Evidently, Cook's plan was to withdraw the money from the savings account in Otero Savings Bank and redeposit the money in another bank using a false identity. This was to conceal his ownership of the funds. To accomplish this, he had to first break his chain of ownership of the funds by depositing the funds from Otero Savings Bank in his existing account at Colorado National Bank and then withdrawing the money in increments not greater than $10,000 to avoid reporting to the IRS. By December 3, 1982, Cook successfully withdrew $90,000 from his account in increments of $9,900 or $9,999 without filing any CTR with the IRS. He then attempted to redeposit the funds in the South Continental Industrial Bank of Englewood, (presently the Manufacturers Hanover Industrial Bank) under a false identity.

On December 3, 1982, in late afternoon, Cook arrived at South Continental Industrial Bank (hereinafter Industrial Bank) with $90,000 in cash. There he identified himself as David Miller (not David Cook) and attempted to deposit the funds in an account. The lateness of the day and the large size of the cash deposit caused Industrial Bank to refuse to process the cash deposit and to send Cook to the larger and federally insured First Continental Bank (now First Interstate Bank) to deposit the cash and return with a cashier's check for deposit at Industrial Bank.

At First Continental Bank, Cook identified himself again as David Miller. He deposited the $90,000, and obtained in return a cashier's check in that amount made out to David Miller. The transaction involved more than $10,000, so the bank prepared a CTR for filing with the IRS. The name of David Miller was given together with a fictitious address. In addition, when asked his social security number he said he could not remember it and further stated that he had lost his social security card.

Cook then returned to Industrial Bank, identified himself again as David Miller, produced a social security card bearing the name of David Miller and showing the social security number 148-33-1718. Industrial Bank refused to accept the cashier's check and open an account in the name of David Miller, for the reason that Cook could not produce a driver's license as a second form of identification. He represented that his license had been suspended in New York.

Following refusal of Industrial Bank to open an account in the name of David Miller, Cook returned to First Continental Bank and reclaimed his $90,000 in cash in exchange for the cashier's check. Englewood police observed Cook leave the bank with the large amount of cash and stopped him in the parking lot outside the bank. They requested identification, and he identified himself as David Miller and showed the police officer the social security card bearing that name but could not produce a driver's license. He was told, therefore, not to drive his car since he lacked a license.

Subsequently, plain clothes detectives again observed Cook in the parking lot acting suspiciously, as if he were attempting to evade being seen. He was then stopped as he drove his car out of the parking lot. He again identified himself as David Miller, but then relented and correctly identified himself as David Cook. This was after the officer determined from a computer check that no such David Miller was ever issued a license nor was the automobile registered under such a name.

The officer prepared a report on the incident but did not charge Cook with any violations. Cook repeatedly asked what government agencies would be notified of his attempt to falsely identify himself. Three days later Cook deposited the $90,000 in Columbia Savings Bank and used his correct name, social security number, and address. Subsequently he was indicted by the United States on the three counts identified above.

Cook raises three issues on appeal:

1. He seeks reversal maintaining that the statute charged in Count I does not reach his conduct or is unconstitutionally vague; 2. he maintains that the court erred by amending Count I in the indictment; 3. he maintains that the district court committed reversible error by admitting into evidence police testimony of Cook's conduct after commission of the offenses charged in the indictment.

II.

We hold that Title 31 U.S.C. Sec. 5313, charged as violated in Count I of the indictment, applies to Cook's conduct as an individual and is not unconstitutionally vague or uncertain. Cook's contention is that 31 U.S.C. Sec. 5313 does not impose on an individual person a duty to file an accurate CTR.

Cook offers several arguments in support of his contention that his conviction under Count I of the indictment ought to be reversed. He was charged in that Count with a violation of 31 U.S.C. Sec. 5313(a) and its implementing regulation, 31 C.F.R. Sec. 103.22(a). The statutory provision requires a financial institution to file a report with the IRS for any monetary transaction involving the transfer of funds in an amount to be established by the Secretary of the Treasury. The implementing regulations promulgated by the Secretary specify the filing of such a report for all transactions involving more than $10,000 and establish the requirements of a CTR as the report. ¹

Cook contends that the statute and its regulations reach only the conduct of financial institutions and do not reach his conduct as an individual. Therefore, he contends, the statute and its regulations cannot be used in order to charge him with a crime. He asserts that the existence of another statute that could reach his conduct but that was not charged in the indictment, 18 U.S.C. Sec. 1001, demonstrates that the statute and regulations charged were not intended by Congress to apply to him as an individual.

Cook also argues that if the statute charged in Count I, 31 U.S.C. Sec. 5313, is found applicable to his conduct, it is unconstitutional as void for vagueness as applied to him. Thus, he asserts it doesn't pass the test of whether a person of ordinary intelligence receives fair notice by the challenged statute. If not, the contemplated conduct is forbidden. Subject to that standard, he asserts, he was not given such fair notice because the statute refers only to financial institutions and not to individuals.

After reviewing Cook's contentions it is clear that they are without merit in light of the applicable law. He initially attacks the indictment on the ground that as an individual he was under no duty to accurately file a CTR pursuant to 31 U.S.C. Sec. 5313. As a consequence, he argues, his misrepresentation of his true identity on the CTR filed by First Continental Bank could not constitute a violation of Sec. 5313. This, however, is not in accord with the developing case law on this issue and therefore Cook's contention must fail. The indictment did not allege his failure to file a C.T.R.; he...