## Facts

- St. Michael’s Credit Union, a Massachusetts financial institution, employed Janice Sacharczyk as its bookkeeper.
- A state banking audit found the credit union had failed to file two required currency transaction reports (CTRs), prompting an IRS investigation.
- During the IRS inquiry, Sacharczyk provided agents copies of two CTRs she said were filed after the audit and stated the credit union had no formal CTR policy or compliance officer.
- The federal investigation identified numerous cash transactions exceeding $10,000 for which no CTRs were filed, involving multiple customers and forms of currency transfers during roughly a one-year period.
- A grand jury charged the credit union with repeated failures to file CTRs in violation of 31 U.S.C. §§ 5313 and 5322(b), and charged both defendants with concealment of material facts from the IRS by trick, scheme, or device under 18 U.S.C. § 1001.
- A jury convicted the credit union of 39 CTR nonfiling counts (Sept. 1983–Sept. 1984) and convicted Sacharczyk of aiding and abetting those failures and of § 1001 concealment.

## Issues

1. Whether the evidence was sufficient to support felony liability for CTR nonfiling under 31 U.S.C. § 5322(b), including proof of a “pattern of illegal activity” involving more than $100,000 within a 12-month period.
2. Whether the charged conduct fell within the statutory and regulatory definitions requiring CTRs, including “transactions in currency” involving more than $10,000.
3. Whether the evidence supported convictions under 18 U.S.C. § 1001 for concealment of material facts by “trick, scheme, or device,” beyond mere nonfiling of CTRs.
4. Whether alleged evidentiary and jury-instruction errors (including willfulness and the pattern requirement) required reversal.

## Decision

- The First Circuit affirmed all convictions.
- The court held the evidence permitted the jury to find a qualifying pattern of CTR-reportable transactions exceeding $100,000 within a 12-month period, supporting felony penalties under § 5322(b).
- The court held the proof supported findings that the transactions were CTR-eligible under the governing statute and regulations and that the credit union failed to file required reports.
- The court upheld the finding that Sacharczyk knowingly and willfully aided and abetted the credit union’s nonfiling.
- The court sustained the § 1001 concealment convictions, concluding the case involved affirmative deceptive conduct sufficient to constitute concealment by trick, scheme, or device.
- The court rejected challenges to evidentiary rulings and jury instructions, finding no reversible error.

## Legal Principles

- Under 31 U.S.C. § 5313 and implementing regulations, a financial institution must file a CTR for each transaction in currency exceeding $10,000.
- Felony penalties under 31 U.S.C. § 5322(b) may be based on a “pattern of illegal activity” shown by repeated related reporting violations that collectively exceed $100,000 in a 12-month period.
- Willfulness for Bank Secrecy Act reporting offenses may be inferred from evidence of awareness of reporting duties and deliberate noncompliance, including continued nonfiling after an audit or other notice.
- Aiding and abetting liability attaches where a defendant knowingly participates in and intends to help bring about the principal’s reporting violations.
- Under 18 U.S.C. § 1001, concealment by “trick, scheme, or device” requires more than silence; affirmative misleading acts connected to nonreporting can establish concealment of material facts from federal authorities.

## Conclusion

The First Circuit left intact felony convictions where a credit union repeatedly failed to file required CTRs as part of a course of conduct exceeding the statutory dollar threshold, and where the nonreporting was accompanied by affirmative misrepresentations supporting concealment liability under § 1001.


United States v. St. Michael's Credit Union, 880 F.2d 579 (1st Cir. 1989)