In June of last year former Speaker of the United States House of Representatives Dennis Hastert was indicted for structuring and false statements to the FBI in an investigation that focused on more than $900,000 in cash withdrawals the Speaker made from his own bank accounts. See our analysis of the charges here. On Wednesday, April 27, the Speaker, who ultimately pled guilty to those charges, was back in a federal courtroom for sentencing. As the New York Times put it, “[w]hile the sentencing hearing was, technically, about a violation of banking rules and regulations, the proceeding focused squarely on the underlying reason for Mr. Hastert's puzzling bank withdrawals - his abuse of young wrestlers who had viewed him as a role model."
The Speaker's indictment alleged a scheme to structure more than 100 withdrawals from his accounts and revealed a pretty clear effort to avoid the filing of Currency Transaction Reports (CTRs). But, the indictment implied much more. The structuring of the withdrawals was clearly part of an effort to pay off "Individual A" in return for the concealment of past, but undisclosed, "misconduct." That “misconduct” was officially disclosed in Wednesday's hearing, Several individuals stepped to the podium and told the Court that the Speaker - decades ago as a high school wrestling coach - sexually abused them or their family members. The Speaker gave a range of direct and equivocal answers in response, but he essentially admitted to the allegations.
United States District Judge Thomas Durkin was clearly troubled by all that he heard. Indeed, he was so troubled that he deviated strongly from the sentencing recommendations of both the prosecutors and defense counsel. Federal Sentencing Guidelines called for a sentence of between 0 and 6 months incarceration for the structuring offense. Defense counsel argued for no jail time; prosecutors argued for jail time within the range established by the Guidelines. But, Judge Durkin imposed a sentence of 15 months incarceration. Focusing more on the underlying cause for the structuring the Judge called Mr. Hastert a “serial child molester” and noted that “some actions can obliterate a lifetime of good works. Nothing is more stunning that having ‘serial child molester’ and ‘speaker of the House’ in the same sentence.”
As we noted before, from a purely legal standpoint, this prosecution is a compelling reminder that Currency Transaction Reports (CTRs), Suspicious Activity Reports (SARs) and the FinCen financial review process are potent tools for federal investigators and prosecutors. They can detect ongoing criminal activity that itself can be prosecuted. But, these tools can also give life to prosecutions otherwise barred by the passage of time. In the Speaker's case, according to the courtroom presentation and media reporting, all of the sexual misconduct occurred so long ago that it is not prosecutable because of the running of the applicable statutes of limitation. But, it is often the coverup which trips up the criminal. The Speaker's effort to cover his tracks as he paid off Individual A is the sole factual basis of this prosecution. He wasn't charged with sexual misconduct; he was charged with structuring the withdrawals of his own money to avoid public disclosure of his wrongdoing. But, his actions, in effect, extended the statute of limitations on his sex crimes and made the whole matter prosecutable in the here and now. Speaker Hastert will have 15 long months in federal prison to contemplate the power of those tools.
