U.S. v. McLamb

• Decision Date: 10 February 1993
• Docket Number: No. 92-5193,92-5193
• Parties: -5933, 93-1 USTC P 50,143, 38 Fed. R. Evid. Serv. 147 UNITED STATES of America, Plaintiff-Appellee, v. Phillip Chestnut McLAMB, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1284

985 F.2d 1284

72 A.F.T.R.2d 93-5933, 93-1 USTC P 50,143,

38 Fed. R. Evid. Serv. 147

UNITED STATES of America, Plaintiff-Appellee, v. Phillip Chestnut McLAMB, Defendant-Appellant.

No. 92-5193.

United States Court of Appeals Fourth Circuit.

Argued Oct. 28, 1992.

Decided Feb. 10, 1993.

Roger William Smith, Tharrington, Smith & Hargrove, Raleigh, NC, argued, for defendant-appellant.

Thomas Ernest Booth, U.S. Dept. of Justice, Washington, DC, argued (Margaret P. Currin, U.S. Atty., Christine W. Dean, Asst. U.S. Atty., Raleigh, NC, Sidney M. Glazer, Crim. Div., U.S. Dept. of Justice, Washington, DC, on brief), for plaintiff-appellee.

Before WIDENER, PHILLIPS, and WILLIAMS, Circuit Judges.

OPINION

PHILLIPS, Circuit Judge:

Phillip McLamb raises several challenges to his convictions, following jury trial, on transaction structuring and money laundering charges arising out of two transactions connected with a car dealership he owns. We affirm.

I

In early July 1990 Harry Godwin contacted a salesman, M.L. "Bill" Stallings, at the Smithfield Ford-Lincoln-Mercury car dealership in Smithfield, North Carolina ("Smithfield Ford"), seeking to purchase a new Ford van for his girlfriend, Margie Jenkins. Godwin told Stallings he would pay cash for the van because both he and Jenkins had poor credit. Stallings selected a Ford Aerostar van for Jenkins and told McLamb, who owned the dealership, about the deal.

Jenkins purchased the van on July 5. She paid Stallings $13,927.79 in cash, which he took, together with the completed buyer's order, to McLamb. McLamb told Stallings the deal couldn't be done that way, wrote one receipt for $9,900 in cash and one for a $4,027.79 check, then told Stallings to make out a personal check to Smithfield Ford for $4,027.79. Stallings wrote the check, and McLamb gave him $4,028 in cash, which Stallings deposited in his checking account. McLamb then deposited Stallings's check and the $9,900 cash in the Smithfield Ford account. Jenkins later picked up the van, following its delivery from another dealership. No Form 8300 (reporting cash transactions exceeding $10,000) was filed with the IRS.

Somewhat later the IRS became aware that McLamb might be involved in money laundering activities, and on August 1 IRS Special Agent Anthony Asbridge, using a pseudonym and wearing a hidden tape recorder, negotiated the purchase of a Lincoln Towncar with McLamb. Discussing during the course of their negotiations Asbridge's professed desire to pay in cash, McLamb noted that he ran a "straight up business" but that "there are ways to do that, that don't get anybody in trouble," J.A. at 233. "[I]t can be quite a serious problem," he said, "if you don't do it right." Id. Asbridge then explained to McLamb that his brother-in-law wanted to buy a Lincoln Towncar, but

he just is in a situation right now where he can't buy it himself. He ... has problems ... with the drug people ... [T]he money's not clean money ... [H]e can't have a car in his name ... [W]e're dealing with green money, ... and ... one of the problems is all the reporting stuff ...

J.A. 233-34. McLamb told him that the "easy way," "the clean way" to work the transaction would be to pay roughly $9,000 in cash and finance the balance or purchase separate cashier's checks in amounts under $10,000 sufficient to cover the balance. Discussing his belief that this would enable him to avoid reporting the transaction, McLamb warned Asbridge that "if the IRS had ever questioned me, [sic] ... this conversation never existed!" J.A. at 240. But he agreed to proceed with the transaction, noting that although he was also obligated to report a transaction he knew was broken up to evade the reporting requirements, "you can't live by the letter of the law." Id. Asbridge and McLamb then moved on to a discussion of the car's particulars. Asbridge deferred decision on the actual purchase, saying he needed to consult his brother-in-law.

On August 2 Asbridge phoned McLamb and agreed to purchase a new Lincoln Towncar for $31,374.51, to be titled in the name of Bobbie Jeane Melton. While discussing the method of payment Asbridge would use, McLamb reminded him that purchases of cashier's checks for over $10,000 get recorded. The next day Asbridge brought about $7,000 cash and three sub-$10,000 cashier's checks to the dealership. After discussing the sale with McLamb, Asbridge helped the dealership's financial officer complete some paperwork, turning over the checks and telling him to title the car in the name of Bobbie Jean [sic] Melton. When the financial officer told Asbridge the cash balance owed, Asbridge left the office, ostensibly to get the cash from his car. This signalled other IRS agents to execute a search warrant, which they did, entering the premises and seizing the dealership's records, including documentation of the transaction negotiated by Asbridge. ¹

McLamb was subsequently indicted on multiple charges arising out of these two transactions. The jury ultimately returned guilty verdicts on two of them, structuring the Ford van sale to Margie Jenkins for the purpose of evading the IRS reporting requirement in violation of 26 U.S.C. § 6050I(f)(1) and money laundering arising out of the sham transaction McLamb negotiated with Asbridge in violation of 18 U.S.C. § 1956(a)(3), on the basis of which the district judge sentenced McLamb to concurrent terms of 71 months and 60 months, respectively.

McLamb appealed.

II

McLamb contests his conviction for structuring the van sale on three grounds, alleging insufficiency of the evidence, erroneous jury instructions, and improperly admitted evidence.

A

McLamb argues that the government's evidence, which showed that he substituted Stallings's personal check for $4,027.79 of the Godwin-Jenkins cash, was insufficient to convict him under 26 U.S.C. § 6050I(f)(1) because it demonstrated that McLamb acted after the obligation to file a return had already arisen (with Jenkins's payment to Stallings) and therefore could not have "structured" the transaction to avoid the filing of a Form 8300. This misinterprets the statute's requirements.

Section 6050I(a) requires businesspersons receiving more than $10,000 in one or more related transactions in the course of their business to file a return with the IRS. But McLamb was not charged with violating § 6050I(a); he was charged with violating § 6050I(f)(1). That section forbids individuals to "structure or assist in structuring" a business transaction or transactions "for the purpose of evading" the return requirement of § 6050I(a). The evidence was unquestionably sufficient for a reasonable jury to conclude beyond a reasonable doubt that McLamb did so, by assisting in structuring the transaction between Jenkins and McLamb's Smithfield dealership for the purpose of evading the obligation to file a Form 8300 return. The statute requires nothing more.

McLamb's contention that the obligation to report arose before he acted and applied to another individual is, even if correct, irrelevant to our determination that his conduct violated § 6050I(f)(1)(C). The statute's plain language indicates that the structuring prohibition's applicability is not limited to those on whom the duty to file falls and that a person's ability to structure a transaction for the purpose of evading the reporting obligation does not turn on when that obligation arises. That being so, we must reject McLamb's challenge to the sufficiency of the evidence used to convict him of structuring a transaction to evade IRS return requirements in violation of 26 U.S.C. § 6050I(f)(1)(C).

B

McLamb also presses two objections to the district court's jury instructions on the structuring charge. Because McLamb failed to raise these objections at trial, we review the jury instructions against the background of the entire record for plain error prejudicing substantial constitutional rights. Fed.R.Crim.P. 52(a); United States v. Young, 470 U.S. 1, 14-16, 105 S.Ct. 1038, 1045-46, 84 L.Ed.2d 1 (1985).

McLamb's first objection centers on the district court's failure to inform the jury that "structuring" must precede the commencement of the reporting obligation; ² because this objection rests on the improper construction of § 6050I(f)(1) rejected above, we must reject it as well.

McLamb also argues, however, that the district court's explanation of the obligation to file a return imposed by § 6050I(a) left unclear whether that obligation rested with McLamb or with the dealership. We need not address that contention directly, because the district court's instructions were flawed in a different way--one entirely favorable to McLamb--which rendered the instruction on the filing obligation altogether superfluous and any error in its formulation therefore harmless.

Count Four of the indictment charged McLamb with assisting in the structuring of a financial transaction with Smithfield Ford for the purpose of evading the transaction reporting requirement and with causing or attempting to cause the dealership to fail to file a required return, all in violation of § 6050I(f). The district judge outlined all this for the jury. Before detailing the elements of the offense, he explained that the return in question was required by § 6050I(a), which obligated persons engaged in business to report certain business-related transactions. He then discussed § 6050I(f), which McLamb was charged with violating. In doing so, he failed to reiterate at first that which he had outlined earlier in discussing the indictment, that § 6050I(f) forbade structuring a transaction to evade the reporting requirement as well as causing a business not to file a return, mentioning only the latter.

In summing up, the district judge did include the structuring possibility, but he made a further mistake in charging the jury that the government had to prove both the elements of the structuring offense and those related to causing a failure to file in...