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Fifth Circuit Considers Structuring Crimes and Limits on Criminal Forfeiture in Recent Case

The Fifth Circuit Court of Appeals recently decided the case of United States v. Suarez, which involved charges of “structuring” currency transactions.   Thirty-one U.S.C. § 5313(a) requires banks to file a Currency Transaction Report (CTR) whenever someone conducts a transaction involving more than $10,000 in cash.  Illegal “structuring” occurs when someone conducts multiple transactions to avoid causing a CTR to be filed.  For example, instead of withdrawing $15,000 all at one time, someone who is trying to “structure” the transactions might make three $5,000 withdrawals over the course of several days.  This is a crime.

That’s what the defendant in Suarez did, according to the Fifth Circuit opinion.  An office manager at a real estate company that was under investigation for money laundering drug proceeds, the defendant would use her personal account to buy cashier’s checks made out to the company in amounts less than $10,000, and the company would reimburse her.  The opinion doesn’t say why the defendant was making these transactions, but money laundering was strongly suggested.  The defendant was ultimately convicted at trial and sentenced to 13 months in prison and a forfeiture of $52,042.

The discussion of the forfeiture is the most interesting part of the Suarez opinion.  The defendant appealed the forfeiture order, claiming that it was excessive under the Eighth Amendment, which prohibits excessive fines. She also argued that the money involved in the offense was not her personal money, and so it would be unfair to require her to forfeit $52,000 of her own funds.

The Court rejected both of these arguments.  With regard to ownership of the money involved in the crime, the Court noted, first, that there was no evidence in the record showing who exactly the money had belonged to, and, second, that the District Court had concluded the defendant acted in reckless disregard for whether she was involved in money laundering.  It was therefore appropriate to order the forfeiture of her personal funds.

Regarding the general objection that the forfeiture was excessive in amount, the Fifth Circuit applied the test from United States v. Bajakajian, 524 U.S. 321 (1998), the lead Supreme Court case on excessive fines.  Under Bajakajian, the Fifth Circuit considers the following factors when determining whether the fine or forfeiture is “grossly disproportionate” to the offense:  “(1) the essence of the defendant’s crime and its  relationship  to  other  criminal  activity;  (2)  whether  the  defendant  was  within the class of people for whom the statute of conviction was principally designed; (3) the maximum sentence, including the fine that could have been imposed;  and  (4)  the  nature  of  the  harm  resulting  from  the  defendant’s  conduct.” United States v. Mora, 644 F. App’x 316, 317 (5th Cir. 2016).

Applying these factors to the Suarez situation, the Court noted that the forfeiture amount was significantly less than the maximum allowed as a fine under the structuring statute (up to $250,000).  The forfeiture amount was also less than double that recommended by the Sentencing Guidelines.  Although double the recommended amount sounds like a lot, the Fifth Circuit’s case law has permitted forfeitures that were many times the amount recommended by the Guidelines.  Finally, there were many signs and indications that the Suarez defendant had been engaged in money laundering, and so she was not an innocent victim of government overreach.  Accordingly, the Fifth Circuit affirmed the sentence of the District Court, including a forfeiture in the amount of $52,042.