Now that a lot of folks are no longer able to use Bluebird to earn credit card points, many have identified money orders as the tool of choice. That may or may not be the case–I’m in the “don’t bother with money orders” camp–but for those of you who do decide to deposit a bunch of money orders, there is one federal crime you need to know about: structuring.
Structuring is when you break up your bank deposits in order to avoid drawing attention to yourself. Specifically, it’s about trying to keep banks from filing reports on you. Here’s an excerpt from the actual statute (bolding is mine):
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;
In other words: banks are required to file certain reports when they see suspicious patterns of deposits. The most well-known regulation concerns deposits of more than $10,000 in cash. If you do that banks are required (if memory serves–it’s been a few years since I had training on this stuff, so by all means feel free to correct me here) to file a SAR, which stands for Suspicious Activity Report. But they can file a SAR for anything that looks suspicious for any reason. An unusual pattern or activity is fair game; it doesn’t have to be $10,000. I spent well over a decade working for several banks, and they take financial crimes regulations very seriously (for normal people, anyway–if you’re a billionaire I presume it’s a different story). Employees are encouraged to file reports if something looks even slightly awry.
If this sounds like an odd law, you have to understand that it arose as a way to catch people who were laundering drug money. Unfortunately, innocent people have been swept up in this just for making deposits from cash-based businesses. I haven’t heard of any MSers getting caught up by this law, and honestly I think the odds are slim, but better safe than sorry. Don’t try to avoid having the banks file reports on you. There’s nothing wrong with them filing a report if you’re not doing anything wrong; the vast majority of reports lead to no action whatsoever since usually there isn’t anything funny going on.
That brings me to a post today from some blog calling itself “Pointchaser”. Here’s the important paragraph:
This one is tricky and could cause a lot of trouble if you go about it wrong. I try to limit my monthly money order deposits to $9,000 across two checking accounts. Federal law requires banks to report suspicious activity, like large deposits that exceed your monthly income. Any deposit of $10,000 or more gets reported to the Financial Crimes Enforcement Network (FinCEN), but I’ve read that if you split up $10,000 worth of deposits within 30 days, it may still get reported. Obviously, I’m not doing anything illegal, but I’d rather avoid the hassles of being investigated for money laundering, so I keep my deposits under $10,000 per month just to be safe.
I’m not a lawyer, but that seems like a straightforward definition of structuring to me. The blogger stated awareness of required FinCEN reporting as well as stating her desire to evade said reporting. That’s what structuring is, yes?
After yesterday’s post, the last thing in the world I wanted to do was put up another one criticizing another blogger. That’s not what this blog is about (it’s more of a TBB thing to increase his Alexa ratings), and as God is my witness I was actually starting to mentally formulate an entrepreneurship-themed post entitled “In Praise of Million Mile Secrets”. (Believe it or not, I’m serious about that one–watch this space in the weeks to come!)
But I find this appalling. She ought to know better, and she reacted badly today when told by one or two dozen people that she was breaking the law and encouraging others to do so. Let’s hope she reconsiders. Here are the prescribed penalties:
Whoever violates this section shall be fined in accordance with title 18, United States Code, imprisoned for not more than 5 years, or both.
Now with that said, I’m open to the idea that my understanding of this topic may be in error. I’m not a lawyer, after all. What do you all think about this one?
The post How manufactured spending can get you sent to jail appeared first on Personal Finance Digest.
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Structuring is when you break up your bank deposits in order to avoid drawing attention to yourself. Specifically, it’s about trying to keep banks from filing reports on you. Here’s an excerpt from the actual statute (bolding is mine):
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;
In other words: banks are required to file certain reports when they see suspicious patterns of deposits. The most well-known regulation concerns deposits of more than $10,000 in cash. If you do that banks are required (if memory serves–it’s been a few years since I had training on this stuff, so by all means feel free to correct me here) to file a SAR, which stands for Suspicious Activity Report. But they can file a SAR for anything that looks suspicious for any reason. An unusual pattern or activity is fair game; it doesn’t have to be $10,000. I spent well over a decade working for several banks, and they take financial crimes regulations very seriously (for normal people, anyway–if you’re a billionaire I presume it’s a different story). Employees are encouraged to file reports if something looks even slightly awry.
If this sounds like an odd law, you have to understand that it arose as a way to catch people who were laundering drug money. Unfortunately, innocent people have been swept up in this just for making deposits from cash-based businesses. I haven’t heard of any MSers getting caught up by this law, and honestly I think the odds are slim, but better safe than sorry. Don’t try to avoid having the banks file reports on you. There’s nothing wrong with them filing a report if you’re not doing anything wrong; the vast majority of reports lead to no action whatsoever since usually there isn’t anything funny going on.
That brings me to a post today from some blog calling itself “Pointchaser”. Here’s the important paragraph:
This one is tricky and could cause a lot of trouble if you go about it wrong. I try to limit my monthly money order deposits to $9,000 across two checking accounts. Federal law requires banks to report suspicious activity, like large deposits that exceed your monthly income. Any deposit of $10,000 or more gets reported to the Financial Crimes Enforcement Network (FinCEN), but I’ve read that if you split up $10,000 worth of deposits within 30 days, it may still get reported. Obviously, I’m not doing anything illegal, but I’d rather avoid the hassles of being investigated for money laundering, so I keep my deposits under $10,000 per month just to be safe.
I’m not a lawyer, but that seems like a straightforward definition of structuring to me. The blogger stated awareness of required FinCEN reporting as well as stating her desire to evade said reporting. That’s what structuring is, yes?
After yesterday’s post, the last thing in the world I wanted to do was put up another one criticizing another blogger. That’s not what this blog is about (it’s more of a TBB thing to increase his Alexa ratings), and as God is my witness I was actually starting to mentally formulate an entrepreneurship-themed post entitled “In Praise of Million Mile Secrets”. (Believe it or not, I’m serious about that one–watch this space in the weeks to come!)
But I find this appalling. She ought to know better, and she reacted badly today when told by one or two dozen people that she was breaking the law and encouraging others to do so. Let’s hope she reconsiders. Here are the prescribed penalties:
Whoever violates this section shall be fined in accordance with title 18, United States Code, imprisoned for not more than 5 years, or both.
Now with that said, I’m open to the idea that my understanding of this topic may be in error. I’m not a lawyer, after all. What do you all think about this one?
The post How manufactured spending can get you sent to jail appeared first on Personal Finance Digest.
Continue reading...
