## Facts

- Phillip Chestnut McLamb owned the Smithfield Ford–Lincoln–Mercury dealership in Smithfield, North Carolina.
- In July 1990, a salesman (M.L. “Bill” Stallings) arranged a Ford Aerostar van sale to Margie Jenkins, financed entirely with $13,927.79 in cash delivered at the dealership.
- McLamb told Stallings the deal could not be handled as an all-cash payment and instead directed a split-payment method: one receipt for $9,900 cash and another reflecting a $4,027.79 check.
- McLamb instructed Stallings to write a personal check to the dealership for $4,027.79, reimbursed him with cash, and deposited both the $9,900 cash and Stallings’s check into the dealership account.
- The dealership did not file IRS Form 8300, required for business receipt of more than $10,000 in cash in a single transaction or related transactions.
- In August 1990, an IRS agent (Anthony Asbridge), acting undercover with an alias and recording device, negotiated at the dealership to buy a Lincoln Town Car using cash.
- The agent stated the funds were “not clean money,” tied to “drug people,” and that the buyer could not have the car in his own name, emphasizing concerns about reporting.
- McLamb described “ways” to complete the deal without “getting anybody in trouble” and suggested structuring payment as roughly $9,000 in cash plus separate cashier’s checks in amounts under $10,000 to avoid reporting.
- At trial, the government also introduced evidence of three additional dealership vehicle sales involving cash payments near $10,000 combined with cashier’s checks under $10,000.

## Issues

1. Whether the evidence was sufficient to prove McLamb structured the van transaction to evade the Form 8300 reporting requirement under 26 U.S.C. § 6050I(f)(1), despite the initial cash receipt by the salesman.
2. Whether the district court erred on the structuring count by not instructing the jury on whether the duty to file Form 8300 rested on McLamb personally or on the dealership.
3. Whether the district court abused its discretion by admitting evidence of other similar cash-plus-cashier’s-check vehicle sales under Federal Rule of Evidence 404(b).
4. Whether the evidence was sufficient to sustain the money-laundering conviction under 18 U.S.C. § 1956(a)(3) based on the undercover transaction and McLamb’s statements about avoiding reporting.

## Decision

- The Fourth Circuit affirmed McLamb’s convictions for structuring under 26 U.S.C. § 6050I(f)(1) and money laundering under 18 U.S.C. § 1956(a)(3).
- The court held the evidence supported a finding that McLamb engineered the split-payment method for the van sale to prevent Form 8300 reporting.
- The court found no reversible error in the structuring instructions because the jury was required to find McLamb engaged in structuring and caused a return not to be filed, and the evidence showed those acts.
- The court held the Rule 404(b) evidence was properly admitted to show intent and absence of mistake and was not unduly prejudicial.
- The court held the recorded undercover conversation provided sufficient evidence that McLamb understood the money was represented as illicit proceeds and intended to avoid transaction-reporting requirements, satisfying § 1956(a)(3).

## Legal Principles

- A structuring offense under 26 U.S.C. § 6050I(f)(1) may be proved by evidence that a defendant deliberately arranged the form of payment to evade the Form 8300 reporting requirement, including by causing a business not to file the required return.
- In evaluating structuring, the factfinder may consider the substance of the overall transaction and the defendant’s directing role in how payments are recorded and deposited, rather than isolating the moment an employee physically receives cash.
- A jury instruction is not reversible merely because it does not specify the formal filer of the return where the instruction requires finding structuring and causing nonfiling, and the evidence supports those findings.
- Similar-acts evidence may be admissible under Rule 404(b) to prove intent and absence of mistake when it shows a recurring pattern consistent with evading reporting, subject to Rule 403 balancing.
- Under 18 U.S.C. § 1956(a)(3), in a sting operation the government may prove money laundering where property is represented as criminal proceeds and the defendant conducts or attempts a transaction with intent to conceal/disguise or to avoid a reporting requirement; recorded statements can establish knowledge and intent.

## Conclusion

The Fourth Circuit upheld convictions where the evidence showed a dealership owner orchestrated split payments to evade Form 8300 reporting and, in an undercover deal involving funds represented as drug money, advised a payment structure designed to avoid reporting, supporting both structuring and sting money-laundering liability.


United States v. McLamb, 985 F.2d 1284 (4th Cir. 1993)