People v. Smith

                               NO. 5-94-0506

                                  IN THE

                        APPELLATE COURT OF ILLINOIS

                              FIFTH DISTRICT
_________________________________________________________________

THE PEOPLE OF THE STATE OF ILLINOIS,)  Appeal from the
                                    )  Circuit Court of
     Plaintiff-Appellee,            )  Montgomery County.
                                    )
v.                                  )  No. 93-CF-120
                                    )
LARRY D. SMITH,                     )  Honorable
                                    )  Dennis M. Huber,
     Defendant-Appellant.           )  Judge, presiding.
_________________________________________________________________

     JUSTICE KUEHN delivered the opinion of the court:
     On October 19, 1993, a statewide grand jury filed a 40-count
indictment naming several defendants involved in a conspiracy to
distribute cocaine and cannabis.  Defendant, Larry Smith, was one
of these defendants.  Following a jury trial, he was found guilty
of various offenses and was sentenced to concurrent imprisonment
terms as follows:  calculated criminal drug conspiracy (18 years),
criminal drug conspiracy (18 years), narcotics racketeering (15
years), possession of a controlled substance (cocaine) with intent
to deliver (18 years), unlawful possession of cannabis with intent
to deliver (7 years), residential burglary (15 years), unlawful
restraint (3 years), unlawful harassment of a witness (3 years),
and unlawful structuring of a currency transaction (7 years).
     The defendant appeals and raises several issues.  We affirm
most of his convictions in the unpublished portion of this opinion.
     We address defendant's challenge to his conviction for
structuring currency transactions to evade recording and reporting
requirements of the law.  The challenge assails the sufficiency of
the proof as well as the jury instructions by which that proof was
measured.
     We find that the evidence was sufficient to sustain the guilty
verdict for unlawful structuring of currency transactions. 
However, we overturn the verdict and remand for a new trial because
the jury was never told of the reporting requirements that those
transactions were allegedly structured to evade.
     We first consider the sufficiency of the evidence.  In
considering this type of claim, it is not our duty to resolve
factual disputes or assess witness credibility.  People v. Bowen,
241 Ill. App. 3d 608, 619, 609 N.E.2d 346, 355 (1993).  Where the
evidence is not so palpably contrary to the jury s findings or
otherwise so unreasonable or unsatisfactory such that defendant s
guilt is called into doubt, the jury s finding should be affirmed. 
People v. Moore, 171 Ill. 2d 74, 94, 662 N.E.2d 1215, 1224 (1996). 
Proof of intent does not require direct evidence and can be
inferred from the surrounding circumstances.  People v. Richardson,
104 Ill. 2d 8, 12, 470 N.E.2d 1024, 1026 (1984).
     The defendant and his coconspirators acquired large quantities
of currency as a by-product of drug dealings.  During the
conspiracy, the defendant and coconspirators repeatedly entered
banks to exchange small denomination bills of currency for $100
bills.  On three different occasions, one of which included
defendant, members of the conspiracy used the County National Bank
of Hillsboro to convert small bills of currency into $100 bills. 
On another occasion, a conspirator used the First National Bank of
Raymond, entering with $2,000 in various denominations and exiting
with 20 $100 bills.  The Litchfield National Bank was also used on
numerous occasions during the same time frame to transact identical
currency exchanges.  The transactions usually involved only $1,000
at a time.
     The defendant admitted that he exchanged small bills of
currency for larger ones at a Litchfield bank.  He further admitted
that he attempted to do the same at a Hillsboro bank.  He also
acknowledged that other members of the drug conspiracy were
exchanging currency at the same time.
     Defendant claims that the State failed to establish an intent
to evade recording and reporting requirements, a necessary element
to the crime of unlawful structuring of currency transactions.
     Not all currency transactions must be reported.  The statute's
command extends only to currency transactions over $10,000 (205
ILCS 685/4 (West 1992)) and the issuance or sale of bank checks,
cashier's checks, traveler's checks, or money orders of $3,000 or
more (205 ILCS 685/5 (West 1992)).  Defendant takes two somewhat
contradictory positions with regard to these reporting
requirements.
     First, defendant suggests that the proof fails because none of
the transactions exceed the requirements.  Of course, had any of
the transactions exceeded the statute's monetary thresholds, the
reporting requirement would have been triggered and the financial
institution would have ensured the reporting of the transaction. 
Indeed, had the drug conspirators engaged in transactions large
enough to trigger reporting, we might well agree that the evidence
falls short of establishing an intent to evade reporting
requirements.  Such a transaction diminishes the inference that
flows from a pattern of currency transactions beneath the reporting
monetary thresholds.
     The defendant also argues that since the monetary transactions
were significantly less than the statute's reporting thresholds, a
rational trier of fact could not have concluded that the
transactions were engaged in with the requisite intent to evade the
reporting that accompanies those thresholds.  This argument touches
on the flaw in the jury instructions.  The amount of the
transaction in relationship to the monetary limits for reporting is
a valid consideration in determining whether a structured
transaction is intended to evade the reporting requirements.
     The Currency Reporting Act (Act) (205 ILCS 685/1 et seq. (West
1992)) has a simple design.  It tracks cash.  The legislature looks
to the root of all evil as a simple indicator of evil.  It
therefore assures that the Director of the State Police stays
abreast of people who engage financial institutions in large cash
transactions.  The statute seeks law enforcement knowledge of cash
dealings because "reports and records of transactions involving
United States currency *** have a high degree of usefulness in
criminal, tax or regulatory investigations or proceedings."  205
ILCS 685/2 (West 1992).
     In order to safeguard this purpose, the Act outlaws any plan
to evade the Act's reporting requirements by the "[s]tructure,
assist in structuring, or attempt to structure or assist in
structuring any transaction with one or more financial
institutions."  (Emphasis added.)  205 ILCS 685/7(a)(3) (West
1992).  The scope of this edict is indeed broad.  Any cash
transaction is potentially covered.  Notwithstanding, a proper
limitation is imposed by the need to prove that a transaction was
structured to evade the reporting requirements.
     Clearly, as the transaction's cash amount approaches the
monetary thresholds for reporting, the inference rises that the
transaction is structured to evade the reporting requirement.  The
individual who deposits $9,999 leaves a strong inference that the
deposit was structured to evade the transaction's report.  Although
the amount of the transaction is a significant factor in
determining an unlawful structure, it is not the only factor.
     In our case, the transaction amounts were far removed from the
amounts that trigger the reporting requirement.  The key here is
not the transaction amounts but the transactions themselves.  The
pattern of activity clearly shows an objective to avoid the
scrutiny and attention that often accompany large quantities of
cash.  The conspirators moved from one bank to another within the
same time frame.  Rather than exchange all of their smaller bills
for $100 bills at a single bank, they chose to travel significant
distances to transact smaller exchanges at numerous banks.  The
amounts exchanged were large but not exceedingly large.  The
exchanges were performed by different conspirators.  Moreover, the
transactions themselves are instructive.  They evince a need to
maintain large quantities of $100 bills.  Such a need kindles
curiosity that the transactions were designed to minimize.  
     Defendant and his cohorts may not have known of the reporting
requirements.  They may simply have been interested in avoiding the
attention of the specific cashiers and bank officials. 
Nevertheless, they did not so claim.  There was nothing offered to
negate the inference that the pattern of activity constituted a
structuring of transactions to evade the reporting requirements,
other than the fact that the amounts of cash involved were far less
than those amounts that trigger the Act's reporting requirements. 
While the transactional amounts give rise to an inference that the
reporting requirements were not the motivation behind the
structuring, such inference is not determinative.  The jury might
well conclude that the pattern of activity was designed to evade
the statute's reporting requirements.  The conspirators may have
been generally aware that banks report large cash transactions,
without knowing the specific triggering amounts.  Then again, they
may have had explicit knowledge of the specific triggering amounts
and simply chose to keep their patterned exchanges clear of the
threshold.
     Viewing the evidence in a light most favorable to the
prosecution (see People v. Collins, 106 Ill. 2d 237, 261, 478 N.E.2d 267, 276-77 (1985)), we hold that a rational trier of fact
could reasonably find that defendant and his coconspirators engaged
in a pattern of cash transactions structured with the design to
evade the currency reporting requirements.
     We next examine defendant's claim that the jury instructions
related to the crime of unlawful structuring of a currency
transaction were incomplete.  At trial, defendant objected to the
instructions but offered no alternative.
     There are no pattern jury instructions relating to the crime
of unlawful structuring of a currency transaction, and therefore
the State became creative out of necessity.  More for what was not
included in these instructions, it is useful to include their
complete text.
     The State's instruction number 40 stated, "A person commits
the offense of Unlawful Structuring of a Currency Transaction when
he structures, assists in structuring, or attempts to structure or
assist in structuring any transaction with one or more financial
institutions for the purpose of evading the recording or reporting
requirements of the Currency Reporting Act."  This instruction
generally tracks the following language of section 7(a)(3) of the
Currency Reporting Act (205 ILCS 685/7(a)(3) (West 1992)):  "No
person shall for the purpose of evading the recording or reporting
requirements of Sections 4 and 5 of this Act *** [s]tructure,
assist in structuring, or attempt to structure or assist in
structuring any transaction with one or more financial
institutions."  The only substantive difference between the two is
that the statutory language obviously contemplates specific
reference to the two statutes containing the reporting and
recording requirements, as opposed to the instruction's simple
reference to the "recording or reporting requirements."
     The People's instruction number 41 stated, "A person
structures a transaction if he was acting alone, or in conjunction
with or on behalf of other persons and conducts, attempts to
conduct, or assists in conducting one or more transactions in
currency, cashier's checks, money orders or travelers checks 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
of the Currency Reporting Act."  This language is virtually
identical to section 7(b) of the Act (205 ILCS 685/7(b) (West
1992)).
     On appeal, the State correctly argues that the two
instructions virtually mirror the statute outlining the elements of
the offense.  The first instruction set forth the elements of the
offense.  The second instruction defined the phrase, "structuring
a transaction."  The intent element of this crime requires a
finding that the defendant and/or others so structured a financial
transaction or series of transactions "for the purpose of evading
the recording or reporting requirements of the Currency Reporting
Act."
     Notwithstanding, the instructions are incomplete because the
jury was not instructed as to the Act s recording or reporting
requirements.  The requirements are not self-defining and should
not be drawn out of a jury's imagination.  The requirements are
quite specific.  The dollar amounts involved are $10,000 for
currency (205 ILCS 685/4 (West 1992)) and $3,000 for money orders,
cashier s checks, bank notes, and traveler s checks (205 ILCS 685/5
(West 1992)).  By not including or otherwise defining the dollar
amounts at issue and thereby providing a measuring device, the
implicit message to the jury is that there is always a reporting
requirement and that any cash amount would suffice.  The omission
is critical in this case because the reporting or recording
requirements represent an element of the offense and defendant's
involvement with $1,000 transactions does not carry nearly the
inference of transactions that closely approximate the monetary
reporting limits.  Unless the jury has been given the statutory
recording and reporting parameters, they cannot fairly draw the
appropriate inferences from the defendant's and his codefendant's
smaller dollar amount transactions.
     Jury instructions will not amount to harmless error if they
incorrectly advise the jury as to an essential element of the
crime.  People v. Stromblad, 74 Ill. 2d 35, 41, 383 N.E.2d 969, 972
(1978).  Because the error is fundamental, the evidence presented
at trial need not be reviewed.  Stromblad, 74 Ill. 2d  at 42, 383 N.E.2d  at 972-73.  Accordingly, we reverse defendant s conviction
for unlawful structuring of a currency transaction and remand for
a new trial on that charge.
     Upon retrial, the jury should be instructed upon the recording
and reporting requirements as factually applicable to the case.  In
other words, if no evidence establishes transactions with bank
checks, cashier's checks, traveler's checks, and money orders, then
it would be inappropriate to instruct the jury as to the $3,000
requirement.  If the evidence involves only currency, the jury
should be instructed that the reporting and recording requirements
of the Currency Reporting Act require all financial institutions to
record and report currency transactions involving more than
$10,000.
     Nonpublishable material under Supreme Court Rule 23 omitted.
     For the foregoing reasons, the judgment of the circuit court
of Montgomery County is affirmed in part, reversed in part, and
vacated in part, and the cause is remanded with directions.  

     Affirmed in part, reversed in part, and vacated in part; cause
remanded with directions.
     WELCH, P.J., and MAAG, J., concur.                                      NO. 5-94-0506
                                     IN THE
                          APPELLATE COURT OF ILLINOIS
                                 FIFTH DISTRICT
___________________________________________________________________________
THE PEOPLE OF THE STATE OF ILLINOIS,)  Appeal from the
                                    )  Circuit Court of
     Plaintiff-Appellee,            )  Montgomery County.
                                    )
v.                                  )  No. 93-CF-120
                                    )
LARRY D. SMITH,                     )  Honorable
                                    )  Dennis M. Huber,
     Defendant-Appellant.           )  Judge, presiding.
___________________________________________________________________________

Opinion Filed:                   March 24, 1998
___________________________________________________________________________

Justices:      Honorable Clyde L. Kuehn, J.
                         
               Honorable Thomas M. Welch, P.J., and 
               Honorable Gordon E. Maag, J.,
               Concur
___________________________________________________________________________
                         
Attorneys      Robert Agostinelli, Deputy Defender, Mark D. Fisher, 
for            Assistant Defender, Office of the State Appellate Defender,
Appellant      Third Judicial District, 1100 Columbus Street, Ottawa, IL
               61350
___________________________________________________________________________

Attorneys      James E. Ryan, Attorney General, State of Illinois, Barbara
for            A. Preiner, Solicitor General, State of Illinois, William
Appellee       L. Browers, Lisa Anne Hoffman, Assistant Attorneys General,
               100 West Randolph Street, 12th Floor, Chicago, IL 60601
___________________________________________________________________________