It would be like a speed limit law that says you can drive up to 100mph, but for every time you go over 70mph, you need to file a report with the state.
Well, I don’t want to file reports and I think the state invades my privacy enough anyways, so I’ll just keep it under 70mph.
But that ain’t good enough! You get punished for keeping it under 70.
The speeding analogue just doesn’t apply. You can’t go 100mph by driving 50mph one day and 50mph another.
Structuring speeding offences is intrinsically impossible. Since it is impossible to structure, there is no law against it.
The whole point is that there is a specific offence for structuring. This applies in many areas. Not just finance reporting. If you structure your activities with the intent of avoiding the impact of a law, you are often doing something or something that will be disallowed. Financial constructs are easy to dream up, but if the intent is nothing but avoiding tax or the like, they will be disallowed (at best) and may be themselves illegal.
Structuring your casino or bank transactions with the intent of evading reporting laws is illegal. Simple. If you happened to perform a set of transactions that looked a lot like structuring there is a legal requirement on the casino or bank to take notice and report anyway. If they didn’t, they would be breaking the law. If your deposits are above board, and you are clearly not structuring by intent, you have not broken any law. But if your intent was to avoid reporting requirements, for whatever reason, you have broken the law by structuring. Whether your mother is watching from heaven or not, the law does not care. A religious disagreement with the law gets you exactly nowhere.
It is going to be interesting to see how the move way from cash causes issues for the criminal classes. As noted above many times, the problem is all about getting the dirty money into a form that is no longer traceable to an illegal activity. That is becoming increasingly hard.
It seems that Bitcoin and other crypto-currencies have been one mechanism to have a commerce system outwith normal channels. But that still has lots of problems. Up until very recently Tesla would sell you a car for Bitcoin. I wonder how many jet-black Plaid model S cars were sold for Bitcoin to mid-level drug dealers. Just buying a car for Bitcoin and selling it used was probably tied as a way of laundering money for a while. I wouldn’t be surprised some of this might have played on Elon’s termination of Bitcoin as acceptable.
No doubt the various worldwide agencies have been carefully tracking the entire Bitcoin transaction history identifying where the money goes. Users were naively unaware of how much information was available for so long that it is going to be near impossible for them to avoid traceability for a huge number of users.
The days of cash for everything must have been an absolute boon for laundering. One scheme that occurred to me would have been to run an employee payments company as a major laundering operation. Companies pay you to assemble the pay-packets for employees. Payday, your armoured van arrives at the factory filled with envelopes full of cash for each employee. Company transfers money to your bank account. You move money about, and organise cash in industrial quantities from other banks. Somehow the profit margin is really good. Not all of the cash going into pay-packets was obtained with money from the client employers. Keep enough of a low profile, and not get greedy, and you might launder a lot of money. However you would be undone the moment you were properly audited. Wouldn’t work in the modern world, but I do wonder if the idea was used in the past.
My company works in the financial industry. I am NOT a financial person (I do the computer stuff) but being as close to it all as I am I see things.
My boss looooves railing on Bitcoin (cryptocurrency in general). In his view it is nothing but a mechanism for crime.
He never seems to get that, before cryptocurrencies, cash was the mechanism for crime. Also, cryptocurrencies are not a magic bullet that makes you immune to prosecution. Far from it.
Can you use crypto for crime? Sure! Absolutely! 100%. But, as with cash, you need to go to great lengths to make it work. Is it more profitable to launder money this way? I’m not sure. Partly because the price of crypto is so volatile and partly because it it not easy to convert the cryptocurrency back to real-world cash.
I think the big thing for crime is the international transferability avoiding reporting mechanisms. How you prove the location of the recipient digital wallet is not clear. I’m sure the various reporting authorities are more than a bit miffed about this. Getting your coins into local currency remains the interesting issue, but there are plenty of exchanges, and it appears buyers. I guess the various ransomware operations keep some market open for exchange.
Volatility of crypto-currencies is a different matter. There is no regulation and enormous potential for market manipulation. I can’t help but feel that a very significant part of the volatility is the result of manipulation.
The whole point of Bitcoin was to make a “currency” free from government manipulation. You could move money internationally without the horrible fees and delays banks charge.
Whether that is a noble goal or something it managed to achieve is debatable.
The original Bitcoin manifesto was hilarious. Long since gone. One part that sticks with me was the question about its intrinsic worth and what happens if the bottom drops out of it. The answer was that it would have become so important that governments would have no choice but to bail it out. Too big to fail.
Basically they railed at government backed fiat currency, but ultimately wanted the security that came with that backing.
I remain bemused by anyone who thinks that an instrument for commerce is compatible with an instrument for speculation.
I sense a Great Debate in this (in a good way).
Like the difference between murder and manslaughter? Or the difference between theft and a simple mistake?
The idea that intent is important was not historically obvious, and a lot of people don’t really agree even now, you certainly aren’t alone in objecting to ‘intent’ crimes.
One wonders how those criminals that currently sell goods for cash will manage in a totally cashless society.
I think that fast food will be one method and it is currently in use with cash anyway. If you order a pizza with ‘extra anchovies’ you get a bonus baggie and it is charged to your credit card. This is fine until the pizza place gets busted and they follow up on the transactions.
Does anyone have a solution?
Accept credit card transactions for a service, say massage. It’s been done that way.
Isn’t “mens rea” a thing in law?
Mens Rea refers to criminal intent. The literal translation from Latin is “guilty mind.” The plural of mens rea is mentes reae . A mens rea refers to the state of mind statutorily required in order to convict a particular defendant of a particular crime. See, e.g. Staples v. United States, 511 US 600 (1994). Establishing the mens rea of an offender is usually necessary to prove guilt in a criminal trial. The prosecution typically must prove beyond reasonable doubt that the defendant committed the offense with a culpable state of mind. Justice Holmes famously illustrated the concept of intent when he said “even a dog knows the difference between being stumbled over and being kicked.”
The mens rea requirement is premised upon the idea that one must possess a guilty state of mind and be aware of his or her misconduct; however, a defendant need not know that their conduct is illegal to be guilty of a crime. Rather, the defendant must be conscious of the “facts that make his conduct fit the definition of the offense.” SOURCE
Structuring is breaking up a cash transaction of more than $10,000 to less than $10,000 to avoid triggering the CTR (reporting) limit. So - one transaction, you are good boy. 2-plus transactions in a short time, totaling more than $10,000, that logically could have been 1 transaction - structuring - you bad boy!
If your pizza joint takes in $8,000 a day, so each day you deposit the proceeds, Ok. If your pizza joint takes in $15,000 a day and you deposit 2 separate (cash) deposits of $7500 - well, you could be cleaning out the register at noon to minimize the risk of theft and that would be OK. But two deposits at midnight when the business closes instead of one big one? Why?? Your lawyers can argue that one with the FBI and eventually (maybe) get your funds unfrozen. And… you’ve attracted scrutiny. Also - your cash deposits go from $1000 a day to a sustained $8000 a day overnight - eventually the bank may file a SAR (based on the “S” for “Suspicious”). Investigation may yield a valid explanation (the new Amazon warehouse and Walmart opened next door.) Or, they may conclude "no way this guy’s selling that much pizza.
Exactly. I think the whole CTR/SAR/$10,000 discussion misses the point. The point is - “structuring” is deliberately breaking up a transaction into components of less than $10,000 to avoid the reports. One transaction of less than $10,000 is always OK.
The government does not need you to testify “yeah, I broke up the transactions on purpose”. (Some people stupidly do - recall the congressman who paid off former students and explained he broke up the transactions to avoid reports…) They can show a pattern - it’s a lot easier if the transactions are close together, more than two, etc. Not everyone gets away with manslaughter because they neglected to say “I’ll kill the bastard!” to show intent in front of witnesses.
The government is always free to investigate when a large amount (or small) of cash changes hands - they likely just don’t usually bother. A person looking furtive in a bank, or an adult male sitting on a park bench watching children play is doing nothing wrong - but also may expect questions from police. We live in a messed up world.
Similarly, an 18-yo can buy a house. It’s legal. What will raise questions is - how? If daddy’s paying for it, and all the gift tax reporting has been properly filled out - legal; especially if it’s done with electronic money, not cash, and so is obviously traced . If he’s walking into the bank with $500,000 in small unmarked bills, questions will be asked. Maybe he asked people on GoFundMe to help and they all sent him $20 bills. The mailman can testify to this. Not sure the IRS implications, but that would be legal. If so, then the FBI will unfreeze the funds when they conclude the investigation a year or three later.
You cannot avoid you name on forms in modern society. You may not want your name on a report for going over 70mph but your name is already on a driver’s license (we hope - or else you are breaking the law).
There was a whole another thread on bitcoin. It’s hard to hide transactions from deep scrutiny. It’s just, unlike cash, you don’t have to figure out how to move a pallet load to another location for transactions - especially offshore - to complete a transaction. But I don’t see a difference between bitcoin and, let’s say, diamonds other than physical transport. You got something valuable, depending on the market. You buy from others or mine it. If everyone were smart enough to tell diamonds from cubic zirconia, there could easily be a market where sellers would take diamonds in trade for a car, or you could get a year’s supply of cocaine for one. It’s essentially the same as what happens in many third world countries where locals are happy to take Euros or US Dollars instead of the local currency. You have something others will accept as money because they too know others will accept it (and they are fairly good at telling real from fake). Nobody in those third world countries wants Canadian bills. (Except, some people in India had no problem with Canadian dollars 
) )
Not quite. If you had say, $10005 and transacted $9999 to avoid the CTR and out the other $6 in you pocket- you have structured.
Correct.
There is nothing illegal about a transaction over $10,000, it is just a flag that requires a report.
But that’s what it is, is a flag. There are other flags as well. Other things that are not illegal, but are suspicious enough to cause one to generate a report.
In this example, an alcohol retailer is required to deny the sale if they have suspicion that the purchase is being made for people under 21. The fact that you have your ID that says that you are over 21 does not alleviate you from all suspicion, so a slightly useful analogy here. The part where it is not a useful analogy is that you are allowed to make transactions over $10,000, while you are not allowed to buy alcohol when you are under 21.
Why would they do this? The limit is not on how much you are allowed to transact. The limit is based on what automatically generates a report. If you are “of course” transacting at a dollar less specifically to avoid that report, then that is specifically doing something that is against the law, unlike just having a transaction at $10,001.
As an aside:
That actually happened to me once. I was 20 and with my GF and another friend who was 21. He tried to buy the beer and the store manager stopped the sale because we were with him and not 21.
The store manager got it right. Of course, we just went down the street to another store and bought the beer.
Some stores are really strict about this.
My mother would occasionally buy a single bottle of wine with the regular groceries when we were shopping with her as kids. Most of the time this wasn’t a problem but once when she was shopping at a grocery store she usually did not go to and they refused to sell it to her because my then 9 year old sister was with her. She just paid for the regular groceries and left.
I thought it was structuring only if my cumulative spending was $10,000 or over. If I deposit $9999.99 into a bank account and that is my only deposit ever, then is it still structuring?
Maybe not. Wasn’t there a small business that got nailed for structuring because their daily drop was always between $9K and $10K? Their accounts were frozen and they had to spend quite a bit of money to prove that those were in fact the actual amounts of cash they made.
Once when I was a cashier, there was a ~80 year old woman buying large amounts of groceries with what I guessed was her granddaughter, who may or may not have been over 21. I didn’t card her, but I definitely got a feeling as though maybe I should have and denied the sale of alcohol if she had been under 21. Because of the large amount of groceries, I felt it was pretty safe to allow the sale regardless. I don’t recall what my training was like at the time in order to make such decisions, but I’m not surprised that some places have erred on the side of extreme caution and not selling alcohol whenever there’s anyone underage with them, regardless of how unlikely it might seem that they would be providing alcohol to them through the transaction.
But this is rather off-topic.
It is the intent- is your goal to avoid the CTR?
This would be a "facts and circumstances’ issue. It is a maybe.