GINSBURG, Circuit Judge:
Dr. Robert Sperrazza was convicted of three counts of tax evasion, in violation of 26 U.S.C. § 7201 and two counts of structuring a currency transaction, in violation of 31 U.S.C. § 5324(a)(3). The district court sentenced him to 36 months imprisonment and ordered him to forfeit $870,238.99. Sperrazza argues the conviction must be set aside because the structuring counts of the indictment are defective and, if the conviction is not set aside, the order of forfeiture must be vacated because it violates the Excessive Fines Clause of the Eighth Amendment to the Constitution of the United States. We disagree with both arguments and affirm the conviction and the order of forfeiture.
Pursuant to 31 U.S.C. § 5313(a), a "domestic financial institution" is required to file a report with the Secretary of the Treasury whenever it "is involved in a transaction for the payment, receipt, or transfer of United States coins or currency. . . in an amount" greater than $10,000. See 31 C.F.R. § 1010.311. The "currency transaction reports" generated by financial institutions are used by law enforcement to detect criminal activity. See United States v. Lang, 732 F.3d 1246, 1247 (11th Cir. 2013). Because, however, the reporting obligation is borne by the financial institution
Sperrazza and two other doctors had an anesthesiology practice in Albany, Georgia. The practice outsourced its billing operations to Physicians Professional Management (PPM), which collects and processes payments from patients and insurance companies. PPM ordinarily deposits the checks it receives from patients, but Sperrazza instructed PPM to mail to him each week any checks received from his patients. The bundle of checks Sperrazza received each week from PPM usually totaled several thousand dollars and on at least one occasion the checks totaled more than $10,000.
Approximately every ten days Sperrazza cashed the checks he received from PPM at a bank in Albany. Although Sperrazza and his practice had several accounts with the bank, he always cashed the checks rather than depositing them into an account. Ordinarily he cashed between 20 and 50 checks per visit; the checks often totaled more than $9,000 but never exceeded $10,000. In 2008, for example, Sperrazza cashed checks on 36 days, on 24 of which the checks totaled between $9,000 and $10,000. According to one of his partners, Sperrazza had told him he never cashed checks totaling more than $10,000 at one time because he wanted "to avoid any reports or anything that would involve. . . the regulatory or IRS authorities."
Sometimes Sperrazza also deposited cash into one of his accounts at the bank before he cashed the checks he had received from PPM. The cash deposits, like the checks, often totaled more than $9,000 without ever exceeding $10,000. In 2008, Sperrazza deposited cash on 18 days, on 14 of which he deposited between $9,000 and $10,000.
In December 2008 law enforcement officials searched Sperrazza's home in connection with an unrelated criminal investigation. The officers discovered there approximately $24,000 in cash, some of which was in an envelope labeled "clean." Sperrazza's accountant subsequently informed the IRS that Sperrazza had underreported his income by failing to disclose payments he had received from his patients. Sperrazza later filed amended tax returns and paid the tax owed for 2005, 2006, and 2007.
In 2012 a grand jury returned a five-count indictment against Sperrazza. The first three counts allege he evaded income tax in 2005, 2006, and 2007, respectively; the fourth and fifth counts allege he structured a currency transaction in 2007 and in 2008, respectively, in amounts totaling $870,238.99. The Government also notified Sperrazza it would seek an order requiring him to forfeit that amount.
In 2013 a jury found Sperrazza guilty of all five counts. In 2014 Sperrazza filed a motion to set aside the jury's verdict, in which he argued for the first time the indictment is defective. The district court denied the motion as untimely. It then sentenced Sperrazza to concurrent terms of 36 months imprisonment for each count and ordered him to forfeit the $870,238.99 sought by the Government.
On appeal Sperrazza renews his arguments that the indictment is defective and the order of forfeiture is excessive.
Sperrazza first contends we must set aside his conviction because counts four and five of the indictment, which charge him with structuring a currency transaction in 2007 and in 2008 respectively, fail to state an offense and are factually inaccurate. Before turning to the merits of Sperrazza's two claims, we must decide whether they are subject to appellate review and, if so, under what standard of review.
Sperrazza first asserted the indictment is defective in a motion he filed ten months after his trial and conviction. The scope of our review is governed by Federal Rule of Criminal Procedure 12, which identifies the motions a defendant must file before trial and the consequences of filing an untimely motion. A revised version of Rule 12 took effect after Sperrazza filed his appeal but before we heard argument.
The old version of Rule 12(b), which was in effect prior to December 1, 2014, distinguished two types of claims that an indictment is defective.
The second type of claim created by the old version of Rule 12 is that the indictment is defective for any reason other than those of the first type. Type two claims had to be raised by the pre-trial deadline set by the district court and, pursuant to Rule 12(e), a defendant "waives" any type two claim not raised by that deadline. See United States v. Pacchioli, 718 F.3d 1294, 1307 (11th Cir.2013) ("[A] defendant must object before trial to defects in the indictment, such as a lack of factual specificity, and the failure to do so waives appellate review"). An argument that has been waived may not be reviewed on appeal. See United States v. Lewis, 492 F.3d 1219, 1222 (11th Cir.2007) (en banc). If the old version of Rule 12 applies to this case, then under Rule 12(e) we are barred from reviewing Sperrazza's claim the indictment is factually inaccurate unless there is "good cause . . . [to] grant relief from the waiver."
Under the new version of Rule 12(b)(3), which took effect December 1, 2014, all claims that an indictment is defective "must be raised by pretrial motion if the basis for the motion is then reasonably available and the motion can be determined
If applicable to Sperrazza's appeal, the new rule renders untimely his motion arguing the indictment fails to state an offense—unless, that is, the "basis for the motion" was not "reasonably available" before trial or it could not have been "determined without a trial on the merits." Rule 12(b)(3)(2015). If the motion was untimely, then the argument is forfeit, and we must review its denial by the district court only for plain error, not de novo. See FED.R.CRIM.P. 52(b); United States v. Olano, 507 U.S. 725, 731, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993) (holding the plain-error standard applies to "errors that were forfeited because not timely raised in district court").
Although the amendment to Rule 12 is detrimental to Sperrazza's cause in one respect, it works to his advantage in another. Under the old version of the rule, Sperrazza waived his claim the indictment is factually inaccurate because he did not raise it before trial, and the argument is not subject to appellate review unless Sperrazza shows there is "good cause" for relief from the waiver. Rule 12(e)(2013); see Pacchioli, 718 F.3d at 1307. The new version of Rule 12, however, makes no mention of "waiver." The committee's notes explain the word was omitted "to avoid possible confusion" because "Rule 12(e) has never required any determination that a party who failed to make a timely motion intended to relinquish a defense, objection, or request that was not raised in a timely fashion." Sperrazza's claim the indictment is factually inaccurate is therefore subject to review for plain error under the new rule even if he does not show "good cause" for failing to present the claim before trial.
The chart below illustrates some of the differences between the old and new versions of Rule 12:
Type of claim not timely raised before trial Indictment is Court lacks Indictment fails to defective for any jurisdiction state an offense other reason, e.g., factual inaccuracy Not subject to Before Review de novo at any time until appellate review Dec. 1, mandate issues on direct review except "for good 2014 cause" shownVersion of Rule 12 Review de novo at Review only for plain error unless the As of any time until "basis for the motion" was not Dec. 1, mandate issues on "reasonably available" before trial or it 2014 direct review could not have been "determined without a trial on the merits"
Having outlined the difference between the two versions of Rule 12, we consider which version applies to this appeal.
The order of the Supreme Court amending Rule 12 provides the amendment "shall take effect on December 1, 2014, and shall govern in all proceedings in criminal cases thereafter commenced and, insofar as just and practicable, all proceedings then pending." Proposed Amendments to the Federal Rules of Criminal Procedure, 572 U.S. ___ (Apr. 28, 2014); see also 28 U.S.C. § 2074(a) (describing the process by which the Supreme Court transmits to the Congress amendments to the federal rules of procedure). This same provision "has been submitted by the Supreme Court [to the Congress] with nearly all amendments to the Federal Rules of Criminal Procedure." United States v. Woods, 399 F.3d 1144, 1147 (9th Cir.2005). In its original brief, the Government relied upon the old version of Rule 12 for its waiver argument but neither party discussed which version of the rule applies to this case. Because the jurisdiction of the court was implicated, we ordered the parties to submit supplemental briefs addressing whether this appeal is a "proceeding" that was pending on December 1, 2014 and, if so, whether it would be "just and practicable" to apply the new rule. Although we have previously applied the old version of Rule 12 to two appeals decided after December 1, 2014, in neither case did we consider whether we were required to apply the new version of the rule. See United States v. Bailey, 778 F.3d 1198, 1201 n. 1 (11th Cir.2015); United States v. Moran, 778 F.3d 942, 963-64 (11th Cir. 2015). In any event, whether it is "just
In their supplemental briefs, the parties agree this appeal is a "proceeding" that was pending on December 1, 2014 within the meaning of the Supreme Court's order. A "proceeding" may be defined as "`any procedural means for seeking redress from a tribunal or agency.'" United States v. Moreno, 364 F.3d 1232, 1235 (11th Cir.2004) (quoting Black's Law Dictionary 1221 (7th ed.1999)). Indeed we have used this definition in interpreting an identical order of the Supreme Court amending the Federal Rules of Criminal Procedure. See id. Because a direct appeal is a "proceeding," the new version of Rule 12 governs an appeal filed before December 1, 2014 but decided after that date "insofar as just and practicable." See United States v. Anderson, 783 F.3d 727, 740-41 (8th Cir.2015) (applying the new version of Rule 12 to an appeal filed before December 1, 2014 but decided after that date); United States v. Soto, 780 F.3d 689, 700-01 (6th Cir.2015) (same); but see United States v. Smith, 600 Fed.Appx. 991, 994 n. 3 (6th Cir.2015) (applying the old version of Rule 12 to an appeal decided after December 1, 2014 because "the district court's final judgment was entered. . . well before the effective date of the Rule 12 amendments").
The parties disagree about whether it would be "just and practicable" to apply the new version of Rule 12 to this case. Sperrazza argues it would be unjust because it would render untimely his argument the indictment fails to state an offense even though the old version of the rule was in effect when he first raised the argument in his motion for a new trial and, under that version, the argument was timely. See Izurieta, 710 F.3d at 1179. Under the new version of the rule, Sperrazza's argument would have been timely only if he had raised it before trial, which was well before the new rule had even been proposed.
We agree with Sperrazza that it would not be "just" to change the legal consequence of his failure to raise an argument in June 2013 based upon an amendment that was proposed in April 2014 and took effect in December 2014. See United States v. Bowler, 252 F.3d 741, 746 (5th Cir.2001) (holding it would not be "just and practicable" to apply the new version of a Federal Rule of Criminal Procedure because the defendant's motion would be considered timely under the old rule but untimely under the new rule). We will therefore apply the old version of Rule 12 to Sperrazza's claim the indictment fails to state an offense and hence we review that claim de novo.
We will, however, apply the new version of the rule to Sperrazza's claim the indictment is factually inaccurate because it would not be unjust or impractical to do so, and neither party argues it would be. Sperrazza's argument the indictment is factually inaccurate was untimely under both versions of the rule, but under the new version it is forfeit rather than waived. We will therefore review for plain error Sperrazza's claim the indictment is factually inaccurate.
Sperrazza argues the indictment fails to charge him with structuring a currency transaction in violation of 31 U.S.C. § 5324(a) because it does not allege he had a "cash hoard" in excess of $10,000 that he divided into two or more amounts of less than $10,000. To be sure, some prosecutions for structuring involve allegations the
The Government argues that dividing a sum the defendant has in hand is not the only way to violate the statute. It relies upon a regulation promulgated by the Department of the Treasury, which provides that structuring "includes, but is not limited to, the breaking down of a single sum of currency exceeding $10,000 into smaller sums." 31 C.F.R. § 1010.100(xx). Structuring may also involve "a transaction, or series of currency transactions at or below $10,000." Id.; see United States v. Sweeney, 611 F.3d 459, 470 (8th Cir.2010) (holding "the Treasury regulations accurately describe the offense of structuring a transaction"); United States v. Van Allen, 524 F.3d 814, 821 (7th Cir.2008) (defining "structuring" as "altering the form of a transaction in order to avoid activating the bank's duty to file a currency transaction report" and noting this definition "meshes well with [the definition] in the Treasury regulation" (quotation marks omitted)).
Sperrazza contends our decision in Lang requires the Government to allege in the indictment he had cash on hand in excess of $10,000. In Lang the Government asserted the defendant engaged in a series of 85 cash transactions, each of less than $10,000, for the purpose of evading the reporting requirement; the indictment charged the defendant with 85 counts of structuring. 732 F.3d at 1250-52. We held the indictment was "so defective that it does not . . . charge an offense" because "[a] cash transaction involving a single check in an amount below the reporting threshold cannot in itself amount to structuring." Id. at 1249-50 (quotation marks omitted). In other words, each count of structuring must include two or more transactions. Id. at 1249 ("When cashed checks come to the structuring dance, it takes at least two to tango"). In this case, the Government did not charge Sperrazza with a separate count of structuring in connection with every transaction he conducted. In keeping with Lang, the Government grouped into a single count a series of transactions, all of which were allegedly part of a single offense of structuring. As we said in that case, the "structuring itself, and not the individual deposit, is the unit of the crime." Id. at 1248 (quotation marks omitted).
We have never held all the transactions that make up a single count of structuring must have originated from a single cash hoard, and Sperrazza has not pointed to any case endorsing that rule. To the contrary, two circuits have expressly rejected the contention. See Sweeney, 611 F.3d at 471 ("While breaking up a single cash transaction that exceeds the $10,000 reporting threshold into two or more separate transactions is one way of committing the offense of structuring a transaction, it is not the only way"); Van Allen, 524 F.3d at 820 (rejecting the argument "that the only method of proving structuring is to demonstrate that a defendant held a unitary cash hoard over $10,000 and then broke it up to deposit in amounts under $10,000").
Sperrazza also relies upon a single sentence in Ratzlaf v. United States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994), which held a prior version of § 5324 required the Government to prove the defendant knew his conduct was unlawful in order to convict him of structuring.
Our recent decision in United States v. Aunspaugh, 792 F.3d 1302 (11th Cir.2015), is inapposite for the same reason. In that case, the defendants argued there was insufficient evidence to prove they had structured a series of transactions of less than $10,000 because they had also engaged in several transactions above the $10,000 reporting threshold. We rejected this contention because "a person who once engages in a transaction of more than $10,000 does not get a pass to structure later transactions with impunity." Id. at 1311. In the course of rejecting the defendants' argument, we observed: "To constitute structuring, a transaction of more than $10,000 must be broken into smaller increments, each of which typically is for less than $10,000, thus avoiding the reporting requirement." Id. Unlike in this case, however, we were not called upon to determine whether that is the only way to structure a transaction in violation of § 5324(a). Our generic description of the offense was not tied to the facts of the case or necessary to our decision that a defendant may be convicted of structuring a series of transactions of less than $10,000 even though he also engaged in transactions of more than $10,000. See Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 762 (11th Cir.2010) ("Statements in an opinion . . . that are not fitted to the facts . . . or that are not necessary to the decision of an appeal given the facts and circumstances of the case . . . are dicta" (internal quotation marks and citations omitted)). If anything, our decision in Aunspaugh is of a piece with our disposition of this case. In Aunspaugh the Government alleged the defendants received small sums of money on an ongoing basis from a fraudulent scheme and engaged in 15 separate transactions of slightly less than $10,000 each for the purpose of evading the reporting requirement. See 792 F.3d at 1305, 1310. The Government charged the defendants with a single count of structuring that encompassed all 15 transactions of less than $10,000. Id. at 1310. That is the same approach the Government took in this case, and that we now hold is consistent with § 5324(a).
To be clear, each count of structuring must include two or more transactions that together exceed $10,000. See Lang, 732 F.3d at 1249 ("A cash transaction
Sperrazza argues an indictment that merely lists a series of transactions of less than $10,000 expands the scope of liability under § 5324(a) to the point that it "criminalize[s] going to the bank too often." Of course many a small business may make daily or weekly cash deposits in amounts less than $10,000; they are not liable to prosecution for structuring, however, because one violates § 5324(a)(3) only if one structures a transaction for the purpose of evading the reporting requirement. The key allegation in the indictment is not that Sperrazza engaged in a series of transactions under $10,000, but that he did so "for the purpose of evading the reporting requirements." Sperrazza does not challenge the sufficiency of the evidence showing he had the requisite mens rea, which includes his partner's testimony that Sperrazza told him he never cashed checks totaling more than $10,000 because he wanted "to avoid any reports or anything that would involve . . . the regulatory or IRS authorities."
The Government concedes counts four and five of the indictment, which charge Sperrazza with structuring in 2007 and 2008 respectively, are multiplicitous, meaning they "charge[ ] a single offense in more than one count." United States v. Woods, 684 F.3d 1045, 1060 (11th Cir.2012) (quotation marks omitted). The Government admits having erred by dividing the transactions based upon the year in which they occurred because "no provision of the statute indicates that a single course of structuring can be segmented based on 12-month intervals (or any other intervals of time)." United States v. Handakas, 286 F.3d 92, 98 (2d Cir.2002). As it acknowledges, it "should have charged [Sperrazza] not with two counts of structuring for a one-year period each, but rather with one count of structuring approximately $800,000 over a two-year period." At the same time, the Government argues Sperrazza has forfeited any argument for relief on the basis of this error.
Indeed, Sperrazza has never argued the indictment is multiplicitous. He did not raise the point before the trial court or in his opening brief here, and his reply brief neither requests relief on this ground nor responds to the Government's assertion he failed to raise the argument. Perhaps Sperrazza's silence reflects his understanding that, as we have explained upon numerous occasions, "we do not consider arguments not raised in a party's initial brief." Holland v. Gee, 677 F.3d 1047, 1066 (11th Cir.2012) (internal quotation marks omitted). To be sure, we interpreted the old version of Rule 12 as requiring the court "to raise sua sponte the issue of whether an indictment properly charges an offense," but we have declined to extend that obligation to a claim that "does not implicate jurisdictional issues and does not assert that the indictment fails to state an offense." United States v. Seher, 562 F.3d 1344, 1359-60 (11th Cir.2009) (holding the court is not obligated to consider sua sponte whether an indictment is "duplicitous," i.e., whether it "charges two or more separate and distinct offenses" in the same count). Because we are not obligated to determine sua sponte whether counts four and five of the indictment are multiplicitous, we will apply "our well-established rule that issues and contentions not timely raised in the briefs are deemed abandoned." United States v. Ardley, 242 F.3d 989, 990 (11th Cir.2001).
Sperrazza next argues the indictment is factually inaccurate. The indictment introduces the list of 108 transactions Sperrazza conducted in 2007 and 2008 by alleging he "negotiate[d] the checks set for[th] below in increments less than $10,000." The parties agree that statement is inaccurate because the evidence shows 32 of the 108 transactions involved deposits of cash, not checks. For example, the indictment asserts Sperrazza conducted two transactions on March 15, 2007, one in the amount of $9,000.00 and a second in the amount of $7,289.65. The indictment states both transactions involved the cashing of checks, but the evidence presented at trial shows Sperrazza deposited $9,000.00 of cash into his account and then cashed checks totaling $7,289.65.
Because we have concluded it is "just and practicable" to apply the new version of Rule 12 to this claim, we review it only for plain error. Under that standard, we may reverse the defendant's conviction only if we determine the district court committed "(1) . . . an error (2) that is plain (3) that affects the defendant's substantial rights and (4) that seriously affects the fairness, integrity, or public reputation of judicial proceedings." United States v. Madden, 733 F.3d 1314, 1321 (11th Cir.2013).
Although the Government concedes it erred in drafting the indictment, it argues the error is not plain and did not affect Sperrazza's substantial rights. We agree the factual inaccuracy in the indictment did not affect the defendant's substantial rights. Despite the error, the indictment notified Sperrazza of the precise transactions the Government alleged were structured. The cash deposits were erroneously referred to as checks, but they were not outside the scope of the offense charged because a defendant may be convicted of violating § 5324(a)(3) for structuring that involves either cashing checks or depositing cash. See United States v. Vazquez, 53 F.3d 1216, 1219 (11th Cir. 1995) (affirming a conviction for structuring cash deposits). Moreover, the Government's trial exhibits clearly showed which transactions were actually deposits of cash, and a Government witness accurately described the exhibits to the jury. Sperrazza himself also testified about some of the cash deposits, which indicates the factual inaccuracy in the indictment did not affect his ability to prepare a defense. See United States v. Hill, 643 F.3d 807, 860 (11th Cir.2011) ("A variance between indictment and proof is fatal only when it affects the `substantial rights' of the defendant by insufficiently notifying him of the charges against him so that he may prepare a proper defense" (quotation marks omitted)); see also United States v. Pena, 684 F.3d 1137, 1147-48 (11th Cir.2012) ("Practical, rather than technical, considerations govern the validity of an indictment. Minor deficiencies that do not prejudice the defendant will not prompt this court to reverse a conviction." (quotation marks omitted)).
Sperrazza next argues the order compelling him to forfeit $870,238.99 violates the Excessive Fines Clause of the Eighth Amendment. A "forfeiture violates the Excessive Fines Clause if it is grossly disproportional to the gravity of a defendant's offense." United States v. Bajakajian, 524 U.S. 321, 334, 118 S.Ct. 2028, 141
First, we agree with the Government that Sperrazza's conduct places him "at the dead center" of the class of persons at whom § 5324(a)(3) is directed. Law enforcement officials use the currency transaction reports filed by financial institutions to track down criminal activity. See Lang, 732 F.3d at 1247. Here the evidence shows Sperrazza structured transactions in order to disguise his tax evasion. The course of his unlawful structuring persisted for two years and involved more than 100 transactions in amounts totaling more than $800,000. See United States v. Jalaram, Inc., 599 F.3d 347, 356 (4th Cir.2010) (holding an order of forfeiture did not violate the Excessive Fines Clause because the defendant's conduct "spanned a long period of time, was connected to other crimes, and . . . [involved] substantial sums of money").
Second, we do not think the order of forfeiture is excessive in relation to the penalties authorized by the Congress and the Sentencing Commission. We follow three rules of thumb when comparing the amount subject to forfeiture to the penalties authorized by statute and by the Sentencing Guidelines. First, "if the value of the property forfeited is within or near the permissible range of fines under the sentencing guidelines, the forfeiture almost certainly is not excessive." United States v. 817 N.E. 29th Dr., Wilton Manors, Fla., 175 F.3d 1304, 1310 (11th Cir. 1999). Second, a forfeiture "above either the statutory maximum fine or the Guidelines range" is not "presumptively invalid," but will "receive closer scrutiny." United States v. Chaplin's, Inc., 646 F.3d 846, 852 (11th Cir.2011). Third, a "forfeiture far in excess of the statutory fine range . . . is likely to violate the Excessive Fines Clause." 817 N.E. 29th Dr., 175 F.3d at 1309 n. 9.
Under the relevant statute and Sentencing Guideline, Sperrazza was subject to a fine of up to $500,000. See 31 U.S.C. § 5324(d)(2); U.S.S.G. § 5E1.2(c)(4).
Third, we reject Sperrazza's argument that the amount of the forfeiture is grossly disproportional to the harm caused by the structuring. Sperrazza argues he caused minimal harm because he lawfully earned the money he structured. As the Government explains, however, a person may be convicted of structuring in violation of § 5324(a) regardless whether he earned the money lawfully. See United States v. MacPherson, 424 F.3d 183, 193 (2d Cir. 2005) ("Section 5324 makes no reference to the source of the monies at issue or to the reason why a person seeks to avoid" the reporting requirement). To be sure, structuring might cause less harm when it does not disguise another crime. See Bajakajian, 524 U.S. at 338, 118 S.Ct. 2028 (holding a forfeiture was grossly disproportional to the gravity of the offense in part because the defendant's violation of a reporting requirement "was unrelated to any other illegal activities" and the "money was the proceeds of legal activity and was to be used to repay a lawful debt"). That is not the case here, however, because the evidence shows Sperrazza structured transactions specifically in order to hide taxable income from the IRS. See United States v. George, 779 F.3d 113, 123-24 (2d Cir.2015) (distinguishing the harm caused by the "deliberate and sustained thwarting" of multiple laws from the "one-time failure to report otherwise legal activity as in Bajakajian"). Sperrazza points out he eventually paid the tax owed on the income, but that was after a search of his home had turned up a large sum of cash. He also overlooks the harm caused by the structuring itself, which decreased the likelihood the IRS would detect the underlying tax evasion and increased the cost of investigating his crime. See United States v. Malewicka, 664 F.3d 1099, 1107 (7th Cir.2011) (explaining structuring "inhibit[s] the government's ability to effectively uncover and identify fraud").
Finally, Sperrazza asserts the "district court's order permits the government to count and thus to forfeit the same funds. . . twice" because the indictment "includes cash in and cash out." As we have seen, the evidence shows Sperrazza structured some transactions by cashing checks and others by depositing cash into his account. He seems to imply the district court double counted some of the money he structured, presumably because some or all of the cash he deposited might have originated as checks he had previously cashed. As the Government points out, however, Sperrazza does not explain why this assertion is relevant to whether the order of forfeiture is grossly disproportionate. Whether sufficient evidence supports the amount the defendant is said to have structured is a different question than whether the amount to be forfeit is so disproportionate as to violate the Eighth Amendment. Cf. United States v. Dowling, 403 F.3d 1242, 1245 (11th Cir.2005) ("[A]n objection based solely upon sufficiency of the evidence does not preserve a constitutional error").
In any event, Sperrazza's passing reference to the possibility the district court double counted some of the money subject to forfeiture is not presented as a challenge to the sufficiency of the evidence. We will not, therefore, address whether sufficient evidence supports the district court's calculation of the amount subject to forfeiture. See Brown v. United States, 720 F.3d 1316, 1332 (11th Cir.2013) ("[A] party seeking to raise a claim or issue on appeal must plainly and prominently so
Sperrazza is not entitled to relief on his claim the indictment is defective. The indictment properly charges him with structuring in violation of 31 U.S.C. § 5324(a)(3), and although there is a factual error in the indictment, he has not shown the error affected his substantial rights. Sperrazza's claim the order of forfeiture violates the Excessive Fines Clause of the Eighth Amendment also lacks merit. The judgment of the district court is, therefore,
Affirmed.
ROSENBAUM, Circuit Judge, concurring in part and dissenting in part.
During oral argument in this case, the Court, in effect, asked counsel for the government whether a salaried person who earned $9,000 a week and deposited it in cash weekly, intending at least in part to evade the reporting requirement, committed the crime of structuring under 31 U.S.C. § 5324(a)(3). The government suggested that such a person did. Today the Court embraces this construction of § 5324(a)(3) as the law.
Granted, most of us do not have the problem of trying to figure out what to do with our $9,000-per-week salary, but this same logic applies to any weekly salary payment under $10,000. And it does not end with weekly salary payments. As a result of today's ruling, in this Circuit, no matter how small a sum of money a person may possess or otherwise enjoy a right to control—even if only a few dollars—he may find himself facing structuring charges if he goes to the bank often enough to create the appearance to the government of engaging in a pattern of financial transactions of $10,000 or less. I suppose that we will discover in the coming years how frequent a bank visitor one must be to imperil himself, but, in any case, it is clear today that § 5324(a)(3) has taken on a far broader reach than Congress ever intended.
Beginning, as we must, with the statutory language, see CBS Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 1217, 1222 (11th Cir.2001), § 5324 states, in relevant part, that "[n]o person shall, for the purpose of evading the reporting requirements. . . (3) structure . . ., or attempt to structure . . . any transaction with one or more domestic financial institutions." 31 U.S.C. § 5324(a)(3). In the past, we have said that the language "`for the purpose of evading' the reporting requirements" means that "the structured transaction must involve an amount that is more than $10,000; otherwise, evasion would not be necessary or possible because there would be no reporting requirement anyway."
And, even to the extent that § 5324(c)(3) may be viewed as ambiguous on this issue, the legislative intent is perfectly clear. Indeed, the Senate Report accompanying the Money Laundering Crimes Act of 1986 expressly stated the statute's intention to exclude from the reach of the anti-structuring statute transactions arising out of a total sum of $10,000 or less:
S.Rep. No. 99-433, 22 (1986) (emphasis added).
This commentary could not state more straightforwardly that a person simply cannot commit the offense of structuring if he does not control more than $10,000, even if he has the specific intent to evade a reporting requirement. Despite this fact, the Court suggests that we look not at the amount that the person controlled at the time that she conducted a transaction of $10,000 or less but instead at the endpoint of all of the transactions that the government happens to choose to charge to see whether they add up to more than $10,000. Maj. Op. at 1122-23 & 1124 n. 4. I'm guessing that they always will.
I respectfully disagree with the Majority's approach. This interpretation does not account for the phrase "
Nor does the regulatory definition of "structuring" somehow expand the breadth of § 5324(a)(3). To begin with, the regulatory definition of "structuring" does not, as the Court suggests, necessarily indicate that a person can structure even where he has control over $10,000 or less. The regulation provides,
31 C.F.R. § 1010.100(xx). At least one treatise has characterized this definition as "presum[ing] the existence of an initial sum." B. Frederic Williams, Jr., & Frank D. Whitney, Federal Money Laundering: Crimes and Forfeitures 224 (1999).
A review of the notice and comment materials regarding the promulgation of this regulation supports this construction. The Treasury Department based its definition of "structuring" on the concerns that Congress expressed in its reports in support of the enactment § 5324. See Amendment to the Bank Secrecy Act Regulations Relating to Domestic Currency Transactions, 53 Fed.Reg. 3023 (Jan. 23, 1989) (citing H.R.Rep. No. 746, 99th Cong., 2d Sess. 18-20 (1988); S.Rep. No. 433, 99th Cong., 2d Sess. 21-22 (1986)).
Section 5324(a)(1) was designed to address the first problem by expressly criminalizing causing or attempting to cause a financial institution to fail to file a required report. See Phipps, 81 F.3d at 1060. Congress intended for § 5324(a)(3) to cover the second problem by creating a mechanism to prosecute the structuring of sums over $10,000 when the method of structuring did not trigger the financial institution's obligation to file a report. Id.; see also H.R.Rep. No. 99-746 at 19 (citing an incident where two people laundered $200,000 in cash in a day and a half by purchasing cashier's checks, each for less than $10,000, at several different banks).
In both cases, Congress was specifically concerned with conduct where a person who had within his control a reportable sum made smaller transactions to avoid triggering the filing of a required report. Thus, in the announcement of its final rule, the Treasury Department explained,
Amendment to the Bank Secrecy Act Regulations Relating to Domestic Currency Transactions, 54 Fed.Reg. 3023 (Jan.23, 1989). Against this background, it is clear that this explanation presumes a preexisting $10,000 sum, in implicit reliance on the purposes behind the enactment of § 5324(a)(1) and § 5324(a)(3).
The Court's invocation of the phrase "but is not limited to" does not somehow alter the natural and intended understanding of the regulatory definition. I agree with the Court that the phrase "but is not limited to" could be viewed as supporting the notion that "dividing a sum the defendant has in hand is not the only way to violate the statute." Maj. Op. at 1122.
Second, in fact, people have found ways to structure a sum of more than $10,000 other than by "dividing a sum the defendant has in hand" into packets of $10,000 or less each, that still otherwise meet the regulatory definition of "structuring." For example, defendants have also used creative billing mechanisms, such as requiring clients to pay in numerous small installments, to avoid ever having "in hand" a sum that would trigger the reporting threshold. See, e.g., United States v. Chaplin's, Inc., 646 F.3d 846, 847 (11th Cir.2011) (affirming forfeiture order imposed after defendant was convicted of structuring a transaction by instructing a client to pay in "three separate bundles" to avoid the reporting requirement).
Similarly, the example that the Court provides today—a defendant who has checks totaling $9,000 and knows he will receive another bundle of checks totaling more than $10,000 tomorrow cashes his $9,000 in checks today to avoid the reporting requirement—also can meet the regulatory definition of "structuring" that Congress intended when it enacted § 5324(a)(3). If the defendant had an ability to control the checks in both packages and cashed the first group before the second group arrived in order to evade the reporting requirement, I agree with the Majority that the defendant would be guilty of structuring.
Unlike the broad definition of "structuring" that the Court adopts today, this form of structuring satisfies the definition of "structuring" that Congress intended when it enacted the anti-structuring statute. Nevertheless, it does not fall neatly within the express example of structuring that the regulatory definition supplies, so it is covered by the "but is not limited to" phrase.
Finally and most important, reading the regulation as broadly as the Court does today causes the regulation to conflict with congressional intent in enacting the anti-structuring statute. But courts "must reject administrative constructions which are contrary to clear congressional intent." Chevron, U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 n. 9, 104 S.Ct. 2778, 2781 n. 9, 81 L.Ed.2d 694 (1984) (citations omitted). Indeed, "a regulation must be interpreted so as to harmonize with and further and not to conflict with the objective of the statute it implements." Emery Min. Corp. v. Sec'y of Labor, 744 F.2d 1411, 1414 (10th Cir.1984). Because the Court's interpretation of the regulation directly conflicts with congressional intent in enacting § 5324(a)(3), I cannot agree with it.
It is true, as the Court points out, that two other circuits have reached the contrary conclusion, holding that a person need not have a right to control a sum of more than $10,000 before that person can engage in structuring. See Maj. Op. at 1121 (citing United States v. Sweeney, 611 F.3d 459, 471 (8th Cir.2010), and United States v. Van Allen, 524 F.3d 814, 820 (7th Cir.2008)). But neither of these courts appears to have engaged in any analysis of the language or considered the legislative intent of § 5324(a)(3). Instead, they appear
In Van Allen, for example, the analysis first acknowledged that the court had previously made the statement in United States v. Davenport, 929 F.2d 1169 (7th Cir.1991), that the intent of the anti-structuring statute was to prevent individuals from evading the reporting requirement "`by breaking their cash hoard into enough separate deposits to avoid activating the requirement.'" Van Allen, 524 F.3d at 820-21 (quoting Davenport, 929 F.2d at 1173). Then the court concluded simply,
Id. at 821 (internal citations omitted). That's it.
Sweeney's analysis followed a similar path. The court began by setting forth the regulatory definition of "structuring" and then commented only that, "[i]n our view, the regulations accurately describe the various ways that a person may commit the offense of currency structuring in violation of § 5324(c)(3)."
But even Sweeney's reliance on Phipps was misplaced. Phipps did not hold or even suggest that § 5324(c)(3) criminalizes the structuring of amounts that add up to a total sum of less than $10,000. Instead, Phipps explained only the congressionally intended difference between §§ 5324(a)(1) and 5324(a)(3), as revealed by the Senate and House Reports accompanying the legislation. Nothing in Phipps purported to opine that § 5324(a)(3) authorizes structuring charges against a person who does not have control over at least $10,000 before he or she transacts in smaller amounts.
In short, neither Sweeney nor Van Allen set forth any analysis of the statutory language or considered the legislative intent of § 5324(a)(3). Instead, both cases effectively relied on only their own interpretation of the regulatory definition of "structuring." But, for the reasons previously
Finally, again, to the extent to which § 5324(a)(3) may be viewed as ambiguous about whether a person who controls $10,000 or less when that person transacts smaller amounts can commit a violation of § 5324(a)(3), the rule of lenity demands that we construe § 5324(a)(3) not to cover such conduct. Under the rule of lenity, "ambiguous criminal laws [must] be interpreted in favor of the defendants subjected to them." United States v. Santos, 553 U.S. 507, 514, 128 S.Ct. 2020, 2025, 170 L.Ed.2d 912 (2008).
Id. If, as the Court holds, § 5324(a)(3) is "read . . . broadly, courts . . . run afoul of the Rule of Lenity, which insists that ambiguity in criminal legislation be read against the prosecutor." United States v. Jimenez, 705 F.3d 1305, 1308 (11th Cir. 2013) (internal quotation marks omitted). So, even assuming that, in a vacuum, the language of § 5324(a)(3) is susceptible to being construed the way the Court holds today, when "there are two rational readings of a criminal statute, one harsher than the other, the rule of lenity dictates that we are to choose the harsher one only when Congress has spoken in language that is clear and definite." United States v. Inclema, 363 F.3d 1177, 1182 (11th Cir. 2004) (internal quotation marks omitted).
As previously discussed, a natural reading of § 5324(a)(3) leads to the conclusion that the statute contemplates covering only those transactions that originate from a sum that the defendant controls in excess of $10,000. See Lang, 732 F.3d at 1248 ("`for the purpose of evading' the reporting requirements" means that "the structured transaction must involve an amount that is more than $10,000; otherwise, evasion would not be necessary or possible because there would be no reporting requirement anyway."); see also Aunspaugh, 792 F.3d at 1311. As this construction of the statute is rational and more lenient than the one the Court adopts today, it should govern.
Though I respectfully disagree with the Court's broad construction of § 5324(a)(3), I agree with the Court that the government nonetheless presented sufficient evidence to sustain a structuring conviction in this case under the definition of "structuring" that Congress intended. In fact, I would uphold conviction on two counts of structuring.
At trial, the government presented evidence that on 15 separate days in 2007 and 13 separate days in 2008, Sperrazza made cash deposits and cashed checks totaling over $10,000. The government's evidence demonstrated that when Sperrazza conducted these transactions he first deposited the cash and then cashed the checks. Because of this sequence of events, the cash amounts Sperrazza had were necessarily distinct from the cash received from the checks, so Sperrazza had access to and control over $10,000 on each of those days but chose to transact in cash amounts under $10,000. In addition, as the Court
Under plain-error review, which applies here because Sperrazza did not raise this particular error, even assuming plain error in how the indictment was charged, Sperrazza has shown no prejudice. See United States v. Vernon, 723 F.3d 1234, 1260 (11th Cir.2013) (reviewing for plain error unpreserved challenges to an indictment and affirming convictions where, even if plain error had occurred, defendant failed to prove prejudice). All of the smaller transactions comprising each of the reportable sums during 2007 and 2008 were set forth in the two separate structuring counts in the indictment, so Sperrazza had notice of the transactions that the government contended constituted structuring.
732 F.3d at 1249 (emphasis added). As this excerpt shows, while we identified "[t]he structuring itself, and not the individual deposit" as the unit of prosecution, id. at 1248 (citation and internal quotation marks omitted), we further indicated that the "structuring itself," meaning the prosecutable unit, refers to the payment or group of payments "
Id. In other words, we confirmed in Aunspaugh our understanding expressed in Lang: to structure, a person must control at least a reportable amount. To the extent that the Court's opinion can be viewed as positing that the form of the indictment in Aunspaugh suggests that the defendants did not control more than $10,000 during some or all of the specific transactions alleged in the structuring count, it would have been quite strange for us to have defined structuring in Aunspaugh in a way that conflicted with the facts of that very case. Instead, it is clear that the problem that today's Majority picks up on in Aunspaugh is one of form of the indictment; to the extent that any two or more of the transactions charged represented smaller transactions derived from a reportable amount, separate from the other transactions alleged in the structuring count, the conduct should have been charged in as many counts as hoards that were structured. But no party in Aunspaugh ever raised that as an issue, so we had no reason to evaluate it, and we did not even purport to consider it. For that reason, our affirmance of the Aunspaughs' convictions cannot be construed as confirmation that stringing together a bunch of otherwise-unchargeable transactions over a lengthy period to arrive at a total sum of more than $10,000 somehow renders the conduct structuring.
524 F.3d at 821. But the court brushed off this problem with its construction, explaining only, "The fear raised, in this case at least, rings a bit hollow[,]" since Van Allen was not in that situation. Id.
