Kent Hovind on "structuring"!

[Paths of the Sea]

In an rather odd turn of events, I happened to find myself involved in a brief, personal correspondence with Kent Hovind, who happens to have a deadline with the U.S. Tax Court today.

Regarding one, simple, fundamental point, I happen to think he is just flat out wrong. Shortly after I told him that, and in the broader context of our correspondence, he pulled the plug; our total correspondence came to 10 messages each.

Here's the message where he makes a fundamental claim regarding the law; the claim I told him I doubted was correct:

-----------------------------------------

From: KENT E HOVIND (06452017)
To: Maury Enthusiast!
Date/Time: 1/28/2013 8:50:45 AM

Subject: RE: Your latest 2 Emails earlier today!

One more thot on the same topic.

If structuring requires TWO or more transactions of
less than $10,000 on the same day (and it does) that
total MORE than $10,000 how can there be 45 counts
in my indictment?

The MAX would be 22 counts.

The indictment is fatally flawed therefore the court
lack jurisdiction to even hear the case.

The indictment must still be dismissed and the case
overturned.

Are you seeking for truth or seeking to get me to
confess to a crime I (and scores of others) do not
think I committed?

What is your motive in all this?

You asked if I would admit I was guilty...

Will YOU admit I was NOT guilty if that is where the
evidence leads?

History records hundreds of thousands of WRONG decisions
that hurt others badly you know.

Have a great day!

KH

--------------------------------------------------------

I don't think "structuring" requires "two or more".

In Kent's case, there were 45 single transactions which the jury found were each, individually, "structuring"; just as the indictment claimed.

There were other interesting aspects of the correspondence, but I thought I would run this by the experts here for comment.

Sincerely,
Maury Enthusiast!

[notorial dissent]

I don’t mean this to sound any more sarcastic than it really is, but since when hasn’t Dr Dino been reality challenged?

It has been quite some time since I looked at the actual indictment, but from what I remember, there were indeed 45 separate transactions, that taken together constituted a very real presumption and appearance of structuring. The fact that he doesn’t want to see it that way is, as they say, tough!!! Going by their actions and the totality of the amounts, it would certainly appear to an outsider, and obviously it appeared to the jury that they were trying to evade the structuring laws, which is certainly what it amounted to, and was why they were convicted.

They call it “structuring” because it is the obvious attempt to get around the reporting rule about $10,000 cash at any one time. The actual reporting limit is considerably under that, but $10k is the magic number. It wouldn’t make any difference if it were two transactions of $4999 and one of $2, or ten transactions of $1000, it still sets off the requirement as long as it is within a reasonable period. So gee, guess what, that makes Dr D WRONG, yet again.

[webhick]

He seemed to put an awful lot of emphasis on "TWO" rather than "TWO OR MORE." I bet he did 3 or more in many of those days and thinks that they can only use two of them for the indictment so he's cherry picking which two he's justifying for the indictment. For instance, he did three transactions for $4000, and is only counting two of them.

Or, "in a day" really means "in a 24 hour period."

[The Observer]

Just another case of TPs trying to hold the court to a twisted interpretation of what the law says.

Let's look at IRC 6050I(f):

(f) Structuring transactions to evade reporting requirements prohibited.
(1) In general. No person shall for the purpose of evading the return requirements of this section--
(A) cause or attempt to cause a trade or business to fail to file a return required under this section,
(B) cause or attempt to cause a trade or business to file a return required under this section that contains a material omission or misstatement of fact, or
(C) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more trades or businesses.

Note that any transaction that is determined to be structuring gets you into trouble, not two or more as Hovind would have us believe. The fact that Hovind has 45 of these questionable transfers of cash only makes it worse. As notorial dissent points out, taking all of these into account and seeing the relationship develop over time only strengthens the application of law here.

[Pottapaug1938]

I work in the financial services industry; and every year, all of us have to undergo training about how to identify and prevent money-laundering. In our training materials, several examples are given; and one of them (which I have seen myself) involves multiple purchases into an account, followed by one or more (usually large) redemptions. Nothing has ever been said about how many transactions are required to trip the "red flag".

I would be willing to bet that Dr. Dino made a bunch of purchases/deposits, and then a bunch of redemptions/withdrawals,in such amounts as to make it impossible to match up one transaction with another.

[notorial dissent]

Its been a long time since I had to really deal with this, but I would bet this is what they nailed him with.

The upshot of this act is, that if it looks suspicious, report it to CYA

And, it still comes down to Dr D being reality challenged.

Chapter 26. Bank Secrecy Act
Section 13. Structuring
1.
The definition of structuring for purposes of currency transaction reporting is found at 31 CFR 103.11(gg). The elements of the structuring regulations are:
*
A person acting alone, in conjunction with others, or on behalf of others,
*
Conducts or attempts to conduct,
*
One or more transactions in currency,
*
In any amount,
*
At one or more financial institutions,
*
On one or more days,
*
For the purpose of evading the reporting requirements of 31 CFR 103.22 (requiring CTRs).

2.
The definition is specifically written to include those transactions which occur beyond a single business day and transactions which are conducted through more than one financial institution, but only if the purpose of the transaction(s) is to evade the reporting requirements. It is not the intent of the definition to expand the reporting requirements of a financial institution.
3.
The definition of structuring is not the same as, and is separate from, any requirement to report suspicious transactions. However, attempts to structure need to be reported as suspicious transactions on the appropriate Suspicious Activity Report (SAR) form.

[Pottapaug1938]

My company files a SAR if we even begin to suspect that something stinks about a transaction or a set of transactions, which keeps us legally protected. As for me, I will not process a transaction (such as, say, a redemption by check to a new address within 30 days of an address update) unless the formalities of the law are strictly followed.

[grixit]

I remember back when i first heard of Hovind, back on talk.origins. At that time, he was just another creationist, with the distinction of having built a crude amusement park/museum in his backyard.

The shift started when local authorities questioned whether the installation fit the zoning laws, given that he was operating it as business, the safety laws, given that he was having the public in, licensing, parking, etc. Eventually property and sales tax came in.

His first response was to try to claim religious exemptions. He tried to use the amish as a model. It was quickly pointed out that those amish who have exemptions, have equivalent procedures to spare their religious sensibilities but do not get them out of paying. Plus, i suspect they involve at least as much work. Plus, a tourist to a working farm wouldn't be invited to jump into the grain silo, whereas Hovind had among other things, a "pterydactyl ride" which was just a homemade long range rope swing.

And the more he lost, the more outrageous his claims became. And now, here we are, with his argument having "devolved" to trying to nit pick how many chrages he can be convicted on.

[wserra]

I hate to say it, but Hovind may have a point. It's not the one he makes - there is no requirement of two transactions a day, a month, a year or a century. If he was in fact indicted in a separate count for each transaction, his argument is that the indictment is multiplicious - it charges the same offense in multiple counts. I don't have time to run an update or to learn more about Hovind's case, but at least there used to be case law that each deposit or withdrawal does not constitute a separate crime. For example, United States v. Nall, 949 F.2d 301 (10th Cir. 1991).

No more time.

[grixit]

Really? Well then, i guess he showed us. Fellow quatloosians, we must acknowledge this resounding victory!

[Paths of the Sea]

I hate to say it, but Hovind may have a point.

It's not the one he makes - there is no requirement
of two transactions a day, a month, a year or a century.

If he was in fact indicted in a separate count for each
transaction, his argument is that the indictment is
multiplicious - it charges the same offense in multiple
counts.

That's where I disagreed.

In my reading of the law, one transaction designed to evade the reporting rules is enough for one charge.

Hovind made 45 cash withdrawals over about a year's time, each one being $9,500.00 or $9,600.00 and each one, arguably, a "structure" independent of all the other transactions.

He was indicated on 45 charges.
He was convicted on 45 charges.

I don't recall, but he probably could have made a plea deal for less, but, of course, we known that is not what he's all about.

In the same indictment were the charges for employment tax evasion and obstruction for which he was also convicted.

Sincerely,
Maury Enthusiast!

[Pottapaug1938]

I hate to say it, but Hovind may have a point.

It's not the one he makes - there is no requirement
of two transactions a day, a month, a year or a century.

If he was in fact indicted in a separate count for each
transaction, his argument is that the indictment is
multiplicious - it charges the same offense in multiple
counts.

That's where I disagreed.

In my reading of the law, one transaction designed to evade the reporting rules is enough for one charge.

Hovind made 45 cash withdrawals over about a year's time, each one being $9,500.00 or $9,600.00 and each one, arguably, a "structure" independent of all the other transactions.

He was indicated on 45 charges.
He was convicted on 45 charges.

I don't recall, but he probably could have made a plea deal for less, but, of course, we known that is not what he's all about.

In the same indictment were the charges for employment tax evasion and obstruction for which he was also convicted.

Sincerely,
Maury Enthusiast!

I would agree as well. In the world of mutual funds, that's one of the reasons why many funds have rules as to how often money can be moved in and out of one account, or among several accounts.

[Quixote]

Dr. Dino has a point, but it is relevant only to the length of his sentence, not to his conviction. He was charged with structuring, i.e., breaking a single transaction of $10,000 or more into multiple transactions for the purpose of evading currency transaction reporting. He made 45 deposits of less than $10,000. Even supposing that every two related deposits summed to $10,000 or more, he engaged in at most 22 instances of structuring.

The regulation refers to structuring a transaction by breaking it down into several transactions of less than $10,000 each. If I make two cash deposits of $7500 each for the purpose of evading the reporting requirements, I have engaged in one instance of structuring, not two. Neither transaction by itself is structuring. Even together they do not constitute structuring unless they are two pieces of a larger transaction that I am attempting to get past the reporting requirements. It takes two to structure. Dr. Dino's 45 deposits cannot possibly be 45 instances of structuring.

[Quixote]

I hate to say it, but Hovind may have a point.

It's not the one he makes - there is no requirement
of two transactions a day, a month, a year or a century.

If he was in fact indicted in a separate count for each
transaction, his argument is that the indictment is
multiplicious - it charges the same offense in multiple
counts.

That's where I disagreed.

In my reading of the law, one transaction designed to evade the reporting rules is enough for one charge.

...

Sincerely,
Maury Enthusiast!

There is no way to evade the reporting requirements with one transaction. If the transaction is for less than $10,000, there is no reporting requirement to evade. If the transaction is for $10,000 or more, it's going to be reported, so the requirement has not been evaded.

[Paths of the Sea]

I suppose the Hovind supporters and Hovind himself owe me a debt of gratitude for introducing the issue here. Maybe he will be able to reference some here in support of one or more of his claims.

I still think some of y'all are wrong.

I think the law and regulations make it clear that one transaction, which could be less than $10,000 and intended to evade the reporting rules, can represent one violation justifying one charge and one conviction.

See:

31 CRF 103.11

Title 31: Money and Finance: Treasury

Subtitle B: Regulations Relating to Money and Finance

PART 103: FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN TRANSACTIONS

Subpart A: Definitions

103.11 - Meaning of terms.

(excerpts)

(gg) Structure (structuring).

For purposes of section 103.53, a person structures
a transaction if that person, acting alone, or in
conjunction with, or on behalf of, other persons,
conducts or attempts to conduct one or more transactions
in currency, 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 under
section 103.22 of this part.

"In any manner" includes, but is not limited to, the
breaking down of a single sum of currency exceeding
$10,000 into smaller sums, including sums at or below
$10,000, or the conduct of a transaction, or series
of currency transactions, including transactions at
or below $10,000.

The transaction or transactions need not exceed the
$10,000 reporting threshold at any single financial
institution on any single day in order to constitute
structuring within the meaning of this definition.

Sincerely,
Maury Enthusiast!

[JamesVincent]

I would, with my normal person eye, have to agree with Wes. If the actual law is against the structuring, not the deposits, then it would seem to be one count of structuring. If the entire system was set up and ran for 45 deposits to hide the total deposits, it would seem he violated that law, not 45 times. I mean, if you commit murder by stabbing someone 10 times, is that 10 counts or one? One with special circumstances maybe? Probably not the best example.

the
breaking down of a single sum of currency exceeding
$10,000 into smaller sums, including sums at or below
$10,000, or the conduct of a transaction, or series
of currency transactions, including transactions at
or below $10,000.

That would seem to me makes it one violation for the entire structure, not one per deposit. As all one part of the same crime.

[Paths of the Sea]

I would, with my normal person eye, have to agree with Wes. If the actual law is against the structuring, not the deposits, then it would seem to be one count of structuring. If the entire system was set up and ran for 45 deposits to hide the total deposits, it would seem he violated that law, not 45 times.

I mean, if you commit murder by stabbing someone 10 times, is that 10 counts or one? One with special circumstances maybe?

Probably not the best example.

James,

You are correct in supposing your attempt at analogy might not work.

It doesn't.

It's one murder that the person is charged with in your example.

As to structuring, the law seems clear as well as the regulations that if you want to evade the $10,000 reporting rule you can do that by intentionally engaging in ONE transaction of less than $10,000.

If you do it 45 times, it's 45 violations.

Here the charge received by the jury:

--------------------------------------------------------------

You must also follow the law as I explain it to you
whether you agree with that law or not; and you must
follow all of my instructions as a whole.

You may not single out, or disregard, any of the
Court's instructions on the law.

The Defendants can be found guilty of this offense
(structuring) only if all the following facts are
proved beyond a reasonable doubt;

First:

That the Defendants had knowledge of the currency
transaction reporting requirements;

Second:

That with such knowledge, the Defendants knowingly
structured or assisted in structuring a currency
transaction;

Third:

That the Defendants' purpose in structuring the
transaction was to evade the transaction reporting
requirements; and

Fourth:

That the structured transaction involved one or
more domestic financial institutions.

The transaction or transactions need not exceed the
$10,000 reporting threshold at any single financial
institution on any single day in order to constitute
structuring within the meaning of this definition.

-------------------------------------------------------

I'm stickin' with the judge on that one. He seems a lot more reasonable than Hovind, his supporters, and some who have opined here.

Sincerely,
Maury Enthusiast!

[Paths of the Sea]

Here's how the indictment put it:

In the United States District Court
For the Northern District of Florida
Pensacola Division

Indictment
Case No. 3.06 cr83/mcr

United States of America

v.

Kent E. Hovind
and
Jo D. Hovind

THE GRAND JURY CHARGES:

(excerpts)

COUNTS THIRTEEN THROUGH FIFTY-SEVEN

That, on the dates specified below, in the
Northern District of Florida, defendants

KENT E. HOVIND
and
JO D. HOVIND

knowingly and for the purposes of evading the
reporting requirements of Section 5313(a) of
Title 31, United States Code, and the
regulations promulgated thereunder, structured,
assisted in structuring, and caused to be
structured the following transactions, each
transaction being a cash withdrawal from AmSouth
Bank, a domestic financial institution:

(45 withdrawals of either $9,500 or $9,600
between July 2001 and September 2002)

July 11, 2006

Gregory R. Miller
United States Attorney

Michelle M. Heldmeyer
Assistant United States Attorney

[mirele]

1) Prisoners have e-mail accounts? I know he's able to talk on the phone to outsiders because I watched a film last month featuring a recorded conversation with him. (The conversation had nothing to do with taxes but rather with Hovind's conversion from one type of end of the world belief to another, which is beyond the scope of this board.)

2) Did Hovind file anything with the Tax Court today?

3) I work for a financial institution and have to take a Bank Secrecy Act / Anti-Money Laundering course every year, even though I work on the technology side. Our training is pretty unsubtle--it's basically along the lines of, "If you even THINK someone is structuring, report it." A bank we purchased a few years back had been allowing for serious money laundering to go on, so of course my employer is going to be erring on the side of disclosure. Having to pay a multi-million dollar fine will do that to you.

[Paths of the Sea]

1) Prisoners have e-mail accounts?

2) Did Hovind file anything with the Tax Court today?

I don't know if he filed anything or not. The Tax Court is typically a little slow in posting stuff to the docket history. And so we wait.

As to e-mail:

--------------------------------------------

From: info@corrlinks.com
To: Maury Enthusiast
Date: Sat, 26 Jan 2013 06:31:18 -0600

Subject: Inmate : HOVIND, KENT E

This is a system generated message informing you
that the above-named person is a federal prisoner
who seeks to add you to his/her contact list for
exchanging electronic messages.

You can ACCEPT this prisoner's request or BLOCK
this individual or all federal prisoners from contacting
you via electronic messaging at http://www.corrlinks.com.

To register with CorrLinks you must enter the email
address that received this notice along with the
identification code below.

Email Address: xxxxxxxxxxxxxx
Identification Code: xxxxxxxxx

This identification code will expire in 10 days.

By approving electronic correspondence with federal
prisoners, you consent to have the Bureau of Prisons
staff monitor the content of all electronic messages
exchanged.

Once you have registered with CorrLinks and approved
the prisoner for correspondence, the prisoner will be
notified electronically.

For additional information related to this program, please
visit the http://www.bop.gov/inmate_programs/trulincs_faq.jsp FAQ page.

--------------------------------------------------

Someone recommended me to Kent and he set it up, and then pulled the plug when I tried to help him understand his problems and deal with them. I was answering his questions and he was evading mine.

Sincerely,
Maury Enthusiast!