United States v. Yulia AbairUnited States v. Yulia Abair
Lead Opinion
Two weeks before she was planning to close on the purchase of a new home in Indiana, 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.
I. Factual Background
Abair emigrated to the United States from Russia in 2005 and married an American citizen. They lived together in Indiana, where Abair ran a massage therapy business and worked toward her nursing degree. During this time, Abair still owned her old apartment in Moscow. After being divorced, Abair sold the apartment in 2010 and deposited the proceeds in her account with Citibank Moscow. The next year, she signed a contract to buy a home for cash in South Bend, Indiana. That agreement set the closing for June 3, 2011.
Several weeks after signing the contract, Abair asked Citibank Moscow to transfer the purchase price from her account. The bank refused, apparently because her local bank account was in her married name and the Citibank Moscow account used her maiden name. The only way to reach her money in time for the closing was by withdrawing it bit by bit from Citibank ATMs in Indiana. Abair did so over a frenetic two weeks in which she repeatedly withdrew the maximum daily amount of cash (this ceiling was set in rubles but hovered around $6400). Over the same period, Abair made eight deposits at her local bank in amounts ranging from $6400 to $9800 — all below the $10,000 limit at which the currency reporting requirements kick in. See
The U.S. Attorney’s Office decided Abair was worth prosecuting, and she was indicted by a grand jury on eight counts— later correctly merged into one — of structuring financial transactions for purposes of evading the reporting requirements. Abair went to trial. Because the parties stipulated that her local bank was a domestic financial institution, the only two elements the government had to prove were that Abair knew of the reporting requirements and that she had structured her transactions for the purpose of evading those requirements.
During its case-in-chief, the government focused on Abair’s pattern of withdrawals and deposits. It showed that on each day Abair went to the bank, she had more than $10,000 in her possession yet always deposited less than that amount. The government called two IRS agents who had interviewed Abair. They testified that during the interview, which was not recorded, Abair revealed her knowledge of the reporting rules. The agents also testified that Abair told them outright that she had wanted to avoid the reporting rules because “she thought the government would look at her as though she was part of an organization or something, is what she said.”
For her part, Abair did not dispute that she was aware of the $10,000 limit by the time she spoke with the agents. But she said she learned about it only after making the deposits, when she asked a friend why she had been asked to show identification at the bank. Abair’s version was that the agents asked her why she thought the requirements existed, and she “said probably of organization or something — something like this.” (Abair had arrived in the United States speaking very little English, and she testified to continuing difficulties with complex or technical conversations.) She said her deposit amounts were based on how much cash she had on hand at the time and how much would fit in her purse.
In cross-examining Abair, the prosecutor sought to ask about her 2008 joint income tax return and the Free Application for Federal Student Aid (“FAFSA”) forms she filed while attending nursing school. Her attorney objected on relevance grounds. In a sidebar conference, the prosecutor said he believed Abair misrepresented her business expenses on the tax return and lied on her student aid applications about her business income and her assets. He intended to ask about the filings to attack Abair’s truthfulness under
The questioning continued in the same vein. Wasn’t it true she also lied about her income on the FAFSA forms? Didn’t she lie on her taxes about her business’s losses? Didn’t she say expenses were double her gross receipts? Was she unaware that she gave her husband false numbers when he did their taxes? Abair denied having lied. She said she played almost no role in preparing her family’s tax returns and never signed them. Her attorney raised multiple objections. But although the trial court reined in the questioning somewhat, the prosecutor had achieved what he set out to do.
The jury found Abair guilty on all counts. The court merged the eight counts into one, sentenced Abair to two years of probation, and ordered her to sell her new home and forfeit to the government all the proceeds of the sale, which amounted to $67,060.
II. Analysis
Abair argues that the district court abused its discretion in allowing the questions about her financial filings and claims the forfeiture was unconstitutionally excessive. Before dealing with those issues, though, we address briefly her argument that the original eight-count indictment was multiplicitous on the theory that her eight deposits together could support only one count of structuring. We have suggested as much before, United States v. Davenport,
A. Cross-Examination Under
In this case we conclude that the district court abused its discretion by allowing the cross-examination on Abair’s financial filings because the government did not provide a sufficient basis to believe the filings were probative of Abair’s character for truthfulness.
As a general matter, lying on financial documents such as tax returns or financial aid applications would seem to be an archetype of conduct bearing on truthfulness. See United States v. Lynch,
The government acknowledged at sentencing that Abair could skip these questions, but it claimed she had nevertheless affirmatively reported having no assets. The government failed to explain why Abair would have done this, and the Department of Education printout on which the government relies is not enough to support its position. The printout shows a list of zeros next to items relating to the applicant’s assets, but that does not mean Abair actually entered those figures. The printout is an internal department record, and the government has provided no reason to think that such zeroes and similar
The government also lacked sufficient basis for believing Abair intentionally lied on her and her then-husband’s joint income tax return for 2008. The return listed $8,872 in vehicle expenses stemming from her massage business, a figure large enough to shift the business into the red. Abair acknowledged having provided her ex-husband most of the figures for her business, but he testified — in response to a question from the government — that he had calculated the vehicle numbers himself. In addition, the government never provided any reason for doubting Abair’s testimony that she not only did not see the tax return but never even signed it because her husband filed it electronically.
Without more than the government has presented here, it has not established a good faith basis for attributing the vehicle figure to Abair or thinking it was the result of a deceitful act rather than an oversight. See Miles,
The error was not harmless. We could hold the error harmless only if the government persuaded us that we could say “with fair assurance that the error did not substantially sway the jury.” Barber v. City of Chicago,
This conclusion becomes compelling when one considers the extent and accusatory nature of the cross-examination. The repetitive questions about Abair’s FAFSA form, in particular, went far beyond simply identifying the specific conduct she was being asked about. The questioning recounted her various assets in such detail that the court worried aloud whether it was essentially “an attempt by the government to proffer her bad acts.” See Wein-stein, § 608.22[2][c][ii] (warning that cross-examiner’s detailed questioning “can convey the theoretically barred information to the jury” and be so extensive “as to render the witness’s denials completely suspect”),
At the beginning of the examination on the FAFSA forms, the prosecutor used a vague and confusing compound (triple) question to attack: “And on that form they ask you to state your family income; they ask you to state how much you earn from working and they ask you to state your assets; isn’t that true?” Abair answered (correctly) “Not exactly.” That prompted the follow-up question: “Isn’t it true that when you were asked in the FAFSA application to state what your assets were, to list them, to state the value of your assets — ” which drew the accurate objection that the question assumed facts not in evidence, namely that Abair was actually asked those questions in the online form.
The prosecutor then restated his question: “Don’t you recall, ma’am, that you were asked what the value of your assets were when you were filling out those FAF-SA forms?” Abair answered: “When I was filling this forms, they asked questions how — about tax return — how much money you earn — and then it was giving me — it was saying — computer said that based on my answers I might skip question about my assets, and I did — I went to Mr. Stevens’ [defense counsel] office and we — all screens was — I did the same thing.... ”
Under
When questioning resumed, the prosecutor returned to the subject: “Isn’t it true, ma’am, that you lied not only about not having any assets during those three years — .” Defense counsel objected again, properly, for Abair had just denied having done so, but the prosecutor kept repeating the question. The judge was clearly attuned to the risk presented by this line of questioning, but he did not take effective action by stopping or rebuking the prosecutor or telling the jury to disregard these
B. Forfeiture
Abair also challenges the forfeiture of her house’s entire value, arguing that it is so disproportionate to the crime as to amount to an unconstitutionally excessive fine under the Eighth Amendment. The forfeiture was ordered pursuant to
This statutory command is subject to the constitutional limit of the Eighth Amendment. United States v. Bajakaji-an,
Applying Bajakajian, an unconstitutionally excessive fíne can be identified by looking to: (1) the nature of the defendant’s crime and its connection to other criminal activity, (2) whether the criminal statute is principally meant to reach people like the defendant, (3) the maximum punishment that could have been imposed, and (4) the harm caused by defendant’s conduct. United States v. Malewicka,
In Bajakajian, the Supreme Court held that $350,000 was an excessive punishment for the defendant’s failure to report taking that amount of currency out of the country. We distinguished that case in Malew-icka, affirming a $280,000 forfeiture for the same structuring offense Abair was charged with. Malewicka was a close case, however, and differed significantly from the facts here. Over the course of several years, defendant Malewicka withdrew millions of dollars from her business’s bank account through hundreds of cash transactions just below the $10,000 limit. Id. at 1102. We upheld the forfeiture in large part based on the pervasiveness of the violations and the risk that a small-business owner in her position could structure transactions to facilitate tax evasion or other crimes. Id. at 1105-07.
Malewicka recognized a limit on the logic of Bajakajian: even a reporting offense can warrant a large forfeiture when the forfeiture amount is sufficiently related to the “quality and quantity” of the criminal conduct. Id. at 1104. Abair’s prosecution involves the same criminal statute as did Malewicka but otherwise bears little resemblance to that case. Abair was sentenced on one count to Malewicka’s twenty-three. Abair made eight deposits over a week and a half, compared with Malewic-ka’s hundreds of cash withdrawals over six years. Because Malewicka was an employer who operated her business with cash, there was a special risk of tax evasion or money laundering not present in
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,
Abair’s conviction and sentence, including the forfeiture order, are REVERSED and the case is REMANDED to the district court for a new trial.
Dissenting Opinion
dissenting.
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. The U.S. Attorney’s Office in South Bend indicted her on eight counts of structuring a money transaction to avoid currency reporting requirements. See
Abair raises four arguments on appeal: (1) the indictment was multiplicitous; (2) the district court committed an evidentiary error; (3) the evidence was insufficient to convict; and (4) the forfeiture was excessive in violation of the Eighth Amendment. Three of these arguments can be summarily rejected. The district court cured the multiplicity problem by merging the counts at sentencing. The evidence was sufficient to convict, even though the structuring violation was technical and not connected to any criminal activity. And because Abair stipulated to the forfeiture, she waived the Eighth Amendment chai-
That leaves the claim of evidentiary error. My colleagues hold that the judge should not have permitted the prosecutor to cross-examine Abair about specific instances of conduct bearing on her truthfulness under
As with other evidentiary questions, the trial judge has broad discretion to permit or exclude cross-examination under
Here, the judge allowed the government to cross-examine Abair about apparent falsehoods in her 2010-2012 FAFSA forms (federal financial-aid applications) and in her 2008 federal tax return. My colleagues conclude that this was an abuse of discretion because “the government did not demonstrate a sufficient reason to believe Abair herself actually lied” in these documents. Majority op. at 264. Respectfully, this conclusion sidesteps the applicable legal standard for
To cross-examine a witness under
Abair’s counsel vigorously objected to the government’s proposed cross-examination. After a lengthy sidebar, the judge overruled the objection and permitted the cross-examination to proceed, concluding that the documentary evidence established a good-faith basis for the prosecutor to ask Abair whether she provided false information in these financial filings. But the judge reminded the prosecutor that he could not use extrinsic evidence; if Abair denied that she lied on the documents, the government would be stuck with her answer. The judge also warned the prosecutor to keep the scope of his inquiry narrow.
Cross-examination resumed but proceeded clumsily and was interrupted by several additional objections. Abair denied that she lied and offered a plausible explanation for how the misleading information wound up in these documents. She testified that the online program for the FAFSA permitted her to skip the questions about her assets based on other answers she gave earlier in the form. (Her counsel speculates that the program entered the zeroes automatically.) She also testified that her husband completed their 2008 tax return and filed it electronically. She acknowledged giving him financial information about her massage business, but said that she neither saw nor signed the return before it was filed.
My colleagues credit Abair’s explanation and conclude that the cross-examination lacked a good-faith factual basis and should have been excluded. Majority op. at 264-66. This reasoning misapplies the governing legal standard and overlooks the deference owed to a trial judge’s evidentia-ry determinations.
The good-faith-basis standard for cross-examination under
It’s true that the documentary evidence in this case gave rise to competing inferences, but one permissible interpretation was that Abair provided false information
But this reasoning overlooks that the prosecutor did not have to disprove Abair’s explanation before getting the green light to proceed with his cross-examination. All he needed to do was establish a good-faith factual basis to ask the questions; here, the documents themselves provided that good-faith basis. Nothing required the judge to credit Abair’s proffered explanation when ruling on the defense attorney’s objection. Even accepting the factual premise that the online FAFSA program permits applicants to skip certain questions and that Abair in fact did so, we can only speculate about whether the program fills in zeroes automatically or leaves the skipped questions blank. Abair’s explanatory speculation may be plausible, but there’s no evidence one way or another. Her FAFSA forms contain both blanks and zeroes. What we do know with some certainty is that nothing in the caselaw applying
Simply put, the presence of a factual dispute about the specific instances of conduct does not defeat the cross-examiner’s good-faith factual basis to proceed with the cross-examination under
That ruling was sound. The disputed issues at trial were Abair’s knowledge of the $10,000 reporting limit and her intent to evade it. On the witness stand, she denied that she knew about the currency-transaction limit at the time of the offense and denied any intent to structure her transactions to evade it. Because her credibility was key, so was the government’s
As my colleagues have noted, providing false information on a financial-aid application or a tax return is “an archetype of conduct bearing on truthfulness.” Id. at 264. So the government’s proposed cross-examination was obviously highly probative. Of course, the prosecutor had to take the good with the bad; once the cross-examination was underway, he was stuck with Abair’s denial and her plausible
Finally, the court’s holding fails to account for the deferential standard of review that applies to evidentiary determinations. Cross-examination under
In short, I can find no reason to fault the district judge’s decision to permit this cross-examination or to criticize his refereeing of it once it was underway. 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.
When confronted with Abair’s objection, the trial judge’s obligation was simply to test the prosecutor’s good-faith factual basis for the proposed cross-examination. The judge did so here, conducting a proper inquiry under both
Notes
. The documents were not offered or admitted as evidence before the jury, consistent with the bar on the use of extrinsic evidence to prove character for untruthfulness. See
. Despite our disagreement about the legal issue under