## Facts

- Federal law and Treasury regulations required banks to file Currency Transaction Reports (CTRs) within 15 days for customer currency transactions exceeding $10,000.
- Customer James McDonough made 31 cash withdrawals at the Bank’s Prudential Branch (Boston) between May 1983 and July 1984.
- On each occasion, McDonough presented multiple checks—each under $10,000—simultaneously to a single teller and received more than $10,000 in cash in one visit.
- The Bank did not file CTRs for these withdrawals until May 1985, after receiving a grand jury subpoena.
- Trial evidence included employee testimony that branch supervisors treated such aggregated same-day transactions as reportable and internal compliance materials stating that multiple same-day transactions totaling over $10,000 required CTRs.
- A grand jury indicted the Bank (and others) for conspiracy and substantive CTR violations; after dismissals and acquittals affecting other counts/defendants, the case proceeded against the Bank on 31 counts for failing to file CTRs tied to McDonough’s withdrawals.
- A jury convicted the Bank on all 31 CTR counts as felonies based on a pattern of illegal activity exceeding $100,000 in a twelve-month period.

## Issues

1. Whether simultaneously presented multiple checks, each under $10,000, resulting in a single cash payout over $10,000 constitute a reportable “transaction in currency” requiring a CTR.
2. Whether the government could treat each willful failure to file within a qualifying “pattern of illegal activity” as a separate felony under 31 U.S.C. § 5322(b).
3. Whether the willfulness instructions—including corporate “collective knowledge” and willful blindness—were legally correct and supported by the evidence.
4. Whether reference to conduct outside the indictment period improperly influenced the jury’s willfulness determination.

## Decision

- The First Circuit affirmed the Bank’s 31 felony convictions.
- The court held that each McDonough visit involved a single reportable currency transaction exceeding $10,000, regardless of the number of checks used to obtain the cash.
- The court upheld felony treatment under § 5322(b), concluding that once a pattern exceeding $100,000 in a twelve-month period is proved, each willful non-filing within that pattern may be punished as a felony.
- The court approved the district court’s willfulness instructions, including collective-knowledge attribution to the corporation and a willful-blindness instruction.
- The court found no reversible error in the court’s limited reference to post-period conduct; any error was harmless and the evidence was properly considered on willfulness.

## Legal Principles

- CTR duties turn on the substance of the transaction: a single physical transfer of more than $10,000 in currency is reportable even if accomplished through multiple instruments each below $10,000 presented at the same time.
- Treasury regulations provided adequate notice that aggregated same-day cash transfers over $10,000 required CTR filing; the absence of a single check over $10,000 does not avoid reporting.
- Under 31 U.S.C. § 5322(b), proof that willful reporting violations occurred as part of a pattern involving more than $100,000 in transactions within twelve months permits felony punishment for each willful failure to file within the pattern.
- Corporate criminal knowledge may be established by aggregating the knowledge held by different employees and compliance materials; a corporation cannot avoid liability by compartmentalizing information.
- Willful blindness may satisfy willfulness where responsible personnel suspect a high probability of a reporting obligation and consciously avoid confirming the facts or requirements.

## Conclusion

The First Circuit sustained the Bank’s convictions, holding that simultaneous multi-check withdrawals producing a single cash payout over $10,000 trigger CTR reporting, and that corporate willfulness can be proven through collective employee knowledge and conscious avoidance, with each willful non-filing in a qualifying pattern punishable as a felony.


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