USA V Kent Hovind Trial Transcripts (1 of 8)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF FLORIDA

PENSACOLA DIVISION
UNITED STATES OF AMERICA,
)
)
Plaintiff,
)
)
vs.
)
)
KENT E. HOVIND
)
and JO D. HOVIND,
)
)
)
Defendants.
)
______________________________)
CASE NO.
3:06cr83/MCR
Pensacola,Florida
February 28, 2007
8:35 A.M.
TRANSCRIPT OF ORAL ARGUMENT PROCEEDINGS

BEFORE THE HONORABLE M. CASEY RODGERS,
UNITED STATES DISTRICT JUDGE
(Pages 1 thru 81.)
APPEARANCES:
FOR THE PLAINTIFF:
MICHELLE M. HELDMYER, ESQUIRE

ROBERT G. DAVIES, ESQUIRE
Assistant United States Attorney
21 East Garden Street, Suite 400
Pensacola, Florida 32502
FOR THE DEFENDANT

KENT E. HOVIND:
ALAN S. RICHEY, ESQUIRE

Alan Richey, P.A.
331 Sentinel Firs Road, #A
Port Hadlock, Washington 98330
FOR THE DEFENDANT

JO D. HOVIND:
JEROLD W. BARRINGER, ESQUIRE

Jerold W. Barringer,P.A.
102 South Pine Street
Nokomis, Illinois 62075
Gwen B. Kesinger, RPR, FCRR

Official United States Court Reporter
2
8:32AM
(Court in session.)
(Defendants present.)
THE COURT:
Good morning.
We're here this morning for
oral argument which was ordered in response to a motion for
reconsideration that was filed by both defendants relating to
the Court's order denying the renewed motions for judgement of
acquittal.
parties have provided, and I'm now ready to hear argument.
9
10
Mr. Richey, do you wish to proceed or Mr. Barringer?

Both of you have motions pending for reconsideration.
11
12
The Court required supplemental briefing, which all
MR. RICHEY:
Yes, Your Honor, Mr. Barringer would
begin.
13
THE COURT:
14
I do want the record to reflect that both defendants
15
Mr. Barringer, please approach the podium.
are here in the courtroom as well.
16
MR. BARRINGER:
Thank you, Your Honor.
17
May it please the Court.
18
THE COURT:
19
MR. BARRINGER:
Yes, sir.
We have consistently argued in this
20
case that the indictment with respect to Counts 13 through 57
21
never really stated a cause of action.
22
dealing with the motions to dismiss that were filed back in
23
September of this past year, ruled in part that it was too late
24
to file those motions but also argued that -- or held that
25
where the government was at was an accurate position.

The Court initially, in
But even
3
8:37AM
in those documents, we were saying the same sorts of things
that we began to say throughout the process of the trial up
through closing arguments which was that Counts 13 through 57
didn't state a cause of action.
5
6
7
THE COURT:
Can I stop you just a moment?
We're
just -- and I'll do this periodically, forewarning.

Would you agree with me, however, that as to those
original or initial motions to dismiss that the argument was
not as fully presented as it has been as of late?
10
MR. BARRINGER:
Absolutely.
I don't think there is
11
any doubt that we -- I think everybody in this case has grown
12
in this issue, I believe, from rereading everything, looking at
13
the Court's orders, looking at the whole process, I think
14
everybody has expanded their thought process on what
15
structuring means and how a count can or cannot be structuring.
16
THE COURT:
Okay.
17
MR. BARRINGER:
But -- and I will continue on with the
18
process, that we in the process of the trial -- we saw where
19
the jury instructions were.
20
the jury instructions.
21
I cross-examined agent Evans in particular on whether or not
22
the counts required each other's help to get over a $10,000
23
limit to whether they required additional checks per counts to
24
get over a $10,000 limit.
25
because I had in my mind at the time the same argument that we

The defendants filed objections to
We saw what the government's case was.
Those were specific questions
4
8:38AM
are still dealing with today which was if you don't allege a
structured transaction that exceeds the $10,000 amounts and I'm
not -- and again, I'm not making an issue of whether or not the
bank had a reporting requirement because that's not really what
the issue is.
Ratzlaf decision and as the cases that talked about that say,
it really is an issue, where -- as Ratzlaf says on 136, It is
illegal to structure transactions to break up a single
transaction above the reporting threshold into two or more
As the Supreme Court defines structuring in the
10
separate transactions for the purpose of evading the financial
11
institution's reporting requirements.
12
And when you look at what those words really are
13
saying, it is that somebody has more than $10,000 that they
14
don't want the bank to know -- or they don't want the IRS to
15
know, so they figure out ways in the process of dealing with
16
the case that they are in of how to avoid that $10,000 amount.
17
It's not one whether or not the bank has an obligation to file
18
the report or not.
19
the bank would have, and every case says that, that if you
20
bring in more than 10,000 or take out more than 10,000, the
21
bank files a reporting requirement.
22
cited to and that the defense cited to and even that the
23
prosecution cited to dealt with the issue that there were
24
multiple transactions in excess of the 10,000.
25
case where the government argues that 9,000 was Counts 2 of

If they had dropped the 10,000 or more in
Every case that the Court
Even the Shirk
5
8:40AM
that.
When you look at it -- or 8,000, 8,000 was Count 2 of
the Shirk decision.
8,000 of 50,000.
let the government -- the IRS know about $50,000 and brings in
8,000 and the wife comes in -- and the wife is then told that
day, if you don't bring it all in, we're going to report it
anyway, so she brings in $40,000, which triggers a reporting
requirement.
government is working on a theory here, and the government
When you look at it, what it really is is
So Shirk was trying to figure out how not to
Every case says it's more than $10,000, but the
10
phrases it in several of the pleadings that it is, in fact, a
11
theory that on a use case, and they define the use based upon
12
the Coney decision another reported federal court decision out
13
of the Eastern District of Louisiana, they are saying that a
14
use case doesn't require more than $10,000 at all.
15
THE COURT:
Well, let me stop you here, Mr. Barringer.
16
The cases that we have all sort of focused on, those that are
17
most widely reported are structuring cases that involve
18
deposits.
19
MR. BARRINGER:
20
THE COURT:
21
MR. BARRINGER:
22
THE COURT:
23
24
25
Yes.
Which we don't have in this case.

Right.
And I believe that the regulations are
clear that the transaction is not limited to a deposit.

MR. BARRINGER:
Well, and while I agree that the
regulation says that, I don't know whether that makes a

6
8:41AM
regulation fit within the statute or not, but that's not really
the issue here either, at least in terms of what we're dealing
with in the bigger picture today because in my first motion --
in my motion to reconsider, I said, notwithstanding the issues
of whether it's withdrawal versus deposit, whether it's PRA
issues, a variety of other things --
THE COURT:
But that's important though because,
again, you referenced these other cases including Ratzlaf that
involve a different set of factual circumstances than we have
10
in this case, and I would like to get an acknowledgment from
11
the defense, at least sort of out of the gate here, that we do
12
have sort of a different set of circumstances than was present
13
in, I believe, every case that we've seen.
14
of a case that involves a structuring prosecution involving
15
withdrawals, simply withdrawals from a bank account without any
16
evidence of the lump sum deposit?
17
MR. BARRINGER:
Okay.
I mean, do you know
Without the evidence of a lump
18
sum deposit, I would say, no, and I think that is in fact where
19
the problem is here with the government's case.
20
THE COURT:
So you have to have the lump sum deposit
21
before you can have a successful -- or viable prosecution for
22
withdrawals.
23
MR. BARRINGER:
You have to have an amount greater
24
than the 10,000, whether withdrawal or deposit in order to have
25
a successful prosecution. The government's case really is that

7
8:43AM
it doesn't matter what you take out of the bank, literally,
what -- no matter -- I have $9,000 in my account -- actually, I
have $10,001 in my account.
much I need.
Document 181, the last response.
the $9,000 for.
If I have $10,001 there, I have to take all $10,001 or I've
structured a transaction, and that's what they have alleged
here and that's the position they've taken in their last
I want 9,000 because that's how
This is the government's position in I think

It doesn't matter what I need
It doesn't matter that I only need the 9,000.
10
document.
11
where they are going.
12
there, but Ratzlaf makes clear it's two or more transactions,
13
period.
14
That is not the law.
THE COURT:
It is an interesting theory of
They rely upon Coney to try to get
Okay.
I'm glad you brought that up.
15
Ratzlaf and other cases seem to make that clear, that two or
16
more transactions is required -- what's required.
17
agree with me that the regulation refers to one or more
18
transactions?
19
20
21
22
23
24
25
MR. BARRINGER:
Well, it does say that.
But do you
It says
transaction or transactions is actually how it's phrased.

THE COURT:
No, I think the word one is in the
regulation, one or more transactions.

MR. BARRINGER:
And I think what it really is is a
question of what the phrase transaction means.

THE COURT: I do not disagree with you. I agree with
8
8:44AM
what you've just said.
this case, and I think that that is sort of the starting point
for where a lot of the confusion has arisen with respect to
this argument is what -- what is the transaction --
MR. BARRINGER:
THE COURT:
Yes.
-- that's involved here that we're
analyzing.
8
9
I think that's an important question in
MR. BARRINGER:
And the Court is I think right on
point with this because some of the cases define transaction as
10
being the overall picture of the process and some of them look
11
at the transaction as being what I would call the act of taking
12
money out or putting money in and breaking those two apart and
13
running them in different directions or looking at the
14
regulation, which doesn't really define that process of whether
15
it's the act or the process of there being discussed, you get
16
muddled in the language.
17
that regulation 103.22, which is not specified in its breakdown
18
in the indictment as to which parts they are talking about.
19
Different parts of the regulation mean different things.
20
of them deal clearly with where Ratzlaf was at and some of them
21
are where Shirk is trying to say or what Coney is trying to
22
say.
23
regulation fits what the statute says.
24
argument that -- and one that's accurate with respect to the
25
statutory analysis, you look at the statute, you give effect to

In fact, there are different parts of
Some
So then you have a question of whether or not the

The government makes an
9
8:46AM
the words, what do the words mean, apply those words to what
we're talking about.
got it made.
switch in the actual sentences, they go from one that deals
with statute to the second that deals with regulations, and I
try to apply that the same rationale to the regulation, which
isn't written by Congress, first of all.
secretary.
self-conflicting within all of 103.22, and you come out with a
10
conclusion that nobody knows what that regulation really means
11
in terms of how it applies to structuring.
12
transaction or transactions or a single transaction, I believe
13
they are talking about the overall process.
14
Ratzlaf calls the structure act, structure transaction of two
15
or more transactions, I believe that's what it means when you
16
say the word transaction within the regulations, because
17
otherwise what are you evading and what purpose are you trying
18
to do?
19
say that's structure.
20
nine, you just take it out of the bank, period, the government
21
says in its rationale that we can look at that and if we think
22
it structuring, we can allege structuring without any regard to
23
5313(a).
24
25
And if it's clear and unambiguous, you've
But then when you get to the regulations, they
It's written by the
And then it is confusing and actually, I believe,
When it says
The idea of what
If you take $5,000 out of the bank, the government can
THE COURT:
If you take six or seven or eight or
But isn't the government really
focusing -- I don't think it's as simplistic as you suggest.

10
8:47AM
mean, isn't the government really focusing on the evidence of
intent to establish the structuring?
which the jury could reasonably conclude that the intent was to
evade the reporting requirements or to evade those CTR
requirements and the person conducts the transaction, writes
the check, fills out the deposit ticket in a manner designed to
evade those reporting requirements, then that is the
structuring.
MR. BARRINGER:
10
THE COURT:
If there is evidence from
That's the government's argument, yes.
But that's not as you've just suggested.
11
I mean, there is a little more to it than just simply
12
withdrawing $5,000.
The intent has to be present.
13
MR. BARRINGER:
14
THE COURT:
15
MR. BARRINGER:
And I agree with that.
Okay.
But to say that it is a structured
16
transaction because you've taken money out and you have an
17
intent still doesn't get 5324(a)(3) matched up with 5313(a),
18
which is part of 5324(a)(3), as is defined by the indictment
19
itself where it talks about both statutes as part of what is
20
alleged.
21
nothing for purposes of this case, but that's not true because
22
the structure of 5324(a)3 means you're doing it to avoid
23
5313(a), as the statutes, as the case law all match everything
24
together.
25
transaction to avoid the reporting requirements, you're really

The government has effectively said 5313(a) means
It's clear that in doing a 5324(a)3, structure a
11
8:49AM
talking about what 5313(a) gets to, which is the $10,000
amount.
THE COURT:
But the case law is clear that under a
structuring prosecution, at least the case law in this circuit,
that under a structuring prosecution under 5324, you do not --
it's irrelevant whether the reporting requirement was ever
triggered.
8
9
MR. BARRINGER:
Well, okay.
Let's look at what that
means because the Court has referred to that numerous times.
10
And think about the process for just a moment.
11
Supreme Court and even as a Senate talked about in its
12
discussions on that, I have $18,000.
13
Now, it's irrelevant that the bank didn't have to do anything
14
with respect to that example.
15
The bank didn't have to do anything with that.
16
trigger the banks reporting requirements.
17
did two $9,000 withdrawals or deposits, and I have my money
18
structured.
19
irrelevant because the $10,000 amount is the relevant issue
20
here, the relevant point.
21
22
23
I have, as the
I do two $9,000 checks.
I think everybody would agree.

It didn't
I had $18,000.
But that doesn't mean that the $10,000 amount was
THE COURT:
Why -- is it relevant to intent?
Is that
your position?
MR. BARRINGER:
It is the -- what they phrased as the
24
actus reus part of the statute.
It's critical that it be
25
10,000 that's structured in order for it to be a structure

12
8:50AM
period.
That's what Ratzlaf really says with respect to the
actus part, the physical activity that you're doing.
regard to the mental side of it, you have to structure more
than 10,000 in some way for it to be a structure.
Ratzlaf says.
have an issue of, okay, when they talk about innocent activity
versus criminal activity, and that's what it said it was going
with its $18,000 example.
takes out 9,000 this week and realizes that she needs 9,000
Without
That is what
You apply the mental side of it and then you
A little old a lady comes in and
10
next week and gets it in cash, did she structure it or was
11
innocently doing something?
12
of it comes in.
13
requirements?
14
avoid them?
15
well, that it's over 10,000 that's critical.
16
where we were going in our defense the whole time.
17
at what they alleged.
18
19
And that's where the mental side
Did she know the bank's reporting

Was she specifically intending on trying to
The point was, at the Senate level at least as
THE COURT:
That really was

We looked
Well, let me -- you didn't say it like
this.
20
MR. BARRINGER:
21
THE COURT:
I agree.
Just so that's clear.
I mean, this has
22
been, as you've said at the outset, an evolving issue from, I
23
guess, the time of the motions to dismiss.
24
25
MR. BARRINGER:
Yes.
It's been something that -- my
looking at the indictments caused me to go, so what am I

13
8:51AM
missing here?
that I'm not getting, which was the reason for the questions of
Special Agent Evans?
attempting to prove to try to get over 10,000?
answer is, no.
couldn't have found anything more in its arguments of how this
case proceeded, that $9,500 or $9,600, those are the entirety
of each count, no extra checks, no extra facts, no extra money
in the account, nothing else is alleged, just $9,500 or $9,600.
10
When you look at how these accounts are written, even the issue
11
of multiplicity can't come in because there isn't any bigger
12
picture to work from.
13
what the law is as we know it right now, and certainly in my
14
opinion, they all fall.
15
And I've said that forever.
What am I missing
Is there something more the government is

Well, the
The government admits that the grand jury
THE COURT:
Each count will either stand or fall on
Well, the reason the Court has referred, I
16
guess, on several occasions but most notably in its order
17
denying the renewed motion for judgement of acquittal, to the
18
fact that it is irrelevant whether or not the reporting
19
requirement had been triggered is because that's the argument
20
that at least Mr. Richey had been making, is that how could the
21
defendants be liable when the bank never had a duty to file a
22
report in the first place.
23
and I've heard it made and it's been made in writing as well.
24
And the Phipps case makes clear that that is irrelevant for
25
purposes of a prosecution under 5324. I understand your

And I had seen that argument made,
14
8:53AM
argument now about the actus reus part of the crime, and I
appreciate the argument that you're making, but that is why the
Court referenced Phipps in its order and that was because the
argument that was being made to me and in fact even this Cure
case was argued and cited by Mr. Richey, and I'll discuss this
with Mr. Richey in a little bit, but was cited by Mr. Richey in
his -- I believe it was his motion, renewed motion for
judgement of acquittal.
no longer a viable argument since the enactment of 5324.
10
MR. BARRINGER:
In Cure -- and that that argument is
I don't disagree with that.
I don't
11
know that the argument, and I don't think I can paraphrase back
12
exactly as the Court phrased it, but it's irrelevant whether
13
the bank had a duty to file a report at all.
14
that that's necessarily in disagreement with what we're really
15
saying.
16
the bank have a duty to do something with just a $9,500 check?
17
No.
18
the necessary physical activity for a structured count?
19
And the arguments are really -- when we look at what the
20
instruction says, with what the indictment says, with what the
21
evidence showed, and with what we were arguing, we were really
22
saying this:
23
showed that the Hovinds ever did anything that would ever
24
have -- if they hadn't structured it would ever have triggered
25
it.
And I don't know
Because if you look at Count 13, which is $9,500, did
But does it fit within the category of what I define as

No.
That the bank -- or that the government never
By simply saying $9,500, you could never have ever said

15
8:55AM
the bank had a duty because the bank never would have had a
duty with just $9,500.
THE COURT:
That's the argument that is no longer a
viable argument.
have caused the bank to file the report or not under 5324.
It doesn't matter whether the conduct would
MR. BARRINGER:
And I don't disagree with that.
But
when you look at just a $9,500 check and then look at it from
the standpoint of does it meet what I've defined as the actus
part of it that it has to be more than $10,000, it never could
10
have.
So the bank never could have had a reporting
11
requirement.
12
understand what this means, but we were saying the same thing
13
even then, that none of these counts ever stated a cause of
14
action because none of the counts ever alleged more than the
15
$10,000 amount, having been triggered, regardless of the
16
intent, regardless of anything else, regardless of whether the
17
bank had an obligation because we say the bank did have an
18
obligation, and it doesn't matter.
19
never got above 10,000.
20
case that I have seen until we got here has -- of course, I
21
haven't looked at all these other cases, necessarily -- but
22
none of those cases have ever said just less than 10,000 all by
23
itself is enough.
24
8,000 or some of these other cases, but when you look at how
25
the counts are structured, and I don't remember which one it

We, as we've said, we've evolved in how we
Regardless of that, we
That is the crux of the issue.
And no
The government suggests that Shirk says
16
8:56AM
was now, but one of them had it where it was Counts 2, 3 and 4
each.
THE COURT:
Nall, the case I believe is Nall.
MR. BARRINGER:
Nall, 2, 3 and 4 were 9,000, 9,000,
9,000, and they said, no, it was all one count, and then there
was a second count there -- or a last count there that was also
sitting by itself, but even that count had more money than
10,000, even if all they accomplished was a portion of that.
And that really is the issue.
It's got to be more than 10,000,
10
regardless of how much they accomplished before they were
11
caught.
12
THE COURT:
You're right.
I mean, these cases were
13
not discussed at any point during the trial before or during
14
the trial.
15
or offered to the Court were the Cure line of cases, which are
16
irrelevant under 5324.
17
date of the sentencing.
18
MR. BARRINGER:
19
THE COURT:
In fact, the cases that were presented to the Court
Davenport was never mentioned until the
That's right.
And that's sort of what has spawned all of
20
this.
21
time since the sentencing on this issue.
22
23
24
25
So, yes, we have all become much better educated in the
Would you look at the regulation with me?
Do you have
a copy of it?
MR. BARRINGER:
I don't have that in front of me.
have portions of it.

17
8:58AM
1
2
THE COURT:
Well, do you have maybe a case that quotes
the. . .
MR. BARRINGER:
THE COURT:
Yes.
I'm looking at Nall, it quotes it, many of
them quote the regulation.
MR. BARRINGER:
THE COURT:
I have my Nall decision, Your Honor.
All right.
draft copy, Footnote 7.
MR. BARRINGER:
10
THE COURT:
11
MR. BARRINGER:
12
THE COURT:
Page, it's six of my Westlaw
I'm sorry.
Footnote 7.
What?
It refers to the regulations.
Yes.
In a case the court says the regulations
13
parallel the provision -- I'm reading from the text now, but
14
parallel the provisions of 5324 in prohibiting structuring to
15
evade the reporting requirements.
16
give a regulatory definition of structuring, and then Footnote
17
7 contains the definition of structuring in the regulation.
18
And it does state here in the regulation where a person
19
conducts or attempts to conduct one or more transactions.
20
MR. BARRINGER:
21
THE COURT:
22
And the regulations also
Yes.
Can you reconcile that with the Ratzlaf
definition --
23
MR. BARRINGER:
No.
24
THE COURT:
25
MR. BARRINGER: I cannot. I do not believe that this

-- definition?
18
8:59AM
regulatory definition really would stand muster if put against
Ratzlaf.
issues, I think the Department of Treasury, the Secretary,
created some issues here that simply do not stand statutory
muster with respect to whether or not they fit what the statute
is saying.
I think that in trying to anticipate all possible
THE COURT:
All right.
I have another question for
you.
The language -- let me see if I can put my hands on it.
The language that the Court used in modifying the jury
10
instruction after Mr. Richey's closing -- I have the jury
11
instructions with me.
12
13
14
MR. BARRINGER:
I do have my jury instruction that was
filed with the court.

THE COURT:
It's probably sitting on my desk.
Will
15
you read the last sentence, the modification that was made,
16
will you read that now?
17
MR. BARRINGER:
Yes.
And it reads this way:
The
18
transaction or transactions need not exceed the $10,000
19
reporting threshold at any single financial institution on any
20
single day in order to constitute structuring within the
21
meaning of this definition.
22
THE COURT:
Would you agree with me that that language
23
has no impact or relevance to the issue we're discussing now,
24
that that language refers to the actual, in this case, would be
25
the withdrawal, that that amount does not have to exceed

19
9:01AM
$10,000?
MR. BARRINGER:
No.
And I think -- well, we obviously
objected to this language coming in.
effectively changed what our argument was with respect to --
the $10,000 threshold level is what we looked at, did somebody
structure transactions to avoid that in some way, shape or
form?
8
9
THE COURT:
But I read that, Mr. Barringer, as
referring to the transaction itself, the transaction --
10
MR. BARRINGER:
11
THE COURT:
12
Okay.
I understand.
The transaction that was structured, not
the greater sum, if we'll use the lump sum definition, but.
13
14
I don't know that it
MR. BARRINGER:
We're talking about the individual act
now transaction that we've talked about a little bit already.
15
THE COURT:
Exactly.
16
MR. BARRINGER:
And I agree that this accurately
17
states that, that an individual act as part of an overall
18
structuring could be less than $10,000.
19
to be.
20
THE COURT:
21
MR. BARRINGER:
22
THE COURT:
In fact, it would have
Isn't that what that says?

Yes, I think it is.
That doesn't, then, have any relevance to
23
the argument that we're all here now discussing, which is
24
whether or not the indictment has to charge a greater sum, an
25
amount exceeding $10,000 from which the defendant structured

20
9:02AM
smaller amounts.
MR. BARRINGER:
I don't believe that this is important
for that.
what we're arguing, but this doesn't really address what we're
talking about, I agree.
I won't say that it's completely irrelevant from
THE COURT:
Okay.
Is there any argument that you wish
to make regarding the force and effect of the regulation or the
lack of force and effect of the regulation, assuming that's --
I believe that to be your argument?
10
11
MR. BARRINGER:
I will go to where the Court was just
at with respect to this 103.11(n) is what's actually defined.
12
THE COURT:
Yes.
13
MR. BARRINGER:
Which is not, by the way, what was
14
charged.
We were charged with 103.22 in this indictment, I
15
believe.
So this definition is someplace else.
16
right.
No.
I'm sorry.
I think that's
It is 103.11.
17
THE COURT:
18
MR. BARRINGER:
19
They talked about sub-part (gg).
20
of what I'm talking about in that there are all kinds of
21
different definitions all over the place with respect to this?
22
And in the Nall case, they go to 103.11(n) as to issue
23
involved.
24
25
THE COURT:
Yes, 103.11 on page 7 of the indictment.

The cases talked about sub-part (a).
Does the Court get a flavor
But there is really only one definition in
the regulations of structuring. To structure a transaction,

21
9:04AM
there is really only one place that that's defined, is there
not?
you know of another specific definition of structuring other
than this one, not about what a transaction is but of
structuring?
6
7
8
9
Now -- well, let me ask you to answer that question.
MR. BARRINGER:
Do
As I stand here, I won't say that I
specifically do, no.

And as you look through this process of conduct one or
more transactions in currency in any amounts at one or more
10
financial institutions on one or more days in any manner for
11
purposes of evading the reporting requirements under 103.22 is
12
you have to evade the reporting requirements.
13
the reporting requirements?
14
manner includes but is not limited to the breaking down of a
15
single sum of currency exceeding 10,000 into smaller sums.
16
so there you have in the beginning at least the discussion once
17
again it's got to be more than 10,000 in this regulation.
18
19
20
THE COURT:
Well, what is
Again, it's the 10,000, in any
And
But the regulation is not that narrow.
That's why you can't reconcile it with Ratzlaf.

MR. BARRINGER:
Yes, that's the point is that while
21
parts of it stayed exact same as Ratzlaf and then it turns
22
right around and says something completely different, or it
23
seems to, because it then says breaking down a single sum of
24
currency exceeding $10,000 into smaller sums, including sums at
25
or below 10,000, in the conduct of a transaction or series of

22
9:05AM
currency transactions including transactions at or below
10,000.
that this doesn't seem to fit with what Ratzlaf is saying at
all, that structuring really is two or more transactions as
part of an overall structure to avoid the reporting
requirements.
What does that mean?
THE COURT:
I mean, that is my point, is
But Ratzlaf and these other cases that
deal with the lump sum definition, which is the classic case of
structuring.
I give you that.
That is the classic case of
10
smurfing that I've seen reference, but the regulation is just
11
not that narrow.
12
MR. BARRINGER:
Then you have to reconcile the
13
regulation with what the statute says.
14
something more than what the statute says?
15
it can.
16
17
18
THE COURT:
Can the regulation say

I don't think that
Have you addressed that, that issue, that
legal question?
MR. BARRINGER:
In an offhand way, I've commented that
19
we have to look at the statute, not the regulations.
And that
20
really is, when we look at this, the government's position is
21
really hinged on a regulation versus the statute, because the
22
argument has been the regulations say we can do all these other
23
sorts of things and they quote Coney and Shirk and that was in
24
Document 181, the last response, where they work through the
25
regulations at length trying to build a case that the statute

23
9:07AM
says this.
these other words.
can the regulation go beyond what the statute is?
regulation and this definition has parts of what we're trying
to say, and then it goes in different directions after that by
using phrasings including but not limiting to.
that this regulation can stand that muster.
statute controls.
scenario, each of these counts fail.
10
Well, we know that the statute doesn't have all

That's what the regulations are for.
This
I don't believe
I believe the
I believe Ratzlaf controls.
THE COURT:
But
Let me ask a hypothetical:
And under that
If the
11
evidence in the case -- well, assume we have the same type of
12
charge, charging in the indictment, separate counts, individual
13
transactions each under 10,000, no lump sum alleged.
14
the evidence in the case was that, and I'll use the defendants
15
here just for sake of making argument and this is not the
16
evidence at the trial but this hypothetical, that Mr. and Mrs.
17
Hovind, there was evidence that they had had a conversation
18
with one another, Mr. Hovind knew that Mrs. Hovind was going to
19
the bank that day, they had a conversation, they spoke about
20
their knowledge of the CTR, the reporting requirements and
21
Mr. Hovind told Mrs. Hovind, be sure don't withdraw any more
22
than 10,000, keep your withdrawals at, you know, $9,900, you
23
know, make one withdrawal today and one withdrawal tomorrow,
24
maybe next week.
25
money.
What if
There is no discussion of an overall sum of
Okay.
24
9:09AM
MR. BARRINGER:
the indictment as it is written.
THE COURT:
MR. BARRINGER:
THE COURT:
MR. BARRINGER:
THE COURT:
I think there is still a problem with
Even though the intent is clearly there?

Yes.
The intent is to evade, your position -And the reason I say that.
No, no.
Go ahead.
I'm sorry.
I think I know your
position.
MR. BARRINGER:
I think you could make an argument at
10
that point in time that there is a greater sum available
11
because you just have to get the deposits to see what's there,
12
to see what -- you could get, in fact the Kushner court talks
13
about the government being able to do the research, okay, how
14
much was really there.
15
things.
16
THE COURT:
What was the money from, those sorts of
We have that in this case.
We have the
17
bank account with, you know, an amount that was present in the
18
bank account the day Mrs. Hovind withdraw the sum she withdrew.
19
MR. BARRINGER:
The Kushner court was going in a
20
direction that the indictment has to allege the greater
21
amounts --
22
THE COURT:
Right.
23
MR. BARRINGER:
-- versus we know that it might be
24
there.
In fact, I don't think anybody would dispute there was
25
more than $9,500 in the account at the end of one day.

I'm not
25
9:10AM
sure why the government didn't try to do what we're now talking
about in trying to figure out how much was there and saying,
rather than tip everybody off and take 10,001 out, they take
$9,500 out because they have more than enough, or whatever, but
they didn't do that.
we're working on the same set of allegations, not facts proved
at trial, but allegations in the indictment that it's just
$9,500, with nothing else talked about, and intents to not to
go over 10,000 because we know the CTR is not in and of itself
And because they didn't do that, and
10
still the act necessary to be a crime.
11
intent but you haven't -- you might be able to allege it's an
12
attempted structure, but that wasn't really what was charged
13
either.
14
You might have the
It was structuring there.

THE COURT:
So follow another hypothetical:
If I walk
15
into a financial institution, I'm going to withdraw, stay away
16
from deposits.
17
bank teller says to me, well -- or I ask the question, you
18
know, I understand you have some reporting requirement to the
19
IRS.
20
reporting requirement?
21
it's in excess of $10,000 so I write my withdrawal ticket
22
for -- or I write out my check to cash for 9,500 because in my
23
mind, and there is evidence in my mind, I don't want to trigger
24
that reporting requirement, but I didn't have an exact number
25
in my head when I walked into the bank as to how much I was

I'm going to withdraw an amount of money.
The
What is the threshold amount that will trigger that

And the bank teller advises me that
26
9:12AM
going to withdraw.
than 10,000 that would trigger the reporting requirement, that
I wanted to stay under that.
I just knew when she told me it was more
MR. BARRINGER:
And that's what was alleged.
That really is cutting the hair fine
at that point.
And a couple of issues come out at me:
Number
One, could intent had been inferred that more than 10,000 was
intended on being taken out, but because of the conversations
with the bank, did they decide not to?
take more than 10,000 out?
Did you decide not to
Because if that's the case, then
10
you could make an allegation that they had more than 10,000,
11
but in order to avoid the reporting requirements took out 9,500
12
with the intent perhaps to take out more later.
13
an allegation like that and try to prove it at trial.
14
simply say, you know -- strike that.
15
You can make

But to
In going along with what you've said, that I know the
16
reporting requirements because the bank and I have had a
17
conversation.
18
I'll have to tell the IRS, and I have this form that I have to
19
fill out, and that's the way it works.
20
I'll take 9,500 out, you could arguably even then make the
21
inference from that conversation that you knew how much it was,
22
the base -- direct evidence shows that there was more than
23
10,000 in the ask, and you could build a structuring charge
24
around that.
25
here either.
The bank said, well, if you take out $10,001,
And you say, okay, then
I think that's possible, but we don't have that

27
9:13AM
THE COURT:
Is it your position then that in the
Hovinds' case and accept for the sake of argument that we have
evidence that the Hovinds were aware of this reporting
requirement, and I think the evidence was sufficient for the
jury to conclude that, they are aware of the reporting
requirement, they want to avoid the reporting requirement, and
the government charged in the indictment the balance in the
checking account as of the date the transactions were
conducted, would that have been?
10
MR. BARRINGER:
I think it takes a bit more than that,
11
but that's the beginning of the process of what the government
12
would have to say.
13
the purpose in violation of 5313(a) with the purpose of evading
14
reporting requirements when the defendants knew that they had
15
more than this amount of money in the bank and with the intent
16
of specifically avoiding the threshold reporting requirements
17
took out only $9,500 on this date, but all the other language
18
has to be there, too.
19
They would have to say something like with
If you look at how this indictment was written, it
20
truly is barebones in terms of even getting into what the
21
statutes are, much less any facts aside from the physical act
22
of taking a $9,500 check out.
23
that all these case had in order to make a structuring charge.
24
And that's where the indictment really was deficient in not
25
having anything else there to support simply saying $9,500 was

It simply didn't have the facts
28
9:15AM
taken out because the $9,500 by itself could never have given a
charge.
3
4
THE COURT:
Okay.
Any further argument you wish to
make?
MR. BARRINGER:
You saw my brief.
You've seen -- I've
spent a lot of time working on that.
I've touched on the
points the government has.
else that I specifically have to say to make my point more
clearer.
I don't think there is anything
10
THE COURT:
Thank you for answering my questions.
11
MR. BARRINGER:
12
THE COURT:
13
MR. RICHEY:
14
Your Honor, I don't know if it's plausible to reserve
You're welcome, Your Honor.
Mr. Richey.
Yes, Your Honor.
15
any time for rebuttal or if the Court just wants me to make
16
argument.
17
THE COURT:
Make argument.
I will allow you all to
18
rebut, and I'll cut you off if I think you're repeating
19
yourself, but we have plenty of time.
20
hours for this.
21
fair time.
I think I reserved three
And I will give Ms. Heldmyer sufficient and
22
MR. RICHEY:
23
A number of things have come up during this case
24
that -- but I think the important thing is to, first of all,
25
realize that the burden rests on the government completely to

29
9:16AM
prove every count and every allegation, and the burden also
rests on the government to cite correctly and correctly charge
the defendants in this case.
correct their charge, no burden to put on any defense.
The defense has no burden to
Now, there is a couple of very important things in
this case.
The first of all deals with the definition,
obviously, of structuring.
of problems.
that -- and this is the Davenport case actually that I'm
And what we have here is a couple
First of all, in CFR 103.22(a)(1), it says
10
citing, at page 1172, where they cite the regulation.
11
in November 1987, as today, the Secretary's regulation in
12
addition to the basic requirement that banks report any cash
13
transaction, usually a deposit, in excess of $10,000 only
14
required a bank to aggregate the cash deposits made by a person
15
during any one business day for determining whether the $10,000
16
threshold had been crossed.
17
We then look at 103.11.
18
THE COURT:
19
please, Mr. Richey.
20
MR. RICHEY:
21
THE COURT:
22
MR. RICHEY:
I'm sorry.
It says,
Give me the page number again,
Yes, that was 1172.

Okay.
I'm there.
Go ahead.
103.11(p), which says that the
23
transaction or transactions need not exceed the $10,000
24
reporting threshold at any single financial institution on any
25
single day in order to constitute structuring. And then we

30
9:19AM
look at 103.11(g)(g), which says, a person structures a
transaction if that person, acting alone or in conjunction with
or on behalf of other persons conducts or attempts to conduct
one or more transactions in currency in any amount at one or
more financial institutions on one or more days in any manner
for the purpose of evading the reporting requirements under
Section 103.22 of this part.
8
9
So it refers back to 103.22.
And as the regulation
defines 103.22, it has to be an amount greater than 10,000
10
day -- $10,000.
11
would require a reporting requirement is exceeding the
12
threshold amount of 10,000.
13
important.
14
That's the threshold amount.
That's what
That's why that figure is
It's also important to note that this Court in its
15
jury instruction stated that 31 U.S.C. 5313(a) and its
16
regulations require a domestic financial institution or bank to
17
file a currency transaction report.
18
itself raises that issue.
19
the jury that it's the law.
20
U.S.C. 5313(a) and its regulations that require the filing of a
21
CTR, and that requirement can only be triggered when the
22
threshold amount is crossed.
23
So the jury instruction
The jury instruction itself notified

It's -- as the Court stated, 31
We then have to go to what the Supreme Court has
24
defined as structuring.
That's where Ratzlaf is correctly on
25
point because Ratzlaf looked at the identical charge, although

31
9:21AM
it's been restructured since then, it was a charge under 5324,
what is now (a)(3).
this is dicta, it is the second sentence in the court's
opinion.
opinion, which was a majority opinion says:
requires banks and other financial institutions to report -- to
file reports with the Secretary of the Treasury whenever they
are involved in a cash transaction that exceeds $10,000, citing
31 U.S.C. Section 5313 and the regulation 31 CFR Section
And although the government claims that
The very first sentence of Justice Ginsburg's
The very second sentence says:
Federal law
10
103.22(a).
It is illegal to
11
structure transactions, i.e., to break up a single transaction
12
above the reporting threshold into two or more separate
13
transactions for the purpose of evading a financial
14
institution's reporting requirement.
15
U.S.C. Section 5324.
16
and then it states what the issue is in the case.
17
government to state that the Court is merely citing dicta here,
18
I think requires the government to state what dicta means
19
because Kushner certainly cited that same provision, certainly
20
cited Ratzlaf and that identical language.
The Court then cites 31
It then cites another provision, 5322,

For the
21
Now, the Court asked Mr. Barringer if there is
22
anyplace where it would challenge that there was a problem then
23
with the regulation.
24
it's important to look that in Dashney, the court looked at the
25
Senate report, which the Senate gave an example of what

And actually, before I go there, I think
32
9:23AM
structuring means.
And this is Dashney, at page 538, where
they are citing the Senate Committee on the judiciary.
what the Senate, the example that the Senate gave was, a person
who converts $18,000 in currency, cashier's check checks, by
purchasing two $9,00 cashier's checks at two different banks or
on two different days with the specific intent that the
participating bank or banks not be required to file CTRs for
those transactions, would be subject to potential civil and
criminal liability.
And
Any person conducting the same
10
transactions for any other reasons would not be subject to
11
liability under the proposed amendment.
12
On page 7 of my motion to reconsideration, I
13
specifically refer to then, we have an issue here where the
14
regulations render the statute and the purpose of Congress and,
15
in fact, render 103 -- or 103.22(a)(1) superfluous and
16
meaningless.
17
And I think where we've already discussed that none of
18
the cases that we've looked at and none of the cases that have
19
been cited set out a circumstance equal to this one here that's
20
a clear pattern for this Court to follow.
21
clearly dealing with a case of first impression here.
22
And the issue that arises is:
I think we're
Was Ratzlaf wrong?
Was
23
the Supreme Court wrong in its definition of structuring?
Is
24
there any way to say in looking at all of these cases that the
25
Supreme Court was in error in its definition? And in looking

33
9:25AM
at the Senate report and in looking at the statute saying that
you have to evade the reporting requirement, and the only way
to evade the reporting requirement is to somehow have a figure
above that threshold and then structure the transaction under
that threshold.
It's important also to note exactly what the
government has stated in this case.
In its motion, in its
response to defendant Jo Hovind's motion to reconsider
judgement of acquittal -- I'm not sure exactly which document
10
that is.
11
beginning, middle, and end of the structuring act.
12
withdrawal was dependent upon any other withdrawal to complete
13
the intended act.
14
On page 3, the government says here, each act was the

No
Now, this Court referred to the check ledgers or the
15
bank amount that the bank, I think there is no dispute that
16
there was more than the $9,500 in the account or more than the
17
$9,600.
18
government that no withdrawal was dependent upon any other
19
withdrawal to complete the intended act.
20
beginning, middle, and end of the structuring act.
21
government has never alleged, never argued at trial, and
22
presented no evidence that Count 13 had another amount
23
connected with it.
24
sparse amounts of 9,500 or $9,600 as the complete actus reus.
25
The government cannot now claim or allege because that the

But what we have here is an admission by the
Each act was

So the
The government has relied solely on those
34
9:27AM
indictment did not allege or claim and as there was no
testimony at trial and, as the government has clearly admitted,
that there was greater than $10,000 that was structured.
And looking specifically at the Phipps case, and
although this Court did state, and I certainly do not disagree
with this, that it's irrelevant if the reporting requirement
was in fact triggered, because that's the whole purpose of
structuring, is that you have an amount greater if you
structure in order not to trigger it, and it wasn't triggered.
10
But less we not forget, there was in fact evidence submitted at
11
trial that in fact currency transaction reports had been filed
12
on a couple of occasions and the government dismissed that as
13
just an error on the part of defendants.
14
However, even looking at Phipps at page 1058 of
15
Phipps, where they cite 31 CFR 103.22, says:
16
institution other than a casino or postal service shall file a
17
report of each deposit, withdrawal, exchange of currency or
18
other payment or transfer, by, through, or to such financial
19
institution which involves a transaction and currency of more
20
than 10,000.
21
Each financial
So it's clear from all the cases and from the
22
definition as put forth in Ratzlaf that -- and by the
23
regulations, that in order to evade a reporting requirement,
24
there has to be a currency amount of greater than 10,000, that
25
the government admits that in Counts 13 through 57, each one is

35
9:30AM
independent.
only with the amount alleged, 9,500 or 9,600.
Each one is separate and constitutes a structure
THE COURT:
Let me ask, Mr. Richey, as to the
language -- and I pose this question to Mr. Barringer -- as to
the language that was added by the Court to the structuring
jury instruction, would you agree that that language from the
regulation really is the language that addresses the sort of
the Cure line of cases, what we're talking about now in Phipps,
that it doesn't matter or is irrelevant whether that reporting
10
requirement was actually triggered by the transaction at the
11
bank?
12
the issue we are discussing here today.
13
That's what that language to me refers to, which is not
MR. RICHEY:
I disagree with that because I believe
14
that what it did was say that in absolutely no way did the
15
government have to prove that the amount structured exceeded
16
the $10,000 limit.
17
18
19
THE COURT:
Okay.
So you are taking issue then with
that regulation as well?

MR. RICHEY:
Yes, Your Honor, because, as I previously
20
stated, that regulation would render superfluous, I think is
21
how it's pronounced, meaningless the actual statute and
22
102.11(a)(1), which it refers back to.
23
THE COURT:
What regulation -- I'm referring -- I'm
24
referring now to -- I believe it's -- I'm trying to remember
25
what the subsection is.

36
9:32AM
MR. RICHEY:
THE COURT:
MR. RICHEY:
MR. BARRINGER:
(gg).
Is it (gg)?
I believe so.
If I might, Your Honor, I think it was
(p) that you and I were talking about 103.11(p).
THE COURT:
MR. RICHEY:
Okay.
Okay.
So look at 103.11(p).
So (p) says, the transaction or
transactions need not exceed the 10,000 reporting threshold at
any single financial institution on any single day in order to
10
constitute structuring.
11
THE COURT:
12
Thank you, Mr. Barringer.
13
That is the language that the Court inserted, the only
14
language that the Court inserted into the jury instruction when
15
it modified the instruction following your closing arguments.
16
Just a moment.
The Court's understanding of that language is that it
17
serves to explain or to clarify what the Phipps court says as
18
far as a 5324 prosecution, and that is that it doesn't matter
19
whether the reporting -- excuse me -- the reporting requirement
20
was triggered based on the transaction at the bank.
21
was intended -- that language was intended to codify the
22
Tobon-Builes, I believe is the name of the case, T-o-b-o-n,
23
B-u-i-l-e-s, case from this circuit and then negate the effect
24
of those other cases like Cure and Anzalone -- and Varbel.
25
you not agree with that?

Again, it
Do
37
9:33AM
MR. RICHEY:
Let me phrase it this way:
I do not
agree because, first of all, the Court instructed the jury that
31 U.S.C. 5313(a) and the regulations required a bank or
financial institution to file a CTR.
5
6
7
THE COURT:
to file a CTR.
Excuse me.
Mr. Richey, they are required
That's the law.
There is no issue about that.
MR. RICHEY:
So then for the Court to add the language
specifically to say it was irrelevant whether a CTR was filed,
I think cuts against that.
10
THE COURT:
I didn't say it was irrelevant.
What I
11
said -- what that language there says, the regulation says,
12
refers to the amount of the transaction.
13
instruct the jury that it was irrelevant whether the reporting
14
requirement was triggered, but that is the law.
15
there being any objection from the defense as to that language
16
in the jury instruction in any event, the language as far as
17
the bank having to file the report.
18
MR. RICHEY:
At no time did I
I don't recall
But my issue is then that what that told
19
the jury was that there didn't need to be, although a single
20
transaction, and certainly in structuring cases, the
21
transaction does -- is below a $10,000 -- it is below the
22
threshold amount.
23
because these amounts were structured under the threshold
24
amount to avoid or to evade, excuse me, the reporting
25
requirement.
That's the whole reason for the statute is

38
9:35AM
1
2
THE COURT:
MR. RICHEY:
THE COURT:
MR. RICHEY:
THE COURT:
MR. RICHEY:
I understand.
That's what prompted that regulation that
But we would note -- I would note, Your
Honor --
12
THE COURT:
13
MR. RICHEY:
14
Again, I'm referring back to Phipps and a
we've just referred to in subsection (p) to be created.
10
11
Ratzlaf specifically
prosecution for causing the bank to fail to file the report.
5324 was enacted.
looked at 5324.
5
6
But under the statute before,
5324 was enacted, that would not have been enough.
3
4
All right.
changed this.
15
And 5324 be passed.
I'm sorry.
I would note that it's not Congress that
It's a regulation.
THE COURT:
I understand that, but it explains
16
congressional intent.
17
far as how the statute should be interpreted or could be
18
interpreted.
19
MR. RICHEY:
It is something the Court can look to as
Yes, and I don't dispute that.
And it
20
is, I believe, Your Honor, correct in the fact that a
21
structured transaction would not exceed the $10,000 reporting
22
requirement, but I think at that point, it was then misleading
23
to the jury because you still had to have an amount that was
24
structured that exceeded 10,000, certainly the transaction
25
itself.
And I think maybe one of the problems is we're

39
9:37AM
combining structure and transaction and trying to make them
equivalent in the same definition.
THE COURT:
I also think that the problem is that the
Eleventh Circuit pattern instruction is where we started with
our instruction to the jury is a restatement in part, only in
part, of the regulation and a restatement of the Ratzlaf
definition, which is not the entire regulation definition
that's given there.
that regulation and believe that it does not state
10
And you and Mr. Barringer disagree with
congressional intent and that's -- that's the issue here.
11
MR. RICHEY:
I think the issue is that it, although
12
the transaction itself would not exceed, and I think that's a
13
correct statement, it would not exceed the $10,000 threshold,
14
reporting threshold.
15
THE COURT:
16
MR. RICHEY:
17
It does not have to.

Correct.
The total amount structured has
to exceed that.
18
THE COURT:
Right.
And that -- again, this is where
19
you and Mr. Barringer, I believe, have your argument, or the
20
center of your argument is that the jury instruction didn't
21
state that.
22
far as this greater sum and that's -- the pattern instruction
23
doesn't refer to it.
24
Ratzlaf.
25
about Ratzlaf and the Ratzlaf definition. The only -- I don't

I mean, there was no instruction to the jury as
We never discussed during this trial
I mean, there was never an argument made to the Court
40
9:39AM
want to say we never discussed Ratzlaf because I think we did
in the context of the willfulness element, but not in the
context of the structuring definition, so. . .
MR. RICHEY:
I agree.
And oftentimes I'm not as clear
as I should be and maybe that was one of the issues in my
closing argument, because certainly my intent was not that
there had to be a CTR filed.
argument was there had to be an amount that would have
triggered this CTR, and the amount had to be structured under
That was not my argument.
My
10
that in order to do it.
11
that word in the jury instruction then went specifically to
12
impair the effectiveness of my argument or in fact repudiate
13
it, and I think that was the whole intent of the inclusion of
14
that, at least that was my perception, that it went to
15
repudiate or impair the effectiveness of my argument, that that
16
threshold amount had to be crossed.
17
structuring, there had to be more than 10,000.
18
THE COURT:
And so from my view, the inclusion of
In order to be
But your argument to the jury was that the
19
transaction, there had to be evidence that the transaction
20
exceeded $10,000.
21
MR. RICHEY:
22
THE COURT:
The structured amount.

That's not the argument that you were
23
making.
What you were making was -- your argument was that the
24
transaction had to exceed 10,000, and that's why this language
25
was added, because the transaction itself does not have to

41
9:40AM
exceed 10,000.
MR. RICHEY:
Well, and I think also, Your Honor, in
looking at all these cases, the cases themselves are not that
careful in their precise wording.
They say structured
transaction.
They say transaction.
it's used interchangeably.
to be noted is that a structured transaction.
8
9
They say structure.
THE COURT:
And
However, one of the things that has
But I understand your argument today,
Mr. Richey, but this is not the argument that you were making
10
to the jury during your closing.
11
argument that you made as artfully to the Court at the time of
12
trial as you and Mr. Barringer make today.
13
MR. RICHEY:
14
THE COURT:
And it really wasn't an
I agree with that.

And the reason, again, this language was
15
added was because the argument to the jury that the
16
transactions had to exceed $10,000 is an incorrect statement of
17
the law.
18
MR. RICHEY:
I believe -- and again, you know, I just
19
want to make a point and move on because I don't want to argue
20
with the Court, but I believe that my argument was that the
21
government had to prove that there was an amount that exceeded
22
the transaction amount that was structured, that that had to
23
have been what the government had to prove and that there was
24
insufficient evidence.
25
Being that then -- I mean, we've discussed primarily

42
9:42AM
the actus reus, but the Court also asked us to discuss the mens
rea, and the mens rea requires that there be the knowledge of
the reporting requirement, and there was no evidence whatsoever
that the defendant's had knowledge of the reporting
requirement.
Now, let me cite page -- on page 4 and 5 of the
government's brief, Document 181, their supplemental brief,
beginning at the bottom of page 4.
A person engages in structuring not only where he or she
The government states this:
10
engages in multiple transactions but also where the person,
11
after being informed that the institution intends to file a
12
report on the transaction, seeks to take back part of the
13
currency in order to reduce the amount of the transactions to
14
10,000 or less.
15
the amendments of the Bank Secrecy Act Regulations.
16
the government says is, and again, a direct quote:
17
engages in structuring not only where he or she engages in
18
multiple transactions but also when, after the person has been
19
informed that a CTR is going to be filed, they take some of it
20
back.
21
22
23
24
25
This is the government's own brief citing to

So what
A person
Now, if the government is now admitting that, which

they clearly do, again, Counts 13 through 57 are deficient.
THE COURT:
I don't understand your point.
What point
are you making?

MR. RICHEY: Well, the government has admitted on page
43
9:44AM
4 through 5 of Document 181, again that a person engages in
structuring not only when there is multiple transactions, which
are not the charges here --
THE COURT:
MR. RICHEY:
Right.
-- but also then when the person, after
being informed that the institution is going to file a CTR,
takes back part of the money to reduce the amount to a
transaction to $10,000 or less.
And in looking --
10
THE COURT:
Okay.
So that shows clear intent.
But I still don't understand the
11
point you're making.
12
that they made in their brief to the Court, and it's very
13
similar to the hypothetical that I posed to Mr. Barringer just
14
a moment ago, and it also is consistent, arguably so, with the
15
regulation because the regulation does refer to one or more
16
transactions.
17
government's prosecution -- I mean, they are relying, at least
18
in part, if not in large part, on the language in this
19
regulation.
20
with that?
21
That's the government's -- an argument
So your point from -- and obviously, the
But what is your point here, that you disagree
MR. RICHEY:
No.
My point is that the government
22
admits that there had to be multiple transactions to exceed the
23
$10,000 amount.
24
there had to have been some way, some proof, some evidence that
25
the defendants were made aware that exceeding $10,000 would

But also then going to the mens rea, that
44
9:46AM
trigger the reporting requirement and they had to then have
that knowledge or that understanding.
The Cassano case, at page 16, specifically says that
the defendant must have knowledge of the reporting requirement.
There was insufficient evidence of that here at the trial.
There was no evidence, whatsoever, that the defendants were
told when they went in to withdraw from the bank that, well,
you know, this could be structuring, if you went to 10,000 or
more, the bank would be required to file a CTR.
In one of the
10
cases, the defendant had in his hand the instructions.
In
11
another case, the defendant told his employees not to
12
withdraw -- or not to deposit more than $10,000 because that
13
would trigger the reporting requirement.
14
was the Coney case.
15
THE COURT:
I believe that that
But here in this case we have evidence,
16
and the Court has already ruled that there was sufficient
17
circumstantial evidence from which a jury could have concluded
18
or found that the defendants had the knowledge based in part on
19
the communication from Glen Stoll to them, about the $10,000
20
transaction.
21
MR. RICHEY:
And that's very important because that
22
communication from Glen Stoll came after -- the time frame
23
after Count 57.
24
completed by the time of that memo from Glen Stoll.
25
Court relies solely on that, there is no evidence then at the

So all of the acts, 13 through 57, had been

So if the
45
9:47AM
time of the transactions that they had actual knowledge.
2
3
I don't know that I have much more, and I don't want

to belabor the issue.
4
5
THE COURT:
turn.
I'll hear from Ms. Heldmyer now.
And then I'll give each of you an opportunity to rebut.
MS. HELDMYER:
THE COURT:
MS. HELDMYER:
It's her
Good morning, Your Honor.
Good morning.
Your Honor, this case seems to be
boiling down to a fundamental disagreement as to what the
10
regulations and the statutes say.
11
arguing that the issue is that the indictment must charge and
12
one must commit structuring by withdrawing over $10,000 or
13
having over $10,000 charged even if it's a fluid account in a
14
use cases versus a lump sum case and a source case.
15
course, disagree with that for a number of reasons, many of
16
which were spelled out in our brief.
17
The defendants are clearly
We, of
The regulations are -- the law on the regulations are
18
obviously where we start in any analysis of what it takes to
19
commit a crime in this case, and in any case.
20
particular case, it's a little unusual because the legislature
21
and the regulations, which were promulgated as well, obviously
22
create a number of situations that can define structuring that
23
can be within the definition of structuring, and we have talked
24
about the law.
25
definitions are all spelled out, including the definition of

In this
The Court is well aware of the law.
The
46
9:49AM
transaction, which I believe Mr. Barringer argued was not
clearly defined, but in fact, it is in subsection (i)(i) of
103.11, where it clearly includes as a transaction a single
withdrawal.
So that issue is cleared up.
The argument that the government has made in its brief
and continues to make is that the law on the regulations are
abundantly clear and unambiguous, and that any disagreement can
be remedied simply by reading the law on the regulations.
The regulation that defines structuring under (gg),
10
which we have consistently argued, has an enormous range of
11
activities that can fall within the definition of structuring.
12
Acting alone or in conjunction with or on behalf of other
13
persons, a defendant conducts, attempts to conduct, or assists
14
in conducting one or more transactions in currency in any
15
amount, clearly in any amount -- there are no caveats to
16
that -- at one or more financial institutions on one or more
17
days in any manner.
18
defined to be breaking down a single sum of currency or having
19
a single transaction, that single transaction need not exceed
20
the $10,000 reporting threshold at any single financial
21
institution.
22
as it is accompanied by the requisite mens rea, as we, the
23
Court has already found we proved in this case.
24
25
In any manner has also been further
There is very little that is not included as long
Clearly what Congress has been trying to do with the

past couple of amendments of this statute is to ensure that
47
9:51AM
they have covered all the possible ways the defendants have
come up with over the years to structure transactions to avoid
reporting requirements.
there are defendants, potential defendants, who want to avoid
and evade the reporting requirements.
Congress' intent and the Department of Treasury's intent has
been to be all inclusive to anything that a person can do with
currency in order to evade structuring.
legislative history as well as the plain unambiguous language
10
11
There are as many ways to do that as
So clearly, what
That is clear from the
of the regulations and the law.

We have cited to the Court a number of quotations from
12
the legislative history, including the one just discussed with
13
Mr. Richey, which is the hypothetical, which was a hypothetical
14
that was provided in the legislative history.
15
16
THE COURT:
The legislative history, are you referring
to the history of the regulation or the statute?
17
MS. HELDMYER:
18
THE COURT:
Your Honor, the hypothetical --
Are you referring to the hypothetical
19
about the individual going into the bank and being told by the
20
teller that the reporting requirement would be met by a
21
transaction in excess of 10,000 or. . .
22
MS. HELDMYER:
Yes, Your Honor, that's the regulation.
23
That's the Department of Treasury regulation, the final rule
24
from the regulation.
25
that contradicts all of the arguments that Mr. Barringer just

That is a hypothetical example of that --
48
9:52AM
made with regard to what was required in order to have
structuring.
provided but not ever intended to be an exhaustive list.
can't be because there are too many ways that people can come
up with to violate the statute.
activity with currency and you combine it with the mens rea and
I know I'm being very, very broad here, but the statute is
very, very broad, and so are the regulations, as long as you
combine it with that intent, the requisite intent, then you
10
It is one of many hypotheticals that were

It
So as long as you take some
have a structuring violation.
11
THE COURT:
How are they different?
I mean, under the
12
government's position, how is the actus reus and the mens rea
13
different?
14
mean, you infer the intent from the act of structuring and --
15
16
MS. HELDMYER:
19
You certainly do in some cases, Your
Honor.
17
18
I mean, aren't they really one in the same?
THE COURT:
But in this case?
Let's talk about this
case.
MS. HELDMYER:
In this case we have both.
In this
20
case we were able to prove direct knowledge as well as
21
circumstantial evidence of knowledge based upon the activities
22
of the defendant.
23
that primarily by the circumstantial evidence, the evidence
24
that she went irregularly into the bank and conducted these
25
financial transactions regardless of the fact that she had more

Clearly in the case of Jo Hovind, we showed
49
9:54AM
money to get out of the bank and regardless of the fact that
she needed more money at any particular point in time.
We also had some evidence other than just the fact
that they were -- the acts that she was conducting.
We have
the AmSouth teller that testified that customers are regularly
notified about the reporting requirements or when a report is
going to be filed and that there are signs up all over the bank
and particularly the branch that Mrs. Hovind went to to conduct
these acts, have signs up talking about the $10,000 requirement
10
and the report, the 2 o'clock -- I'm missing the word here --
11
the 2 o'clock cutoff, I suppose, for the transaction before 2
12
o'clock and the transactions after 2 o'clock, which, of course,
13
led to a couple of the -- the reports actually being filed in
14
this particular case.
15
case.
16
also had the conversation that Brian Popp testified about where
17
he had a direct conversation about reporting requirements, the
18
$10,000 limit, and Brian Popp testified directly that
19
Mr. Hovind thought that those reporting requirements were,
20
quote, a bad thing.
21
that, and I'm not sure that Mr. Richey is correct about the
22
date, the timing of the communication with Glen Stoll.
23
have to go back and check on that, but my memory is that those
24
were documents that were in the possession of Mr. and Mrs.
25
Hovind at the business during the time of the structuring.

So we had a little more, even in her
But in Mr. Hovind's case, we had direct evidence.
We
So we had direct evidence with regard to
I would
50
9:55AM
could be wrong on that, but I did not check that prior to
coming in here, but I believe that may have been available.
But even if that's not the case, Your Honor, we had plenty of
evidence, independent of the actus reus in this particular
case, that the defendants had the requisite mens rea as well.
6
7
THE COURT:
I'm sorry.
I've got to stop you here
again so I don't forget.
MS. HELDMYER:
THE COURT:
Sure.
The knowledge element, okay, I'm on board
10
with you there as far as the evidence, but in terms of the
11
intent to evade, not just knowledge of the reporting
12
requirements, but then the intent to evade those reporting
13
requirements, the evidence -- the evidence in support of the
14
intent element for each of the defendants is, what, from the
15
irregularities, from the pattern?
16
Mrs. Hovind?
17
as the evidence of the intent?
18
MS. HELDMYER:
Is that the activities of
Is that what the government is suggesting as far
Your Honor, I would certainly agree
19
with the Court that that was the vast majority of the evidence
20
presented.
21
purposes, also used the other evidence in conjunction with the
22
pattern, but I certainly agree that that was the bulk of the
23
evidence from which the jury can conclude intent in this case,
24
given -- in terms of the pattern including the fact, and here's
25
another point that I disagree with Mr. Barringer with regard to

I believe that the jury could have also, for intent
51
9:57AM
the $10,000, I do not agree that we have to prove 10,000.
The
case law is very clear as well as the regulation, but in fact,
we did because each and every time, as the Court pointed out,
each and every time she went in there, she had more than
$10,000 available to her.
remember all of the records that came in with regard to what
their labor cost obligations were, the salaries, the wages that
they were paying out, were substantially more than the 95- or
$9,600 that she was getting out each and every time.
And we showed by the records --
So what
10
we were able to prove is not only that she had available to her
11
more than $10,000, we also proved that she needed more than
12
$10,000 for the purpose for which she was using the money.
13
we were able to prove on two different occasions that there was
14
an amount over $10,000 that was important in this particular
15
case and that she purposely did not get out as much money as
16
she needed every time that she went, in fact leading her to go
17
several times a week sometimes to the bank and even several
18
times a day or at least more than once a day on a number of
19
occasions to get out more money, each time less than that
20
$10,000 amount.
So
21
Did I answer the Court's question?
22
THE COURT:
23
The question that I had really has to do with whether
24
25
Well, my -- yes, yes, and then some.
each individual count in the indictment can stand on its own -MS. HELDMYER: Yes, Your Honor.
52
9:59AM
1
2
THE COURT:
-- in terms of the elements of the
offense.
MS. HELDMYER:
THE COURT:
Yes.
And I guess I wanted to ask whether the
government was relying on, say, Counts 14 through 57 to prove
Count 13, and that's where I was headed with my question.
MS. HELDMYER:
All right.
And that's certainly a
valid question, particularly in the multiplicity argument, but
clearly our position, and I don't want to waive the position,
10
is that that argument was waived and that's not a valid
11
consideration for the Court procedurally at this point in time.
12
However, we are certainly prepared to address it substantively.
13
The way that this indictment was charged is based
14
primarily on the fact that it's a use case.
Use cases are a
15
little bit more difficult to deal with in terms of writing an
16
indictment than source cases.
17
absolutely agree with the line of cases where -- that indicated
18
that in a source case when you start with one lump sum of
19
money, that that lump sum of money, once you get that and then
20
you go about structuring it so that none of the transactions
21
are over $10,000, that that is one count, because in order for
22
you to complete the transaction, to complete the structuring,
23
all of that money needs to be disposed of.
24
of prosecution and that is one count.
25
that.
There is no question, and I
So that is one unit
I absolutely agree with

53
10:00AM
In this particular case, which is in line with the
facts of Coney and that's why Coney, even though it is a
District Court case unreported, it is crucial in evaluating the
sufficiency of the indictment in this case and the way that
this case was charged.
all along is that there is no way to do that in a use case.
You do not have a lump sum of money that you start with.
have each individual act, each time she went to the bank.
time money was withdrawn from the bank, it was withdrawn from a
What they say and what we have argued
You
Each
10
different pot of money, a very fluid pot of money.
The source
11
of that money could have been -- was different every time she
12
went to the bank.
13
the bank because it wasn't a deposited one lump sum of $10,000
14
or $100,000 that was withdrawn over time.
15
account, a business bank account, into which their money was
16
flowing, wherever it came from, where they were making regular
17
deposits, as the bank accounts show, and they were making
18
regular withdrawals from this and for other things.
19
writing numerous checks on this account.
20
would go into the bank, she was withdrawing from a different
21
pot of money, from a different source of income.
22
no way to group that amount of money.
23
it in terms of days because she would go in irregularly.
24
wasn't as if she had a pattern where she would go in every
25
Monday, Wednesday, and Friday where those Mondays, Wednesdays

So there was no lump sum of money even in
This is a fluid bank
They were
So every time she
So there was
There is no way to group

So it
54
10:02AM
and Fridays could be grouped, even though the case law
indicates that that would even be an artificial way to break up
these transactions.
So in other words, if you look at this case in the big
picture and you eliminate the fact that there's already been an
indictment and you look at it and you try and figure out a way
to break this up into increments that could be charged, there
is no other way to do this because they are all irregular.
They all stand on their own.
They are all complete units of
10
prosecution, just like the Court indicated in Coney.
11
in Coney specifically acknowledged the fact that use cases are
12
significantly different than source cases, and they have to be
13
treated as such in terms of determining what the unit of
14
prosecution is.
15
16
THE COURT:
The Court
Do you know of another use case other than
Coney?
17
MS. HELDMYER:
I don't, Your Honor.
And this is
18
unusual.
And frankly, to be honest with you, I've researched
19
it fairly thoroughly before presenting this indictment to the
20
grand jury to determine whether or not this was appropriately
21
charged.
22
use cases.
23
of prosecution.
24
would have been to charge one count flowing over the whole
25
period of two-and-a-half, three years, whatever it was in this

There just wasn't a whole lot of help out there with

So you go with what you feel is an appropriate unit
The only alternative in this particular case
55
10:03AM
particular case.
But that, I believe, you could make a very valid
argument would be duplicitous, so -- because that is charging a
number of counts into one count.
duplicity arguments because no defendant wants to argue that
they should have been charged with 45 counts instead of one.
But I believe that to charge it any other way would have been
duplicitous because otherwise it would have been random.
would have charged one count per week, that would have been
Now, normally we don't get
If I
10
random.
11
rhyme or reason to that.
12
down except to to do either 45 counts, however many there were,
13
or one count.
14
There would have been that there would be no other

There was no other way to break it
So the Court may decide that multiplicity is an issue
15
in this case.
16
decides that, the net effect, even if the Court feels that
17
argument wasn't waived, the net effect is the same, one count
18
or the counts as charged.
19
certainly urge the Court, to sentence Mrs. and Mr. Hovind
20
exactly the same as if they had been charged with multiple
21
counts because the sentencing guidelines are designed to
22
account for those types of groupings, and they were grouped.
23
I do not believe that it is.
THE COURT:
But if the Court
The Court can, and we would
But if Mr. Mr. Barringer's position is
24
correct, that all of the counts must fail because there is no
25
sum greater than 10,000 alleged in the indictment, then I don't

56
10:05AM
think that the convictions can be modified or the sentence can
be modified in this case, and the defendants' argument in my
mind is not a multiplicity argument, although the line of
cases, the Davenport line of cases were dealing with just that
issue, but I really don't -- and they can correct me when they
get back up.
multiplicity argument.
argument in that Davenport line of cases, the reasoning in
those cases, but my understanding really is more of the
I don't interpret their argument as being a

They find support for their overall
10
indictment, these counts in the indictment, 13 through 57,
11
simply, each one failings to state a claim.
12
MS. HELDMYER:
I understand that is their argument,
13
Your Honor, and I want to address that directly.
14
Your Honor, the reason why we included the multiplicity
15
language is because we believe that that is in fact what they
16
are truly arguing, what they are really saying in this.
17
are making the same analogy, but they are making a wrong
18
conclusion in terms of the relief that they are entitled to.
19
We believe what they are truly arguing is -- and shown by the
20
cases that they cite, which are multiplicity cases.
21
that's what Davenport was.
22
THE COURT:
Certainly,
They
I mean,
But all of those cases, and I think
23
Mr. Barringer mentioned this in his argument, all of those
24
cases, even Shirk, according to Mr. Barringer, have that
25
overall larger sum of money or source that we don't have

57
10:06AM
1
2
present in this case.

MS. HELDMYER:
Well, I disagree with that, Your Honor.
First of all, I don't think that's what Shirk says.
Shirk is very clear.
defense was making the same argument in Shirk that the defense
is making here, and that argument failed.
the government failed to charge an identifiable pool of money
over $10,000, which was broken down into smaller components.
That's exactly what the Shirk defendant argued, and that's
I think
They are making the same argument, the
And that is, that
10
exactly what was rejected by the court.
11
argument they are making here, which just simply isn't true.
12
And that's the
Certainly, Your Honor, I agree that Mr. Barringer is
13
correct that we have to charge over $10,000.
14
Court that that can't be remedied in terms of the structuring
15
count, but that is clearly not the law.
16
Shirk and it's certainly not the law or Nall.
17
I agree with the
That's not the law in
Even if it were, Your Honor, we do have that here.
18
disagree with him there too.
19
two times.
20
bank, which she did not withdraw, and we have the larger amount
21
of money that she needed that she didn't withdraw.
22
both of those things.
23
case, not alleged in the indictment certainly, but we do have
24
that in this case.
25
We do have a larger pool of money
We have the larger pool of money sitting in the
We proved
So I do think we do have those in this
If we had shown, for example, that every time she went

58
10:08AM
in to get $9,600, she had $9,601 in the bank, then I don't know
that we would have a crime, but that's not what we have here.
We have proven that there was over $10,000 available, that
there was an over $10,000 need, and that the decision was made
to withdraw $9,500.
And I also very strongly disagree with the argument
that the defense has made that this is inconsistent with
Ratzlaf.
analogy that we are making here, and it is certainly not
Ratzlaf is certainly not inconsistent with the
10
inconsistent with the state of the indictment and the state of
11
the proof that we showed in this case.
12
Ratzlaf was a willfulness.
13
willfulness case.
14
the issue under review in Ratzlaf was the willfulness argument,
15
period.
16
they had a source case and they provided a single definition of
17
structuring does not exclude any other definition of
18
structuring.
19
the very regulations that we are citing.
20
own portions of the regulations, those that were relevant to
21
them.
22
disagree with or overrule those regulations.
23
In fact, first of all,
We all know this.
Ratzlaf was a
That's why we say the rest was dicta because
And that is what they addressed.
The fact in Ratzlaf
In fact, the Ratzlaf court cited with authority

They just cited their
And they wouldn't have done that were they going to
And certainly -- and this is obviously not part of the
24
case, but I'm certainly not the only one to conclude that they
25
only cited the relevant portion, that the portion that was
59
10:09AM
relevant to them of the structuring law, because if you read
the syllabus, the syllabus of this case as it's written, the
first words that are written were before the section describing
the state of the law in terms of structuring is as here
relevant.
for this case agrees with our position that they were only
citing the pertinent portion of the structuring statute and the
structuring regulation.
9
10
So clearly the person who would write the syllabus
THE COURT:
What force does this Court give to the
regulations?
11
MS. HELDMYER:
Well, the regulations, Your Honor, have
12
been used by every case, every court that has ever considered
13
any portion of the structuring law.
14
been given full force and effect.
15
authority by every court that's ever considered structuring.
16
There's not been a court, there's not been a case cited by the
17
defendant that these regulations have been repudiated by
18
Congress, that these regulations have been repudiated by any
19
court.
20
structuring as -- and very helpful to the Court in determining
21
whether -- how to define structuring.
22
certainly guidelines, at the very least, that the Court can use
23
in determining the definitions that are involved in this case,
24
as every other court has considered.
25
law that has cited Ratzlaf and cited the regulations, nobody
Those regulations have

They have been given full
In fact, they are part of the definition of the
So, Your Honor, they are
And even subsequent case
60
10:11AM
has ever said that Ratzlaf limited to one single definition
what structuring is.
with any of the arguments that the Court -- that the government
is making here or any of the arguments that courts have made
subsequent to Ratzlaf.
years now, and no one has ever come up with an argument, that I
can see, that Ratzlaf has narrowed the definition of
structuring.
THE COURT:
So clearly Ratzlaf is not inconsistent
Ratzlaf has been in existence for 12
Can you address, Ms. Heldmyer,
10
Mr. Richey's statement, argument, that the only way to have
11
intent or prove intent to evade is to have evidence of the
12
transaction above the reporting requirement at the outset?
13
linked some of the regulations together in making that
14
argument, and I think he also alluded to this in his reference
15
to the jury instructions and how the Court instructed the jury
16
that the law does require the CTR to be filed.
17
MS. HELDMYER:
Your Honor, I certainly can.
He
I would
18
start that discussion by saying that it's a moot point in this
19
particular case because we did prove, as I had stated, that we
20
did involve more than $10,000 in this case, both availability
21
and need of the $10,000.
22
in terms of the indictment, that whether or not the $10,000 was
23
alleged is irrelevant, because clearly the indictment as long
24
as it states a cause of action is going to be sufficient.
25
Court can -- even if the Court finds that -- and we don't even
So that was proved.
And I might add
The
61
10:13AM
agree with this, but even if the Court finds that there was
some requirement to charge some amount over $10,000 within the
body of the language of the charge, of the crimes charged in
the indictment, we can see that it is certainly -- would be
certainly plain error, at the very worst, with regard to any
such defect in the indictment.
Neder case, Neder versus United States, which is a Supreme
Court case on materiality, 527 U.S. 1, 1999.
case found that the jury instructions, the indictment charged
I would cite the Court to the
And the Neder
10
materiality, but the jury instructions did not include an
11
instruction on materiality.
12
They found that to be plain error.
And then subsequent to that in the Eleventh Circuit,
13
the Sanchez, United States versus Sanchez, 269 F. 3d 1250.
14
That's an Eleventh Circuit 2001 case, which cited Neder and
15
used that for the proposition that even an element of the
16
offense does not have to be alleged -- well, it would be
17
harmless error if the indictment did not allege an element of
18
the offense.
19
So we would first argue that -- certainly the
20
indictment is not error because it is in keeping with the plain
21
language of the regulations and the statute that we do not have
22
to show or prove that the $10,000 amount alleged in the
23
indictment, but even if that were a requirement, that it would
24
be harmless error in this case, particularly in light of the
25
fact that during the course of the trial, we did in fact prove
62
10:15AM
that there was over $10,000 involved in each and every one of
these transactions.
And again, as a unit of prosecution, each time she
went to the bank, we were able to show that there was $10,000
in the bank at least available to her and that her need was
greater than the amount of money, greater than the $10,000
limit as well.
8
9
THE COURT:
argument before.
I don't believe the Court has heard that
Now, am I right?
I mean, is this the first
10
time this has been presented to the Court?
11
you, we haven't discussed unit of prosecution up to this point.
12
MS. HELDMYER:
Right, Your Honor.
And in fairness to
That was in their
13
memo of January 26th, I believe was the first time -- was the
14
first time that they argued the unit of the crime and the unit
15
of prosecution from the Davenport case.
16
not been argued up to this point.
17
certainly we even argued to the jury that each one of these
18
offenses, each one of these charges, was an independent crime,
19
standalone crime.
20
THE COURT:
Sure.
So that's why it has
We did argue, however, and
But in terms of whether there was
21
proof of cash, a sum of cash in excess of the 10,000, I don't
22
think I've heard the argument as far as the bank account and
23
then also in terms of the money that may have been needed to
24
pay the employees.
25
MS. HELDMYER: I agree, Your Honor. And that's in

63
10:17AM
direct response to their argument of the unit of prosecution
and our interpretation of the materiality question -- I mean,
the multiplicity question, that we believe has now been raised.
THE COURT:
source prosecution?
That this is a use prosecution and not a
MS. HELDMYER:
Exactly, Your Honor.
Exactly.
So in terms of whether that has to be proved, I think
it's moot because I believe we have, and certainly in this
particular case the evidence was quite clear.
The bank records
10
are in.
11
all the records that were seized from CSE are in evidence and
12
anyone can look at them and see what the actual labor needs
13
were of this company.
14
something that I am presenting for the first time, certainly to
15
the Court.
16
The labor, all the labor charts and the labor needs,
So that evidence is in, and this is not
The argument, yes, but the evidence is in evidence.
THE COURT:
The records that you're referring to in
17
evidence, do they correlated?
18
recollection of the evidence is rather dim at this point.
19
they correlated to the dates of withdrawal?
20
MS. HELDMYER:
I believe they do, but my
They cover the same time frame, Your
21
Honor.
22
cover the time period that was charged.
23
seized were certainly. . .
24
25
I'm sure not exact, but the same time frame.
THE COURT:
Do
But we do
The records that were
Let me ask it this way:
I understand this
is the government's theory, that Mrs. Hovind was taking out

64
10:18AM
these withdrawals, these cash withdrawals, to satisfy payroll
needs.
3
4
MS. HELDMYER:
Well, there was evidence to that effect
as well, Your Honor.
THE COURT:
Help me with that.
MS. HELDMYER:
Where?
The employees testified regarding --
Brian Popp and several other employees testified about the
need -- I think Brian Popp was probably the most specific about
it when he said that he had the conversations with Mr. Hovind
10
about paying cash to the employees.
11
the bank to get the cash.
12
into evidence about -- there was one in particular that I
13
recall where Mr. Hovind is talking about how they are going to
14
stop actually because it was too much cash for her to be going
15
to the bank to fulfill all of their wage and salary needs.
16
there were several witnesses who testified to that effect.
17
There were memos as well.
18
testified about the cash that was obtained by Mrs. Hovind and
19
brought back and paid out to the employees.
20
the checks -- the other use of that same account, we introduced
21
checks to the Court to show that other expenses, other needs of
22
the ministry were being paid by check as well.
23
of elimination, you can see that the cash was primarily used if
24
not exclusively used for labor.
25
Mrs. Hovind would go to
We even had some memos that came
So
And Brian Popp specifically
And we had many of
So by process
THE COURT: Okay. Anything else you'd like to add to

65
10:20AM
the argument?
MS. HELDMYER:
Just, Your Honor, if -- with regard
again to Mr. Barringer's argument about the indictment and the
indictment not being, not being sufficient, we would submit to
the Court that that is a bill of particular's issue and not a
sufficiency argument, and it goes also to the sandbagging issue
as well.
those are things that could have been raised prior.
of these arguments obviously were, but, as we have all
If there were problems with the indictment, certainly

And some
10
acknowledged, this has been an argument that has evolved over
11
time.
12
government's problem.
13
all the issues pretrial and it's required to be raised
14
pretrial, and if they failed to raise something, that could
15
have a true problem -- we don't believe it was -- but a true
16
problem that could have been corrected by a superseding
17
indictment.
18
But that is, to be perfectly honest, that is not the

It's the defendants' problem to raise
That's exactly what Rule 12(b) contemplates.
THE COURT:
I went back through the motions to
19
dismiss, the initial ones, or I guess there was a motion to
20
reconsider, but the initial motion that was filed.
21
although the word -- again, I don't think they are making a
22
multiplicity argument, but that word certainly was not used,
23
hasn't been used at any time in this case up until the day the
24
Davenport case was referenced and provided, offered to the
25
Court for consideration. But I did -- I did review

And
66
10:22AM
Mrs. Hovind's motion to dismiss.
MS. HELDMYER:
THE COURT:
Let me see if I can. . .
Document 847.
Yeah.
There were arguments made by both
defendants in the -- several in the motion to dismiss, which I
will refer to as typical antitax, or tax protester arguments.
There were numerous or technical issues raised, technical
violations raised, but I saw something in Mrs. Hovind's
argument that I felt came close to, if not did actually raise a
question as to the --
10
11
12
13
And, Mr. Barringer, you can help me out here if you

can point me to it.
-- but did actually raise a question as to whether the
Counts 13 through 57 properly stated a claim.
14
MS. HELDMYER:
15
THE COURT:
16
MS. HELDMYER:
An offense.
An offense.
Excuse me.
Yes, Your Honor.
I don't necessarily
17
disagree with that.
18
found them a little hard to follow.
19
frankly, they more than likely did raise issues regarding
20
failure to state an offense in those counts.
21
grounds are quite different than what we're arguing here today.
22
But in terms of just arguing the deficiency in the indictment,
23
I agree that they did that.
24
THE COURT:
25
Okay.
I think the arguments were -- frankly, I
Okay.
I do believe that,
I believe the
Well, then I need not belabor that.
Ms. Heldmyer, thank you very much.

67
10:24AM
MS. HELDMYER:
THE COURT:
Let's take a brief recess.
We'll take ten
minutes and come back in, and I'll hear rebuttal from defense
counsel.
10:35.
So we'll take ten minutes.
(Recess.)
THE COURT:
We'll be in recess until
We'll continue now with rebuttal.
We'll
start with Mr. Barringer.
MR. BARRINGER:
10
Again, thank you, Your Honor.
Ms. Heldmyer said so many things that I think I
11
objected to that I'm going to work -- have to struggle to work
12
my way through each of them and do so relatively quickly.
13
But let me start first with the allegation that some
14
of these other cases dealt with amounts less than $10,000 is
15
the totality of the charge in any one individual count that
16
held through conviction.
17
reread a couple of others as we were going through our
18
arguments.
19
period.
20
four checks within a two-day period of time twice, or Nall,
21
where it was three checks for the first count and then the
22
8,000 as part of the 50 for the second.
23
over $10,000.
24
25
I reread Nall.
I reread Shirk, and I
None of those cases is just a below $10,000 amount,
Each of them, including Shirk, dealing with three or
All of them dealt with
That, I believe, is critical.
In addition, even the Court's jury instruction, the

one we've talked about, and the Court's reference the last
68
10:36AM
sentence at length, but the beginning portion of that
paragraph, which starts:
deposit or withdraw or otherwise participate in a transfer of a
total of more than 10,000 in cash or currency by or to a
financial institution or bank by setting up or arranging a
series of separate transactions each involving less than 10,000
individually are, thereby, intentionally evading the currency
reporting requirements that would have applied if the
transaction had not been so structured.
10
To structure a transaction means to
Think of that -- and that last portion is really
11
irrelevant to what we're now talking about, when you look at
12
that first part, because the Court has defined as the Eleventh
13
Circuit pattern instruction concerns that it still has to be
14
more than $10,000 that you are structuring.
15
not happen here.
16
that it is listed here by a series of different events that
17
we've not talked about or hadn't gotten to previously.
18
first one is that there is more than $10,000 in the bank and,
19
therefore, if we allege $9,500, the government argues, then
20
we've accomplished the process because we've shown that there
21
is more than $10,000 sitting in the bank, but that's not what
22
the charge was and it's not even what the instruction
23
accomplishes with respect to what the evidence showed because
24
the instruction says setting up a series of transactions, each
25
of which total more than 10,000 by doing a series of

That simply did
The government, however, is trying to say
The
69
10:37AM
transactions, each which is less than 10,000, more than 10,000,
less than 10,000, the multiple of less gets you to the more
than 10,000.
4
5
THE COURT:
Again, but the regulation doesn't refer to
a series -- or isn't limited to a series of transactions.
MR. BARRINGER:
So now how does the Eleventh Circuit
instruction that I've just referred to fit up with the
regulation that the Court is referring to that says, can take
one to be theoretically one transaction less than 10,000 and
10
that can be it.
11
pattern instruction says, nor, quite frankly, did any of even
12
the extra language that the Court added, does that really
13
address where the government was at before it's argument is
14
now?
15
That's not even what the instruction, the
THE COURT:
The language that the Court added at the
16
end was added because of and I'll -- because of the argument
17
that I -- because the argument that Mr. Richey made as I
18
interpreted it.
19
bearing, whatsoever, on the issue that we're all now
20
addressing.
21
And I don't think that that language has any
So you and I agree on that.
MR. BARRINGER:
Now, continuing on with some of the
22
other things that Ms. Heldmyer said, she referenced the fact
23
that evidence was adduced, deduced, whatever word that is, that
24
at trial that the money taken out was necessary to pay
25
employees.
Do you remember what Special Agent Evans

70
10:39AM
specifically said in direct examination, not cross-examination,
but direct examination, when asked that question, can you find
the correlation?
out?
Can you find a pattern for taking the money
No, no pattern, nothing there.
Now, do you see how the argument has changed to try to
fit, yet again, with where the government's position is, first,
there was no pattern, which I think was designed to take off
into the forfeiture side of it.
is a correlation that the money was needed specifically to pay
Now there is a pattern.
There
10
employees and the government is having to change its theory
11
after the trial to make the indictment still hold with the
12
facts of the case to try to fit it altogether as yet a crime.
13
That is not exactly what happened.
14
The Court also phrased a question to Ms. Heldmyer that
15
was along the lines of, do you need -- or what do you need to
16
show that each count demonstrates that the defendants knew and
17
were intending to evade the reporting requirements, the
18
specific language of the indictment and the specific language
19
of the statute?
20
It's the totality of the activity?
21
where a flaw is in the government's case.
22
What evidence do you have that shows that?

And I think that's really
It struck me, as the Court asked that question, that
23
if they have to look at, okay, look what the Hovinds did for 13
24
months in taking all these checks out to show that the
25
knowledge of evasion exists. Remember that each count has to

71
10:40AM
establish facts in and of itself and now -- and the government
has admitted that each count has to establish the facts in and
of itself.
said, with respect to Mr. Evans on the witness stand, with
respect to arguments in brief and today, each count states on
its own all the elements necessary.
question, how do you know that they are evading the
transactions?
And if you have to look at everything, you've suddenly stepped
Everybody is in that position.
The government
But the court phrased the
Are you having to look at everything to do so?
10
out of each count.
They, by their own discussions, have missed
11
the point that they didn't prove that the defendants
12
specifically knew and evaded, not willfulness obviously, but
13
knew and evaded the reporting requirements themselves.
14
allegations that, well, Glen Stoll said, well, remember don't
15
go over the 10,000, or Brian Popp saying the banks reporting
16
requirements might -- and I don't remember that testimony.
17
I do know with respect to Glen Stoll, I tried to pin down
18
somebody, anybody, with a date on that, asking all kinds of
19
questions of all kinds of witnesses and nobody could give me an
20
answer.
21
to be perfectly honest.
22
could show, it was happening at the time that the money was not
23
being cashed and cash taken out anymore.
24
that's after the fact.
25
there was an evasion of the reporting requirements specifically

The
But
Special Agent Schneider didn't know when it came out,

And from the evidence, as best we
As Mr. Richey said,
There wasn't evidence of showing that
72
10:42AM
1
2
known and taken by the Hovinds.

Now we've drifted off into the mens rea side of it,
but it points out once again, number one, we're not arguing
multiplicity, and to the extent that anybody suggested it, I've
never gone there.
own, and I believe that the $9,500 by itself is deficient.
if the Court or the government is taking the position that you
have to get over or look at all the other counts or look at all
the activity in general in order to show evasion, then that
And secondly, each count has to stand on its

But
10
doesn't fit the pattern either, because if each count has to do
11
it, it's not there.
12
want to make that point that that's something that has jumped
13
out at me as being a problem with, again, how the indictment
14
and the evidence and everything else fits together.
15
And I know I ran over that twice, but I
Ms. Heldmyer indicated that in looking at a syllabus
16
of Ratzlaf and dealing with as relevant here, and I really
17
think dealing with what is a structured transaction, a
18
definition within Ratzlaf, and I really think what that
19
syllabus is talking about is the small portions of the
20
statutes, the specific statutes that are questioned in that
21
case as opposed to a small portion of the individual statutes
22
because if you flip to page 136, the ones everybody cited to,
23
it's just a flat out straight statement.
24
structure transactions, i.e., to break up a single transaction
25
above the reporting threshold into two or more separate

It is illegal to
73
10:43AM
transactions for the purpose of evading a financial
institution's reporting requirement.
Eleventh Circuit pattern instruction was at.
I read to you as I came back up here for purposes of the
rebuttal and what I was talking about, that's exactly the same
thing I'm saying here, over 10,000 broken up into multiple
transactions.
shown that.
those other cases.
That's really where the
Everybody has said that.
In terms of what
All the cases have
All the evidence has demonstrated that in all

But here we start out with an allegation
10
that it's only 9,500 or only 9,600 for each of the counts,
11
nothing more.
12
THE COURT:
But if you accept that definition, then
13
you cannot accept the regulation.
14
ever -- let me rephrase that.
15
structuring as stated by the definition you just mentioned but
16
only involve one transaction?
17
MR. BARRINGER:
Do you agree?
How could you
When would you ever have
The only way I can answer that that
18
fits everything else is defining what transaction suddenly
19
means as being the overall activity versus one act of cashing
20
or depositing money because the concept of one act of cashing
21
or depositing money, period, I don't believe fits Ratzlaf.
22
don't believe it fits the statute.
23
even the Eleventh Circuit pattern instruction on what a
24
structure can be.
25
I don't believe it fits
THE COURT: The pattern instruction is not law.

74
10:45AM
1
2
mean, it's not.
It's not law.
MR. BARRINGER:
It's not the law.
And yet, from a standpoint of what we
argued to the jury, we're limited in what we can say based upon
what the instructions are and where -- what we're telling the
jury the law means.
instruction.
certain portions of it and it was given as being this is what
you have to find.
9
10
11
I didn't propose that particular
The government did.
THE COURT:
I believe I objected to
Did you propose an alternative
instruction?
MR. BARRINGER:
I proposed different language than
12
this -- in portions of it.
I wanted to have it what cash or
13
currency meant.
14
dealing with 10,000 being only in a single day.
15
variety of things that I specifically objected to without
16
saying the entirety of it was faulty.
17
entirety of it.
18
what we have to argue to the jury, what the evidence has to
19
sort of fit into the category of is where the instructions
20
really take us.
21
it is as, the Court defines it, I'm now going to read you the
22
instructions this is the law as I'm giving it to you.
23
what we're really telling the jury.
24
not to go beyond that because we face the objections and things
25
of that nature.
I wanted to have additional definitions

There were a
But I didn't propose the
It was the government that proposed it.
And
While it may not be the totality of the law,
This is
And what we argue, we try

75
10:46AM
All the things we looked at here from the indictment,
to the evidence, to the instructions, to the statutes, and to
Ratzlaf now support exactly what the defendants have argued all
along.
saying something different, and I'm not sure that -- that it's
not inherently and internally conflicting with respect to some
portions of it, as I've talked about previously.
8
9
Only the regulations are hanging out there somehow is
The bottom line is that none of the counts stand.

None of the counts can now in second -- hindsight, look back
10
and say, well, we showed evasion by saying that they knew what
11
was going on at the bank.
12
believe it was Anne Dyson was the one from Amsouth that
13
testified about CTRs, and my understanding is that she never
14
told a client, never told a customer that she would file ever
15
file -- ever tell anyone they were going to file a CTR, never
16
did, not that she told everybody what CTRs are.
17
I don't recall anybody, and I
And secondly, the notice that's in the bank about
18
business days tells you when the bank's business day is going
19
to end and when the next day is going to start.
20
say anything about this is a CTR trigger point, if you have
21
10,000 and you bring it in the first day and you bring it in
22
the second day, then you've covered it, I don't believe anybody
23
ever testified that that, the $10,000 amount is ever told to
24
customers specifically with respect to everybody that walks in
25
and can suddenly see signs that say $10,000 is the amount, if
That doesn't
76
10:47AM
you go over it, we're going to tell the IRS.
that exists in any bank that I've seen either.
I don't think
So we have a question in terms of what the evidence
showed, but more specifically, dealing with where the
indictment was, where the facts were, where the instructions
were, and where the arguments were, and where the case law is,
not regulations, but where the case law is, none of these
charges is a crime.
THE COURT:
And I don't see any way around that.

All right.
Thank you.
10
Mr. Richey.
11
MR. RICHEY:
12
I think, once again, it's very clear that we're
13
dealing with a case of first impression since -- regarding use
14
cases, there is absolutely no case, especially in the Eleventh
15
Circuit, that's cited for a use case.
16
case of first impression.
So this is clearly a
17
The other issue, or another issue that we're dealing
18
with is that Ms. Heldmyer stated that Ratzlaf is not the only
19
definition of structuring.
20
how many definitions of structuring are there.
21
are more than one definition, what definition did the
22
defendants know?
23
structuring a transaction.
24
that the courts and Congress and the regulations, the
25
Department of Treasury don't even agree as to what the

That then raises an issue then of

And if there
How did they know that they were then

If there are so many definitions
77
10:49AM
definition of structuring is?
I think what has to be done,
what is always done is that a regulation cannot be read
separate and independent, otherwise it renders the other
definitions, the other regulations and statutes superfluous and
meaningless.
conjunction with the other regulations, in conjunction with the
statute, and in conjunction with Ratzlaf and the definitions of
the Court.
correct definition of what structuring is.
They have to be read in conjunction, in
When you read all those together, then you have a

There is not
10
multiple definitions, as the government suggested.
11
one and they all fit within that same parameter.
12
THE COURT:
There is
Let me ask you the question I posed to
13
Mr. Barringer.
14
that in the Eleventh Circuit pattern instruction, when would
15
one transaction ever be sufficient to support the offense as
16
charged here?
17
If you accept the Ratzlaf definition or even
MR. RICHEY:
I know of absolutely no case that would
18
support that, Your Honor, no case law that would support one
19
transaction.
20
They have --
THE COURT:
But that's what the regulation provides
21
for.
They have to show, and the indictment has to charge that
22
there was more money being structured than 10,000.
23
may have been only one -- I could forseeably see a situation
24
where, for example, there was $10,100 that needed to be taken
25
and the check was cashed for 9,000 and they were told that if
Now, there
78
10:51AM
they took out more than that, that -- or deposited more, or
whatever the situation were, that it would file a CTR and they
chose then not to take the additional amount and somehow that
got back to the government and they were charged with that one
count, that could be a foreseeable situation.
But what we have here is a situation that is not that
way.
You have to look at it as, even the government has
admitted, let's get rid of 14 through 57 and look solely at
Count 13.
If we look at that as a sole count, if all the
10
arrests were dismissed and that's the only count, is there
11
structuring involved there?
12
Now, the government has for the first time today, I
13
believe, argued that they proved and argued that the defendants
14
actually needed more money than the 9,600 or $9,500.
15
problem with that is that is not what the indictment charges.
16
The indictment in fact has between -- in each count has between
17
four and about 30 days when the checks were separate.
18
there is a time span between each count of around between four
19
to 30 days, separating each of them.
20
The
And so
Also, the evidence at trial showed that the
21
withdrawals began at about 1996 or 1997, began with the amount
22
of $3,000 and steadily grew, and even the evidence showed that
23
many weeks the amounts withdrawn was only 7,500 or 7,800.
24
Agent Evans testified that those were not -- they didn't charge
25
those as structuring counts because they were not as egregious.

79
10:53AM
So there is no pattern, as Agent Evans testified, between the
salaries that were paid and the amounts withdrawn.
a new novel argument that the government has made today, and
it's certainly not supported by the indictment, the charges
there.
So that is
With regard to the specific memo from Kent Hovind, the
memo said that for safety reasons they needed to stop
withdrawing that.
be paid in cash because he didn't believe he was an employee,
10
11
But as Brian Popp testified, he continued to
and that was specifically how he worded it.

I think all of these things show how it is that this
12
case has evolved, how it has become a difficult case.
And some
13
of these issues weren't raised because issues continue to be
14
raised even at this point after trial.
15
important thing is that there is only one definition of
16
structuring and all of the regulations, the statutes and the
17
courts' definitions have to be interpreted together, otherwise
18
you're running into a problem where some of them are being held
19
meaningless and superfluous.
20
insufficient evidence and insufficient charges, in fact, for
21
any of the Counts 13 through 57 to survive.
But I think the
Based on that, there is
22
THE COURT:
Thank you.
23
All right.
Well, you've all given the Court a great
24
deal to consider.
I will continue to ponder this novel
25
question and do my very best to have an order for you all in,
80
10:55AM
I'll say, the future, hopefully, the near future.
going to take me some time to go through -- again, some of the
arguments are new, newly raised, and to apply the arguments
against the case law and the legislative history as well.
Mrs. Hovind's sentencing has been continued.
Mr. Barringer, do you wish to address that?
we've given a new date yet for that sentencing.
8
9
This is
MR. BARRINGER:
I don't believe
We haven't, but as I was traveling
down here, apparently the new presentence report hit my
10
computer and was sent down to Mrs. Hovind for me to see.
I've
11
not looked at it yet, but there is a new presentence report
12
that's been filed.
13
respond to that by?
14
THE COURT:
Will I have a specific time that I need to
I'm not going to give you a time today.
15
Let me look at it.
This must be based on the revised offense
16
level calculation.
Is that right?
17
MR. BARRINGER:
18
MS. HELDMYER:
19
THE COURT:
Yes, I believe so.

That's correct.
I haven't seen it.
Let me look at that.
20
I will -- I'll put something out in writing advising of dates
21
for objections when I have a better idea of when we'll
22
reschedule the sentencing.
23
24
25
Okay.
Anything else?
Well, again, thank you all.
Court will be in recess.

(Proceedings concluded at 10:56 a.m.)
81
10:56AM
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-------------------I certify that the foregoing is a correct transcript from the

record of proceedings in the above-entitled matter. Any
redaction of personal data identifiers pursuant to the Judicial
Conference Policy on Privacy are noted within the transcript.
5
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s/Gwen B. Kesinger
12-30-07
_____________________________
________________

Official Court Reporter
Date
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USA V Kent Hovind Trial Transcripts (1 of 8)

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USA V Kent Hovind Trial Transcripts (1 of 8)

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF FLORIDA

UNITED STATES OF AMERICA,

TRANSCRIPT OF ORAL ARGUMENT PROCEEDINGS

MICHELLE M. HELDMYER, ESQUIRE

FOR THE DEFENDANT

ALAN S. RICHEY, ESQUIRE

FOR THE DEFENDANT

JEROLD W. BARRINGER, ESQUIRE

Gwen B. Kesinger, RPR, FCRR

We're here this morning for

oral argument which was ordered in response to a motion for

reconsideration that was filed by both defendants relating to

the Court's order denying the renewed motions for judgement of

parties have provided, and I'm now ready to hear argument.

Mr. Richey, do you wish to proceed or Mr. Barringer?

The Court required supplemental briefing, which all

Yes, Your Honor, Mr. Barringer would

I do want the record to reflect that both defendants

Mr. Barringer, please approach the podium.

are here in the courtroom as well.

Thank you, Your Honor.

May it please the Court.

case that the indictment with respect to Counts 13 through 57

never really stated a cause of action.

dealing with the motions to dismiss that were filed back in

to file those motions but also argued that -- or held that

where the government was at was an accurate position.

The Court initially, in

in those documents, we were saying the same sorts of things

that we began to say throughout the process of the trial up

through closing arguments which was that Counts 13 through 57

didn't state a cause of action.

Can I stop you just a moment?

just -- and I'll do this periodically, forewarning.

original or initial motions to dismiss that the argument was

not as fully presented as it has been as of late?

I don't think there is

any doubt that we -- I think everybody in this case has grown

in this issue, I believe, from rereading everything, looking at

the Court's orders, looking at the whole process, I think

everybody has expanded their thought process on what

structuring means and how a count can or cannot be structuring.

But -- and I will continue on with the

process, that we in the process of the trial -- we saw where

the jury instructions were.

the jury instructions.

I cross-examined agent Evans in particular on whether or not

the counts required each other's help to get over a $10,000

limit to whether they required additional checks per counts to

get over a $10,000 limit.

because I had in my mind at the time the same argument that we

The defendants filed objections to

We saw what the government's case was.

Those were specific questions

structured transaction that exceeds the $10,000 amounts and I'm

bank had a reporting requirement because that's not really what

the issue is.

it really is an issue, where -- as Ratzlaf says on 136, It is

illegal to structure transactions to break up a single

transaction above the reporting threshold into two or more

As the Supreme Court defines structuring in the

separate transactions for the purpose of evading the financial