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Monday, May 20, 2024 | Back issues
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FDIC Deception Will Cost a Virginia Man $79,000

(CN) - An Ethiopian man who deposited $165,000 in small increments to banks near his home in Virginia without informing Uncle Sam must forfeit $79,650, a federal judge ruled.

In 2006 and 2007, Girma Afework, an Ethiopian citizen living in Virginia, deposited a total of $86,200 into bank accounts he held at PNC Bank and Bank of America.

When Afework tried to deposit $79,650 in cash at a Fairfax branch of PNC in April 2007, the bank told him he would have to fill out a form since it had to notify the FDIC of any cash deposits greater than $10,000. Afework instead deposited $9,900.

Over the next several days, Afework deposited the rest of the money in similar increments and ultimately consolidated all the money into his Bank of America account.

The Postal Inspectors seized the money from Bank of America in 2008, and the government filed a complaint for forfeiture, claiming that Afework illegally structured the deposits. Afework asserted an interest in the money under maritime law.

Though an Alexandria, Va., federal judge ruled in 2009 that Afework must forfeit a percentage of the money, it said $79,650 was excessive under the Eighth Amendment and reduced the forfeiture amount to $50,000.

The 4th Circuit remanded the case, saying the trial court should have based its decision on the maximum statutory fine for currency restructuring.

Earlier this month, U.S. Magistrate Judge Ivan Davis found that the $79,650 forfeiture was not excessive.

"Afework's conduct compromised the ability of two banks - Bank of America and PNC Bank - from satisfying their legal duties to report certain transactions (i.e., currency transactions in excess of $10,000)," Davis held.

Rather than a single reporting offense, Afework's crime was "excessive and prolonged" structuring activity of at least $165,000, so the maximum statutory fine was $500,000.

"Since the $79,650 forfeiture amounts to less than 17% of the maximum allowable statutory fine, the forfeiture is not grossly disproportionate to Afework's conduct," Davis wrote.

Citing a Supreme Court decision, the judge said that "the movement of large sums of cash is one of the most reliable warning signs of drug trafficking, terrorism, money laundering, racketeering, tax evasion, and similar crimes."

"Although no evidence was presented to link Afework's funds to other crimes or illegal activities, this does not militate against the harm caused or potential for additional harm caused by his structuring activity," the seven-page decision states. "Thus, this court is not persuaded by claimant's assertion that the harm is minimal."

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