United States v. Thompson

George Thompson (defendant) was the chairman of the board of Ridglea Bank (Ridglea). The United States charged Thompson with violating the Currency and Foreign Transactions Reporting Act (also known as the Bank Secrecy Act of 1970) and regulations promulgated thereunder by unlawfully causing Ridglea to fail to file a currency-transaction report (CTR) in order to aid and abet Michael Welch’s cocaine-distribution activities. At trial, the United States presented evidence that Thompson authorized a series of Ridglea loans to help Welch buy marijuana for resale, with Welch using the sale proceeds to repay Ridglea for such loans and for previous, legitimate Ridglea loans that Welch could not repay. The United States also presented evidence that Thompson and Welch then agreed to a similar plan regarding a $45,000 loan to finance cocaine sales by Welch. Ridglea provided Thompson with the $45,000 in a single cash disbursal but reflected the transaction in five separate notes for $9,000 each, with each note bearing a different maturity date. Thompson admitted that he structured the transaction with separate notes to avoid the filing of a CTR, which the act and related regulations required for cash transactions exceeding $10,000. Ridglea did not file a CTR regarding the $45,000 loan. The teller who disbursed the money to Welch testified that he did not file a CTR because he did not have enough information to do so and that he relied on Thompson’s authority and on Thompson having not instructed him to file a CTR. Welch purchased cocaine with the $45,000. Welch testified that Thompson knew that Welch was using the loans for marijuana and cocaine transactions, but Thompson denied knowing (or wanting to know) what Welch was doing with the money. Thompson was convicted and sentenced to three years’ imprisonment. Thompson appealed, arguing that (1) the act and relevant regulations were unconstitutionally vague as applied to him because they used the terms “transaction” and “currency transaction” without defining such terms and (2) he was legally allowed to structure a transaction to avoid having to file a CTR in the same way that taxpayers are allowed to structure transactions to avoid (but not evade) taxes.