Melvin D. Van Allen, Jr. was convicted of financial crimes, specifically structuring currency transactions and concealing assets during bankruptcy, violating 18 U.S.C. §§ 152(1), (2) and 31 U.S.C. §§ 5324(a)(3), (d)(2). He appealed, challenging the evidence sufficiency, an evidentiary ruling, and two jury instructions, but the court affirmed his conviction. Van Allen, a former mayor of Justice, Illinois, operated a used auto parts business with his three sons, utilizing multiple bank accounts primarily at Archer Bank. Between 2002 and 2004, he wrote over 3,000 checks, mostly to himself, and cashed them at currency exchanges, which charged processing fees. He claimed this method was to avoid extra paperwork, as his suppliers required cash while customers paid by check. Notably, none of the checks exceeded $10,000, and he made numerous cash deposits into the Archer account, all under that threshold, amounting to over $5.5 million. This structuring was intended to evade federal reporting requirements for transactions exceeding $10,000. By mid-2003, facing financial difficulties, the Van Allens consulted an attorney about bankruptcy. After reviewing and signing a prepared bankruptcy petition, Van Allen filed it on January 28, 2004.
Van Allen's bankruptcy petition was found to have significant omissions, including undisclosed assets such as his home, a Bridgeview account, and a TCF account, as well as failing to reveal his operation of an auto parts business and any income derived from it in the two years prior to filing. During a creditors' meeting on May 10, 2004, Van Allen falsely testified under oath that he did not own his home and had disclosed all his assets, leading the bankruptcy trustee to report favorably on his petition, enabling him to discharge all credit card debt. Consequently, Van Allen faced four bankruptcy-related charges for concealment of assets and making false statements, along with twenty-eight counts of illegal structuring related to cash deposit transactions, resulting in a jury conviction on all counts and a sentence of thirty-six months in prison followed by two years of supervised release.
On appeal, Van Allen raised multiple issues: (1) insufficient evidence for the structuring counts, (2) insufficient evidence for one bankruptcy-related count, (3) denial of an advice-of-counsel jury instruction, (4) improper jury instructions regarding 'concealment' in bankruptcy, and (5) exclusion of evidence showing banks filed transaction reports for the currency transactions in question. The appellate court noted that because Van Allen did not move for acquittal during the trial, his challenge to the sufficiency of evidence for illegal structuring would be reviewed under the plain error standard. This standard requires demonstrating that an error occurred, was plain, and affected substantial rights, with reversal only warranted in cases of manifest injustice or lack of evidence pointing to guilt.
Banks and currency exchanges are required to file a Currency Transaction Report (CTR) with the IRS for transactions exceeding $10,000, as mandated by Treasury regulations. Structuring, defined as breaking down transactions to evade reporting requirements, is illegal under federal law. A conviction for structuring only requires proof that a defendant knowingly attempted to avoid these reporting requirements. In this case, Van Allen was charged with making multiple cash deposits totaling over $10,000 without any single deposit exceeding that amount, which occurred on the same day. The government presented circumstantial evidence to support claims of illegal structuring, including a pattern of large, unreported cash transactions linked to his auto parts business. The jury found that the volume and nature of these transactions, coupled with Van Allen's significant check-cashing fees, indicated a deliberate attempt to evade reporting laws. His argument that the structure of his business necessitated such transactions was rejected by the jury, which concluded that his actions were irrational and inefficient, further supporting the inference of intent to avoid reporting. The evidence was deemed sufficient to uphold Van Allen's conviction, with no indication of a miscarriage of justice.
Van Allen contends that the government did not adequately prove the crime of structuring, asserting that evidence must show he split a single cash hoard exceeding $10,000 into smaller deposits. He relies on United States v. Davenport, 929 F.2d 1169 (7th Cir. 1991), which he misinterprets, as it supports convictions for structuring based on multiple deposits under $10,000 intended to evade reporting requirements. The court clarifies that structuring can be defined as altering transaction forms to avoid triggering bank reporting duties, aligning with Treasury regulations. Van Allen's extensive cash transactions, totaling over $5 million in small amounts, lacked a legitimate business justification, undermining his claims regarding the implications of 31 U.S.C. 5324(a)(3) for cash-dependent businesses.
Regarding Count Three, which charges Van Allen with concealing his business in bankruptcy, he argues the government failed to prove his business interest was part of the bankruptcy estate. This argument, raised for the first time on appeal, requires plain error review, which is a high bar for reversal. The indictment cites 18 U.S.C. 152(1), which prohibits fraudulent concealment of estate property. The government presented substantial evidence, including Van Allen's bankruptcy petition, where he did not disclose his automobile parts business or related income, despite being required to do so. Van Allen claims his business, as a sole proprietorship, did not constitute 'property,' but this assertion does not negate his obligation to disclose it.
Van Allen argues that, under Illinois law, a sole proprietorship lacks a separate legal identity from its owner, implying he had no obligation to disclose business property in bankruptcy proceedings. He suggests that because of this legal status, he should not be required to report any related assets. However, the bankruptcy code defines 'property of the estate' broadly, encompassing all legal and equitable interests, including those of a sole proprietorship. Consequently, debtors must disclose all property interests, regardless of perceived value or availability to the estate. Evidence shows Van Allen attempted to conceal his auto parts business, failing to report significant deposits and withdrawals from his business account, and undervaluing it in bankruptcy filings. His claim that he had disclosed his business interests elsewhere in the bankruptcy schedules is rejected; he was required to report all income and expenses associated with the business. The court finds no significant impact on the fairness of judicial proceedings due to these omissions, supporting Van Allen’s conviction. Additionally, Van Allen sought an advice-of-counsel jury instruction based on his assertions that he disclosed everything to his bankruptcy attorney, who failed to list the assets. The court denied this request, noting the absence of evidence that the attorney instructed him not to disclose the assets.
A district court's decision not to instruct the jury on a defense theory is reviewed de novo. A criminal defendant is entitled to have the jury consider any defense theory supported by law and evidence, regardless of the strength of that evidence. For an instruction on a defense theory to be provided, it must meet four criteria: it must accurately state the law, be supported by evidence, not be part of the government’s charge, and its omission must deny the defendant a fair trial. Although advice of counsel is not a standalone defense, an informed opinion from an attorney regarding lawful conduct can negate the mental state required for certain crimes, such as fraud. A defendant must demonstrate specific elements to support this theory, including seeking competent legal advice in good faith and fully disclosing all relevant facts to the attorney.
In the case at hand, Van Allen presented evidence that suggested his attorney, Piesiecki, was aware of his business and bank accounts. However, Piesiecki contradicted this, claiming Van Allen had ceased operations after September 11, 2001, and only drew income from a village position. Crucially, Van Allen did not provide evidence that Piesiecki advised him to omit any assets from his bankruptcy petition, nor did Piesiecki claim to give such advice. Thus, the district court found that the necessary evidence supporting Van Allen’s advice-of-counsel theory was absent, leading to the conclusion that no instruction on this theory was warranted.
Additionally, Van Allen contested his conviction for the concealment of his interest in his home, asserting that the theory of concealment presented by the government was inadequate. The government had introduced evidence that Van Allen failed to disclose his interest in a trust holding the title to his home, with supporting testimony from a bank representative regarding the trust and events after Van Allen's indictment.
In early 2006, Van Allen contacted a Bridgeview official to correct what he claimed was a mistake in a trust, asserting it should have been in his wife's name rather than his own. This attempt was cited by the government as evidence for a concealment charge. The district court defined concealment as withholding legally required information, emphasizing that it is a continuing offense, which includes actions before and after filing for bankruptcy. Van Allen argued the jury was presented with two theories of concealment—his failure to list his home and his conversation with the Bridgeview official—claiming the latter should not independently support a conviction. He referenced case law suggesting that a verdict must be overturned if the jury cannot clearly distinguish between two grounds for conviction, one valid and one not. However, it was determined that the jury was not instructed to consider the Bridgeview conversation as a separate basis for conviction. Instead, they were directed to view all actions, including the Bridgeview incident, as supportive of the concealment charge.
Additionally, Van Allen contested the exclusion of evidence that Archer Bank filed Currency Transaction Reports (CTRs) related to his deposits, arguing this was relevant to his knowledge and intent regarding structuring charges. The district court ruled the CTRs irrelevant to his guilt, affirming its discretion in evidentiary matters and stating that the decision was supported by the evidence presented. The court upheld Van Allen's conviction on Count One and the structuring counts, affirming the district court's rulings.
Evidence is deemed relevant and admissible if it makes the existence of any consequential fact more or less probable (Fed. R. Evid. 401 and 402). The court found no logical connection between Archer Bank's filing of Currency Transaction Reports (CTRs) and Van Allen's guilt or innocence, as the bank's actions did not provide material insight into Van Allen’s state of mind. The CTRs may reflect the knowledge of Archer Bank officials but do not indicate whether Van Allen was aware of or attempted to circumvent reporting requirements. A precedent established in Cassano confirms that the government needs to demonstrate only that a defendant knew of the reporting obligations and acted to avoid them. Although Van Allen cited cases permitting the jury to consider the consequences of a defendant’s actions as circumstantial evidence of intent, the court clarified that such evidence's exclusion does not constitute an abuse of discretion. The government provided sufficient circumstantial evidence of Van Allen's intent to evade reporting requirements, evidenced by his inefficient business practices and remarks about the inconvenience of filing additional paperwork. Consequently, the court affirmed Van Allen’s conviction and sentence.
