U.S. v. Hoyland, 89-50253

• Decision Date: 14 September 1990
• Docket Number: No. 89-50253,89-50253
• Citation: 914 F.2d 1125
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James Ralph HOYLAND, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1125

914 F.2d 1125

UNITED STATES of America, Plaintiff-Appellee, v. James Ralph HOYLAND, Defendant-Appellant.

No. 89-50253.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 12, 1990.

Decided May 25, 1990.

As Amended Sept. 14, 1990.

Janet Sherman, Sherman & Sherman, Santa Monica, Cal., for defendant-appellant.

Stephen G. Wolfe, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Central District of California.

Before BROWNING, NOONAN and FERNANDEZ, Circuit Judges.

NOONAN, Circuit Judge:

James R. Hoyland appeals his conviction of structuring his bank deposits with the intent of preventing the bank from reporting a deposit of $10,000 or more, 31 U.S.C. Sec. 5324(3). In this case of first impression in this circuit, we affirm his conviction.

FACTS

The parties stipulated to the facts as follows:

JAMES HOYLAND is charged with having engaged in currency transactions in United States currency with various financial institutions in amounts less than $10,000 in order to avoid the bank's filing of a currency transaction report (CTR). He opened a bank account with the Bank of Newport on October 14, 1986 and began making deposits in amounts less than $10,000 knowing the bank would not file a CTR. Mr. HOYLAND was told by bank employees and believed these transactions were legal, and in fact they were. At that time, there was nothing that prevented a bank customer from depositing sums of money less than $10,000 even if it was done with the intent of preventing a financial institution from filing a currency transaction report which would have been required if the deposit had been more than $10,000. From October 14, 1986 until February 9, 1987, Mr. HOYLAND deposited $61,433 in his account and wrote checks at various times for $53,975. For example, from December 1986 to January, 1987, Mr. HOYLAND wrote approximately $31,000 in checks to nautical or marine-type companies. Some of the deposit transactions occurred on the same day; some deposits charged in the indictment were made over a week period.

On January 27, 1987 with the passage by Congress of 31 U.S.C. Sec. 5324, it became a crime to structure a transaction in such a way as to avoid a bank's filing of a currency transaction report. Mr. HOYLAND continued his transactions as before, and did each of the cash deposits and cash exchanges at the time and place alleged in the indictment with the intent that the bank would thereby not file currency transaction reports covering his transactions. No one told him it was now illegal, and Mr. HOYLAND never learned of the passage of the new law. The Government agrees that the defendant had no notice and/or knowledge of the new law.

The issue is whether or not a defendant who engages in what he believes are legal transactions can be found guilty of violating Section 5324(3) without the government showing that he had knowledge that it was illegal, although he committed the acts charged with the same intent as before January 27, 1987, i.e., preventing the filing of currency transaction reports.

PROCEDURE

Hoyland was indicted on October 11, 1988. He moved to suppress evidence allegedly gathered by invalid search warrants. The motion was denied. Hoyland then moved on constitutional grounds to dismiss the indictment. The motion was denied. On January 17, 1989 the parties stipulated as set out above. Hoyland waived jury trial. On January 25, 1989 the government unsuccessfully moved to withdraw from the stipulation. The government then moved to dismiss the indictment without prejudice. The motion was denied. The court then found the defendant guilty.

ANALYSIS

The Search Warrants. Hoyland renews his attack on the validity of the search warrants on the ground that they were issued without probable cause. The statement of probable cause for the first warrant was prepared by Allen J. Roth, an agent of the California Bureau of Narcotics Enforcement with fifteen years of experience as a police officer, with specialized training in narcotics investigation, and over 300 arrests of suspected drug traffickers. His affidavit stated that on September 10, 1987 he had received information from the Newport Beach Police Department that Hoyland was suspected of money laundering in violation of California Penal Code 186.10. The Newport Beach Police Department had been informed by the operations manager of the Bank of Newport that on February 6, 1987 Hoyland had deposited $7,000 at one branch of the bank and $8,242 at a second branch of the bank. Since October 14, 1986 Hoyland had deposited $61,433 with the bank, virtually all of it in cash. Over the period March 3-9, 1987 he made several cash deposits totalling $11,000. On February 24, 1987 Hoyland exchanged $3,500 in twenties for $3,500 in hundreds. He did the same as to $3,000 in twenties on April 27, 1987, and the same as to $5,000 on August 10, 1987 and again as to $5,000 on August 18, 1987. Winston, a narcotics search dog of the Orange County Sheriff's Department, alerted to the twenties deposited on February 26, 1987 and to those deposited on August 10, 1987.

Hoyland himself had obtained a teaching credential in 1968. He taught science at Edison High School in Huntington Beach. His salary was $44,414 per year. He lived at the Dana Point Athletic Club, renting two rooms for $450 per month. His movements were surveyed and he was found to board the Zamazaan, a 52.3 foot sailing vessel, net weight 31 tons, registered in his name.

Agent Roth declared that on the basis of his training, experience, and knowledge, he was of the opinion that Hoyland was part of a much larger organization involved in the drug traffic and the laundering of its proceeds. Agent Roth sought Hoyland's bank records and also any safe deposit box records in his name.

Plainly at this stage of the investigation there was probable cause for the warrant to issue. A high school teacher, living in modest circumstances, was depositing large sums of cash and making exchanges of bills in ways that justified an agent of Roth's experience concluding that here in all probability was a money launderer for a drug ring.

A second warrant to search the Zamazaan and Hoyland's residence was issued after Agent Roth reported that further cash transactions had been carried out similar to those already observed, that the Zamazaan was sailing in a race to Cabo San Lucas, Mexico, and that a truck was known to have been arranged with "supplies" for the yacht when it reached Cabo San Lucas.

Search of safe deposit boxes rented by Hoyland turned up $655,130 in cash and provided the basis for warrants to search further bank records and safe deposits. There is no doubt that these warrants, too, were based on probable cause. In today's America, a pattern of cash deposits and exchanges that have no obvious purpose except the avoidance of detection, plus the secreting of large amounts of cash in safe deposit boxes, all carried out by a man in modest circumstances, do not establish criminality but do give rise to a reasonable belief that the man is engaged in criminal conduct.

The Denial of the Motion to Dismiss. Hoyland argues that the government's motion to dismiss the indictment should have been granted. We conclude that Hoyland lacks standing to appeal this issue. It is an elementary rule of appellate procedure that "[o]nly one injured by the judgment sought to be reviewed can appeal." Parr v. United States, 351 U.S. 513, 516, 76 S.Ct. 912, 915, 100 L.Ed. 1377 (1956). Hoyland argues that he was "aggrieved" by the denial of the government's motion because his trial had commenced and, had the motion been granted, he could have invoked double jeopardy protection to bar any subsequent re-indictment and prosecution on the same charge. His argument is specious.

Under Rule 48(a), "a dismissal may not be filed during the trial without the consent of the defendant." Fed.R.Crim.P. 48(a). Here, the government moved for a dismissal without prejudice but did not obtain Hoyland's consent to the dismissal. There could have been no dismissal without Hoyland's consent; conversely, there could have been a dismissal and a subsequent re-indictment with Hoyland's consent. Because Hoyland did not consent to the motion as required by Rule 48(a) for a dismissal to have been filed, he lacks standing to complain that the motion should have been granted.

The Mental Element Required by the Statute. Hoyland's main case on appeal is pitched on the mental element necessary to be proved. The statute required that Hoyland, to be guilty, have the intent of causing the bank not to report his deposits totalling $10,000 or more. By the stipulation Hoyland has admitted that he had this intent. He argues, however, that a further mental state, which he did not have, was necessary for him to be guilty of a criminal act. He contends that he must have had mens rea, the bad purpose of breaking this law; as he did not know of this law, as indeed he had been told by bank employees that his acts were legal, he was innocent of any intent to violate the statute; his purpose was good; his mind was not guilty.

The Constitution does not require a knowingly criminal mind in order that an act be punished as criminal. It is no accident that this proposition was established in cases dealing with drugs, United States v. Balint, 258 U.S. 250, 42 S.Ct. 301, 66 L.Ed. 604 (1922) (seller of cocaine guilty although he did not know that it was a crime to sell cocaine); United States v. Behrman, 258 U.S. 280, 42 S.Ct. 303, 66 L.Ed. 619 (1922) (physician prescribing the equivalent of 3,000 doses of morphine and cocaine for a patient to use over several days chargeable with distributing drugs although the physician had literally complied with a statutory exception for a physician prescribing for a patient). In these drug cases the Supreme Court only considered the argument that Congress had required a criminal...