Thursday, November 7, 2019
Court Focuses on Drug-Trafficking Offense to Which the Defendant Did Not Plead Guilty Rather Than the Financial-Reporting Crime to Which He Did Plead, and Was Sentenced
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals has rejected the contention of a drug kingpin that an order to forfeit nearly $2 million violates the Eighth Amendment’s ban on “excessive fines” because it was grossly disproportional to the tame financial offense to which he pled guilty.
Affirmance of the order was tied to defendant Lahkwinder Singh’s drug trafficking—of which he does not stand convicted, but which he does not deny—rather than the trickery to which he pled guilty in connection with deterring the filing by third parties of financial reports. Singh was sentenced in the U.S. District Court for the Southern District of California on one count of “structuring” currency transactions to evade reporting requirements.
The defendant owned and operated two Postal Annex stores in San Diego County where customers could leave off packages for various shipping carriers, such as UPS and FedEx, to pick up and transmit the parcels. It was alleged that couriers would bring to Singh’s stores large quantities of addictive prescription drugs smuggled in from Mexico and that small individual supplies were packaged at the stores and shipped to customers in the U.S. who had placed online orders.
Currency Transaction Report
Federal laws and regulations, aimed at detecting and thwarting illegal transactions, require domestic financial institutions to file a Currency Transaction Report (“CTR”) with the U.S. Department of the Treasury where a transaction involves more than $10,000 in United States currency. “Structuring”—also known in the banking industry, informally, as “smurfing”—includes the breaking down of a depositor’s single batch of currency that exceeds $10,000 into deposits “at or below $10,000” to deter a financial institution’s filing of a CTR.
The government sought a forfeiture from Singh of $3,938,976 based on 651 cash deposits by him between December 2011 and January 2014 in San Diego bank accounts. That sum included moneys derived from both lawful and unlawful activities at his stores.
District Court Judge Cynthia A. Bashant of the Southern District of California ordered relinquishment of $1,955,521.
Supreme Court Decision
A three-judge panel on Tuesday affirmed her order, in a memorandum opinion. It acknowledged that the U.S. Supreme Court, in its 1998 decision in United States v. Bajakajian, admonished that isolated violations of reporting requirements are not major offenses, but, the panel said:
“Significantly, although he did not plead guilty to drug trafficking, Singh does not dispute that his structuring activity was related to illicit drug proceeds. His offense of structuring was, thus, a far cry from a single failure to report cash; the totality of his related conduct evidences serious criminality.
“Determination of the severity of an offender’s criminal culpability for forfeiture purposes requires consideration of other authorized penalties for the crime of conviction, as reflected in the applicable maximum guidelines penalties, because those guidelines reflect legislative judgment as to the appropriateness of punishment and because they ‘take into account the specific culpability of the offender.’…Singh’s crime earned maximum guidelines punishments of 71 months of imprisonment and a $100,000 fine. Although the forfeiture exceeded the maximum guidelines fine by a factor of almost 20, our consideration cannot be so limited….A 71-month maximum term of imprisonment is strong evidence of the severity of Singh’s culpability.”
The opinion adds:
“That every structured dollar, or even a majority of the structured funds, was not directly traceable to Singh’s drug shipments is of little consequence, for the scheme as a whole perpetuated drug trafficking.”
The case is United States v. Singh, 18-50332.
Comprising the panel were Circuit Judges Jacqueline Nguyen and Eric David Miller, joined by District Court Judge Eric N. Vitaliano of the Eastern District of New York, sitting by designation.
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