United States v. Sanchez Vazquez, Crim. A. No. CR83-291A.

• Decision Date: 13 April 1984
• Docket Number: Crim. A. No. CR83-291A.
• Citation: 585 F. Supp. 990
• Parties: UNITED STATES of America v. Ignacio Edmundo SANCHEZ VAZQUEZ, Alejandro Valentin de Maria Campos y Vazquez, and Frederico Javier de Maria Campos y Vazquez.
• Court: U.S. District Court — Northern District of Georgia

585 F. Supp. 990

UNITED STATES of America v. Ignacio Edmundo SANCHEZ VAZQUEZ, Alejandro Valentin de Maria Campos y Vazquez, and Frederico Javier de Maria Campos y Vazquez.

Crim. A. No. CR83-291A.

United States District Court, N.D. Georgia, Atlanta Division.

April 13, 1984.

COPYRIGHT MATERIAL OMITTED

Wilmer Parker, III, Asst. U.S. Atty., Atlanta, Ga., for plaintiff.

John R. Martin, Atlanta, Ga., for defendants.

ORDER OF COURT

HORACE T. WARD, District Judge.

The defendants were arrested on November 9, 1983, and accused via a criminal complaint of participating in a money laundering scheme. They are charged in a ten-count indictment with violations of Title 18 U.S.C. § 371, Title 18 U.S.C. § 1001, Title 31 U.S.C. § 5322, and Title 18 U.S.C. § 1952.

This matter is currently before the court on the Magistrate's Report and Recommendation, and defendants' objections thereto, concerning: 1) the defendants' joint motion to dismiss various counts for failure to state a crime or to inform the defendants of the charges against them; 2) defendants' joint motion to dismiss on the grounds of unconstitutionality; and 3) defendants' joint motion to suppress.

I. DEFENDANTS' MOTION TO DISMISS VARIOUS COUNTS FOR FAILURE TO STATE A CRIME OR TO INFORM THE DEFENDANTS OF THE CHARGES AGAINST THEM

Count 1 charges the defendants with conspiring in violation of 18 U.S.C. § 371, to defraud the United States by impeding, impairing, obstructing and defeating the lawful governmental functions of the United States Treasury Department and its agencies in the collection of Currency Transaction Reports (hereinafter "CTR's"), which reports are required, by Title 31 United States Code, and Title 31 Code of Federal Regulations, parts 103 and 104, to be filed by certain financial institutions; Counts 2 through 5 accuse them of unlawfully, knowingly and willfully concealing and causing to be concealed by a trick, scheme and device a material fact within the jurisdiction of the Treasury Department in violation of 18 U.S.C. §§ 1001 and 1002; Counts 6 through 9 accuse them of willfully and knowingly causing certain enumerated financial institutions to fail to file required CTR's with the Internal Revenue Service in violation of 31 U.S.C. § 5322 and 18 U.S.C. § 2; and Count 10 accuses them of knowingly and willfully traveling in interstate and foreign commerce commencing from Miami, Florida to Atlanta, Georgia with the intent to promote, manage, establish, carry on and facilitate the promotion, management, establishment or carrying on of an unlawful activity—the "laundering" of monies derived from the sale of narcotic substances, in violation of 18 U.S.C. § 1952.

A. Definition of "Financial Institution"

Defendants contend that Counts 2 through 9 should be dismissed because no crime is stated under 31 U.S.C. § 5322 or 18 U.S.C. §§ 1001-1002. Specifically, defendants argue that they can only be held liable under these statutes on a theory of vicarious liability if they purchased more than $10,000 of cashier's checks on the same day from the same financial institution and used some trick or device to knowingly cause the financial institution not to file a CTR it was otherwise under a duty to file. Defendants contend that they are not criminally liable because each branch of a bank at which a transaction was conducted constitutes a separate financial institution as defined by 31 C.F.R., Part 103. Therefore, no financial institution was under a duty to file reports as contemplated by 31 U.S.C. § 5313 and 31 C.F.R., Part 103, because each transaction at a branch of a bank was less than $10,000.

The Magistrate found defendants' argument to be without merit. The court agrees. The question presented is what constitutes a financial institution under the statute and regulations.

Title 31 U.S.C. § 5313(a) provides that a CTR must be filed by a domestic financial institution when that institution is involved in a cash transaction "in an amount and denomination, or under circumstances the Secretary prescribes by regulation." The definition of a financial institution under the statute includes a bank. 31 U.S.C. § 5312(a)(2). Furthermore, the regulations promulgated by the Secretary, 31 C.F.R. § 103.22(a), provide in pertinent part, that "each financial institution shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000." The term "financial institution" is defined in these regulations as "each agency, branch or office within the United States of any person doing business in one or more of the capacities listed below: (1) a bank (except bank credit systems) ...." 31 C.F.R. § 103.11.

Defendants argue that the unambiguous language of the regulations means that each branch of a bank is a separate financial institution, and that these regulations, instead of the statute, govern when a CTR must be filed.

While the regulations do govern when a CTR must be filed, the court disagrees with defendants' interpretation of the term "financial institution." The court believes that the statute, 31 U.S.C. § 5312 and the regulations, 31 C.F.R. § 103.11, must be read together in determining the meaning of the term "financial institution."

The court determines that the correct interpretation of the implementing regulations in defining the term "financial institution" is a bank, including each of its branches. Thus, if the financial institution (i.e., the bank, or in particular, any of its branches) is aware of a cash transaction in excess of $10,000 on a particular day, the bank or its particular branch must file a CTR. Likewise, if there are multiple cash transactions at different branches of the same financial institution (i.e., bank) which exceed $10,000, then that particular bank must file a CTR. This interpretation is supported by the supplemental instructions for completing Form 4789 Currency Transaction Report, issued by the Department of Treasury, which states:

If a financial institution is aware that an individual or organization has conducted a series of currency transactions in one day at the financial institution, or at different branch offices of the financial institution, totaling more than ten thousand ($10,000.00) dollars, a report should be filed for all such transactions ....

For the foregoing reasons, the court concludes that the indictment does arguably state a crime pursuant to United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983), and defendants' motion to dismiss Counts 2 through 9 is DENIED.

B. Travel Act

With respect to Count 10 of the indictment which charges a violation of 18 U.S.C. § 1952, defendants contend that this count should be dismissed because: 1) the laundering of money from the sale of narcotic substances is not an unlawful activity within the statute; 2) there is no allegation of a continuous course of conduct; 3) the defendants were not alleged to be members of an illegal activity; and 4) the defendants are not alleged to perform any of the acts specified in § 1952 after traveling with the required intent.

The Magistrate found all of defendants' arguments to be without merit. Upon due consideration of all four grounds, the court finds that only ground 4 has any merit.

Defendants specifically contend that Count 10 fails to set out the essential elements in the statute that the defendants performed or attempted to perform some act specified in § 1952 after traveling in interstate commerce with the intent to promote an unlawful activity as defined in the statute.

Where it is alleged that the indictment is defective, the question presented is whether such deficiency is technical or whether there is a "deprivation of a significant protection of the indictment process." United States v. Wander, 601 F.2d 1251, 1258 (3rd Cir.1979). It is well settled that in determining the sufficiency of an indictment the court must consider: 1) whether the indictment contains the essential elements of the offense intended to be charged and sufficiently appraises the defendant of what he must be prepared to meet, and 2) whether it is specific enough to make a plea of double jeopardy possible. Russell v. United States, 369 U.S. 749, 763-64, 82 S.Ct. 1038, 1046-47, 8 L.Ed.2d 240 (1962). See also United States v. Mouton, 657 F.2d 736 (5th Cir.1981).

18 U.S.C. § 1952 provides in pertinent part:

(a) Whoever travels in interstate or foreign commerce or uses any facility in interstate or foreign commerce, including the mail, with intent to—

(1) distribute the proceeds of any unlawful activity; or

(2) commit any crime of violence to further any unlawful activity; or

(3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity,

and thereafter performs or attempts to perform any of the acts specified in subparagraphs (1), (2), and (3), shall be fined not more than $10,000 or imprisoned for not more than five years, or both.

(b) As used in this section "unlawful activity" means (1) any business enterprise involving gambling, liquor on which the Federal excise tax has not been paid, narcotics or controlled substances (as defined in section 102(6) of the Controlled Substances Act), or prostitution offenses in violation of the laws of the State in which they are committed or of the United States, or (2) extortion, bribery, or arson in violation of the laws of the State in which committed or of the United States.

Thus, the three essential elements which must be alleged in the indictment are: 1) interstate travel or use of an interstate facility; 2) with intent to promote an unlawful activity; and 3) a subsequent overt act in furtherance of the unlawful activity. United States v. Tavelman, 650 F.2d 1133, 1138 (9th Cir.1981); United States v. Wander, supra, at 1258; United States v. Polizzi, 500 F.2d 856, 897 (9th...