The laws around structuring are defined in Federal Statute 31 USC 5324, which states that no person shall, for the purpose of avoiding a financial transaction reporting requirement, cause or attempt to cause a domestic financial institution or nonfinancial trade or business to fail to file a required financial report.
The 11th Circuit Court Criminal Jury Instructions further says that to structure “a transaction means to deposit, withdraw, or otherwise participate in transferring a total of more than $10,000 in cash or currency using a financial institution or bank by intentionally setting up or arranging a series of separate transactions, each one involving less than $10,000, in order to evade the currency reporting requirement that would have applied if fewer transactions had been made.”
The passage of the USA Patriot Act has given law enforcement agencies broader powers to investigate, indict, and convict terrorists. In the name of this goal, federal agencies are able to obtain business and bank records. Financial institutions are also required to aggregate transactions from countries known for laundering money.
This leaves a large amount of data to go through- in 2019 alone, over 20 million currency transaction reports were filed for review. These reports, known as CTRs, are required by regulators under the Bank Secrecy Act and apply to any transaction over $10,000. When multiple reports are filed for the same taxable entity, an investigation is often opened.
FAQs
In order to show that a person is guilty of structuring to avoid having a bank file a Currency Transaction Report (CTR) with the IRS, the government must prove three elements: (1) the defendant (or a claimant in a civil forfeiture case) must have engaged in acts of structuring cash desposits or withdrawals at a ...
What is the penalty for structuring? ›
Structuring is a felony offense and the punishments can be severe. Penalties include monetary fines, imprisonment of up to 10 years, or both.
What is structuring transactions to evade reporting requirements? ›
Designing a transaction to evade triggering a reporting or recordkeeping requirement is called “structuring.” Structuring is a federal crime, and must be reported by filing a Suspicious Activity Report (SAR). Examples 1. A customer breaks a large transaction into two or more smaller transactions.
Does structuring require intent? ›
Though every criminal allegation is different, an allegation that one has structured funds relies on the United States being able to prove that the person knowingly structured a deposit and that the intent of the structure was to avoid transaction-reporting requirements.
How to avoid being flagged for structuring? ›
Avoid saving up cash and making deposits that are of similar amounts. This is precisely what can raise red flags at a financial institution and with investigators.
What is an example of structuring transactions? ›
Structuring and smurfing examples
Let's say that someone has $90,000 in cash. If they want to avoid reporting requirements, they can split this into 10 transactions of $9,000. This is an example of structuring. Remember, structuring transactions in this way is illegal.
What is a red flag for structuring? ›
Some red flags indicating structuring and surfing: Multiple cash deposits are made on the same day across multiple branches or ATMs. Multiple deposits over several days are made just under the $10,000 threshold limit.
How is structuring proven? ›
In order to prove a structuring violation, the Government must establish three elements—that a person has: (1) engaged in acts of structuring; (2) with knowledge that the financial institutions involved were legally obligated to report currency transactions in excess of $10,000; and (3) acted with the intent to evade ...
What is an example of money structuring? ›
For example, you have $30,000. Instead of depositing it into your account, you intentionally (and for the purpose of avoiding detection/reporting by the bank) spread out the deposits over several days. Structuring is a global issue not limited just to the U.S. Many countries have similar rules in place.
What is the statute of limitations on structuring? ›
The criminal statute of limitations for currency structuring is 5 years from the date of the violation.
Structuring is where a person deliberately: splits cash transactions to avoid a single large transaction being reported in threshold transaction reports. travels with cash amounts in a way that avoids declaring cross border movements of the cash.
What is considered a structured transaction? ›
A "structured transaction" is a series of related transactions that could have been conducted as one transaction, but the financial institution and/or the transactor intentionally broke it into several transactions for the purpose of circumventing the reporting requirements of the Bank Secrecy Act (BSA).
What is the threshold for structuring? ›
The transactions need not exceed the $10,000 CTR filing threshold at any one bank on any single day in order to constitute structuring.
How to detect structuring? ›
Detecting and preventing structuring and smurfing
Structuring and smurfing red flags may include: An individual making multiple deposits over a series of days – with the deposits being just under $10,000 threshold (or equivalent). The total amount deposited in small daily transactions exceeds the maximum allowed.
What is cuckoo smurfing? ›
Cuckoo smurfing is a method of money laundering used by criminals to make money generated by criminal activities appear to have come from a legitimate source. Organised criminals use professional money laundering syndicates to target the bank accounts of people receiving money transfers in Australia.
What is an example of possible structuring? ›
Examples of structuring may include: A bank customer depositing several transactions under $10,000 each over a period of several days. A gambling customer cashing in their casino winnings across two portions that together would breach the $10,000 threshold.
Which situation could indicate possible structuring? ›
Some red flags indicating structuring and surfing: Multiple cash deposits are made on the same day across multiple branches or ATMs. Multiple deposits over several days are made just under the $10,000 threshold limit.
How often can I deposit $10 000 cash without being flagged? ›
The IRS requires Form 8300 to be filed if more than $10,000 in cash is received from the same payer or agent in any of the following ways: In one lump sum. In two or more related payments within 24 hours. As part of a single transaction or two or more related transactions within 12 months.
