Structuring—ICE Investigation

12 individuals have been indicted by a federal grand jury in the Eastern District of New York on allegations that they operated “an unlicensed money remitting business that smuggled over $5 million to Yemen,” and that they schemed “to collect extensions of credit using extortionate means targeting members of the Yemeni expatriate community residing in the greater New York City Area.”^[1] The investigation lasted three years, and it involved “approximately 180 days of court-authorized wire-tapping of four of the defendants’ telephones.”^[2]

There are two different schemes alleged by prosecutors. In the first scheme, three Yemeni expatriates allegedly “collected money from other Yemeni expatriates for shipment to known money-remitters in Yemen.”^[3] The cash was given to two attorneys and a real estate broker “who drew down checks in corresponding amounts from their professional checking accounts.”^[4] The three Yemeni men, with the assistance of four other Yemeni men, “then [allegedly] arranged for couriers traveling to Yemen to smuggle the checks out of the United States, without filing the currency transaction reports with the United States government as required by law”; a total of $5,053,965 was allegedly smuggled to Yemen in this manner.^[5]

In the second alleged scheme, one of the attorneys was introduced to Yemeni expatriates needing cash; he allegedly provided “loans ranging in amounts from $5,000 to $100,000.”^[6] The borrowers were required to sign “confessions of judgments,” which left the terms of the agreement blank.^[7] It is alleged that in some instances, “the debtors were required to surrender the leases to their businesses, as well as their travel documents, such as Immigration and Naturalization Service Permanent Resident Alien Cards … and passports, until their debts were paid in full.”^[8]

In September, we mentioned another Yemeni individual who had been convicted of illegal money transmitting (also called “structuring”). The statutes regarding to this aspect of the case are 18 U.S.C. § 1960 and 31 U.S.C. § 5324. Section 1960 has something of a troubled case-history: some courts call it unconstitutional,^[9] others call it constitutional but require the defendant to know that the business is required to be licensed,^[10] and still others require only proof that the business was not licensed—there is no scienter requirement.^[11] Prosecutions under section 5324 are a little more settled. In order to prove structuring, “the government has to show that (1) [the defendant] knew of the relevant reporting requirements, (2) he structured his transaction for the purpose of evading those reporting requirements, and (3) he acted with knowledge that [such] conduct was unlawful.”^[12]

---

[1] ICE, ICE Arrests 12 Charged with Operating an Unlicensed Money Remitting Business and Extortionate Loan Scheme, Mar. 28, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] See United States v. Barre, 313 F. Supp. 2d 1086 (D. Col. 2004).
[10] See United States v. Talebnejad, 342 F. Supp. 2d 346 (D. Md. 2004).
[11] See United States v. Uddin, 365 F. Supp. 2d 825 (E.D. Mich. 2005).
[12] United States v. Hill, 167 F.3d 1055, 1070 n.9 (6th Cir. 1999) (quoting United States v. Gabel, 85 F.3d 1217, 1223 (7th Cir. 1996)).