Recently, there have been many stories involving people being prosecuted - or assets being seized - due to withdrawals or deposits being conducted at the bank in amounts less than $10,000. Most noteworthy is the example of former House Speaker Dennis Hastert, who was recently indicted for it. These reports have led to a great deal of concern about what the law really says about engaging in bank transactions under $10,000.
As part of the Bank Secrecy Act, financial institutions are required to file a Currency Transaction Report ("CTR") anytime a cash transaction is conducted in excess of $10,000. The purpose of the law is to detect things like tax evasion, money laundering, or terrorist financing. The term "structuring" is used to describe cash transactions above $10,000 that are broken down into two or more smaller transactions of less than $10,000 for the purpose of avoiding the filing of a CTR by the bank. The law has been misinterpreted by some to mean that you are not allowed to conduct cash transactions under $10,000, but that is not the case. Most cash deposits or withdrawals of less than $10,000 are totally legitimate.
In Hastert's case, it is alleged in the indictment that he agreed in 2010 to pay $3.5 million to an individual in exchange for keeping silent about some type of misconduct that occurred long ago. For roughly two years thereafter, Hastert withdrew $50,000 from his accounts approximately every six weeks and paid it to the individual in question.
In 2012, the bank questioned Hastert about the withdrawals. Subsequently, he started making all of the withdrawals in amounts under $10,000, although he continued paying the individual in question $50,000 every six weeks as scheduled. Based on this conduct, a jury can infer that the reason he reduced the amount of the withdrawals to below the $10,000 threshold was to avoid the reporting requirements.
Hastert is also charged with lying to federal agents. In 2014, Hastert was questioned by FBI agents about the nature and purpose of the cash withdrawals. Hastert allegedly denied that the purpose of the withdrawals was to pay an individual. He said that he withdrew the cash because he did not trust the banking system, and he claimed that he had kept the cash himself.
Structuring is a felony punishable by up to five years in prison. Hastert's case is similar to some clients that we have represented in the past where structuring did occur, but the funds in question were not related to an underlying crime such as tax evasion, money laundering, or terrorist financing. In those cases, the defendants are typically good candidates for a plea agreement and a sentence below the sentencing guidelines range. Some of these clients have been sentenced to probation as part of a plea agreement, and others were able to get a non-prosecution agreement.