Originally published on Forbes.com.
I have been following the travails of Kent Hovind for over two years. Doctor Dino, as he is known, is a proponent of Young Earth Creationism, the notion that you can arrive at the age of the Earth by summing up the begats in the Book of Genesis. That works out to about 6,000 years, which is not nearly enough time for evolution to work. Doctor Hovind has been in federal prison for nearly a decade on tax related charges that arose out of the operation of a Pensacola theme park called Dinosaur Adventureland. As his release date nears, he has been hit with another charge – mail fraud – related to his attempt to prevent sale of seized property by the federal government. Doctor Hovind has been giving interviews, like this one, in which he claims that the government prosecution of him is religiously motivated.
Kent Hovind was indicted and convicted on fifty-eight counts in 2006. Forty-five of those counts were for structuring – systematically dealing in cash amounts less than $10,000 in order to avoid currency reporting requirements. The structuring is related to 12 of the other counts which relate to failure to withhold and pay payroll taxes.
One of the interview teams Sam and Dan of God’s Property Radio challenged my coverage of these issues and that of Robert Baty, who comments on this blog a lot and runs a facebook site that covers the case. Interesting as that was, I did not deem it forbes worthy, so I covered it on We Are The Future Generations. In the discussions back and forth, though, Bob Baty uncovered something that was rather astounding. In October 2013, the Eleventh Circu it overturned the structuring conviction of someone named Jerry Dwayne Lang who was making an argument very similar to Kent Hovind’s.
This was way above my pay grade or that of Bob Baty so I asked Samuel Brunson, Associate Professor of Law at Loyola University Chicago to take a look at Kent’s indictment, the 11th Circuit decision in Kent’s case and the 11th Circuit decision in the case of Jerry Dwayne Lang to see if we were onto something, Here is how our discussion went.
Peter J Reilly: What Is Structuring, Anyway?
Samuel Brunnson: Federal law requires financial institutions to file a report with the government any time an individual withdraws or deposits at least $10,000 cash in a single day. Which makes it probably the easiest law in the world to avoid. Instead of depositing or withdrawing $10,000 in a single day, you could always split it over the course of a couple days. Only that doesn’t work: the law also prohibits “structuring,” which is any attempt by an individual to get around the filing requirement, say by depositing or withdrawing $9,500 on two successive days.
Reilly: Did Hovind Structure His Withdrawals?
Brunson: Hovind was pretty clearly structuring; the indictment lays out forty-five withdrawals between July 20, 2001 and August 9, 2002. Through November 2, 2001, each withdrawal is for $9,500. After that, each withdrawal is for $9,600. The withdrawals initially happen every three days, but they’re never more than about a month apart. (The government also found a witness and former employee who testified that Hovind knew of and complained about the reporting requirements, so there’s pretty decent evidence that he deliberately structured his withdrawals to avoid the filing requirements.)
After he was convicted, Hovind appealed. In his appeal, he argued that he was not, in fact, guilty of structuring, because the law doesn’t penalize transactions of less than $10,000.
Let’s just say that the Court of Appeals was not impressed, given that the plain language of the structuring law does, in fact, penalize transactions of less than $10,000. Ultimately, the Court of Appeals upheld his conviction and sentence. And the Supreme Court declined to hear his case, making the 11th Circuit’s the last word.
Reilly: But what about U.S. v. Lang?
Brunson: In Lang, the court held that the indictment against Mr. Lang—for structuring!—was invalid. In its indictment, the government charged Lang with 85 counts of structuring. Each of those counts, though, was for an amount of less than $10,000. The Court of Appeals decided that, in order to charge someone with structuring, the amount at issue had to exceed $10,000 (not exactly what Hovind argued on appeal, but close).
The government could do that by grouping multiple withdrawals that together exceeded $10,000 into a single count, but sub-$10,000 withdrawals did not, standing on their own, constitute a cognizable charge.
As a result, the indictment was defective; though the indictment could be fixed (by, for example, refiling a corrected version with the grand jury), it wasn’t the court’s place to fix the indictment. And because a defective indictment violated procedural fairness, the court threw out Lang’s conviction.
Reilly: So Does That Mean The Court Should Throw Out Hovind’s Indictment?
Short answer: no.
Longer answer (and I’m indebted to a colleague who pointed me in the right direction here): by the time Lang was decided, Hovind had exhausted his direct appeals. To challenge it at this point would require collateral review (basically, a second set of proceedings making a different argument—not necessarily innocence, but procedural defects, for example).
And that collateral review only occurs if the 11th Circuit’s decision in Lang should be applied retroactively.
It shouldn’t.
And how do we know it shouldn’t? The Supreme Court dealt with this question in Teague v. Lane.
See, Lang announced a new rule for the 11th Circuit—it clearly changed the playing field (given that it had found the sub-$10,000 counts perfectly acceptable just a couple years earlier in Hovind’s case). And the Supreme Courts said that “new rules should always be applied retroactively to cases on direct review, but that generally they should not be applied retroactively to criminal cases on collateral review.”
Because Hovind’s direct appeals were done by the time the 11th Circuit decided Lang, he doesn’t get the benefit of retroactivity. Because the new rule was enunciated by the court after his conviction was final, Hovind can’t have his sentence overturned based on the new rule.
(Admittedly there’s a little bit of ambiguity here: the Teague case, on its face, applies to new rules from the Supreme Court, and what constitutes a “new rule” isn’t 100% clear. Still, there’s no reason why it shouldn’t apply to new rules from Courts of Appeals, and this sure looks like the type of “new rule” anticipated by the Supreme Court.)
Reilly: But Let’s Say Lang Does Apply Retroactively. Would that mean that Hovind shouldn’t be in jail?
Brunson: Not necessarily. If Lang did apply retroactively, that would mean that none of the structuring charges against Hovind could stand. (It would not mean that he was not, in fact, guilty of the crime of structuring: it would merely mean that the prosecutor erred procedurally in such a way that he failed to allege that Hovind had committed the crime of structuring. It is, that is, a procedural safeguard, not a determination of guilt or innocence.) In the Lang case, that meant the defendant walked free.
But Lang was only charged with structuring. Hovind was also charged with—and convicted of—failing to withhold and pay over to the government various taxes he was obligated to withhold and pay over; in addition, he was charged with and convicted of attempting to obstruct and impede the administration of the tax law.
After Hovind was convicted, but before sentencing, a presentence investigation report was prepared. That document gathered the first twelve counts of the indictment (that is, the failure to withhold) into one group, and the next forty-four counts (that is, all but one of the structuring counts) into a second group. The second group provided the steeper sentence under the 2001 Federal Sentencing Guidelines, indicating a sentence of between 97 and 121 months. The court sentenced him to 120 months of imprisonment.
Reilly: If Lang applied retroactively, though, that second group would would have to be thrown out. Would that at least change his sentence?
Brunson: It’s impossible to say for certain, but it very likely wouldn’t. I’m no expert on sentencing guidelines, but by my back-of-the-napkin calculations, the first twelve counts would give him an offense level of 28, with a recommended sentence of 78-97 months. But there’s also the obstruction charge, which didn’t play at all in the report, that would presumably increase his sentence.
Also, while the length of Hovind’s imprisonment followed the presentence report, since 2005, the sentencing guidelines have not been mandatory. And, in fact, the court didn’t entirely follow them. Instead, it sentenced Hovind to 60 months for failure to withhold, 60 months (to run concurrently) for the next group of structuring charges, 60 months (to run consecutively) for the final structuring charge, and 36 months (to run concurrently) for the interference charge. Even if you were to take out all of the structuring charges, then, and not change anything else, Hovind could still be in jail for 96 months. And there’s no reason to believe that the sentence would be structured in exactly the same way if the court had to go about it a second time.
Reilly: Does this all seem fair to you?
Brunson:
This is probably a fair result. Armed with the knowledge of the 11th Circuit’s standard, prosecutors now group multiple transactions into a single charge. That is, if they filed Hovind’s indictment today, rather than forty-five counts of structuring, the prosecutors would include not more than, say, twenty-two counts, with each count including two or three withdrawals. Sure, it’s a little less dramatic (because 58 counts is really pretty dramatic), but they’d still be able to convict, and they’d still meet all of the same sentencing guideline requirements.
Even if the new standard for charging were to apply retroactively, though, Hovind would still be doing time in jail. And he may well be doing the same ten years in jail; in any event, it’s hard to see how his sentence would ever be reduced to less than eight years, even without the structuring charges.
End of Interview
So there you have it. As I was thinking more about this, the one area where I might quibble with Professor Brunson is that maybe, under this interpretation Kent Hovind was not guilty of structuring at all. If the government were to combine two withdrawals that were a couple of days apart and then look at what happened to that money, they would likely find that it had been spread among numerous people as opposed to being spent in an over $10,000 transaction.
I have written elsewhere that I believe that Kent Hovind is not under scrutiny for his religious beliefs. It is more likely for his association with tax protest like activity even though he claims to not be a tax protester himself. There is little doubt that if he had run his ministry in compliance with tax laws as they are commonly understood by what I would call the reality based community, IRS CID would not have come within miles of him. Nonetheless, in his fairly constant protest that he got a raw deal on the structuring, he may be on to something, perhaps once more illustrating the principle that even a stopped clock is right twice a day.
The Lang decision attracted very little notice when it came out. When Bob told me about, I could not even find it in RIA Checkpoint possibly because there was no mention of a tax connection in the case.