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\deflang1033\pard\plain\f3\fs17 
\par No. 95-1103
\par 
\par In the Supreme Court of the United States
\par 
\par OCTOBER TERM, 1995
\par 
\par SETH WAPNICK AND JON WAPNICK, PETITIONERS
\par 
\par v.
\par 
\par UNITED STATES OF AMERICA
\par 
\par ON PETITION FOR A WRIT OF CERTIORARI 
\par TO THE UNITED STATES COURT OF APPEALS 
\par FOR THE SECOND CIRCUIT
\par 
\par BRIEF FOR THE UNITED STATES IN OPPOSITION
\par 
\par DREW S. DAYS, III
\par Solicitor General
\par 
\par LORETTA C. ARGRETT
\par Assistant Attorney General
\par 
\par ROBERT E. LINDSAY
\par ALAN HECHTKOPF
\par YOEL TOBIN
\par Attorneys 
\par Department of Justice
\par Washington, D.C. 20530
\par (202) 514-2217
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par    
\par QUESTIONS PRESENTED
\par 
\par 1. Whether the vacatur of petitioners' convictions
\par for substantive violations of the currency transaction
\par reporting laws required the vacatur of their con-
\par victions for conspiring to defraud the United States.
\par 2. Whether petitioners were required to file cur-
\par rency transaction reports in connection with their
\par check-cashing business.
\par 
\par (I)
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par TABLE OF CONTENTS
\par 
\par Page
\par 
\par Opinion below . . . . 
\par Jurisdicition . . . . 1
\par Statement . . . . 1
\par Argument . . . . 6
\par Conclusion . . . . 16
\par 
\par TABLE OF AUTHORITIES
\par 
\par Cases:
\par 
\par American Tobacco Co. v. United States, 328 U.S.
\par 781 (1946) . . . . 7
\par Continental Ore Co. v. Union Carbide & Carbon
\par Corp., 370 U.S. 690 (1962) . . . . 7
\par Griffin v. United States, 502 U.S. 46 (1991) . . . . 6
\par Ratzlaf v. United States, 114 S. Ct. 655 (1994) . . . . 2, 4, 6
\par United States v. Alston, No. 94-2195, 1996 WL 79826
\par (3rd Cir. Feb. 26, 1996) . . . . 10, 11, 12
\par United States v. Armstrong, 951 F.2d 626 (5th Cir.
\par 1992) . . . . 15
\par United States v. Hawley, 855 F.2d 595 (8th Cir.
\par 1988), cert. denied, 489 U.S. 1020 (1989) . . . . 15
\par United States v. Jackson, 33 F.3d 866 (7th Cir.
\par 1994), cert. denied, 115 S. Ct. 1316 (1995) . . . . 5, 10
\par United States v. Levy, 969 F.2d 136 (5th Cir.),
\par cert. denied, 506 U.S. 1040 (1992) . . . . 15
\par United States v. Stern, No. 94-3319 (11th Cir.
\par Sept. 20, 1995) (68 F.3d 485), petition for cert.
\par pending, No. 95-965 . . . . 10, 11
\par United States V. Winfield, 997 F.2d 1026 (4th Cir.
\par 1993) . . . . 12, 13
\par United States v. Zehrbach, 47 F.3d 1252 (3d Cir.),
\par cert. denied, 115 S. Ct. 1699 (1995) . . . . 4
\par 
\par Statutes and regulations:
\par 
\par Act of Sept. 23, 1994, Pub. L. No. 103-325, 411, 108
\par Stat. 2253 . . . . 4
\par 
\par (III)
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par (IV)
\par 
\par Statutes and regulations-Continued:
\par 
\par Page
\par 
\par 18 U.S.C. 371 . . . . 2, 5, 10, 11
\par 26 U.S.C. 7201 . . . . 2
\par 26 U.S.C. 7206(1) . . . . 2
\par 26 U.S.C. 7206(2) . . . . 2
\par 31 U.S.C. 5312(a)(2)(K) . . . . 15
\par 31 U.S.C. 5313 (1988) . . . . 2, 14
\par 31 U.S.C. 5313(a) . . . . 15
\par 31 U.S.C. 5322(a) (1988) . . . . 11
\par 31 U.S.C. 5322(b) (1988) . . . . 2, 4, 14
\par 31 U.S.C. 5324 (Supp. IV 1992) . . . . 2, 4, 11
\par 31 C.F.R.:
\par Section 103.11(f) (1995) (redesignated as Section
\par 103.11(i)) . . . . 15
\par Section 103.11(n)(3) (1995) (redesignated as Section
\par 103.11(z)) . . . . 15
\par Section 103.22(a) . . . . 3
\par 
\par Miscellaneous:
\par 
\par 60 Fed. Reg. (1995)
\par p. 228 . . . . 15
\par p. 44, 144 . . . . 15
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par In the Supreme Court of the United States
\par        
\par OCTOBER TERM, 1995
\par 
\par No. 95-1103
\par 
\par SETH WAPNICK AND JON WAPNICK, PETITIONERS
\par 
\par v.
\par 
\par UNITED STATES OF AMERICA
\par 
\par ON PETITION FOR A WRIT OF CERTIORARI
\par TO THE UNITED STATES' COURT OF APPEALS
\par FOR THE SECOND CIRCUIT
\par 
\par BRIEF FOR THE UNITED STATES IN OPPOSITION
\par 
\par OPINION BELOW
\par 
\par The opinion of the court of appeals (Pet. App. la-
\par 19a) is reported at 60 F.3d 948.
\par         
\par JURISDICTION
\par 
\par The judgment of the court of appeals was entered on
\par July 10, 1995. A petition for rehearing was denied on
\par October 3, 1995. Pet. App. lb. The petition for a writ
\par of certiorari was filed on January 2, 1996 (a Tuesday
\par following a holiday). The jurisdiction of this Court is
\par invoked under 28 U.S.C. 1254(1).
\par         
\par STATEMENT
\par 
\par After a jury trial, petitioners were convicted of
\par conspiring to defraud the United States by impeding
\par 
\par (1)
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 2
\par 
\par the lawful functions of the Internal Revenue Service,
\par in violation of 18 U.S.C. 371; aiding and assisting the
\par filing of false tax returns, in violation of 26 U.S.C.
\par 7206(2); failing to meet reporting requirements for
\par large cash transactions, in violation of 31 U.S.C. 5313
\par (1988) and 5322(b) (1988); and willfully structuring
\par transactions to evade the currency transaction re-
\par porting requirements, in violation of 31 U.S.C. 5322(b)
\par (1988) and 5324 (Supp. IV 1992). Pet. App. 3a; Pet. C.A.
\par App. 92-94. 1. Petitioner Seth Wapnick was also con-
\par victed of making false statements on his tax return,
\par in violation of 26 U.S.C. 7206(1). Pet. App. 3a, 6a. 2.
\par The district court set aside the "structuring" con-
\par victions in light of this Court's intervening decision
\par in Ratzlaf v. United States, 114 S. Ct. 655 (1994).
\par Based on the remaining convictions, petitioners were
\par each sentenced to serve 24 months' imprisonment, to
\par be followed by three years' supervised release, and to
\par pay a fine of $10,000. The court of appeals affirmed.
\par Pet. App. 1a-19a.
\par 1. Petitioners worked for a tax preparation service
\par called Harold Wapnick & Sons, which was headed by
\par their father and co-defendant, Harold Wapnick. The
\par 
\par ___________________(footnotes)
\par 
\par 1. Sections 5322(b) and 5324 (31 U.S. C.) were amended in
\par 1994. See note 3, infra.
\par 2 Petitioners' co-defendants, Harold Wapnick and Steven
\par Wolfson, were convicted of conspiring to defraud the United
\par States, in violation of 18 U.S.C. 371, and aiding and assisting
\par the filing of false tax returns, in violation of 26 U.S.C. 7206(2).
\par Harold Wapnick was also convicted of failing to meet reporting
\par requirements for large cash transactions, in violation of 31
\par U.S.C. 5313 (1988) and 5322(b) (1988); willfully structuring cur-
\par rency transactions to evade the reporting requirements, in
\par violation of 31 U.S.C. 5322(b) (1988) and 5324 (Supp. IV 1992);
\par and tax evasion, in violation of 26 U.S.C. 7201.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 3
\par 
\par business prepared tax returns for a large number of
\par New York City cab drivers. Petitioners and their co-
\par defendants prepared numerous tax returns falsely
\par understating the income of cab drivers and coached
\par some drivers to falsify records to support the false
\par returns. Pet. App. 4a-7a.
\par In addition to the tax preparation service, peti-
\par tioners and Harold Wapnick conducted loan and
\par check-cashing operations. In the latter venture, the
\par Wapnick routinely cashed third-party checks for
\par more than $10,000, but they never filed currency
\par transaction reports (CTR's) for those transactions.
\par Pet. App. 7a-8a, 14a. Between 1984 and 1988, the Wap-
\par nicks cashed more than $6 million in checks. Id. at 7a;
\par Gov't C.A. Br. 19-21,52.
\par Harold Wapnick hid the income from the loan and
\par check-cashing operations by depositing it in 13 cor-
\par porate accounts at Republic National Bank. Pet. App.
\par 7a. To fund the operations, the Wapnicks often in a
\par single day made multiple withdrawals from the bank
\par accounts that totaled more than $10,000 but were
\par individually for lesser amounts. Although the indi-
\par vidual withdrawals fell below the $10,000 amount
\par prescribed by regulation, 31 C.F.R. 103.22(a), the
\par suspicious nature of those withdrawals led bank
\par officials to begin reporting them on CTRs. Pet. App.
\par 8a. Petitioner Seth Wapnick also operated a separate
\par business that leased taxicab medallions. He under-
\par reported his income from that business on his federal
\par income tax returns for 1986 and 1987. Pet. App. 7a-8a.
\par 2. The district court instructed the jury that,
\par with respect to the counts that charged petitioners
\par with structuring transactions to evade the currency
\par transaction reporting requirements, the jury should
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 4
\par 
\par find petitioners guilty if it found that they knew of
\par those requirements and deliberately acted to evade
\par them. Pet. C.A. App. 364-366. The court instructed
\par the jury that it was not required to find that peti-
\par tioners knew that structuring was unlawful. Id. at
\par 365. After trial, the court set aside petitioners' con-
\par victions on the "structuring" counts in light of
\par Ratzlaf v. United States, 114 S. Ct. 655 (1994), which
\par held that, to satisfy the willfulness element of the
\par offense in a structuring prosecution, the government
\par must prove that the defendant knew that his conduct
\par was illegal. Pet. App. 3a. 3. The district court did not,
\par however, set aside petitioners' convictions for con-
\par spiring to defraud the United States by impeding the
\par functions of the IRS.
\par 3. The court of appeals affirmed. Pet. App. 1a-19a.
\par As relevant here, it rejected petitioners' argument
\par that Ratzlaf required the vacatur of not only their
\par structuring convictions but also their convictions for
\par conspiring to defraud the United States. 4. The court
\par 
\par ___________________(footnotes)
\par 
\par 3. In the wake of Ratzlaf, Congress amended 31 U.S.C.
\par 5322(b) and 53.24. See Act of Sept. 23, 1994, Pub. L. No. 103-
\par 325, 411, 108 Stat. 2253. Under the amended provisions, the
\par government need not prove that the defendant in a structuring
\par prosecution knew that his or her conduct was illegal. See
\par United States v. Zehrbach, 47 F.3d 1252, 1261-1262 & n.7 (3d
\par Cir.) (en banc), cert. denied, 115 S. Ct. 1699 (1995).
\par 4 In rulings that petitioners do not challenge in this Court,
\par the court of appeals also held that the vacatur of petitioners'
\par structuring convictions did not "taint[]" their convictions for
\par failing to file CTRs in connection with their cheek-cashing
\par business (Pet. App. 12a-15a); that the district court correctly
\par instructed the jury on what constitutes a "sham corporation"
\par (id. at 15a-16a); and that the evidence seized under a search
\par warrant was properly admitted (id. at 17a-19a). The court of
\par appeals rejected without discussion petitioners' remaining con-
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 5
\par 
\par observed that petitioners were not charged under 18
\par U.S.C. 371 with conspiring to commit a crime, but
\par with conspiring to defraud the United States by
\par "impairing] the [Internal Revenue Service's] ability
\par to collect information on cash transactions exceeding
\par $10,000." Pet. App. 11a. 5. In light of that charge, the
\par court explained, the government was not required to
\par prove a violation of the structuring provision. Ibid.
\par The court accordingly held that the vacatur of the
\par structuring convictions did not compel the vacatur of
\par the conspiracy convictions. Id. at lla-12a. In so
\par holding, the court followed the Seventh Circuit's de-
\par cision in United States  v. Jackson, 33 F.3d 866 (1994),
\par cert. denied, 115 S. Ct. 1316 (1995), which rejected an
\par argument "virtually identical" to petitioners'. Pet.
\par App. 11a.
\par The court of appeals rejected petitioners' assertion
\par that, "even though the indictment did not specify the
\par substantive crime of structuring as an object of the
\par 371 conspiracy, the government's argument and the
\par jury charge permitted the jury to find that struc-
\par turing was not only a means to the end of fraud, but
\par that it was the fraud itself." Pet. App. 12a. The court
\par stated. "[O]ur reading of the record does not persuade
\par us that the district court and the government
\par           
\par ___________________(footnotes)
\par 
\par tensions,  including their contention, which they renew in this
\par Court (Pet. 17-23), that they were not required to file CTRs for
\par their check-cashing operations. See Pet. App. 19a.
\par 5 Section 371 (18 U.S. C.) provides in relevant part:
\par 
\par If two or more persons conspire either to commit any
\par offense against the United States, or to defraud the United
\par States, or any agency thereof in any manner or for any
\par purpose, and one or more of such persons do any act to
\par effect the object of the conspiracy, each shall be [guilty of a
\par crime] * * *.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 6
\par 
\par effectively amended the indictment by permitting the
\par jury to find structuring to be an end, rather than a
\par means to an end, of the conspiracy." Ibid.
\par        
\par ARGUMENT
\par 
\par 1. Petitioners contend (Pet. 3-4, 8-17) that Ratzlaf
\par v. United States, 114 S. Ct. 655 (1994), required the
\par vacatur of not only their structuring convictions but
\par also their conspiracy convictions. They argue as
\par follows: One object of the conspiracy with which they
\par were charged was to violate the structuring statute;
\par that object was legally insufficient in light of Ratzlaf;
\par and under Griffin v. United States, 502 U.S. 46 (1991),
\par a conspiracy conviction must be reversed when one of
\par the charged objects is held to be legally insufficient.
\par The premise of petitioners' argument is mistaken.
\par The object of the conspiracy with which they were
\par charged was not to violate the structuring statute.
\par Rather, the indictment charged that the object of the
\par conspiracy was
\par 
\par to defraud the United States by impeding,
\par impairing, obstructing and defeating the lawful
\par functions of the Internal Revenue Service of the
\par U.S. Treasury Department in its authorized
\par functions of (a) ascertaining, computing, asses-
\par sing and collecting revenue, namely income
\par taxes, and (b) collecting information regarding
\par transactions in United States currency in excess
\par of $10,000.
\par 
\par Indictment "Par" 12, at 4 (Pet. C.A. App. 69). Although the
\par conspiracy count of the indictment also alleged that
\par petitioners structured currency transactions with
\par Republic National Bank in order to evade the cur-
\par rency reporting requirements, that conduct was
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 7
\par 
\par alleged to be merely one of the many means by which
\par petitioners sought to achieve their object of de-
\par frauding the IRS. Indictment  "Par" 23, at 7 (Pet. C.A.
\par App. 72). 6. It is well settled that the government is
\par not required to prove that any particular means used
\par to carry out a conspiracy is itself a crime. See Con-
\par tinental Ore Co. v. Union Carbide & Carbon Corp.,
\par 370 U.S. 690, 707 (1962); American Tobacco Co. v.
\par United States, 328 U.S. 781, 809 (1946). Thus, the
\par government was entitled, in alleging and proving the
\par conspiracy charge, to rely upon petitioners' struc-
\par turing conduct and evidence of that conduct, regard-
\par less of whether that conduct constituted a separate,
\par substantive offense. The court of appeals therefore
\par correctly held that petitioners' conspiracy convic-
\par tions were not undermined by this Court's holding in
\par Ratzlaf that such structuring conduct does not
\par constitute a substantive offense in the absence of
\par knowledge of illegality. Pet. App. 10a-12a.
\par The court of appeals was also correct in rejecting
\par petitioners' contention that certain comments by the
\par prosecutor and jury instructions could have led the
\par jury to believe that the object of the conspiracy was to
\par violate the structuring law. Pet. App. 12a. In renew-
\par ing that contention in this Court (Pet. 10-14), peti-
\par tioners cite the prosecutor's comment during sum-
\par mation that structuring conduct "can impair and
\par 
\par ___________________(footnotes)
\par 
\par 6 The indictment also alleged numerous other means, in-
\par cluding defendants' preparation of false tax returns for taxi
\par drivers; defendant Harold Wapnick's underreporting of his
\par income; petitioner Seth Wapnick's underreporting of income
\par from leasing taxi medallions; and petitioners' cashing of third-
\par party checks from businessmen allegedly attempting to conceal
\par their currency transactions and income from the IRS. Pet.
\par C.A. App. 69-72.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 8
\par 
\par impede the IRS in discovering financial information
\par and assuring compliance with the revenue laws." Pet.
\par 12 (emphasis omitted). That statement merely indi-
\par cated that structuring was one of the means by which
\par petitioners sought to achieve their conspiratorial ob-
\par jective of defrauding the IRS. It was therefore
\par consistent with the allegations of the indictment.
\par The comment did not state or imply (any more than
\par did the indictment) that, if the jury found petitioners
\par guilty of the structuring charges, it was compelled
\par also to find them guilty of the conspiracy charge.
\par Nor did the jury instructions so state or imply.
\par Petitioners' argument to the contrary (Pet. 13) is
\par based primarily on a single sentence in the instruc-
\par tions, which stated (Pet. C.A. App. 373): "You may
\par find the defendants guilty of the crime of conspiracy
\par to defraud the United States even though the sub-
\par stantive. crimes which were the objects of the con-
\par spiracy were not actually committed." Read in con-
\par text, that statement could not reasonably have been
\par understood to alter the conspiratorial objective
\par charged in the indictment. The district court began
\par its instructions on the conspiracy count by reading
\par the charge as set forth in the indictment. Id. at 367-
\par 372; Tr. 10,525-10,530. Thereafter, the court explained
\par (Pet. C.A. App. 372):
\par 
\par The crime of conspiracy to defraud the United
\par States is an independent offense. It is separate and
\par distinct from the actual violation of any specific
\par federal laws.
\par 
\par The court stated that one of the elements of the con-
\par spiracy offense was an "unlawful agreement" (id. at
\par 373), and it described the nature of the "unlawful
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 9
\par 
\par agreement" charged in the indictment as follows (id.
\par at 373-374):
\par 
\par In this case, the unlawful agreement charged in the
\par indictment is a conspiracy to defraud the United
\par States[,] which means an agreement or under-  
\par standing to interfere with, or obstruct one of the
\par lawful governmental functions of the United States
\par by deceit, craft or trickery, or by means that were
\par dishonest.
\par 
\par Subsequently, the court explained that the
\par defendants were charged "with conspiring to accom-
\par plish two illegal objectives, namely, 1) impairing the 
\par Internal Revenue Service in computing income, and 2)
\par impairing the Internal Revenue Service in collecting
\par information about transactions in currency." Pet.
\par C.A. App. 376. 7. The court also stated: "If the
\par government fails to prove that at least one of the
\par objectives was an object of the conspiracy in which
\par the defendants participated, then you must find the
\par defendants not guilty on the conspiracy count." Ibid.
\par Thus, read as a whole, the jury instructions properly
\par distinguished the substantive charges from the con-
\par spiracy charge and directed the jury to find petition-
\par ers guilty of the conspiracy charge only if it found
\par that they had agreed to one of the illegal objectives
\par specified in the indictment.
\par           
\par ___________________(footnotes)
\par 
\par 7. The district court was clearly referring to those two
\par unlawful objectives when it instructed the jury that it had to
\par find beyond a reasonable doubt that at least two of the defen-
\par dants agreed "to work together in furtherance of the unlawful
\par schemes alleged in the indictment."  Pet. C.A. App. 376.
\par Petitioners' reliance (Pet. 13 n.3) on that portion of the instruc-
\par tions is therefore misplaced.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 10
\par 
\par The court of appeals' affirmance of petitioners'
\par conspiracy convictions accords with United States v.
\par Jackson, 33 F.3d 866 (7th Cir. 1994), cert. denied, 115
\par S. Ct. 1316 (1995). The defendants in Jackson were
\par convicted of structuring violations and conspiracy to
\par defraud the IRS. 33 F.3d at 867-869. On appeal, the
\par government acquiesced in the vacatur of the
\par structuring convictions in light of Ratzlaf.  Id. at 869.
\par The defendants argued that Ratzlaf also required the
\par vacatur of their conspiracy convictions. Id. at 869-
\par 870. Like the court of appeals in this case, the
\par Seventh Circuit in Jackson rejected that argument.
\par It observed that, because "the government did not
\par have to demonstrate that the defendants violated the
\par antistructuring laws" to establish the conspiracy, the
\par vacatur of the structuring convictions in light of
\par Ratzlaf "has no bearing on the defendants'  371
\par convictions." 8. Id. at 871. 9.
\par 
\par ___________________(footnotes)
\par 
\par 8. Petitioners assert (pet. 15) that Jackson is distinguishable
\par because in that case "neither the indictment nor the govern-
\par ment identified the substantive [structuring] violation as an
\par objective of the conspiracy." As explained in the text, supra,
\par it was also true in this case that neither the indictment nor the
\par government's proof identified structuring as the conspiratorial
\par objective.
\par 9 The decision below also accords with United States v.
\par Stern, No. 943319, judgment noted at 68 F.3d 485 (llth Cir.
\par Sept. 20, 1995) (Table), petition for cert. pending, No. 95-865
\par (filed Dec. 18, 1995). Stern was convicted of conspiring to
\par defraud the United States, in violation of 18 U.S.C. 371, by
\par impeding the IRS's collection of information regarding CTRs.
\par On appeal, he argued that the district court should have
\par instructed the jury that, to find him guilty on the conspiracy-
\par to-defraud charge, it had to find that he willfully violated
\par currency transaction reporting requirements. See Gov't C.A.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 11
\par 
\par In United States v. Alston, No. 94-2195, 1996 WL
\par 79826 (Feb. 26, 1996), the Third Circuit reversed a
\par conspiracy conviction in light of Ratzlaf, but in cir-
\par cumstances quite different from those of this case.
\par Alston had been charged in one count with conspiring
\par to defraud the United States and the Department of
\par the Treasury, and conspiring to structure trans-
\par actions with the purpose of evading the CTR re-
\par quirements, in violation of 18 U.S.C. 371. In a
\par separate count, he was charged with the substantive
\par offense of structuring, in violation of 31 U.S.C. 5324
\par (Supp. IV 1992) and 5322(a) (1988). Alston, slip op. 2.
\par Insofar as the conspiracy to defraud was concerned,
\par the indictment "allege[d] no more than a conspiracy
\par to defraud the United States by structuring," id. at
\par 3; see also id. at 12-13, and "the government offered
\par the same body of evidence * * * to Support both the
\par charge against Alston for 'conspiracy to defraud' and
\par the charge against him for 'conspiracy to structure.'"
\par Id. at 13. In those circumstances, the Third Circuit
\par held that, "to obtain a conviction under either the
\par 'defraud' or 'offense' clause of 371, the government
\par had to prove that Alston knew that his structuring
\par activities were illegal." Id. at 14.
\par The Third Circuit was careful, however, "not [to]
\par foreclose the possibility of convicting a defendant un-
\par der  371's 'defraud' clause based on charges in addi-
\par tion to or different from pre-1994 acts of struc-
\par turing." Slip op. 14;  see also note 3, supra (describing
\par 1994 amendments to structuring statute). It dis-
\par tinguished "cases that have upheld convictions for
\par conspiracy to defraud under 371 [and that] have all
\par           
\par ___________________(footnotes)
\par 
\par Br. at 15 in United States v. Stern, supra. The Eleventh
\par Circuit affirmed the conspiracy conviction.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par          
\par 12
\par 
\par involved additional charges in the indictment and
\par additional evidence produced at trial, over and beyond
\par that required for a conviction for pre-1994 struc-
\par turing." Slip op. 14. In particular, the Alston court
\par distinguished Jackson, inter alia, on the ground that
\par Jackson "involved extensive 'other evidence' beyond
\par structuring activity demonstrating a conspiracy to
\par defraud the United States." Id. at 15. That same
\par feature distinguishes the present case from Alston
\par the indictment in this case alleged, and the evidence
\par showed, that petitioners and their co-defendants
\par sought to defraud the government in many ways in
\par addition to their structuring conduct. See note 6,
\par supra. 10.
\par The Fourth Circuit reviewed conspiracy convic-
\par tions involving CTR requirements in United States
\par v. Winfield, 997 F.2d 1076 (1993), but its decision
\par leaves unclear what position that court would take
\par on the question presented here. The defendants in
\par Winfield were indicted for conspiracy to commit the
\par substantive offense of structuring transactions to
\par avoid the CTR requirements, but the relevant count
\par of the indictment was captioned "Conspiracy to
\par Defraud." The judge instructed the jury that the
\par defendants were charged with conspiracy "to defraud
\par the United States in violation of 18 U.S.C. 371 by
\par conspiring to obstruct the CTR filing requirement of
\par 31 U.S.C.  5322 and 5324," and the court of appeals
\par                             
\par ___________________(footnotes)
\par 
\par 10 Furthermore, the 1994 amendments to the structuring
\par statute deprive of any continuing importance the question
\par whether convictions for conspiracy to defraud the United
\par States must be vacated in light of the vacatur of structuring
\par convictions for Rutzlaf error. See Alston, slip op. 7 n.12 ("In
\par light of the 1994 amendment to [31 U.S.C.] 5324, we observe
\par that the instant situation is unlikely to occur again.").
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 13
\par 
\par ostensibly set out to review the sufficiency of the
\par evidence in support of that theory. Id at 1081. The
\par court correctly stated that conspiring to defraud
\par requires only proof of an "intent to defraud the
\par United States" (id. at 1082); the court also stated
\par that, "to be convicted of conspiracy to structure
\par transactions to avoid CTR requirements, a party
\par must have knowledge of the reporting requirements
\par and act[] to avoid them," ibid. (internal quotation
\par marks omitted), indicating that the court may have
\par viewed the charge as embracing both a conspiracy to
\par defraud the United States and a conspiracy to violate
\par the CTR reporting requirements.  The court
\par analyzed the challenge brought by the first of the two
\par defendants by reviewing the sufficiency of the
\par "prosecution's evidence of a conspiracy to obstruct the
\par CTR requirements." Ibid. (emphasis added). When
\par the court reviewed the sufficiency of the evidence
\par with respect to the second defendant, it looked to
\par "[tlhe evidence connecting [the second defendant] to a
\par conspiracy to defraud the government by obstructing
\par the filing of CTR's," id. at 1083 (emphasis added), but
\par then twice described the charge against that defen-
\par dant as "conspiracy to violate the CTR require-
\par ments, " ibid. (emphasis added). Winfield has never
\par been cited by the Fourth Circuit for any proposition.
\par In light of the confusion evident in the opinion
\par regarding the nature of the charges analyzed by the
\par court of appeals, it is too early to tell whether the
\par position of the Fourth Circuit conflicts with that
\par taken by the Second Circuit below, the Seventh
\par Circuit in Jackson, and the Eleventh Circuit in Stern
\par (see note 9, supra).
\par 2. Petitioners also contend (Pet. 4, 17-23) that they
\par were not required to file CTRs in connection with
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 14
\par 
\par their check-cashing business and that their convic-
\par tions under 31 U.S.C. 5313 (1988) and 5322(b) (1988) for
\par failing to do so are therefore invalid. That contention
\par lacks merit.
\par Petitioners' primary argument is that they were
\par not required to file a CTR each time they cashed a
\par check for more than $10,000 for one of their cus-
\par tomers, because Republic National Bank filed a CTR
\par when petitioners withdrew money from one of 13
\par corporate accounts to obtain the cash to pay their
\par customers. See Pet. 17-18, 23. That argument con-
\par fuses two separate sets of transactions. As the court
\par of appeals correctly recognized, petitioners' transac-
\par tions with the Bank were "distinct and separable"
\par from their transactions with the customers of their
\par check-cashing business: "The transactions underly-
\par ing the structuring counts were the Wapnicks' multi-
\par ple cash withdrawals of amounts just under $10,000
\par from Republic National Bank; by contrast, the
\par transactions underlying the CTR charges were the
\par Wapnicks' cashing of their customers' unendorsed,
\par third-party cheeks in amounts exceeding $10,000."
\par Pet. App. 14a. The separate nature of petitioners'
\par transactions with the Bank, on the one hand, and
\par their transactions with the customers of their check-
\par cashing business, on the other hand, is underscored
\par by the fact that the former invariably involved
\par amounts of less than $10,000, whereas the latter
\par invariably involved amounts of more than $10,000. See
\par Id. at 8a; Gov't C.A. Br. 19-21. Thus, contrary to
\par petitioners' suggestion (Pet. 18), they were more than
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par 
\par 15
\par 
\par merely factotums who "delivered" checks and cash
\par back and forth between the Bank and its customers. 11.
\par Petitioners err in claiming (Pet. 18-21) that their
\par check-cashing business was not a "financial institu-
\par tion" within the meaning of 31 U.S.C. 5313(a). The
\par statute defines that term to include a "cashier of
\par * * * checks," 31 U.S.C. 5312(a)(2)(K), and it is
\par defined by regulation specifically to include "[a]
\par currency dealer or exchanger, including a person
\par engaged in the business of a check casher." 31 C.F.R,
\par 103.11(n)(3); 12. see also 31 C.F.R. 103.11(f); cf. United
\par States v. Levy, 969 F.2d 136, 140 (5th Cir.), cert.
\par denied, 506 U.S. 1040 (1992). 13. Petitioners and Harold
\par Wapnick were clearly acting as a "financial institu-
\par tion" under the statute and regulation. See United
\par States v. Hawley, 855 F.2d 595, 601 (8th Cir. 1988)
\par (check-cashing business was "financial institution"
\par under prior version of regulation), cert. denied, 489
\par U.S. 1020 (1989); see also United States v. Armstrong,
\par 951 F.2d 626, 629-630 (5th Cir. 1992) (bank's, chairman . 
\par               
\par ___________________(footnotes)
\par 
\par 11. It undermines petitioners' argument that the government
\par "could not connect a single third-party businessman's check
\par with a specific check cashed at the bank." Pet. 23. Petitioners
\par prevented such a connection by using a multi-step process: in
\par one step, they deposited their customers' checks for amounts of
\par more than $10,000 into one of the 13 bank accounts; in a
\par separate step, they wrote checks against the accounts for
\par amounts of less than $10,000.
\par 12. Although some of petitioners' convictions for Willfully
\par failing to file CTRs were based on a prior version of the regu-
\par lation defining "financial institution; see Pet. C.A. App, 348,
\par petitioners attach no significance to that fact.
\par 13. Effective April 1, 1996, 31 C.F.R. 103. n(f) was redesign-
\par ated 103.11(i), and 31 C.F.R. 103.11(n)(3) was redesignated
\par 103.11(z)(3). 60 Fed. Reg. 228 (1995); id. at 44,144.
\par 
\par ---------------------------------------- Page Break ----------------------------------------
\par         
\par 16
\par 
\par of the board was a "financial institution" when he per-
\par sonally exchanged $150,000 money order for $150,000
\par cash obtained through the bank).
\par 
\par CONCLUSION
\par 
\par The petition for a writ of certiorari should be
\par denied.
\par Respectfully submitted.
\par 
\par DREW S. DAYS, 111          
\par Solicitor General
\par            
\par LORETTA C. ARGRETT
\par Assistant Attorney General
\par            
\par ROBERT E. LINDSAY           
\par ALAN HECHTKOPF            
\par YOEL TOBIN           
\par Attorneys
\par 
\par APRIL 1996
\par 
\par 
\par 
\par }