Eleventh Circuit Holds "Cash Hoard" Exceeding $10k Currently is Not Required for a Structuring Indictment

In U.S. v. Sperrazza, the U.S. Eleventh Circuit recently affirmed the conviction of a Georgia physician who was convicted of three counts of tax evasion, in violation of 26 U.S.C. § 7201, and two counts of structuring currency transactions, in violation of 31 U.S.C. § 5324(a)(3). U.S. v. Sperrazza, No. 14-11972 (11th Cir. Aug. 17, 2015). Dr. Sperrazza was an anesthesiologist who was underreporting his gross receipts and was also depositing cash in amounts under the $10,000.01 reporting threshold for currency transaction reports at domestic financial institutions. The district court sentenced him to 36 months imprisonment and ordered him to forfeit $870,238.99 for the structuring violations.

On appeal, Dr. Sperrazza argued the conviction must be set aside because the structuring counts of the indictment were allegedly 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.

As to the defendant’s first point on appeal, he essentially argued that the indictment failed to charge him properly because it did not allege he ever had a cash hoard in excess of $10,000 that he divided into two or more amounts of less than $10,000. The court disagreed with the defendant’s argument and held “the Government may properly charge a defendant with structuring a transaction in violation of § 5324(a)(3) by alleging he engaged in a series of currency transactions under $10,000 for the purpose of evading the reporting requirement. The statute does not require the Government to show the defendant had in hand at one time $10,000 or more of the funds he allegedly structured.” 

Dr. Sperrazza also argued on appeal that the order compelling him to forfeit $870,238.99 violated the Excessive Fines Clause of the Eighth Amendment. In order to determine whether a fine is “grossly disproportional” the Court reviewed: “(1) whether the defendant falls into the class of persons at whom the criminal statute was principally directed; (2) other penalties authorized by the legislature (or the Sentencing Commission); and (3) the harm caused by the defendant.” Id. at 25 (citing United States v. Browne, 505 F.3d 1229, 1281 (11th Cir. 2007)). Upon analyzing these factors, and closely comparing the order of forfeiture to the penalties authorized by Congress and the Sentencing Guidelines, the court held the defendant’s Eighth Amendment claim lacked merit. 

A copy of the decision can be located at:   http://media.ca11.uscourts.gov/opinions/pub/files/201411972.pdf.  

Filing obligations for reports of transactions in currency can be located at 31 C.F.R. § 1010.311 and https://www.law.cornell.edu/cfr/text/31/1010.311.