The FBI documented nearly three-dozen deposits into their company’s bank account just under $10,000. The Justice Department takes the position that the transactions alone are sufficient to seize private assets.
Yet few people are aware that such a pattern can be deemed illegal structuring. Perhaps our tax lawyers can fill in the details, but I assume that this money is still reported as income by the business regardless of the deposit amount. Thus, there is no evidence of a benefit to the company in structuring.
What is remarkable is that this is a trap intentionally set by Congress at the demand of the Justice Department. In 1994 in Ratslaf v. U.S, Justice Ruth Ginsburg “interpreted the “willfully” element under 31 U.S.C. Sec. 5324 to require proof that the defendant knew the structuring was illegal. That would seem to create a fair and workable solution to structuring — confining it to the truly criminal element. However, Congress responded to the opinion by removing wilfulness from the statute.
The provision states in part:
(a) Domestic Coin and Currency Transactions Involving Financial
Institutions. – No person shall, for the purpose of evading the reporting requirements of section 5313(a) or 5325 or any regulation prescribed under any such section, the reporting or recordkeeping requirements imposed by any order issued under section 5326, or the recordkeeping requirements imposed by any regulation prescribed
under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508 –
(1) cause or attempt to cause a domestic financial institution to fail to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by an order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508;
(2) cause or attempt to cause a domestic financial institution to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by any order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-
508, that contains a material omission or misstatement of fact; or
(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
According to reports, Randy Sowers told agents that “during the farmers’ market ‘season,’ his weekly cash receipts were on the order of $12,000 to $14,000.” He admitted that “he kept his cash deposits under $10,000 intentionally so as not to ‘throw up red flags.’” He says that he was advised to keep the checks below $10,000 by a teller to avoid forms being filed. Yet, there is no charge of tax evasion. Thus, while the Justice Department insists that there is “a reasonable belief” that there was “an intentional scheme or plan to hold back cash receipts,” it is not clear what benefit the family derived from the practice beyond simply not being reported for such checks. I could understand if this was done for the purpose of some criminal benefit, but there is no indication of a collateral crime.
What do you think?
Source: Frederick News