U.S. v. Risk, 87-1577

• Decision Date: 11 April 1988
• Docket Number: No. 87-1577,87-1577
• Citation: 843 F.2d 1059
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. John T. RISK, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1059

843 F.2d 1059

UNITED STATES of America, Plaintiff-Appellant, v. John T. RISK, Defendant-Appellee.

No. 87-1577.

United States Court of Appeals Seventh Circuit.

Argued Jan. 19, 1988.

Decided April 11, 1988.

James M. Warden, Asst. U.S. Atty., Indianapolis, Ind., for plaintiff-appellant.

Philip R. Melangton, Jr., Melangton & Mowrer, P.A., Indianapolis, Ind., for defendant-appellee.

Before BAUER, Chief Judge, POSNER, Circuit Judge, and WILL, Senior District Judge. ^*

BAUER, Chief Judge.

On October 3, 1986, a grand jury indicted John T. Risk, an officer and branch manager of Merchants National Bank & Trust Company of Indianapolis (Merchants National Bank). Two of the five counts in the indictment alleged that Risk caused the Bank's failure to file Currency Transaction Reports (CTR's), in violation of 31 U.S.C. Secs. 5313 and 5322 (CTR statute), 31 C.F.R. Part 103, and 18 U.S.C. Sec. 2 (Counts 1 and 2). ¹ Two other counts alleged that Risk concealed material facts from the Internal Revenue Service in violation of 18 U.S.C. Sec. 1001 (Counts 3 and 4). The district court, 672 F.Supp. 346, dismissed the indictment and, after reviewing the government's motion to reconsider, reaffirmed its previous dismissal. The government appeals. We affirm. ²

Through voluntary discovery, the government provided Risk with the documentation presented to the grand jury that entered his indictment. The government filed a notice of its voluntary compliance with discovery and Risk appended these discovery materials to his motion to dismiss. These documents provided by the government, therefore, served as the foundation for Risk's motion to dismiss (and, ultimately, the district court's decision). In its response, the government admitted that these facts presented by Risk "essentially accurately summarizes the facts which give rise to the indictment." The government did not object to Risk's submission of these facts, nor did it challenge the authority of the district court to consider the government's facts, as presented by Risk, upon deciding Risk's motion to dismiss.

These uncontested facts show that on December 5, 1985, Steven Baker (really undercover Special Agent Steve Weida of the Internal Revenue Service) entered the main branch of Merchants National Bank and attempted to cash a check drawn on the bank by Raffensperger, Hughes & Co., Inc., and payable to Baker in the amount of $58,677.33. After speaking with Risk, Baker received $9,677.33 in currency and five cashier's checks for $9,800 each. Baker then cashed each of the cashier's checks at five other branches of Merchants National Bank on that same day.

On December 24, 1985, Baker again entered the main branch of Merchants National Bank and wrote a check on his own account payable to "cash" in the amount of $15,000. In exchange, Baker received $9,000 in currency and a cashier's check for $6,000 from Risk. ³

In dismissing the indictment, the district court found the indictment facially sufficient, but held that the statute under which Risk was indicted did not apply to the facts of the case and that to prosecute Risk for such a violation would amount to an unconstitutional application of the statute to Risk. The government argues that the district court erred, both procedurally and substantively, in dismissing the indictment. Specifically, the government contends that the district court exceeded its authority under Rule 12(b) of the Federal Rules of Criminal Procedure by relying on incomplete facts stated by Risk, ruling on Risk's guilt or innocence, and failing to consider all of the facts before it. Moreover, the government claims that the district court erred in finding that there was no violation of the CTR statute.

Rule 12(b) ensures that trials will be efficient and that defendants raise defenses "which [are] capable of determination without the trial of the general issue" before trial. Fed.R.Crim.P. 12(b); United States v. Griffin, 765 F.2d 677, 681 (7th Cir.1985). Rule 12(e) requires the court to make a pretrial determination on the motions raised by a defendant unless there is good cause not to do so. Fed.R.Crim.P. 12(e). Rule 12(e) also allows the court to consider factual issues in its disposition of 12(b) motions. Id.; United States v. Coia, 719 F.2d 1120, 1123 (11th Cir.1983).

The government correctly points out that, at the pretrial stage, the indictment ordinarily should be tested solely by its sufficiency to charge an offense, regardless of the strength or weakness of the government's case. United States v. Sampson, 371 U.S. 75, 78-79, 83 S.Ct. 173, 174-75, 9 L.Ed.2d 136 (1962). The government, however, mistakenly reads the district court's opinion as dismissing the indictment because the government could not prove its case. Rather, the district court found the allegations in the indictment insufficient to state a claim under the CTR statute. Specifically, the indictment alleged that on December 5 and 24, 1985, Risk knowingly and willingly failed to file a CTR for transactions involving more than $10,000. Although this fulfills the elements of a violation of 31 U.S.C. Secs. 5313 and 5322 and 31 C.F.R. Part 103, the district court found that the government's characterization of the undisputed facts did not constitute a violation of any statute. In other words, the government's own facts proffered to the defendant and the district court simply did not conform to the allegations in the indictment. The district court found no violation and correctly dismissed the indictment, not because the government could not prove its case, but because there was no case to prove.

The government did not challenge the district court's authority to consider the undisputed facts disclosed by the government until after the district court granted Risk's motion to dismiss. Even then, the government did not object but proffered additional facts which it urged the court to consider upon reconsideration of Risk's motion. ⁴ It was not until this appeal that the government first objected to the district court's consideration of the undisputed facts voluntarily disclosed by the government to Risk during discovery. Now it is too late. Under the unusual circumstances of this case, we find that the district court acted properly.

The government's challenge to the district court's substantive ruling must also fail. The government argues that on two occasions Risk structured a single currency transaction in excess of $10,000 into multiple components, each less than $10,000, and that this "artifice" cannot allow Risk to escape the reach of the CTR statute, which requires a financial institution to file a CTR for each domestic currency transaction in excess of $10,000. In rejecting this argument, we are bound by our recent decision in United States v. Gimbel, 830 F.2d 621 (7th Cir.1987).

In Gimbel, the defendant Gimbel, a bank customer, was convicted of structuring certain bank deposits and withdrawals exceeding $10,000 into smaller components to...