Criminal Lawyer Group Tax Fraud Team

In an effort to combat money laundering, the government has enacted several statutes that require to report the amount of money you are receiving or paying out.

Documentation of how money is used is an important area of information for the federal government. Part of this is because the federal government wants to know your income. For the most part, this is to ensure that you are paying the correct rate of taxes.

While the monitoring of your income revolves around taxes, it also uncovers instances of other criminal misconduct. In many instances, other criminal misconduct is what brings to light the fact that you are not properly reporting your income.

If you are being accused of failing to report your income, contact an experienced defense attorney. Our law firm has a team that specializes in white-collar crimes, specifically evading reporting requirements. These attorneys have the experiences necessary for your representation and to minimize penalties or dismiss your case.  

Physical Currency Is Not Easy To Track.

The ways that money changes hands is usually monitored by the federal government. While many transactions can easily be monitored through electronic means (the cashing of a check, using a credit card to purchase something), physical currency is not as easy to track.

In instances that you are using physical currency, there is a certain amount that you can exchange before your transaction must be reported to the government.

Often this is reported by the bank when you make a cash deposit or withdrawal. However, there could be instances when you must make the report your self.

Additionally, the government has found that individuals have taken steps to try to conceal the amount of money they are exchanging by breaking large deposit into smaller deposits that are not reported. In response, the government has created statutes that prohibit you from and penalize you for doing such an act.

Reporting Requirement Statutes

31 USC 5313 – Reports On Domestic Financial Transactions

The transactions you make are somewhat regulated by the government. While you are not prohibited from making transactions of certain amounts, once you make a transaction of $10,000 you are required to report that transaction to the government.

Generally, you do not make this report yourself. Rather, financial institutions are to use the Currency Transaction Report (CTR) and within 15 days must file it with the Internal Revenue Service. This report must also be completed if you make two transactions in one day that amount to $10,000. However, this requirement only applies to actual currency (not checks, etc.)

To be clear, if you make cash deposits or withdrawals from a financial institution in the amount of $10,000 or more, that financial institution will have to use the Currency Transaction Report to inform the IRS of your transaction. On the other hand, if your transaction involves a check that transaction will not be reported because of checks essentially self-report.

The difference between currency and a check is the type of information that they provide. Currency has no name on it. It is simply a currency that you can freely spend anywhere in the country.

Checks, however, provide very specific information. This information includes who the check is from, who it is going to, and the amount. In addition, if the check is somehow transferred from one recipient to another recipient that transfer will still be documented because the new recipient will still need to deposit that check.

31 USC 5324 – structuring transactions – Structuring transactions to evade reporting requirement prohibited.

The statute that normally applies to individuals who are evading the reporting requirements is the structuring statute of 31 USC 5324. This statute looks at the types of transactions you are making with the bank.

The most common method of evading this requirement is to structure your transactions. Generally, this means that people make timed transactions that are close to but less than $10,000.

In order to prove that you are structuring your transactions, the government must prove five essentially elements:

That you:

  • knew about the reporting requirement,
  • knowingly and willfully structured your transaction
  • you did so in order to evade the reporting requirements
  • you had knowledge that structuring was illegal, and,
  • your transactions involved one or more financial institution.

Penalties For Evading Reporting Requirements

31 USC 5322 – reporting requirements – Penalties

If you are alleged to have evaded the reporting requirements, you will be subject to both criminal and civil penalties. Generally, the difference between criminal and civil penalties is that criminal penalties come with a possible term of prison.

31 U.S. Code § 5322 – Criminal penalties

The criminal penalties for evading the reporting requirements will vary. The government will look at the facts of your case and the acts that you are alleged to have committed. The following penalties can apply to your case:

  • For a  willful violation, you will be subject to $250,000 or imprisonment of up to five years.
  • For a willful pattern involving $100,000 in a span of 12 months you will be subject to a fine of up to $500,000, up to 10 years in prison, or both.

In some instances, banks and their employees can also violate the reporting requirements and be subject to penalties. For example,

  • When a financial institution fails to report, each day is a violation.
  • When a financial institution violates this section, fine at least two times the amount of the transaction but not more than $1million.

31 U.S. Code § 5321 – Civil penalties

Individuals Involved In Structured Transactions

Will be subject to a penalty that will up to the equal amount of the transaction in question.

Financial Institutions

In the event that a member of a financial institution willfully violates the reporting requirements,  the will be subject to a civil fine of up to $100,000.

If the violation involves an International financial transaction, the fine can be either $100,000 of half the amount in question, whichever is greater.

If a financial institution is found to have patterns of negligent activity -they will be subject to a $50,000 fine.

Defenses To Evading Reporting Requirements

In any case that you are accused of committing a crime or being legally liable for your acts, having a defense is necessary to help fight your case.

The penalties for violating these federal statutes are harsh. The fines are high and penalties can come with federal prison. Additionally, being convicted of a federal crime can cause you to lose certain rights.

Coming up with a defense for your case will vary depending on your specific facts. As you have read through the statutes, it is clear that you have to know what you were doing when you were taking steps to evade the reporting requirements.

  1. One defense could be against the required state of mind and that you actually did not have the knowledge that your acts were illegal. Depending on your case, and your acts, this may or may not be a viable defense.
  2. Your defense could also be that your actual transactions were just below the $10,000 mark; thereby making the transaction not reportable. In this instance, you had no intent to violate the reporting statutes.

These are only two of what could be many different defenses. You will need a defense in your case as it could aid in getting the case dismissed or result in lesser sanctions.

Our office has a team of white collar attorneys who are experienced in the area. They will review and discuss the case with you to determine the best defense to help fight the allegations against you.

Evading The Reporting Requirements In the News

Illegal Gambling Ring Indicted, Charges Include Structuring and Evading Reporting Requirements.

In 2013 multiple members of am 18 member of an illegal gambling ring were indicted for various including money laundering and failing to report.

The indictment alleges that these individuals were in the business of running an illegal gambling ring in which many of their activities included giving and receiving money. To conceal this movement of money, they were structuring their deposits and withdrawals.

Their purpose for structuring their withdrawals is that there is a limit on the amount that you can deposit or withdraw before you have to report the transaction.

Since this indictment, at least one of the alleged co-conspirators have pleaded guilty. That individual faces up to five years of prison and three years of supervised probation and will have to forfeit more than $66 million.

Trio Accused Of Investment Scheme and Structuring To Evade Reporting Requirements

In 2013 three individuals were indicted for acts that amounted wire fraud, money laundering, and structuring to evade reporting requirements.  

Part of their alleged acts included accepting investments for the purpose of mining diamonds and gold from various locations. Instead of mining, these individuals used the money for other purposes, including paying off older investors, purchasing–or paying rent for–homes, paying for other personal types of personal use.

It is further alleged that large amounts of the money were wired to off-shore accounts. There were multiple situations where amounts of money less than $10,000 were wired. There was a grand total of more than $830,000.

The indictments for these charges alleged that the amounts of money displayed a pattern of structuring in order to evade the reporting requirements.

All three of these individuals pleaded guilty to various counts in the indictments. As part of one individual’s guilty plea, he was sentenced to 10 years in prison plus three months of supervised probation. In addition, he will pay forfeiture and restitution in the amount of $2,383,255.26.  

Former U.S. House Speaker Pleads Guilty to Illegal Structuring

In 2016 the former Speak of the House was indicted for making False Statements to federal agents and for Structuring. The allegations from this 2016 indicted started when federal investigators started looking into the types of financial transactions that the Speaker was making.

From the investigations, it was found that over a period of time, the Speaker made at least 106 different transactions. Each amounting to just less than $10,000. When asked why the Speaker was making these transactions, he said that he did not trust the banks and was keeping the money.

However, as the investigation went on it was found that the Speaker was making these withdrawals to make payments to an unnamed individual. The purpose of withdrawing close to but less than $10,000 was for the purpose of avoiding being detected by the federal government.

As part of his guilty plea, the Speaker admitted to these allegations that he purposely made these financial transactions in the specific amounts to not be detected by the reporting requirements. The Speaker was sentenced to three years of prison.

If You Are Accused of Evading Reporting Requirements – Call Us Now!

If you are accused of evading the reporting requirements, it will be important for you to stop making those types of transactions. One of the biggest reasons is that the money in question will likely be seized. Additionally, continuing the transactions could result in additional charges.

If you are confronted by law enforcement, it is in your best interest not to answer questions without an attorney present. Many times answering questions can result in making incriminating statements. An experienced criminal defense attorney can help you to determine whether to answer certain questions.

If you are charged with evading reporting requirements, it will be in your best interest to have an experienced criminal defense attorney. These cases involve various types of documentary evidence that must be sorted and analyzed. Having an experienced criminal defense attorney can help you fight these charges.

Contact our office to be put in touch with one of our white collar attorneys for an assessment of your case.