Judges order new trial for woman who withdrew, deposited cash from ATMs

In a split decision from the 7th Circuit Court of Appeals, the majority reversed a Russian woman’s conviction for violating a federal statute that prohibits structuring currency transactions in order to evade federal reporting requirements for transactions involving more than $10,000 in currency. The majority cited the prosecution’s questioning of the woman about past financial records as the reason for reversal.

Yulia Abair, who moved to the United States in 2005, married, and later got divorced, learned two weeks before the close on her new house that her bank in Russia would not deposit the money she needed from her account there to her U.S. account because her last name on the accounts did not match. She scrambled around Indiana, withdrawing the maximum daily amount of cash from her Russian account from Citibank ATMs and deposited the money into her local bank account. The government became aware of her activity when she made two deposits around Memorial Day, which pushed her daily deposit over the $10,000 reporting threshold set by regulation.

She was indicted by a grand jury on eight charges and convicted, with the judge merging the counts into one. At trial, the District judge allowed the prosecutor to ask Abair about a 2008 joint income tax return and the Free Application for Federal Student Aid forms she filled out while attending nursing school. The government wanted to attack Abair’s truthfulness by using these forms, claiming she lied on the forms.

In United States of America v. Yulia Yurevna Abair, 13-2498, the judges did not hide their beliefs that the government may have better directed its prosecutorial resources elsewhere instead of bringing charges against Abair, a nurse and mother of an 11-year-old son. Due to her conviction, she forfeited the entire value of her house after selling it, which was $67,000.

“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. Rule 608(b) requires that the crossexaminer have reason to believe the witness actually engaged in conduct that is relevant to her character for truthfulness,” Judge David Hamilton wrote for the majority.

While the 7th Circuit didn’t need to hold that the scope of the questioning itself was error under Rule 403 or under Rule 611’s bar on harassing or wasteful questioning, the cross-examination in this case went on so long and in such detail as to dispel any suggestion that the error was harmless, Hamilton continued.

“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,’ but further exploration of the issue can await a new trial.”

Judge Diane Sykes dissented from her colleagues because despite the prosecutorial overreaching, she found no legal error. To cross-examine a witness under Rule 608(b)(1), the cross-examiner needs to only have a good-faith factual basis to support the proposed line of questioning, and that stand was met in this case, she wrote.

Sykes also noted in a footnote, “Despite our disagreement about the legal issue under Rule 608(b)(1), my colleagues’ decision to reverse and remand for a new trial has the salutary effect of permitting a fresh exercise of prosecutorial discretion. The executive branch may choose to moderate its strict enforcement stance against Abair and resolve not to sink further resources into prosecuting her. Under the circumstances, that might be the most prudent and just thing to do.”