There is nothing illegal about having currency, however, federal laws impose reporting requirements on banks, financial institutions, and regular businesses. The reporting requirements of a bank impact not only the bank but also the bank customers.
A deposit of over $10,000 in currency into a bank customer’s account requires that the bank submit a Currency Transaction Report (CTR) to the Treasury Department. This form is utilized by the Treasury Department for various purposes including: tracing cash into a bank, deciding whether to open a criminal tax investigation, or just keeping a historic record of cash deposits.
Many individuals are aware that the bank is required to fill out a CTR, which is sent to the Treasury Department for currency deposits greater than $10,000. Not as well-known, however, is the fact that banks are required to fill out Suspicious Activity Reports (SAR) if the bank has any reason to believe that the cash is being deposited in such a way as to avoid the bank filling out a CTR. There are many factors which trigger the bank’s filing of a SAR. One of the most common reasons for SAR’s being filed is several deposits under $10,000 in a short period of time. For example, if a customer deposits $8,000 on day one, $9,000 on day two, and $7,000 on day three; the $9,000 and $7,000 deposits will each cause the bank to file a SAR.
Most individuals think that they can break up a large cash deposit because they do not want the bank to file a CTR or for other reasons. By breaking up the deposit, the bank customer has unknowingly committed a Federal felony commonly called STRUCTURING. An arrest by the Federal authorities, prosecution and imprisonment can result. The crime of structuring is not dependent upon the source of the money. Therefore, currency that was legitimately earned and tainted by no criminal activity can be the basis of a structuring prosecution.
The necessary intent to be convicted of structuring was considered by the Supreme Court of the United States. The Supreme Court held that it was necessary for the government to prove that the bank customer acted “willfully”. That meant that the government had to prove that the defendant knew that it was illegal to break up the deposit to avoid the bank filling out the CTR. Such knowledge is different than the customer deciding to avoid the CTR, not knowing that to do so was a crime. Congress, however, changed the law so that the Government does not have to prove that the defendant knew it was illegal to structure the deposits but only that the deposits were in fact being broken down into less than $10,000 to avoid the CTR.
The result of Congress’ change of the structuring law is that a citizen with no criminal intent can be convicted of the serious felony of structuring and spend years in prison for making deposits of less than $10,000. The fact that the money was legally earned and not tainted by any criminal conduct is not a defense.
A troubling aspect of allowing such convictions involves the conduct of the Treasury Department and its supervisory authority over banks. Many would argue that the Treasury Department should require banks to post signs to its customers warning them that dividing up a $10,000 deposit is a crime punishable by imprisonment. Have you ever seen such a sign in any bank?
Many people are surprised to learn of this federal law allowing a conviction when a defendant had no idea that they were violating the law. Another troubling aspect of a conviction without proof of criminal intent is that the government can then seek to forfeit the defendant’s assets, including such things as a home purchased with money that had been earned legally but deposited into the bank in amounts less than $10,000. This law allows a person not only to be deprived of their liberty but also their property including their home.