Federal law requires business and financial institutions to report currency transactions in excess of $10,000 in a single or “related” transaction within a twelve-month period. Businesses must file an IRS form 8300 and financial institutions must file a currency transaction report. Even though making a deposit or withdrawal greater than $10,000 in currency is often not connected to any illegality, this reporting requirement helps the IRS, to track suspicious criminal activity including tax evasion and other crimes. This information is also shared by a variety of other government agencies.
“Structuring”, pursuant to U.S. Code § 5324, is the process whereby a person, or persons, attempting to trick the business or financial institution, whether domestic or foreign, into not filing the required report by breaking the single transaction into pieces smaller than $10,000 each within the twelve month period. You can be convicted of the federal felony of structuring even though the money was always legal and you paid all your taxes. Regardless of where the money came from or what the money will eventually be used for, a person suspected of structuring a transaction to evade reporting requirements may be prosecuted. The illegality is solely the attempt to avoid the reporting requirements.
Prior to September 23,1994 the government had to prove that the defendant knew about the federal law requiring the bank to report currency transactions in excess of $10,000 and also the defendant’s obligation not to try to trick the bank into avoiding the reporting requirement. Effective September 23, 1994 the Congress changed the law as it was decided by the United States Supreme Court in Ratlaf on January 11, 1994, 510 U. S, 135, requiring a structuring conviction to have “willfulness”. This change in federal law makes it much easier for the government to obtain a conviction because the “willfulness” requirement was removed. Therefore, the government now only needs to prove that the defendant had the purpose of trying to avoid having the bank file the currency transaction report or the business filing IRS form 8300.
Anyone convicted of violating anti-structuring laws is guilty of a federal felony and could serve many years in federal prison in addition to potentially, huge monetary penalties. Further, since structuring is its own crime, sometimes, a structuring case or investigation lead to additional charges, such as, tax evasion, because the movement of money may allow the person structuring to avoid taxes. It’s important to remember that structuring may alarm authorities to suspected tax evasion and other serious charges.
A consideration in the case of former New York Governor Eliot Spitzer was whether he committed structuring, among other crimes, in the payment of $20,000 in four installments to a prostitution ring.
Radio show host Rush Limbaugh was considered for prosecution on structuring charges when within twelve months he withdrew cash exceeding $10,000 in multiple amounts each less than $10,000 from his bank. There was never any allegation that Rush had acquired the money illegality or that he had any tax problems, only that he may have committed the crime of structuring. On Rush’s radio show he commented that he was being considered for prosecution for “withdrawing his own money” and Rush was correct in that structuring makes how you deposit or withdraw the money the crime.
Most people that are prosecuted under the structuring law are not famous; they are common business people, or even people that do not even own a business. For example, a police officer was found guilty of structuring when he re-deposited cash in excess of $10,000 in multiple deposits of less than $10,000 each from the very banks from which he had earlier withdrawn it, United States of America v. William MacPherson, 424 F. 3d 183, decided September 13, 2005. In an another example, a newly married couple also faced structuring charges when they deposited their cash wedding gifts in excess of $10,000 in multiple deposits of less than $10,000 each in multiple financial institutions.
Businesses can file a form 8300 with the IRS for a cash transaction less than $10,000 if they think the transaction is suspicious. Banks file a Suspicious Activity Report if they think a transaction is suspicious. Almost 50% of the depository institution Suspicious Activity Reports filed to date lists structuring as the suspected violation.
All that the government must prove is that the person intended to trick the financial institution or business into not filing the required report, not that the person intended to commit a crime by violating the provision. So while structuring is not always done to conceal another crime, it is a crime itself, regardless of the desire to violate the law. Because intent is so important, and the understanding of an often complex string of financial transactions must be understood and presented either by direct or circumstantial evidence to the government or a Judge and jury, our law firm, with its financial, criminal and civil expertise is extremely well suited for this type of often very complex case depending on a myriad of possibly interrelated financial transactions and the understanding and presenting of them.
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