Case 2:03-cr JCC Document 92 Filed 10/06/2003 Page 1 of 8

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1 Case :0-cr-000-JCC Document Filed /0/0 Page of Chief Judge John C. Coughenour UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON UNITED STATES OF AMERICA, ) ) NO. CR0-0 Plaintiff, ) v. ) GOVERNMENT S SENTENCING ) MEMORANDUM LAURA JEAN MARIE STRUCKMAN, ) ) Defendant. ) ) I. INTRODUCTION On May, 0, following two days of jury trial, the Defendant, Laura Jean Marie Struckman (Defendant Struckman), was convicted of conspiracy to structure a financial transaction ( U.S.C. ) in violation of Title U.S.C.. Defendant Struckman is scheduled to be sentenced Friday, October, 0 at :00 am. The Presentence Report (PSR) recommended that Defendant Struckman be sentenced pursuant to U.S.S.G. S.(c) because the evidence in this case indicates that the defendant committed the instant offense for the purpose of evading taxes. The tax loss determined by the probation officer was $0,., the figure representing % of currency withdrawals totaling $,,.0. Under U.S.S.G. T.(L), the probation officer determined that the loss amount places Defendant Struckman at a base offense level of, which results in a sentencing guideline range of to 0 months imprisonment. The GOVERNMENT S SENTENCING MEMORANDUM- (CR0-0) () -0

2 Case :0-cr-000-JCC Document Filed /0/0 Page of government had no objections to the PSR. On August, 0, the defendant submitted four objections to the PSR which included challenges to paragraphs,,,, and of the PSR. addresses each of the defendant s objections below. The government II. GOVERNMENT S RESPONSE TO DEFENDANT S OBJECTIONS. Charges and Convictions. Defendant Struckman objects to reference in Paragraph of her failure to appear at an April, 0 hearing. This paragraph merely describes the procedural history in this matter. It includes a summary of all of the judicial proceedings in this matter including hearings which Defendant Struckman voluntarily appeared. Defendant Struckman s assertion that she was given the wrong date to appear by her counsel Mr. Bentley and was in Hawaii at the time of the hearing was rejected by the Magistrate Judge. &. Political Beliefs & Filings with King County Superior Court. Defendant Struckman objects to all references in Paragraphs and to her alleged political beliefs. Paragraph describes the Global Prosperity Marketing Group (Global) as an internet based marketing business that sold an entry-level products consisting of audio tape series espousing various anti-government, and anti-taxation theories. Paragraph states that one of the philosophies that was advocated at these seminars was the concept of sovereignty, which is a concept that individuals are free from the government. Further paragraph reports that On August,, the defendant filed an affidavit in King County Superior Court in Seattle, Washington, in which she declared that the federal, state, and local governments had no jurisdiction over her labor and property rights, including the IRS, the Social Security Administration and the Department of Tax Revenue. See also Government s Trial Exhibit No. (Copy of Affidavit). Finally, paragraph states that in the affidavit the defendant also renounced her U.S. citizenship and declared herself a citizen of a sovereign republic. Defendant Struckman objects contending that this information is irrelevant to the charges GOVERNMENT S SENTENCING MEMORANDUM- (CR0-0) () -0

3 Case :0-cr-000-JCC Document Filed /0/0 Page of and to any guideline analysis. It is the government s position that this evidence is directly relevant to proving the motive behind Defendant Struckman s conduct. The defendant is a self-proclaimed tax protestor, as detailed in the affidavit she filed with the King County Superior Court on August,. See Government s Trial Exhibit No. (Copy of Affidavit). Trial evidence showed that not only was she structuring cash withdrawals to avoid the filing of CTR s, but her use of cash was designed to impair and impede the IRS in ascertaining her and her husband s income tax. Cash doesn t leave a paper trail. This concept, among others, including the use of nominee entities and bank accounts to conduct business, was promoted at Global Prosperity seminars through a philosophy styled as sovereignty. See Trial Testimony of Shoshanna Szuch at -0. For these reasons, the information in Paragraphs & is directly relevant to the issue of intent and should not be stricken from the PSR.. Institute of Global Prosperity. Defendant Struckman objects to Paragraph contending that she was not involved with the Institute of Global Prosperity and that this organization was formed after she was estranged from her co-conspirator. Evidence presented at trial through the testimony of Shoshanna Szuch established that the defendant s husband was a co-founder of an organization known by various names including Global Prosperity which later changed its name to Institute of Global Prosperity (IGP). Shoshanna Szuch further testified that Defendant Struckman participated in the business of IGP. See Trial Testimony of Shoshanna Szuch at -.,. Relevant Conduct Determination. Defendant Struckman objects to Paragraphs and contending that she is not responsible for all transactions totaling $,,.0. Rather, Defendant Struckman contends that she is responsible for transactions, totaling approximately $0,000 and that the loss calculated in paragraph and carried forward in paragraph should be recalculated. The government submits that under relevant conduct principles of Section B. of the U.S.S.G., all currency GOVERNMENT S SENTENCING MEMORANDUM- (CR0-0) () -0

4 Case :0-cr-000-JCC Document Filed /0/0 Page of transactions should be used to determine the sentence. Legal Principles Section B. of the U.S.S.G. requires the district court to consider relevant conduct when calculating a defendant s base offense level. U.S.S.G. B.. Subsection B.(a) provides that unless otherwise specified, the base offense level shall be determined based on acts or omissions occurring during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense. Subsection B.(a)(), however, defines a more broader range of conduct. That is, a court must consider, not just criminal conduct with which the defendant was charged, but all acts and omissions that were part of the same course of conduct or common scheme or plan as the offense of conviction. U.S.S.G. B.(a)(). To be considered part of a common scheme or plan, the offense of conviction and uncharged acts must be substantially connected to each other by at least one common factor, such as common victims, common accomplices, common purpose, or similar modus operandi. See U.S.S.G. B., cmt. n.. To be considered part of the same course of conduct, the offense of conviction and the uncharged acts must be sufficiently connected or related to each other as to warrant the conclusion that they are part of a single episode, spree, or ongoing series of offenses. Id. The Ninth Circuit has stated that in determining whether uncharged conduct is relevant conduct, the district court should consider the similarity, regularity, and temporal proximity of the uncharged conduct to the charged conduct. United States v. Hahn, 0 F.d 0, (th Cir. ). Discussion Defendant Struckman was convicted of conspiracy to structure a financial transaction between June and August. The indictment identified separate cash withdrawals which served as overt acts in furtherance of the conspiracy. The PSR included as relevant conduct an additional currency withdrawals made by Defendant Struckman GOVERNMENT S SENTENCING MEMORANDUM- (CR0-0) () -0

5 Case :0-cr-000-JCC Document Filed /0/0 Page of from the same bank accounts in the indictment. The additional currency withdrawals occurred between April ( months before the charged conspiracy) and August, with the vast majority having been completed before the onset of the charged conspiracy. It is the government s position that the additional currency withdrawals conducted by Defendant Struckman is conduct that was part of a common scheme or plan as the count of conviction and therefore should be included in the guideline calculations as relevant conduct. Similarity. The uncharged currency withdrawals are similar to those charged in the indictment because they were made from the same bank accounts and in similar amounts. The evidence at trial established that Defendant Struckman and a co-conspirator opened the Crescent Moon bank account on March,, the Alternate Ventures bank account on July,, and the Specktack-Ular Holdings bank account on October,. The uncharged currency withdrawals were made from these accounts. In addition, Sharon L. Ashley (Ashley), a bank teller at U.S. Bank responsible for merchant accounts testified that on the first occasion Defendant Struckman withdrew money from the Crescent Moon account she initially requested over $,000 cash but adjusted the withdrawal below $,000 to avoid the filing of a currency transaction report (CTR). See Trial Testimony of Sharon Ashley at -. Thereafter, according to the testimony of Ashley, all of Defendant Struckman s currency withdrawals were for less than $,000. Moreover, the bank account evidence bears this out. See Government s Trial Exhibit (Summary of Currency Withdrawals). The uncharged currency withdrawals typically ranged between $, and $, per day. The currency withdrawals made during the charged conspiracy were in The currency withdrawals made between April and May meet the definition of structuring. Under federal regulations, a person structures a transaction if that person, acting alone, or in conjunction with, or on behalf of, other persons, conducts or attempts to conduct one or more transactions in currency, in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading the reporting requirements. C.F.R..(gg) (emphasis added). In any manner is defined as the breaking down of a single sum of currency exceeding $, into smaller sums, including sums at or below $,000.00, or the conduct of a transaction, or series of currency transactions, including transactions at or below $, The GOVERNMENT S SENTENCING MEMORANDUM- (CR0-0) () -0

6 Case :0-cr-000-JCC Document Filed /0/0 Page of amounts of either $, or $,00.00 per day, and the withdrawals were made from one of the three bank accounts: Crescent Moon Enterprises, Alternate Ventures, and Specktack- Ular Holdings. Regularity. The currency withdrawals charged in the indictment were transacted from week to week on nearly a daily basis. See Government s Trial Exhibit (Summary of Currency Withdrawals). So too with the uncharged currency withdrawals. The bank records reveal that the regularity of Defendant Struckman s currency withdrawals remained consistent from April through August. Temporal Proximity. All of the uncharged currency withdrawals occurred within months of the charged conspiracy. The majority of the uncharged transactions ( currency transactions) were made in the months leading up to the charged conspiracy. An additional 0 overlapped the months charged in the conspiracy. This string of unbroken currency withdrawals by the defendant beginning in April and extending through August satisfies the temporal proximity element of the relevant conduct calculus. Motive. Lastly, the uncharged currency withdrawals constitute relevant conduct in this case because the motive behind the uncharged withdrawals was the same as that for the charged conduct. That is, Defendant Struckman s purpose in making currency withdrawals below $, was to avoid government scrutiny into her finances. These acts were part of a larger design to drop out of the system which is a legally incorrect notion that an individual can break one s ties with the federal government and no longer be liable for paying income taxes. Shoshanna Szuch, a former Director of Operations for an organization called Global Prosperity (later named Institute of Global Prosperity), testified at trial that Global Prosperity was an organization that aligned itself with tax protestor themes transaction or transactions need not exceed the $, reporting threshold at any single financial institution on any single day in order to constitute structuring within the meaning of this definition. C.F.R..(gg). Thus, while Defendant Struckman s transactions during the time period between April and May were for amounts that were typically less than the amounts made during the charged conspiracy, her conduct still meets the definition of structuring. GOVERNMENT S SENTENCING MEMORANDUM- (CR0-0) () -0

7 Case :0-cr-000-JCC Document Filed /0/0 Page of and that the defendant s husband was a co-founder of the organization. See Trial Testimony of Shoshanna Szuch at -. Szuch further testified that the defendant was active in the organization as a speaker at the seminars and that the business was very successful financially in and. Id. Szuch s testimony, coupled with Defendant Struckman s banking practices, her status as a tax non-filer (See Government s Trial Exhibit, IRS Certificate of Lack of Record), and her public announcement in an affidavit filed in King County Superior Court disavowing all ties to the federal government fits a pattern of behavior consistent with that of a tax protestor. For these reasons, the uncharged currency withdrawals constitutes relevant conduct for purposes of the conspiracy to structure a financial transaction and therefore should be included in the guideline calculations. DATED this th day of October, 0. Respectfully Submitted, JOHN McKAY LARRY J. WSZALEK MARK T. ODULIO CHRISTOPHER J. MAIETTA Department of Justice, Tax Division Trial Attorneys 00 E Street N.W. Washington, D.C. 00 Phone: () -0 GOVERNMENT S SENTENCING MEMORANDUM- (CR0-0) () -0

8 Case :0-cr-000-JCC Document Filed /0/0 Page of CERTIFICATE OF SERVICE I hereby certify that on October, 0, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the attorney(s) of record for the defendant(s). I hereby certify that I have served the attorney(s) of record for the defendant(s) that are non CM/ECF participants via telefax. s/leah Melendy LEAH MELENDY Paralegal Specialist United States Attorney s Office 0 Union Street, Suite 0 Seattle, Washington -0 Phone: () - FAX: () -0 leah.melendy@usdoj.gov CERTIFICATE OF SERVICE () -0