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Wednesday, March 19, 2014

Ind. Decisions - 7th Circuit decides one very interesting Indiana case today

In United States v. Yulia Yurevna Abair (ND Ind., DeGuilio), a 26-page, 2-1 opinion, Judge Hamilton writes:

Two weeks before she was planning to close on the purchase of a new home in Indiana, appellant Yulia Abair learned that her bank in Russia would not wire the purchase price from her account. She managed to secure the money before the closing by withdrawing a few hundred dollars at a time from ATMs up to her maximum daily limit and depositing the cash at her bank in Indiana. She was charged with violating a federal criminal statute that prohibits structuring currency transactions in order to evade federal reporting requirements for transactions involving more than $10,000 in currency. 31 U.S.C. § 5324(a)(3). Abair was convicted in a jury trial. She also agreed to sell her new home and to forfeit the entire proceeds to the government. She argues on appeal that the trial court erroneously applied Federal Rule of Evidence 608(b) by allowing the prosecutor to cross-examine her at length about alleged false statements on a tax return and student financial aid applications. We find that the government lacked a good faith basis for believing that Abair lied on the tax and financial aid forms and therefore conclude that the district court erred by allowing the prosecutor to ask a series of accusatory and prejudicial questions about them under Rule 608(b). We cannot say that the error was harmless in a trial that hinged on Abair’s credibility. We reverse Abair’s conviction and remand for a new trial. Abair also challenges the forfeiture of the entire proceeds of her home sale as an unconstitutionally excessive fine. We offer some guidance on that issue in case it arises again after remand.

[The forfeiture discussion, which begins on p. 14, concludes] We recognize that the government believes that Abair may have been involved in a range of other wrongdoing, but there is simply no evidence of other wrongdoing. For all that appears in this record, Abair is at most a one-time offender who committed an unusually minor violation of the structuring statute not tied to other wrongdoing. We therefore have serious doubts that the forfeiture of her home’s entire $67,000 value comports with the “principle of proportionality” that is the “touchstone of the constitutional inquiry under the Excessive Fines Clause,” Bajakajian, 524 U.S. at 334, but further exploration of the issue can await a new trial.

Abair’s conviction and sentence, including the forfeiture order, are REVERSED and the case is REMANDED to the district court for a new trial.

[Judge Sykes' dissent begins on p. 17] Yulia Abair, a Russian immigrant and registered nurse, made an unusual series of large cash deposits into her account at a bank near South Bend, Indiana. This attracted the attention of IRS agents and eventually the Department of Justice, but their investigation turned up no evidence of nefarious activity. Abair wasn’t evading taxes or laundering ill-gotten gains; she was buying a home and was having difficulty accessing funds in her Citibank Moscow account. To get around the problem, Abair resorted to the scheme my colleagues have described: She made repeated ATM withdrawals from her Russian bank account and deposited the cash with her local bank in a series of transactions just under the $10,000 threshold that triggers the bank’s reporting requirements for currency transactions. The withdrawals were legitimate, but the deposits landed Abair in big trouble.

The bank tellers told investigators that the money had a “musty,” “mildewy,” or “dirty” odor, as if it had been kept in a basement rather than freshly drawn from an ATM. Prosecutors inferred from the odd smell that the money must have come from an illegitimate source and brought the full force of the federal criminal law down on Abair. * * *

Finding no error, I would affirm, although not without serious misgivings about the wisdom of this prosecution. It’s unclear to me how the interests of justice are served by saddling Abair with a felony conviction and forcing her to forfeit her home as punishment for a technical, trivial violation of the structuring statute. Without more, the government’s suspicions about the malodorous money do not support an inference that broader criminality was at work here. Abair has no criminal history, and at sentencing the judge noted that she is otherwise a responsible person, has a good employment history, is an excellent mother to her 11-year-old son, and has substantial community support. No doubt these observations contributed to the judge’s decision to place her on probation.

For the foregoing reasons, I respectfully dissent.

Posted by Marcia Oddi on March 19, 2014 07:34 PM
Posted to Ind. (7th Cir.) Decisions