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United States v. Van Allen

April 29, 2008


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 CR 914-David H. Coar, Judge.

The opinion of the court was delivered by: Bauer, Circuit Judge.


Before BAUER, ROVNER and WOOD, Circuit Judges.

Melvin Van Allen was convicted of a series of financial crimes involving the structuring of currency transactions and the concealment of assets in a bankruptcy proceeding, in violation of 18 U.S.C. §§ 152(1) and (2) and 31 U.S.C. §§ 5324(a)(3) and (d)(2). On appeal, Van Allen challenges the sufficiency of the evidence supporting the convictions on several counts, an evidentiary ruling by the district court, and two of the jury instructions. For the following reasons, we affirm Van Allen's conviction.

I. Background

Van Allen, erstwhile mayor of the Village of Justice, Illinois, made a living in the used auto parts business, purchasing parts from junkyards and reselling then to auto rebuilders. Van Allen ran the unincorporated operation with the help of his three sons, Melvin III, Zachary, and Joshua. In running the business, Van Allen maintained several bank accounts. The primary account used in Van Allen's transactions was with Archer Bank in Chicago, and was in the name of Van Allen and his wife "doing business as Treyzack Trailers." The Van Allens also had joint accounts at TCF National Bank and Bridgeview Bank and Trust.

Between 2002 and 2004, Van Allen wrote more than 3,000 checks on the Archer account. Most of the checks were made out to himself, though several were made out to his wife or one of his three sons. All of the checks were cashed, mostly at a currency exchange which would charge a processing fee. This business practice stemmed (or so Van Allen claimed) from the nature of the used auto parts business: Van Allen's suppliers dealt exclusively in cash, and Van Allen would write checks that he expected to be sufficient to cover each day's purchase of parts. Van Allen's customers, on the other hand, paid primarily by check. Instead of depositing these checks directly into the Archer account, the Van Allens would cash the checks at the currency exchange and then deposit the cash into the account, so that the cash would be immediately available. As Van Allen would explain to an F.B.I. agent, he engaged in these somewhat circuitous practices in order to "avoid the aggravation" of filing extra paperwork.

Notably, though checks written by Van Allen between 2002 and 2004 totaled over $5.8 million, none of the 3,000 checks exceeded $10,000. At the same time that Van Allen wrote and cashed these checks, he made hundreds of cash deposits into the Archer account, also conspicuously under the $10,000 amount. In 2003 and the first half of 2004, the Van Allen family made 1,148 separate cash deposits totaling over $5.5 million into the Archer account, and all but three of these deposits were in amounts under $10,000. The amount of money involved in these transactions tracked the federal law that requires banks and currency exchanges to report currency transactions over $10,000 to the IRS; structuring transactions to evade this requirement violates federal law.

Though the Van Allens moved millions of dollars in cash through the auto parts business, by mid-2003, the Van Allens encountered significant financial difficulties. On August 9, 2003, the Van Allens met with Christine Piesiecki, an attorney, to discuss the possibility of one or both of the Van Allens entering into bankruptcy. The Van Allens presented several documents to Piesiecki and disclosed information regarding their business troubles and financial instability-though Piesiecki and the Van Allens disagree as to the nature and extent of those disclosures.

On January 10, 2004, Van Allen informed Piesiecki that he had decided to file for bankruptcy. Piesiecki prepared the bankruptcy petition and schedules, which Van Allen reviewed, certified, and signed. Piesiecki filed the petition and schedules on January 28, 2004.

Van Allen's bankruptcy petition omitted some key facts about his financial status. The bankruptcy schedules failed to disclose several of his assets, including his ownership interest in his home, the Bridgeview account, and the TCF account. He also failed to disclose that he operated the auto parts business in the two years leading up to the bankruptcy filing, or that he obtained any income from the business.

After filing for bankruptcy, Van Allen attended a statutorily-required meeting of the creditors on May 10, 2004. With the bankruptcy trustee presiding, Van Allen stated under oath that he did not own his home and that he had listed all of his assets in his bankruptcy petition. Both statements were false. In reliance on these statements and the bankruptcy petition, the bankruptcy trustee filed a report that allowed Van Allen to discharge all of his credit card debt.

Van Allen was charged with four bankruptcy-related offenses, including three counts of concealment of assets under 18 U.S.C. § 152(1) and one count of making false statements to a trustee during a trustee meeting under 18 U.S.C. § 152(2). Van Allen was also charged with twenty-eight counts of illegal structuring, including twenty-five counts of structuring cash deposits at Archer Bank (Counts Five through Twenty-Nine) and three counts of structuring currency transactions at the currency exchanges (Counts Thirty through Thirty-Three), all in violation of 31 U.S.C. §§ 5324(a)(3) and (d)(2). A jury convicted Van Allen on all counts, and he was sentenced to thirty-six months' imprisonment and two years' supervised release.

II. Discussion

Van Allen raises several issues on appeal: (1) that the government failed to present evidence sufficient to convict Van Allen on the structuring counts; (2) that the government failed to present evidence sufficient to con- vict Van Allen on one of the bankruptcy-related counts; (3) that the district court erred in denying an advice-of-counsel jury instruction; (4) that the jury was improperly instructed on what constitutes "concealment" for the concealment of assets in a bankruptcy proceedings count; and (5) that the district court erred in excluding evidence ...

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