United States of America v. $157,000.74 U.S. Currency
Filing
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MEMORANDUM OPINION AND ORDER GRANTING 16 Motion for Judgment of Forfeiture. Signed by Magistrate Judge Charles B. Day on 9/17/2014. (kns, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
UNITED STATES OF AMERICA
Plaintiff,
v.
$157,000.74 IN U.S. CURRENCY
Defendant.
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Civil Action No. CBD-12- 2034
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MEMORANDUM OPINION
Before this Court is Plaintiff’s Motion for Final Order of Forfeiture (the “Motion”) (ECF
No. 16). The Court has reviewed the Motion, related memoranda, and applicable law. No
hearing is deemed necessary. See Local Rule 105.6 (D. Md.). For the reasons presented below,
the Court GRANTS the Motion.
I.
Background
On February 27, 2012, the United States of America (Plaintiff) seized $157,000.74 from
Galaxy Sports Bar & Grill and a Bank of America account that had transacted with the bar.
Plaintiff alleged that such currency had been involved in revenue reporting evasion in violation
of federal law. 31 U.S.C. § 5324(a)(1); 31 U.S.C. § 5324(a)(3). Y.S. Enterprises (Claimant),
owner of Galaxy Sports Bar alleged that the funds were revenue derived from legitimate business
activities and were not subject to forfeiture.
Plaintiff and Claimant entered into a settlement agreement on April 25, 2014, agreeing
that Plaintiff had reasonable cause to seize the property, that Claimant’s claim to the property
was timely, and that while Claimant had a right to trial, it waved such right. ECF No. 16. The
parties further agreed that Plaintiff would not criminally prosecute Claimant, that Plaintiff would
release $54,310.14 of the seized funds to Claimant, and that Claimant would withdraw its claim
as to the remaining $102,690.60.
II.
Discussion
Businesses are required to report transactions of over $10,000 to the Internal Revenue
Service and Financial Crimes Enforcement Network. 31 U.S.C. § 5313(a); 31 C.F.R.
§ 103.22(b)(1); see also United States v. Peterson, 607 F.3d 975, 977 (4th Cir. 2010). Under
federal law, “[n]o person shall, for the purpose of evading the reporting requirements of section
5313(a) . . . cause or attempt to cause a domestic financial institution to fail to file a report
required under section 5313(a).” 31 U.S.C. § 5324(a)(1). A person can attempt to cause a
domestic financial institution, such as a bank, to fail to file a report by engaging in what is
known as “structuring,” or splitting deposits to that bank into smaller increments to avoid
triggering the reporting requirement under Section 5313(a). Peterson, F.3d at 977. The United
States government is entitled to seize and forfeit currency involved in specified forms of
reporting evasion, including structuring. 31 U.S.C. § 5317(c)(2).
As the affidavit of Internal Revenue Service Federal Task Force Officer John Matzerath
makes clear, the transactions associated with the seized funds appear to have been structured to
avoid triggering the $10,000 reporting requirement. ECF No. 1. Most notably, on nine separate
days, multiple cash deposits were made that, in the aggregate, totaled more than $10,000. This
Court agrees with the parties to the settlement agreement that there was probable cause to
suspect structuring, and that the civil forfeiture of these funds was thus proper.
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This Court is not aware of any authority that requires judicial inquiry into the amount
released or retained in a civil forfeiture settlement. The release of $54,310.14 of the seized funds
to Claimant and continued control of the remaining $102,690.60 by Plaintiff thus appears proper.
III.
Conclusion
For the foregoing reasons, this Court GRANTS the Motion.
September 17, 2014
/s/
Charles B. Day
United States Magistrate Judge
CBD/sdh
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