Full opinion text
DECISION AND ORDER CURRAN, District Judge. I. Background and Procedure On January 17, 1984, the grand jury returned a sixteen-count indictment against the defendant, Stanley P. Gimbel, charging him with multiple criminal violations of 18 U.S.C. §§ 2 & 1001 and 31 U.S.C. § 5313 & 5322. Count One of the indictment states that Gimbei, an attorney who represents clients in criminal and tax matters, knowingly, willfully and intentionally falsified, concealed and covered up by a scheme and device material facts which are within the jurisdiction of an agency or department of the United States Government, namely the Internal Revenue Service. (See Appendix A) The remaining counts charge specific instances of violations which oecurred between April, 1982 and May, 1983. (See Appendix B) In common parlance, the government is accusing Gimbei of devising and carrying out a money laundering scheme for certain of his clients, some of whom were engaged in criminal activities. Under this scheme Gimbei or someone acting on his direction would either withdraw or deposit currency totalling over $10,000.00 in a single day through the trust account which Gimbel’s law firm maintained at a Milwaukee bank. A financial institution such as a bank is required to file a currency transaction report (CTR) with the Internal Revenue Service for all currency transactions exceeding $10,000.00. Since 1981, banks have been asked to aggregate multiple transactions made by one person in the course of a single day if they are aware of them. The indictment alleges that Gimbel attempted to evade these reporting requirements by breaking up the transactions into amounts of less than $10,000.00 and making multiple deposits or withdrawals in a single day; by naming only himself or his law firm’s trust account as the party for whom the transactions were being made; and by advising others to use false names when opening bank accounts and endorsing checks. The indictment implies that the motive for this scheme was to conceal the origin of currency garnered from criminal activity and to evade paying income taxes. Gimbel is also said to have counseled these clients to underreport their income for tax purposes. On April 30,1984 the magistrate issued a Recommendation and Order which upheld the Indictment except that portion of Count I, ¶ 5(e) which refers to the underreporting of income. This clause was struck as prejudicial and irrelevant surplusage. The defendant then filed an Objection to and Appeal from Magistrate’s Recommendation and Order of April 30, 1984, on the following grounds: 1) the indictment contains misstatements of the law; 2) Count I fails to allege an offense and is insufficient; 3) Count I is unconstitutionally vague; 4) Count I is duplicitous; 5) the charge in Count I under 18 U.S.C. §§ 2 & 1001 is unconstitutional; 6) Count I impermissibly merges with Counts II through XVI; 7) Counts II through XVI fail to allege an offense; 8) Counts II and XVI are unconstitutionally vague; 9) Sections 5313 and 5322 of Title 31 of the United States Code are unconstitutional on their face and/or as applied. The government appeals from that part of the Magistrate’s Recommendation and Order which strikes as prejudicial and irrelevant surplusage that part of Count I, 115(e) of the Indictment which alleges that the defendant counseled individuals “to report income to the Internal Revenue Service in an amount different than actually received by those persons as an alternative to such evasion and falsity.” The government contends that this clause is “highly relevant” toward showing the purpose of the scheme it claims the defendant devised. See Government’s Objection to and Appeal from Magistrate’s Recommendation and Order of April 30, 1984 at 2. II. The Defendant’s Objections The defendant’s motions all challenge the sufficiency of the Indictment. Those challenging the constitutionality of the law allegedly violated and those which say that the Indictment fails to state the elements of a crime go to the validity of this court’s jurisdiction. “[A] federal court has jurisdiction to try criminal cases only when the information or indictment alleges a violation of a valid federal law; and it is ultimately the court’s responsibility to ensure that jurisdiction exists.” United States v. Saade, 652 F.2d 1126, 1134 (1st Cir.1981). The motions to dismiss based on duplicity, multiplicity, surplusage,, impermissible merger and vagueness of the charges go to the form of setting forth these charges in the Indictment. The test for the sufficiency of an indictment is whether “[i]t states the elements of the offense intended to be charged with particularity sufficient to apprise the accused of what he must be prepared to meet, and to enable the accused to plead a judgment under the indictment as a bar to any subsequent prosecution for the same offense.” Russell v. United States, 369 U.S. 749, 763-64, 82 S.Ct. 1038, 1046-47, 8 L.Ed.2d 240 (1962); United States v. Garcia-Geronimo, 663 F.2d 738, 743 (7th Cir.1981); United States v. London, 550 F.2d 206, 210 (5th Cir.1977); United States v. Logwood, 360 F.2d 905, 907 (7th Cir.1966); United States v. Raineri, 521 F.Supp. 16, 22 (W.D.Wis.1980). The court may properly decide all questions of law raised by the defendant as grounds for dismissing the indictment. United States v. Jones, 542 F.2d 661, 664-65 (6th Cir.1976); United States v. Higgins, 511 F.Supp. 453, 454 (W.D.Ky.1981). Because the court must have jurisdiction before this case can proceed, the threshold issue in this appeal from the Magistrate’s Recommendation and Order is whether the laws and regulations the defendant is charged with violating are constitutional and, if so, whether the Indictment sufficiently alleges the necessary elements of the crimes charged. See United States v. Conlon, 481 F.Supp. 654, 660 (D.D.C.1979), aff'd in part rev’d. in part, 628 F.2d 150. (D.C.Cir.1980), appeal after remand, 661 F.2d 235 (1981), cert. denied, 454 U.S. 1149, 102 S.Ct. 1015, 71 L.Ed.2d 304 (1982). Although the defendant mounts a due process challenge to the statutes he is charged with violating, the rule of strict necessity would have this court attempt, to resolve this motion to dismiss by evaluating the sufficiency of the Indictment rather than by declaring any of the laws in question to be unconstitutional. See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 341, 56 S.Ct. 466, 480, 80 L.Ed. 688 (1936) (Brandeis, J., concurring). The defendant argues that sections 5313 and 5322 of Title 31 of the United States Code are unconstitutional on their face and/or as applied because they “do not afford a person of reasonable, intelligence notice of what they prohibit or require.” Defendant’s Objection to and Appeal from Magistrate’s Recommendation and Order of April 30, 1984 at 23. Following this line of reasoning, the defendant concludes that 18 U.S.C. §§ 2 & 1001, as applied, are also unconstitutionally vague. “If the financial institution has no legal obligation to file such a CTR it cannot be a crime for an individual ‘to cause’ the financial institution to fail to file the CTR.” Id. at 22. The government responds that the carrying out of the scheme allegedly devised by the defendant contradicts his claim that he had no notice or idea that his actions were prohibited. See Government’s Response to Defendant’s Memorandum Brief at 7. The government also contends that other courts have already found the law in question to be constitutional. See, e.g., California Bankers Association v. Shultz, 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974); United States v. Dichne, 612 F.2d 632 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980); United States v. Fitzgibbon, 576 F.2d 279 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978). In addition, courts have recognized similar offenses under Title 31 of the United States Code. See, e.g., United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983); United States v. Dickinson, 706 F.2d 88 (2d Cir.1983); United States v. Kattan-Kassin, 696 F.2d 893 (11th Cir.1983); United States v. Dichne, 612 F.2d 632 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980); United States v. Thompson, 603 F.2d 1200 (5th Cir.1979); United States v. Beusch, 596 F.2d 871 (9th Cir.1979); United States v. Fitzgibbon, 576 F.2d 279 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978). Reviewing the charges in the Indictment, it appears that the defendant could not be charged with a crime under only one of the statutes cited. The charging sections depend on interlocking two or more federal laws. The cornerstone of the charges, however, is section 5313 of Title 31 of the United States Code. Under that section a financial institution must file a CTR when a person’s currency deposit or withdrawal exceeds $10,000 in a single day. If the CTR contains false statements or if material facts are concealed so that no CTR is filed, the person responsible can be charged with filing a false statement under 18 U.S.C. § 1001. Even though a person does not have a direct legal duty to file a CTR, he can be charged as a principal if he causes another not to carry out that duty. 18 U.S.C. § 2. Thus, if section 5313 is not applicable, the defendant cannot be charged under that section, nor under the penalty enhancement section, 31 U.S.C. § 5322, nor under 18 U.S.C. §§ 2 & 1001. Consequently, this court must first rule on the constitutionality of section 5313 in the context of this Indictment. The defendant asked the magistrate to consider certain discovery materials in regard to his motion to dismiss the Indictment. See Defendant’s Objection to and Appeal from Magistrate’s Recommendation and Order of April 30, 1984 at 22. The allegations contained in an indictment must be taken as true. United States v. Mann, 517 F.2d 259, 266 (5th Cir.1975). But, in general, a court ruling on the sufficiency of an indictment is limited to considering only the face of the indictment. Id. at 266-67. But see United States v. Jones, 542 F.2d 661, 664 (6th Cir.1976) (“Rules 12(e) and (a) [of the Federal Rules of Criminal Procedure] clearly envision that a district court may make preliminary findings of fact necessary to decide the questions of law presented by pre-trial motion so long as the court’s findings on the motion do not invade the province of the ultimate finder of fact.”). The court believes that the discovery materials in question are unnecessary to determine the questions of law at issue here. Sections 5313 and 5322 of Title 31 of the United States Code are part of what is popularly called the Bank Secrecy Act of 1970. The constitutionality of the Act has already been challenged in one case decided by the United States Supreme Court, California Bankers Association v. Shultz, 416 U.S. 21, 94 S.Ct. 1494, 39 L.Ed.2d 812 (1974). The appeal to the Supreme Court was filed on behalf of the California Bankers Association, the Security National Bank, the American Civil Liberties Union (ACLU) as a depositor in a bank subject to the Act and as a representative of its bank customer members, and on behalf of certain bank customers. The appeal challenged the recordkeeping requirements of Title I of the Act and the reporting requirements of Title II of the Act on three grounds: (1) that the requirements constitute an unreasonable search and seizure in violation of the Fourth Amendment; (2) that the requirements constitute a coerced creation and retention of documents in violation of the Fifth Amendment privilege against compulsory self-incrimination; and (3) that the requirements violate the First Amendment rights of free speech and free association. Id. at 43, 94 S.Ct. at 1508. The Court, in an opinion written by Justice Rehnquist, declined to decide whether the Association had standing to make these claims. Id. at 44, 94 S.Ct. at 1509. But the Court did decide that the depositor plaintiffs and the ACLU did not have standing to assert their claims because they were not ripe, that is, these parties had not yet suffered any injury. Id. at 69, 76, 94 S.Ct. at 1521, 1524-25. Thus, the judgment of the Court, upholding the Act against all these constitutional challenges was narrowly drawn. At the outset the Court stated that “we think it important to note that the Act’s civil and criminal penalties attach only upon violation of regulations promulgated by the Secretary; if the Secretary were to do nothing, the Act itself would impose no penalties on anyone.” Id. at 26, 94 S.Ct. at 1500. The government’s position at that time essentially mirrored this view: [Sjince only those who violate these regulations may incur civil or criminal penalties, it is the actual regulations issued by the Secretary of the Treasury, and not the broad authorizing language of the statute, which are to be tested against the standards of the Fourth Amendment; and that when so tested they are valid. Id. at 44, 94 S.Ct. at 1509. The District Court which heard California Bankers ruled that the domestic reporting requirements were “an invasion of a citizen’s right of privacy as amounts to an unreasonable search within the meaning of the Fourth Amendment.” Id. at 64, 94 S.Ct. at 1519. But the Supreme Court would not let the plaintiffs below speculate as to hypothetical injuries: Since, as we have observed earlier in this opinion, the statute is not self-executing, and were the Secretary to take no action whatever under his authority there would be no possibility of criminal or civil sanctions being imposed on anyone, the District Court was wrong in framing the question in this manner. The question is not what sort of reporting requirements might have been imposed by the Secretary under the broad authority given him in the Act, but rather what sort of reporting requirements he did in fact impose under that authority- Id. Taking this restricted approach, the Court decided that “the Secretary’s requirements for the reporting of domestic financial transactions abridge no Fourth Amendment right of the banks themselves.” Id. at 66, 94 S.Ct. at 1520. The Fourth Amendment challenge of the depositors was not considered because “the depositor plaintiffs lack standing to challenge the domestic reporting regulations, since they do not show that their transactions are required to be reported.” Id. at 68, 94 S.Ct. at 1521. Consequently, the majority did not rule on the issue of whether the domestic reporting requirements of the Act are constitutional in relation to depositors, so this case cannot be used as authority to say that the Act has passed constitutional muster in this respect. Justice Powell, with whom Justice Black-man joined concurring, made an additional observation on the domestic reporting requirements: A significant extension of the regulations’ reporting requirements, however, would pose substantial and difficult constitutional questions for me. In their full reach, the reports apparently authorized by the open-ended language of the Act touch upon intimate areas of an individual’s personal affairs. ' Financial transactions can reveal much about a person’s activities, associations, and beliefs. At some point, governmental intrusion upon these areas would implicate legitimate expectations of privacy. Id. at 78-79, 94 S.Ct. at 1525-26. Justice Douglas, dissenting from the Court’s opinion, was sharply critical of the Act’s reporting requirements: We cannot avoid the question of the constitutionality of the reporting provisions of the Act and of the regulations by saying they have not yet been applied to a customer in any criminal case. Under the Act and regulations the reports go forward to the investigative or prosecuting agency on written request without notice to the customer. Delivery of the records without the requisite hearing of probable cause breaches the Fourth Amendment. Id. at 90, 94 S.Ct. at 1531 (footnote omitted). In separate dissents, Justices Brennan and Marshall agreed that the reporting requirements are unconstitutional. In the two other cases cited by the government, individuals challenged the foreign reporting provision of the Bank Secrecy Act on the ground that it violated their Fifth Amendment privilege against self-incrimination. See United States v. Dichne, 612 F.2d 632 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980). See also United States v. Fitzgibbon, 576 F.2d 279, 285 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978) (“We do not here decide constitutional' questions raised because they are not properly before us.”). In Dichne the Second Circuit affirmed the trial court’s ruling that the reporting requirements did not violate the defendant's right not to incriminate himself because transporting over $5,000 out of the country is “not per se an illegal act” and because the law is aimed at the general public and not at a “highly selective group inherently suspect of criminal activities.” Dichne, 612 F.2d at 638. The court relied on a lower court decision which held that because these reports were required when crossing international boundaries, they involve substantial interests of the United States government. These interests outweigh the interest of an individual in avoiding a requirement which presents only a “possibility” of self-incrimination. This decision was later reversed by the Second Circuit. United States v. San Juan, 405 F.Supp. 686, 694-95 (D.Vt.1975), rev’d, 545 F.2d 314 (2d Cir.1976). The Gimbel case can be distinguished from those cited by the government in that it involves a due process challenge to the domestic reporting provisions of the Bank Secrecy Act. Under the standards set forth in California Bankers, Gimbel would have standing as a customer of a financial institution to attack the constitutionality of the Act because the Indictment alleges that some of his transactions should have been reported. California Bankers Association, 416 U.S. at 68, 94 S.Ct. at 1520-21. Gimbel is challenging section 5313 on the ground that if it does cover the type of transactions made by him, it is unconstitutionally vague — it does not put him on notice that it applies to him. Although, in general, a citizen is charged with knowledge of the law, it is the defendant’s position that the law and regulations do not require a lawyer to name the real parties in interest to transactions in currency made through his trust fund. There is no claim that the financial institution notified customers of a contrary interpretation. The Indictment mentions that on at least one occasion “Gimbel assisted in filling out the [CTR] report,” but it does not allege that any of the financial institutions involved notified customers of the domestic reporting requirements. Indictment at Count I, 115(d). In California Bankers the majority said that: [W]e do not address ourselves to the necessity of notice to those bank customers whose transactions must be reported. The fact that the regulations do not require the banks to notify the customer of the report violates no constitutional right of the banks, and the banks in any event are left free to adopt whatever customer notification procedures they desire. California Bankers Association, 416 U.S. at 70, 94 S.Ct. at 1521-22. In San Juan the Second Circuit held that the government should make some effort to bring the foreign reporting requirement to the traveler’s attention. United States v. San Juan, 545 F.2d at 319. However, more recently, the Tenth Circuit held that a bank’s failure to notify a customer that a CTR will be filed does not violate the customer’s expectation of privacy under the Fourth Amendment or his privilege against self-incrimination under the Fifth Amendment. United States v. Kaatz, 705 F.2d 1237, 1242 (10th Cir.1983). This suggests that the government is not particularly anxious to have bank customers know that the banks are filing the CTR’s, lest the customers take the obvious step and structure their transactions into amounts which are unreportable. If this-structuring causes the financial institution to file an inaccurate CTR or no CTR, the person responsible can be charged with a crime under certain circumstances. See, e.g., United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983). The Indictment does not allege that the manner in which Gimbel structured his currency transactions caused a bank not to file a CTR for his law firm’s trust account. Counts II through XVI do state that: “This currency was owned by a person or persons other than STANLEY P. GIMBEL.” Thus, the government is charging either that an inaccurate CTR was filed which did not name the true owner of the currency or that because the true owner or owners of the currency were not revealed, no CTR was filed on their behalf. The government derives the “requirement” that the true party in interest be identified from that portion of 31 U.S.C. § 5313 which states: A participant acting for another'person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made. On its face, this sentence could be interpreted as requiring that the identity of the true owner of the currency be revealed. However, as California Bankers stated, no part of this statute is self-executing, so the court must examine the implementing regulations to determine whether they would require a financial institution to report the identity of the true party in interest to a currency transaction made through Gimbel’s law firm trust account. The key regulation in this regard is found in 31 C.F.R. § 103.22(a) (1982), which states, in part: Each financial institution shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution, which involves a transaction in currency of more than $10,000. Such reports shall be made on forms prescribed by the Secretary and all information called for in the forms shall be furnished. Internal Revenue Service Form 4789 is the document the financial institutions are required to file. This form is reproduced here as Court Exhibit A. Part I of this form asks for the identity of the individual who conducts the transaction with the financial institution. Part II calls for the identity of “the individual or organization for whom this transaction was completed.” Nowhere does the form require the person conducting the transaction or the individual or organization for whom the transaction was completed to state whether this person is acting as an agent or bailee for the true owner of the currency involved. The regulations, as they are implemented by this form, do not appear to take into account the out-of-the-ordinary situation involved when the account is a lawyer’s trust fund. All jurisdictions in the United States require lawyers to maintain trust accounts. In Wisconsin such an account is mandated by Supreme Court Rule 11.05, which states, in part: (1) A member of the state bar shall not commingle the money or other property of a client with his or her own, and he or she shall promptly report to the client the receipt by him or her of all money and other property belonging to the client. Unless the client otherwise directs in writing, whenever an attorney collects any sum of money upon any action, claim or proceeding, either by way of settlement or after trial or hearing, he or she shall promptly deposit his or her client’s funds in a bank, trust company, credit union or savings and loan association, authorized to do business in this state, in an account separate from his or her own account and clearly designated as “Clients’ Funds Account” or “Trust Funds Account,” or words of similar import. The attorney, with the written consent of the client, may deposit the client’s funds in a segregated client’s trust account with all interest accruing thereon to the client. Unless the client otherwise directs in writing, securities of a client in bearer form shall be kept by the attorney in a safe deposit box at a bank, trust company, credit union or savings and loan association authorized to do business in this state, which safe deposit box shall be clearly designated as “Clients’ Account” or “Trust Account,” or words of similar import, and be separate from the attorney’s own safe deposit box. (2) A member of the state bar shall maintain and preserve for at least 6 years complete records pertaining to client’s funds or assets received by him or her which are required to be distributed or segregated by sub. (1). The records shall include his or her trust fund checkbooks and the stubs thereof, statements of the account, vouchers and canceled checks or share drafts thereon or microfilm copies thereof and his or her account books showing dates, amounts and ownership of all deposits to and withdrawals by check or share draft or otherwise from the accounts, and all of the records shall be deemed to have public aspects as related to the member’s fitness to practice law. Upon request of the board of attorneys professional responsibility, or upon direction of the supreme court, the records shall be submitted to the board for its inspection, audit, use and evidence under such conditions to protect the privilege of clients as the court may provide. The records, or an audit thereof, shall be produced at any disciplinary proceeding involving the attorney wherever material. Failure to produce the records shall constitute unprofessional conduct and grounds for disciplinary action. It is obvious that with this type of account the law firm or the lawyer is never the real party in interest to the transactions made. And, although section (2) of this rule requires an attorney to keep records of transactions made through a trust fund, revealing such information to a third party such as a bank might raise ethical questions related to the attorney-client privilege. See Wis.Stat. § 905.03 (1981-1982). That the regulations do not appear to cover a situation where the signatory to an account is acting as the agent or bailee for another cannot be dismissed as a mere oversight on the part of the Secretary of the Treasury. By way of comparison the Court offers Exhibit B, which is Customs Form 4790. Question 27 of this “Report of International Transportation of Currency or Monetary Instruments” specifically asks the individual: “Were you acting as an agent, attorney or in capacity of anyone in this currency or monetary instrument activity?” If the answer is “yes,” the individual is asked to list the name, address, and business activity, occupation or profession of the real party in interest. This form must be sworn to and signed by the individual conducting the transaction. Under the plain meaning of the regulations implementing the Bank Secrecy Act, Gimbel and others similarly situated would not have notice that they must reveal the identities of the real parties in interest to domestic currency' transactions made through their trust accounts. If the reasoning of the prosecution is followed and the enabling statute does create such an obligation, then the Act and the regulations considered together are certainly vague on that point. When a law cannot be evaluated according to its plain meaning, a court may look to legislative history for guidance. See United States v. Anderez, 661 F.2d 404, 406 (5th Cir.1981); United States v. Wander, 601 F.2d 1251, 1257 n. 3 (3d Cir.1979). The Bank Secrecy Act of 1970 was, in part, a reaction to financial abuses such as kickbacks and bribes. The House of Representatives Report states the purpose behind the domestic reporting requirements: Criminals deal in- money — cash or its equivalent. The deposit and withdrawal of large amounts of currency or its equivalent (monetary instruments) under unusual circumstances may betray a criminal activity. The money in many of these transactions may represent anything from the proceeds of a lottery racket to money for the bribery of public officials. H.R.Rep. No. 91-975, 91st Cong., 2d Sess. 11 (1970), U.S.Code Cong. & Admin.News 1970, pp. 4394, 4396. Section 5311 of Title 31 of the United States Code also declares the law’s purpose: “It is the purpose of this subchapter (except section 5315) to require certain reports or records where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.” The bill drafted by the House envisioned that the customer would be notified of what must be included in a report and would be obliged to sign the report: The bill requires that reports be filed both by the financial institution involved and by one or more of the other parties to or participants in the transaction, as the Secretary, may require. The purpose of this is twofold. First, it permits the prosecution of a person who supplies false information for such a report and signs it. Secondly, it relieves the institution of any pressure the Secretary of the Treasury might otherwise be inclined to exert to require it to submit reports of this type without notifying the customer. The latter procedure raises serious questions in respect to the fiduciary duty of financial institutions to their customers, not to mention the right of privacy or simple fairness. H.R.Rep. No. 91-975, 91st Cong., 2d Sess., U.S.Code Cong. & Admin.News 1970, 4407 (1970). The Senate version of the bill contemplated a similar requirement that both the financial institution and a party to the transaction would sign the report: It is expected that the reports required to be filed by a party to a currency transaction would be filed through the financial institution involved acting as an agent for the Secretary with respect to the collection of such reports. In most cases, a single document signed by the financial institution and the party to the transaction should suffice to satisfy both reporting requirements. S.Rep. No. 91-1139, 91st Cong., 2d Sess. 6 (1970). The regulations and form subsequently adopted by the Secretary demonstrate that he did not choose to implement that portion of the enabling act under which he could have required the person conducting the transaction to sign and file the report together with the financial institution. Thus, the legislative history of the Act is at odds with the actual implementation of the law. This tends to bear out the defendant’s contention that the law is vague or nonexistent as applied to him. The government urges the court to consider recent case law which has recognized crimes “similar” to the offenses in question. See Government’s Response to Defendant’s Memorandum Brief at 4. Of the seven cases cited, four deal with convictions obtained under the foreign transaction reporting provisions of the Bank Secrecy Act. While these opinions could serve to uphold the validity of part of the charging scheme in the Gimbel Indictment, they do not bear on the falsification and concealment charges being discussed here. See United States v. Dickinson, 706 F.2d 88, 91 (2d Cir.1983) (pattern of illegal activity must involve repeated violations of the Act for penalty enhancement provisions to apply); United States v. Dichne, 612 F.2d 632, 641 (2d Cir.1979), cert. denied, 445 U.S. 928, 100 S.Ct. 1314, 63 L.Ed.2d 760 (1980) (foreign reporting requirements of Act not violative of Fifth Amendment privilege against self-incrimination); United States v. Beusch, 596 F.2d 871, 877 (9th Cir.1979) (bank officer causing bank to fail to file foreign transaction report can be charged as principal); United States v. Fitzgibbon, 576 F.2d 279, 283-85 (10th Cir.), cert. denied, 439 U.S. 910, 99 S.Ct. 279, 58 L.Ed.2d 256 (1978). (Provisions of Bank Secrecy Act do not preempt prosecution under false statements statute and are not violative of First and Fourth Amendments). Three of the cases cited by the government do deal with the domestic currency transaction reporting requirements of the Act. However, United States v. Kattan-Kassin, 696 F.2d 893, 898 (11th Cir.1983) only stands for the proposition that each violation of 31 U.S.C. § 1059 can be prosecuted as a separate felony — a point not at issue here. In United States v. Thompson, 603 F.2d 1200 (5th Cir.1979), the Fifth Circuit ruled that the statute and regulations of the Bank- Secrecy Act were not vague as applied to the defendant, the chairman of the board of a Texas bank. Id. at 1203. The defendant had arranged for a $45,000 loan to a drug dealer. He structured the loan into five notes, each in the,amount of $9,000.00 and each bearing a different maturity date. In the course of one day the defendant personally processed these notes at his bank to obtain cash. The bank had an obligation to file a CTR for currency transactions in excess of $10,000 and the court interpreted the word “transaction” to encompass the aggregate amount of multiple transactions made in a single day by one person. This case arose prior to the revision of Form 4789 to cover such situations. The Eleventh Circuit in United States v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983) upheld the conviction of a defendant in a one-count indictment which alleged that: Tobon concealed and caused to be concealed the existence, source, and transfer of approximately $185,200 in cash by purchasing approximately twenty-one cashier’s checks in amounts less than $10,000 from eleven different financial institutions, using a variety of names, including false names, as payees and remitters for the purpose of avoiding the financial institutions’ filing of Currency Transaction Reports____ Id. at 1094. Tobon was convicted under the false statements statute, 18 U.S.C. § 1001, for giving false names and for concealing the fact that he was making currency transactions in excess of $10,000 at a single bank in a single day. The banks were under an obligation to file CTR’s for currency transactions of over $10,000 made by one “person,” and the Eleventh Circuit found that Tobon and his accomplice acted as a “person” under the “broad definition” in 31 C.F.R. § 103.11. Id. at 1097-98. This regulation defines “person” to include: An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, and all entities cognizable as legal personalities. The court, on its own initiative, included the terms “principal/agent” within this definition of “person.” Id. at 1098. But see United States v. Higgins, 511 F.Supp. 453, 455 (W.D.Ky.1981) (broad expansion of statute should not be imposed by judicial decision). These terms do not appear in 31 C.F.R. § 103.11. Because Tobon and his accomplice were considered as a unit fitting the definition of “person,” the court did not have to consider whether the accomplice was guilty of causing the bank to file a false statement on those occasions when she used her own name and concealed the identity of Tobon as the true owner of the currency. Id. at 1096. It appears that the concealment charge was primarily directed toward the concealment of the aggregate amount of the transactions through the use of fictitious names and an accomplice. The Tobon court noted with approval that the Thompson court had “adopted a sensible, substance-over-form approach in dealing with schemes to circumvent financial institution reporting requirements.” Tobon-Builes, 706 F.2d at 1098. This court declines to adopt such an approach in the case of the Gimbel Indictment. Although the government and the public have a strong interest in ensuring that not only the letter but also the spirit of a law be observed, this consideration is countered by the familiar and long-standing canon of statutory construction which requires that any ambiguity concerning the ambit of criminal statutes be resolved in favor of lenity. See Rewis v. United States, 401 U.S. 808, 812, 91 S.Ct. 1056, 1059, 28 L.Ed.2d 493 (1971); United States v. Levy, 533 F.2d 969, 973 (5th Cir.1976). See also United States v. Yermian, 468 U.S. 63, —, 104 S.Ct. 2936, 2947, 82 L.Ed.2d 53 (1984) (Rehnquist J., dissenting) (“I would hold that the rule of lenity is applicable in this case and that it requires the government to prove that a defendant in a § 1001 prosecution had actual knowledge that his false statements were made in a matter within federal agency jurisdiction.”). It is reasonable to require that a question be asked before a person can be accused of answering falsely or of not answering at all. See United States v. Irwin, 654 F.2d 671, 678-79 (10th Cir.1981), cert. denied, 455 U.S. 1016, 102 S.Ct. 1709, 72 L.Ed.2d 133 (1982). The government cannot expect a person making a transaction at a bank to volunteer all manner of information on the chance that it may be required for some government report. This is especially true when the form for the report does not contain any space or directive for supplying such information. The Bank Secrecy Act is an enforcement tool which is meant to be used in the investigation of other crimes. It requires financial institutions to keep records and file reports on activities which are otherwise innocent acts. Similarly, if government agents were to set up a blockade of the Florida coast to apprehend drug runners, and no law created a legal duty for ship captains to steer a course which would bring them into contact with the government agents, the government could not charge a captain with a crime because he took a route which caused his ship to avoid the blockade. Some captains, whether acting for criminal or innocent motives, would deliberately steer their ships through the holes in the blockade. Taking the allegations in the Gimbel Indictment as true, which the court must, it appears that this defendant has taken notice of the “blockade,” has found a “hole,” and is conducting his affairs accordingly. He is not the first to find that the Bank Secrecy Act has many infirmities. The district court in United States v. San Juan, 405 F.Supp. 686, 694-95 (D.Vt.1975), rev’d, 545 F.2d 314 (2d Cir.1976) actually suggested that the defendant could have avoided the foreign reporting requirements by making several trips over the border with amounts of less than $5,000. Another commentator has pointed out that: [D]rug financiers can readily evade or avoid the reporting requirements of the BSA [Bank Secrecy Act]. The BSA does not cover interbank transfers within the United States and wire transfers with foreign banks; reporting requirements would disrupt the flow of the massive volume of such transactions. For domestic cash deposits, a drug dealer or courier can avoid the CTR filing requirement by making deposits in amounts less than $10,000.00 at a number of banks. Wisotksy, Exposing the War on Cocaine: The Futility and Destructiveness of Prohibition, 1983 Wis. L. Rev. 1305, 1370. If an individual used the last-mentioned ruse and made currency transactions of-less than $10,000.00 at different banks, but these transactions totalled over $10,000.00 on a single day, it could be alleged that the individual structured his transactions for the purpose of avoiding the filing of CTRs. Yet, 31 U.S.C. § 5313 and the accompanying regulations clearly do not impose an obligation on separate financial institutions to aggregate all daily transactions. But would the substance-over-form approach adopted in Thompson and Tobon allow such a person to be convicted because he had violated the spirit of the Bank Secrecy Act? This hypothetical scenario is directly analogous to the instant situation where a loophole exists in the regulations as to a person’s legal duty to identify the real party in interest to a currency transaction when the account holder is holding funds in trust for others. Not to admit that such a loophole exists would be to invite criminal prosecution of the truly unwary. It is not within the province of the judiciary to fill in gaps in the law. A theory of prosecution cannot do so either. The Secretary of the Treasury has it within his delegated power to revise the regulations and the form to cover the type of conduct alleged in this Indictment. For reasons of economics and customer relations the banks have resisted these regulations from the outset. See generally S.Rep. No. 91-1139 (1970); H.R.Rep. No. 91-975 (1970); Hearings on Foreign Bank Secrecy and Bank Records (H.R. 15073) before the House Committee on Banking and Currency, 91st Cong., 1st and 2d Sess. (1969-1970); Hearings on Foreign Bank Secrecy (S. 3678 and H.R. 15073) before the Subcommittee on Financial Institutions of the Senate Committee on Banking and Currency, 91st Cong., 2d Sess. (1970). Consequently, far from being the broad delegation of power that some feared, this enabling act has never been fully implemented. Based on the considerations discussed above, the court finds that the Secretary of the Treasury has never implemented by regulations or form that portion of the Bank Secrecy Act, 31 U.S.C. § 5313(a), under which he could have required a participant in a domestic currency transaction who is acting as the agent or bailee for another to identify the person for whom the transaction is being made if that person is someone other than the. signatory to the account through which the transaction is being made. If such a requirement is intended, the statute, the regulations and the form, considered together, are vagué as applied to this defendant. Because the court finds the charges under 31 U.S.C. § 5313 to be invalid, the charges brought under 31 U.S.C. § 5322 and 18 U.S.C. §§ 2 and 1001 must also fail because they depend upon the applicability of section 5313. Accordingly, the court ORDERS that Counts I through XVI of the Indictment of Stanley P. Gimbel are DISMISSED WITHOUT PREJUDICE. In issuing this order the court makes no judgment as to the facts of any of the allegations made against this defendant. The government has alleged a pattern of conduct which, if true, suggests a calculated scheme to circumvent the law. This decision should in no way be construed as condoning such conduct. The court simply rules that as a matter of law it is invalid to charge this defendant under section 5313. It is not the province of this court to judge the wisdom of the law as it stands. See Leathers v. United States, 471 F.2d 856 (8th Cir.1972), cert. denied, 412 U.S. 932, 93 S.Ct. 2754, 37 L.Ed.2d 161 (1973) (remedy for closing tax loophole is with Congress). IT IS FURTHER ORDERED that, in view of this order of dismissal, the evidentiary motions raised by the plaintiff and the defendant are now MOOT and are therefore DENIED. Genera! Instructions Paperwork Reduction Act Notice. — The Paperwork Reduction Act of 1980 says we must tell you why we are collecting this Information, how we will use It, and whether you have to give it to us. The requested information Is useful In criminal, tax, and regulatory investigations. In addition to directing the Federal Government’s attention to unusual or questionable transactions, the reporting requirement discourages the use of currency In illegal transactions. Financial institutions are required to provide the information under 31 CFR 103.22, 103.25, and 103.26. Who Must File. — Each financial Institution must file a Form 4789 for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through, or to that financial institution, which involves a transaction In currency of more than $10,000. Multiple transactions by or for any person which In any one day total more than $10,000 should be treated as a single transaction, If the financial Institution Is aware of them. Exceptions. — Banks do not have to file Form 4789 for transactions with Federal Reserve Banks, Federal Home Loan Banks, or other domestic banks. Banks do not have to file Form 4789 for the following transactions if the amounts Involved are reasonable and customary in the course of the customer's business or activities: (1) deposits or withdrawals of currency from an existing account by an established depositor who is a U.S. resident and who— (a) operates a retail business In the United States (except automobile, boat, or airplane dealerships), or (b) operates a sports arena, race track, amusement park, bar, restaurant, hotel, licensed check cashing service, vending machine company, or theater; (2) deposits or withdrawals, exchanges of currency, or other payments and transfers by local, state, or Federal government agencies; (3) withdrawals for payroll purposes from an existing account by an established depositor who is a U.S. resident and who operates a firm that regularly withdraws more than $10,000 to pay employees In currency. Banks must keep a record of customers whose transactions are not reported because of exceptions (1) through (3) above. (See 31 CFR, section 103.22 for details •bout what to include In this record.) Nonbank financial Institutions do not have to report transactions with commercial banks. When and Where to File. — File this form by the 15th day after the date of the transaction with the Internal Revenue Service, Odgen, UT 84201, or hand carry it to your focal IRS office. Keep a copy of each Form 4789 for 5 years from the date you file it. Identifying Number. — For individuals this Is the social security number. For others It is the Federal employer Identification number (9 digits). Identification Required. — Before com¡pletlng a transaction, a financial institution must verify and record (1) the name and address of the Individual making the transaction and (2) the Identity, account number, and taxpayer identifying number (if any) of the Individual or organization for whose account the transaction Is being made. Use a passport or other official document showing nationality to verify the identity of an alien or nonresident of the United States. Use a document like a driver’s license, etc., normally accepted as a means of Identification when cashing checks, to verify the identity of anyone else. In each case, record on this form the method of Identification used. Penalties. — Civil and criminal penalties (up to $500,000) are provided for failure to file a report or to supply information, and for filing a false or fraudulent report. See 31 CFR, sections 103.47 and 103.49. Specific Instructions Part I.— (1) In the eddress section, enter the permanent street address of the Individual conducting tha transaction. If the currency was received or shipped through the U.S. Postal Service, write In "U.S. Mail." If the currency was received In a night deposit box, write in "Night Deposit." If the currency was received or shipped through an armored car service, licensed by a state or local government, provide. only the service’s name and address. (2) In the social security block, enter the social security number of the Individual conducting the transaction. If the Individual has no number, write "None” in this block. (3) Check the appropriate box and enter the number of the document used to verify the identity of the individual making the transaction. When the name of an individual is not required to be given, it is not necessary to describe the method of verifying Identification. Part II.— (1) For Individuals, enter last name, first name, and middle Initial, If any, in the name block In that order. For all 'others, enter the complete organization name. (2) In the Identifying number block, enter the social security number or employer Identification number. Part III.— Check the appropriate box and enter the appropriate customer’s account number. If there Is no account relationship, check Other and write In "None." Part IV, line 1.— If the transaction being reported was the sale or purchase of foreign currency, check Other and write in "sate of foreign currency" or "purchase of foreign currency," whichever applies. Part IV, line 6.— Complete this line If a check is cashed or a bank cheek is purchased with currency. Part V.— Institutions may also enter In the name and address block other identifying Information. Signature. — This report must be signed by an authorized individual. Also type or print the name of the authorized signer. Definitions Bank. — Each agent, agency, branch, or office in the United States of e foreign bank and each agency, branch, or office In the United States of any person doing business In one or more or the capacities listed below: (1) a commercial bank or trust company organized under the laws of any state or of the United States; (2) a private bank; (3) a savings and loan association or a building and loan association organized under the laws of any state or of the United States; (4) an Insured institution as defined In section 401 of the National Housing Act; (5) a savings bank, industrial bank, or other thrift institution; (6) a credit union organized under the laws of any state or of the United States; and (7) any other organization chartered under the banking laws of any state and subject to the supervision of the bank supervisory authorities of a state. Currency. — The coin and currency of the United States or of any other country, which circulate In and are customarily used and accepted as money In the country in which issued. It Includes United States silver certificates, United States notes, and Federal Reserve notes, but does not include bank checks or other negotiable Instruments not customarily accepted as money. Financial Institution. — Each agency, branch, or office In the United States of any person doing business In one or more of the capacities listed below: (1) a bank; (2) a broker or dealer In securities, registered or required to be registered with SEC under the Securities Exchange Act of 1934; (3) a person who engages as a business In dealing In or exchanging currency (for example, a dealer in foreign exchange or a person engaged primarily In the cashing of checks); (4) a person who engages as a business in issuing, selling, or redeeming traveler's checks, money orders, or similar instruments, except one who does so as a selling agent exclusively, or as an incidental |>art of another business; (5) a licensed* transmitter of funds, or other person engaged In the business of transmitting funds abroad for others. Person. — An individual, corporation, partnership, trust or estate, joint stock company, association, syndicate, Joint venture, or other unincorporated organization or group, and alt entitles treated as lege! personalities. Transaction In Currency. — A transaction Involving the physical transfer of currency from one person to another. A transaction in currency does not include a transfer of funds by means of bank check, bank draft, wire transfer, or other written order that does not include the physical transfer of currency. [Customs Form 4790] 3298 171 682 Ceneral Instructions This icpoit <s requited by Tteastiry Department regulations (31 Code of Federal Regulations 103). Who Must File. — Each person who physically transports, mails, or ships, or causes to be physically transposed, mailed, shipped or recetved currency or other monetary instruments in an aggicgate amount exceeding $5,000 on any one occasion from the United States to any place outside the United States, ot into the United States from any place outside the United States. A TRANSFER OF FUNDS THROUGH NORMAL BANKING PROCEDURES WHICH DOES NOT INVOLVE THE PHYSICAL TRANSPORTATION OF CURRENCY OR MONETARY INSTRUMENTS IS NOT REQUIRED TO BE REPORTEO. Exceptions. — The following persons are not required to file reports: (1) a Federal reserve bank, (2) a bank, a foreign bank, or a broker or dealer in securities in respect to currency or other monetary instruments marled or shipoed through the nnstat service oi by common carrier, (3) a commercial bank ot trust company organized under the laws of any Stale ot of the United States with respect to overland shipments of currency or monetary instruments shipped to or received from an established customer maintaining a deposit relationship with the bank, in amounts which the bank may reasonably conclude do not exceed amounts commensurate with the customary conduct of the business, industry ot profession of the customer concerned, (4) a person who is not a citizen or resident of the United States in respect to currency or other monetary instiuments mailed oi shipped from abroad to a bank or btokei or dealer in securities through the postal snvice or by common carriel, (5) a common came' of passengeis in respect to currency oi other monetary instruments in the possession of its passengeis, (6) a common earner of goods in respect to shipments of cimoncy or monetary instiuments not declared to be such by the shippei. (7) a havclprs* check issue or its agent in inspect to the transportation o» traveler’ checks prior to theii delivery to selling agents for eventual sale to the public, nor by (8) a person engaged as a business m the transportation of currency, monetary instiuments and other commercial papéis with respect to the transpottat ion of currency o« other monetary rnstruments overland between established offices of banks o> brokers or dealers in secuiities and foreign persons. * When and Where to File: /I. Rrttf'h’nts Each person who receives currency oi other monetary instruments shall file I’nttn 4790, within 30 days after receipt. with the Customs office* in charge at any poit of entiy or departure oi by mail with the Commissioner of Customs. Attention: Cunency Tianspoi tation Reports. Washington, D.C. 20229. ft. Shif'fnrtur If the cwrcncy or other monetary instrument does not accompany the person entering o» departing the United Stales, f omi 4 790 may be filed by mail on c* before the date of entry, departu'e, mailing, or shipping with the Commissioner of Customs. Attention. Currency Transportation Reports. Washington. D.C. 20229. C. Travelers. Travelers cmrying currency or other moneta'y instruments w>th them shad lile I mm 4790 al the time of entry into the United States or the time of departure from the United States with the Customs officer in chatgo at any Customs port of entry or departure. * An additional report of a particular tiansporation. mailing, or shipping of currency or othei monetary instruments, is not required if a complete and truthful report has aheady been filed. Howevei. no person otherwise required to file a report shall be excused from liability for failure to do so if, in fact, a complete and truthful report has not been filed. Forms may be obtained from any United States Customs Service office. PENALTIES. — Civil and criminal penalties, including under certain circumstances a fine of not more than $500,000 and imprisonment of not more than five years, are provided for failure to file a report, supply information, and for filing a false or fraudulent report. In addition, the currency or monetary instrument may be subject to seizure and forfeiture. See sections 103.47, 103.48 and 103.49 of the regulations. , Definitions Bank. — Each agent, agency, branch or office within the United States of a foreign bank and each agenev, branch or office within the United States of any person doing business in one cr more of the capacities listed: (1) a commercial bank or trust company organized under the laws of any state or of the United States: (2) a private bank; (3) a savings and loan association or a building and loan association organized under the laws of any state or of the United States; (4) an insured institution as defined in section 401 of the National Housing Act: (5) a savings bank, industi ial bank or other thrift institution: (6) a credit union otganized under the laws of any state or of the United States, and (7) any other organization chartered under the banking laws of any state and subject to the supervision of the bank supervisory authorities of a state. Foreign Bank. — A bank organized under foreign law, or an agency, branch or office located outside the United States of a bank. The term does not include an agent, agency, branch or office within the United States of a bank organized under foreign law. Broker or Dealer In Securities. — A broker or dealer in securities, registered or required to be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934. IDENTIFYING NUMBER. — Individuals should enter their social security number, if any. However, aliens who do not have a social security number should enter passport or alien registration number. All others should enter their employer Identification number. Investment Security. — An instrument which: (1) is issued in bearer or registered form: (2) is of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it ts issued or dealt in as a medium for investment: (3) is either one of a class or series or by its terms is divisible into a class or series of instruments: and (4) evidences a share, participation or other interest in property or in an enterprise or evidences an obligation of the issuer. Monetary Instruments. — Coin or currency of the United States or of any other country, travelers' checks, money orders, investment securities in bearer form or otherwise in such form that title thereto passes upon delivery, and negotiable instruments (except warehouse receipts or bills of lading) in bearer form or other in such form that title thereto passes upon delivery. The term includes bank checks, travelers' checks and money orders which are signed but on which the name of the payee has been omitted, but does not include bank checks, travelers' checks or money orders made payable to the order of a named person which have not been endorsed or which bear restrictive endorsements. Person. — An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, and all entities cognizable as legal personalities. Special Instructions You should complete each tine which applies to you. Part M. — Line 22, Enter the exact date you shipped or received currency °L »e í0 *eAa.ry" l?VruiJ?5n!í,)‘ LIh* 23, Check the applicable box and give the complete name and address of the shipper or reef* P u Li . Line 26, If currency or monetary Instruments of more than one country is involved, attach a schedule showing each kind, country, and amount. * PRIVACY AC1 NOTIFICATION *" ,hf rrq,»»emenM or i’.iMic Law «3 S79. (Privacy Ail of 19741. notice Is htnby given tint the author»* 4700 in ercnrdance with 5 U.S.C. S5J*tO(.t)is Public Law 9 MO*: 31 U.S.C. MOI:S U.S.C. .*01: Reorganization P partment No. 16$. revised, as amended; 31 ITR If».* * to collect Information on Form Ian No. I of |9Sf>; Treaty»* 13c- The principal purpose for collectinc the Information is to assure maintenance of reporte or records where cm h reports or records have a high decree £r ihw« *r . H"1, ,?%,or refulatoty iiweshgaiioti» or proceedings I hr tnfornutinn collected mi) he provided to thosr officers nndemptoyeea th.ivtr..,!. ,,f"'S'rvlce and an* other constituent un» of the Department of the treasury who have a need for the records in the performance of I.mL.I'i . c fct°fds may l«e referred to any other departmehl or agency of the Federjl Government upon the request of the head of such department ot agency. ’ 13,,u.r5 *° r»‘*'idr alt *» MW owl oMhe requested Information may subject the currenc* m monetary Instruments to sciiure and forfeiture, as well aa subject the individual to dvil and criminal liahititiei. ' SnS'S?!' I2*I,AU,7* ,,Uf *u,hofit> etrllecf thh number h 31 Cl R M» *.J$. 1 he social security number wilt he useo as a meant to identify the individual who tiles the terord. (11365} APPENDIX A COUNT ONE 1. At all times pertinent to the Indictment herein: a. Transactions in currency were defined as transactions involving the physical tran