The latter is IMO a prime example of where federal law (and not necessarily only fed) in the US now has too many minefields of ‘crimes’ they can basically make up. Who is to really say how withdrawals less than $10k relate to a total withdrawal more than $10k?
But that is the law as written and definitely something to be aware of if perhaps one brings more scrutiny by refusing to say what a relatively large <$10k withdrawal is for. But it’s at discretion of bank to ask, even above $10k, to ask not file the form.
In my recent experience with personal acct, one of my sons took out ~8k to pay me for a car, no questions. And I’ve taken out amounts like that or more than $10k from business account time to time with never any question from the bank. When it’s >$10k I assume they file the form, but have never asked me about it. The business owns rental properties. Not rare for contractors to want cash (though most don’t). In one case a tenant was paid >>$10k to move out (NY rent stabilized) and insisted that be in cash (this is completely legal except for them if they don’t report it as income, we made it clear we’d answer any IRS inquiry honestly and completely). Bank said notify them in advance so they had the cash on hand, but no other questions. They presumably have some leeway to say to regulators: ‘this is how business is done around here’, a question of pattern. As to inquiries besides simply filing the form >10.
I always have to swipe ATM car at teller, I guess might need ID if I didn’t have the card. But anyway I deposit lots of stuff for the business almost always by ATM. Although the banking/regulatory system is AFAIK not necessarily so rigorously logical that they’d never ask a question on an in person transaction that they’d allow you to do with no question via ATM.
Is it illegal to structure money transfers so that they’re each over $10,000? Let’s I want to send about $50,000 money to my brother over several months, can I structure it to be five $10,001 transfers? Or does not run afoul of the same law?
Are you doing to get around a report being filed are are you doing because that’s just the way this is set up?
It’s like cutting through the gas station to get around a red light vs pulling into the gas station, then leaving because you forget your credit card.
It’s going to come down to what [they decide] your intent is.
Also FWIW, a lot of this has to do with cash. I don’t know about the scenario you set up, but if you’re transferring it electronically, they’re going to be less concerned since it creates a trail.
Two or three transactions of $5K - $6K in a row aren’t really going to catch any attention. It’s when you make a bunch that are fairly close to the $10K limit that someone may start asking questions.
In Dennis Hastert’s case, he reportedly made about 100 withdrawals that were just below the $10K limit. If his withdrawals were made this way for legitimate reasons, e.g. to make cash gifts to several friends, then backing up his claims with sworn affidavits from those friends would have staved off structuring charges. If he was making a bunch of cash purchases with those withdrawals, one would expect he would have had a bunch of bills of sale he could show to investigators.
There have been cases where the assets involved in structured transactions have been seized even though there was no criminal activity other than the structuring itself, but according to this article, the justice department has changed their policy in that regard.
For starters, this is not a cash transaction, so a CTR will not be filed regardless of amount. But even if you were withdrawing $10,001 in cash each time, it would not be considered structuring, because you clearly aren’t intending to stay below the $10,000 limit.
Be careful you don’t start transacting $9000 to avoid the $10,000 threshold (or $4500 to avoid $5000). One elderly woman, not wealthy but with some need for cash transactions, began making smaller, $9000, transactions on the advice of bank employee, to avoid paperwork. She ended up charged with ‘small transactions to avoid report threshold’ and forfeited all the money even though there was no other crime or evasion.
Banks are heavily regulated, you might have heard about this before. Criminals like to launder money to hide their criminal activities, you might have heard of this before too. Banks being the depository institution of money are required by law to report suspicious activity with money going in/out of their bank accounts. Not suspicious as in “that guy looked like he might be scary to me”, but specific regulatory requirements for types and amounts of transactions that in most cases are perfectly legal. But as someone else pointed out, could also fit a pattern of money laundering type activity. Should it be discovered that it was not an innocent and legal withdrawal the bank doesn’t get to shrug its shoulders and say “Well gosh, who knew?!?”. They are required to file CTRs, SARs, etc. by law. To not do so subjects them to sizable fines and consequences.
This isn’t really new, I think BSA came into affect… in the 70’s? If you don’t like it, as an alternative your mattress can hold your cash in a real pinch.
I’m not debating any particular case. I just think the degree of discretion given in deciding what’s a crime is excessive and subject to abuse in this case. Just because discretion is subject to abuse doesn’t mean it always ends up in abuse. It’s simply my opinion there’s excessive discretion to the authorities in defining crimes in some areas of federal law and this is one.
A better law would simply set a $ limit, and if it’s ‘gamed’, so be it. Or specify a particular combination of amounts and frequency.
Another issue there is gift tax. More than $15k gift in a year to one recipient and you should file a gift tax return*. Although that has nothing specifically to do with how many pieces it’s split into. You’re just supposed to do it according to the total in a calendar year.
*although that would have limited practical impact unless you’re quite wealthy since all the return would do is record a reduction of $35k in your lifetime gift tax exemption currently ~$11.2mil.
I’m not clear on your wording. Are you bothered by the fact that structuring has been defined as a crime? Or are you bothered by the fuzziness of what actually constitutes structuring?
If it’s the latter, well, there’s little fuzziness: if you arrange your cash transactions for the specific purpose of not triggering CTRs, you are guilty of structuring. If your reason for any given arrangement of cash transactions is something other than not triggering CTRs, you are not guilty of structuring.
But the “reason” is subject to interpretation by the authorities. That’s where the problem lies.
The logic - questionable? - is that the banking system today is sufficiently flexible that there is no reason for large cash transactions.
There have been several prominent cases - most recently, an elderly immigrant going back home with his life savings had it confiscated at the airport for failing to declare. His argument - he did not know, and there was no warning nor any actual customs officers in the departure area to declare the content. Oddly, about $700 seems to have gone missing during the process. Plus, they offered him the reduced amount ($39,000 I think) if he would drop all claims to anything more.
I believe one post refers to a rural restaurant where the owner was advised by a bank employee she could avoid a lot of paperwork if none of her deposits exceeded $10,000. Since she told this to the authorities, she was admitting to structuring. her accounts were frozen, her business failed. After several months or a year and much bad publicity, they returned her money and the new policy announced (not sure I believe them) was that they would not pursue structuring charges if the money were not related to a crime.
Hassert was charged because he apparently admitted to police that he had structured the withdrawals to avoid triggering reports. Here’s one of the main lawmakers of the country, and he’s too stupid to know one of the key laws for fighting organized crime in the USA? Or more likely, he believed since the money was not proceeds of crime he was not guilty. Again, too ignorant of the law in that position says something.
I went to the bank where I’ve had an account for nearly two decades to deposit a $100 bill. I had to show my driver’s license. I guess it’s all part of security theater now.
Specifying combinations of amounts and frequencies just changes the game.
The question is “do you consider money laundering a serious crime?”. If you do, then you need to give the government some leeway in asking innocent people nosey questions, to enable them to find the folks who look innocent but are really Walter White.
Yes, the basic idea is to catch those who make piles of cash - usually from illegal activities like drugs; and make it impossible for them to do business. When you can’t buy a house, can’t buy your pimped out Escalade, and can’t buy airline tickets or other expensive items, because every transaction triggers a report - then the authorities have one more way to nail organized crime.
When the $10,000 limit was introduced, there were plenty of “mules” depositing smaller amounts of cash into banks. So banks were given a random number each day to report on; but of course, then the crooks learned this number and adjusted. Now it’s any large cash transaction.
If it also helps trap tax evaders - bonus for the IRS.
While the origin is part of the Federal anti-money laundering effort, and the bank’s effort to cover themself, it can have an additional benefit for the bank.
Put down “buy a new car” on that form, then either the teller will ask you right away if you have talked to their loan officer about their deals on car loans, or soon after you get home you will get a phone call from the car loans department.
So the form is for legal requirements, but they use it as a sales tactic, too.
The reason for making a series of sub-threshold transactions? If they’re going for a felony conviction, they’ll need to prove your intent beyond a reasonable doubt. If you’re innocent, a few receipts or witness depositions in your defense will take care of this.
There are endless legitimate reasons for large cash transactions. this is why large cash transactions are absolutely legal. Case in point, the author of The Oatmeal specifically withdrew $200,000+ in cash just to take a picture of it - several pictures, actually - for the sole purpose of thumbing his nose at a slimy lawyer who was threatening to sue him.
I agree that civil asset forfeiture laws have put too much discretion in the hands of authorities, and innocent people are getting ground up in the gears of a machine designed to combat drug trafficking and other organized crime. I’m not the only one that feels that way: see the article I linked to upthread, which describes changes to asset forfeiture practices at the federal level that are designed to avoid the sort of sad cases you described.
These kinds of laws are indeed obscure enough that it would be appropriate to post prominent warnings against structuring in banks, and warnings against failing to report large cash carries in ports of entry/exit. I don’t think that informing people about these laws makes it easier for criminals to move large amounts of cash, any more than posting speed limits makes it any easier for adrenaline junkies to speed.
It’s interesting to note that if you are taking more than $10K in cash into/out of the US, you’re supposed to file this PDF form with
I can easily spot the customs officer in charge at the point of entry when I fly into the US, but, I don’t know that I’ve ever seen one at a port of departure. Is that the TSA agent who’s checking my passport and boarding pass at the security checkpoint?
It might also have something to due with fighting counterfeit currency.
There is no big deal about filing a CTR. CTRs do not trigger audits. In fact no one looks at them until and unless other suspicious activity shows up . If you are called in for a routine Tax audit, yes, they will have your CTRS. Or if your name pops up on a SAR or other data.
So, do not worry about a CTR.
DO worry about a SAR (suspicious activity report). Every one of those is examined by a FBI agent and IRS CID agent. I suspect OP, that your refusal there may have forced your bank to file a SAR.
A SAR can trigger an audit- or a criminal investigation. Or, like in one case, INS sending the person back.
Never, ever structure. It is a crime in of itself, and while yes, a single act of structuring with nothing else suspicious likely wont get you a indictment (there are too many such reports) it still isnt good.
Just smile, and cooperate. A little grumbling and questioning is normal, but dont do as the Op did.
