Large Cash Bank Transactions Attract Government Attention

Former Speaker of the House Dennis Hastert has been making headlines as of late, and not for earmarks or his coined “majority of the majority” rule. Late last month, it was revealed that Hastert was indicted by a federal grand jury and charged with a banking withdrawal scheme known as “structuring,” which we will explain herein.
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As our West Palm Beach and Fort Lauderdale criminal defense lawyers know, the federal government regulates the national banking system, and one of the regulations comes in the form of the Bank Secrecy Act, enacted way back in 1970.

In an attempt to combat financial crimes such as money laundering, the Bank Secrecy Act requires financial institutions to report to a branch of the federal government cash transactions above a certain dollar amount. As we will explore, this has serious implications for Americans.

Many Americans engaged in questionable (not necessarily illegal) business transactions feel that dealing in cash is safer than dealing with credit cards and bank checks. The theory goes something like this: while you run the risk of actually losing all of the money if you lose the physical cash, you also can go undetected. While credit cards and bank checks leave trails, cash changes hands all the time and is hard to trace.

To a certain extent, the theory holds true. As our West Palm Beach and Fort Lauderdale criminal defense lawyers know, if you give somebody cash, they can really spend it wherever they want and you will have no way of knowing exactly where it was spent (whereas if you give them a credit card, you can track the purchases on paper statements, online banking accounts, etc.). That said, the Bank Secrecy Act throws a wrench into the theory that cash flies under the radar. The law requires American banks to file a special report with FinCEN (the Financial Crimes Enforcement Network) each time that somebody transacts (withdrawals, deposits, transfers, etc.) in excess of $10,000.00 in a business day. So, let’s say somebody deposits $10,005.00 in cash in one bank and somebody else deposits $3,000.00 four times during the same day in a different bank. In both cases, the banks would be required to file a currency transaction report with FinCEN.

One way people try to get away with depositing or withdrawing large sums of cash without triggering the FinCEN report is by depositing or withdrawing sums under the $10,000.00 threshold with higher frequency. In other words, if John Smith wanted to take out $50,000.00 in cash from his bank over a five day period, he couldn’t do that. However, in order to get away with it, he might just withdraw $8,333.33 every day for six days, thereby not transacting more than $10,000.00 in any single day. People who do this might think they’re getting away scot-free, but the government has caught on to this illegal practice which they have labeled “structuring.” Dennis Hastert has been charged with structuring.

The fact that he’s accused of using the hundreds of thousands of dollars obtained through structured withdrawals to pay off a former student so they’d keep quiet about a past, inappropriate sexual relationship is not what he is in trouble for. The student has been over 18 for many years now, meaning the statute of limitations for any alleged crime has surely expired. As our West Palm Beach and Fort Lauderdale criminal defense lawyers know, Hastert faces serious trouble for his deceptive bank withdrawal practices.

All of this being true, we must remember that some people have to make large cash deposits in excess of $10,000.00 per day. Restaurant managers, for example, often have tens of thousands of dollars to deposit at the end of a week, when they empty out the safe and bring money to the bank. This is completely legitimate, but a FinCEN report will still be filed. It is in this way that federal anti-money laundering regulations put a magnifying class on all Americans, whether or not they’re engaged in illegal behavior. Just as Hastert was, you could become the subject of a criminal investigation if you’re suspected of structuring (i.e., if the authorities think you’re trying to avoid triggering a FinCEN report).

As our West Palm Beach and Fort Lauderdale criminal defense lawyers know, you need to be aware of the fact that regardless of whether or not you’re engaged in illegal behavior, government authorities are going to be paying attention to you and your bank accounts if you engage in large cash transactions at the bank, regardless of whether or not your reason for doing so is legitimate.

If you have any questions about this issue, or if you’ve been accused of or charged with any crime (financial or other) in Palm Beach, Broward or Miami-Dade County, please contact our West Palm Beach and Fort Lauderdale criminal defense lawyers at the Law Offices of Leifert & Leifert by calling 1-888-5-DEFEND (1-888-533-3363) to schedule a free consultation. We look forward to assisting you.

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