## Facts

- The USDA Food and Nutrition Service ran a food-stamp program in which recipients used an electronic benefits card at authorized retailers, and the government reimbursed retailers through deposits into the retailers’ bank accounts.
- Salem Fuad Aljabri owned Sobba Food Mart, an authorized retailer in the program.
- Trial evidence showed Aljabri illegally purchased food-stamp benefits from customers for cash and then redeemed those benefits through Sobba’s reimbursement account.
- To obtain cash used to buy benefits, Aljabri withdrew funds from the reimbursement account by writing checks payable to “cash” and cashing them at banks.
- Over several months, Aljabri cashed at least 155 checks, almost all in amounts under $10,000, including sets of withdrawals that together exceeded $10,000.
- Sobba was later terminated from the food-stamp program.
- After Sobba’s termination, Aljabri continued similar conduct through a second store, White Bird, opened in his girlfriend’s name and enrolled in the program.
- When arrested, Aljabri admitted he knew banks must file a federal currency transaction report (CTR) for cash transactions over $10,000.
- A federal jury convicted Aljabri of wire fraud, money laundering, and structuring transactions to evade CTR reporting requirements (one structuring count had been dismissed before trial).
- On appeal, Aljabri challenged the sufficiency and legal basis for the structuring convictions and the money-laundering convictions’ “proceeds” element.

## Issues

1. Whether the money-laundering convictions could stand where, in this type of operation, “proceeds” meant net profits and the evidence did not establish that the laundered funds were net proceeds of unlawful activity.
2. Whether the evidence was sufficient to support the structuring convictions, including whether structuring may be proven by a pattern of sub-$10,000 currency transactions spread over more than one day and conducted to evade CTR reporting.
3. Whether any difference between the indictment’s description of the structured transactions (grouping and timing) and the proof at trial required reversal because it prejudiced the defense.

## Decision

- The Seventh Circuit vacated the money-laundering convictions after concluding (and accepting the government’s concession) that the record did not establish the required “proceeds” element under the applicable net-profits meaning.
- The court affirmed Aljabri’s structuring convictions, holding that the statute and implementing regulations reach structured transactions carried out “on one or more days,” not only same-day transactions.
- The court held the jury could infer intent to evade CTR reporting from Aljabri’s repeated withdrawals just under $10,000, the clustered nature of the transactions, and his admission that he knew the $10,000 reporting threshold.
- The court rejected Aljabri’s variance argument, finding no reversible prejudice from any mismatch between the indictment’s transaction groupings and the proof at trial.
- The court left the remaining convictions intact and remanded for resentencing in light of the vacatur of the money-laundering counts.

## Legal Principles

- In money-laundering prosecutions under 18 U.S.C. § 1956 involving business-like unlawful activity, “proceeds” may mean net profits rather than gross receipts; if the government fails to prove net proceeds, the conviction cannot stand.
- Structuring requires proof that the defendant conducted (or attempted) currency transactions with a financial institution, knew of the institution’s duty to report currency transactions over $10,000, and acted for the purpose of evading that reporting duty.
- A structuring scheme may be shown by transactions conducted “on one or more days”; the law does not require that the related transactions occur on the same day.
- Intent to evade may be inferred from circumstantial evidence such as a sustained pattern of withdrawals just below $10,000 coupled with proof the defendant knew of the CTR threshold.
- A variance between indictment allegations and trial proof warrants reversal only if it affects substantial rights, such as by causing unfair surprise, impairing trial preparation, or creating a meaningful double-jeopardy risk.

## Conclusion

The Seventh Circuit vacated Aljabri’s money-laundering convictions because the government did not prove that the transactions involved net proceeds as required in this context, but it affirmed his structuring convictions, concluding that a multi-day pattern of repeated sub-$10,000 cash withdrawals—combined with Aljabri’s admitted knowledge of the $10,000 CTR threshold—supported the jury’s finding that he intentionally arranged transactions to evade federal reporting requirements, and that any variance in how transactions were grouped did not prejudice his defense.


United States v. Aljabri, 363 Fed.Appx. 403 (2010)