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United States v. Bank of New England, N.A - 821 F.2d 844 (1st Cir. 1987)

Rule:

A financial institution must report a customer deposit exceeding $ 10,000 which had been divided into small sums and in a single day deposited into different accounts held by the same customer in the same financial institution.

Facts:

On 31 separate occasions between May 1983 and July 1984, James McDonough withdrew from a branch of defendant Bank of New England, N.A. ("Bank") more than $ 10,000 in cash by using multiple checks—each one individually under $ 10,000—presented simultaneously to a single bank teller. In a subsequent prosecution in federal district court, a jury convicted the Bank of 31 violations of the Currency Transaction Reporting Act ("Act"), 1 31 U.S.C.S. §§ 5311-22, as federal regulations required banks to file Currency Transaction Reports ("CTRs") within 15 days of customer currency transactions exceeding $ 10,000. The Bank appealed.

Issue:

Did the willful failure of the Bank to report multiple currency transactions violate the Act?

Answer:

Yes.

Conclusion:

The appellate court affirmed the Bank's convictions. The court ruled, inter alia, that despite the Bank's argument to the contrary, each time McDonough presented multiple checks in a single transaction was a single physical transfer of currency in excess of $ 10,000 from the Bank to McDonough. Thus, the language of the regulations itself gave the Bank fair warning that McDonough's transactions were reportable. The court further ruled the district court's jury instruction regarding the pattern of illegal activity was proper as McDonough made consistent withdrawals from defendant, which consistently failed to file the required reports. Each transaction was part of pattern of illegal activity, a felony under § 5322(b).

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