Criminal Defense Lawyers

What is Structuring Cash Deposits

Structuring is when you break up cash deposits into amounts under $10,000 to avoid bank reporting requirements. That definition sounds innocent enough. But here’s what nobody tells you: the crime isn’t about where your money came from – it’s about HOW you deposited it. You can be charged with structuring even if every single dollar was legally earned. The IRS doesn’t care that your money was clean. They care that you made deposits in a pattern that looked like you were trying to avoid detection.

Welcome to Spodek Law Group. We’re writing this article because structuring is one of the most misunderstood federal crimes – and one of the most devastating for people who had no idea they were breaking the law. The Treasury Department’s own Inspector General found that 91% of structuring seizures involved money that was legally obtained. Ninety-one percent. That means the vast majority of people who had their money seized weren’t drug dealers or tax cheats. They were small business owners, farmers, and restaurant operators who made routine deposits that triggered federal attention.

Todd Spodek has represented clients who lost everything they’d built because of how they deposited their own money. Not because they were hiding anything. Not because they cheated on taxes. Because they ran a cash business and made deposits that a bank algorithm flagged as suspicious. The structuring laws were designed to catch drug dealers moving dirty money. Instead, they catch convenience store owners moving money from their cash registers.

The Crime Nobody Knows Is a Crime

Heres the paradox that destroys people. You can deposit $20,000 in cash and thats perfectly legal – the bank just files a Currency Transaction Report. But if you deposit $8,000 today and $8,000 tomorrow, you might have commited a federal felony. The act of breaking up deposits to avoid the $10,000 reporting threshold is called “structuring,” and its a crime under 31 USC 5324.

The penalty is severe. If your structuring involves less then $100,000 over 12 months, your looking at up to 5 years in federal prison and a $250,000 fine. If it involves more then $100,000 in that period – or if its connected to another crime – the penalty doubles. Ten years prison. Half a million dollar fine.

And heres the part that should terrify everyone: in 1994, Congress removed the requirement that prosecutors prove you KNEW structuring was illegal. Under the current law, the government only has to show you intended to avoid the reporting requirement. They dont have to prove you knew that avoiding the reporting requirement was itself a crime. You can be convicted of structuring without knowing structuring is illegal.

How $10,000 Became the Most Dangerous Number

The $10,000 threshold comes from the Bank Secrecy Act of 1970. Any time you deposit, withdraw, or transfer more then $10,000 in cash, the bank must file a Currency Transaction Report with FinCEN – the Financial Crimes Enforcement Network. This happens automaticaly. No bank employee makes a decision. Its systemic.

The theory was simple: drug dealers move large amounts of cash. If banks report large cash transactions, investigators can trace dirty money. The problem is that legitimate businesses also handle large amounts of cash. Restaurants. Convenience stores. Farmers markets. Construction contractors. Any business that deals in cash faces this reporting threshold constantly.

Heres the irony that gets people destroyed: making frequent deposits UNDER $10,000 is actualy MORE suspicious then depositing $20,000 at once. Your attempt to avoid attention draws maximum attention. Banks are specificaly trained to watch for this pattern. Multiple deposits near – but under – $10,000 triggers a Suspicious Activity Report. That SAR goes to investigators. And now your under scrutiny for trying to avoid scrutiny.

Your Bank Is Trained to Report You

Most people think if they keep deposits under $10,000, there safe from reporting. Thats completly wrong. Banks dont just file CTRs on large transactions. They also file Suspicious Activity Reports – SARs – on any pattern that looks unusual.

What triggers a SAR?

• Multiple deposits just under $10,000
• Frequent cash deposits that dont match your declared business volume
• Deposits on consecutive days that aggregate to large amounts
• Anything that looks like your deliberately avoiding the threshold

The bank dosent need to prove your doing something wrong. They just report suspicion.

So theres no safe number. Deposit $9,500 repeatedly? SAR filed. Deposit $5,000 every few days? Could trigger a SAR. The whole system is designed to catch patterns, not just individual large transactions. And once that SAR is filed, it triggers IRS investigation. Then civil forfeiture. Then your money is gone – and you may never be charged with any crime.

Think about what this means. Your a small business owner. You make deposits the same way youve made them for years. The bank flags the pattern. IRS seizes your account. Youve commited no crime. But your money is gone. And the burden is on you to prove you should get it back.

The Small Business Owner Trap

Heres the thing that makes structuring so devastating for ordinary people. The laws were designed to catch drug dealers moving dirty money through the banking system. In practice, they catch small business owners who deal in cash and have never commited a crime in there lives.

Think about how a cash business actualy operates. You have a restaurant. Or a convenience store. Or a farmers market booth. Customers pay in cash. You accumulate bills in a register. At some point you need to deposit that money. What amount do you deposit? Whatever you have. Maybe $4,000 one week. Maybe $8,500 the next. Maybe $6,000 the week after. These arent calculated amounts designed to evade detection. There just whatever came in that week.

But look at the pattern from the banks perspective. Multiple deposits. All under $10,000. Occuring regulary. To the algorithm, this looks like structuring. The fact that your just depositing your business income dosent matter. The pattern triggers the report.

Randy Sowers was a Maryland dairy farmer. In 2012, the IRS seized $60,000 from his account. All of it was legally earned from farm operations. His crime? Making deposits that fell just under the reporting threshold. He wasnt hiding anything. He was making routine deposits the way hed done for years. The way any farmer handling cash sales would make them.

Jeffrey Hirsch ran a candy and snack wholesale business on Long Island. In 2012, the IRS took $446,000 from his accounts. Legitimate business, legally earned money, seized becuase of deposit patterns. Nearly half a million dollars from a guy selling candy to corner stores.

Carole Hinders owned a small restaurant in Iowa called Mrs. Ladys Mexican Food. She ran it for 38 years. Cash only business – her customers paid in bills, she deposited the bills. In 2013, the IRS seized $33,000. She had no idea structuring was even a law. She just deposited her cash the way she always had. The way she had for almost four decades without anyone ever mentioning it was a problem.

Lyndon McLellan ran a convenience store in North Carolina. In 2014, the IRS took $107,000. His business was completly legitimate. His money was completly legal. His deposits triggered the structuring algorithm, and he lost everything.

These arent isolated cases. There the norm. The Inspector General looked at a sample of 278 IRS forfeiture actions were structuring was the primary basis for seizure. In 91% of those cases, the individuals and businesses had obtained there money legally. The structuring laws catch innocent people at a rate of better then 9 out of 10.

When They Take Your Money Without Charging You

OK so heres the part that should make everyone angry. The government dosent have to charge you with a crime to take your money. Civil forfeiture lets them seize funds based on suspicion alone.

In civil forfeiture, the government dosent sue YOU. They sue your MONEY. The case name literally reads something like “United States v. $33,000 in U.S. Currency.” Your property is the defendant. And the rules are completly different then criminal court.

Think about how insane this is. In criminal court, your innocent untill proven guilty beyond a reasonable doubt. In civil forfeiture, your money is guilty untill YOU prove its innocent. The burden flips completly. You have to hire a lawyer, file a claim, and prove that your money came from legitimate sources. If you dont fight, the government keeps everything automaticaly. They dont have to prove you did anything wrong. You have to prove you didnt.

The process is designed to be difficult. You have to file your claim within strict deadlines – miss them and you forfeit automaticaly. You have to pay legal fees out of pocket – your seized money isnt available to fund your own defense. You have to gather years of financial records to prove legitimate income. All while trying to run a business without the operating capital the government just took.

The legal fees to challenge forfeiture often cost more then the amount seized. So you face a terrible choice: spend $20,000 to recover $33,000, or walk away and loose everything. Even if you win, you loose. The system is designed to make fighting back more expensive then giving up.

Heres what else nobody tells you. Even if you eventualy get your money back, the government dosent pay interest. They dont compensate you for business losses caused by not having your capital. They dont pay your legal fees unless you can prove the seizure was made in “bad faith” – almost impossible to establish. You win and your still worse off then when you started.

The 91% That Changes Everything

That 91% number from the Inspector General report should have ended careers. Between 2005 and 2012, the IRS seized $242 million in more then 2,500 structuring cases. One-third of those were civil actions were structuring was the ONLY wrongdoing. No drug dealing. No tax evasion. Just deposits that fell below $10,000.

When investigators actualy looked at a sample of these cases, 91% involved legally-obtained money. Ninety-one percent. The government was seizing money from innocent people at massive scale. Not as an accident. Not as rare mistakes. As routine practice. The system was functioning exactly as it was designed to function – and the design was to seize first, ask questions later.

Heres what that number actualy means in human terms. Out of every hundred people who had there money seized for structuring, ninety-one of them had done nothing wrong except deposit there own legally earned cash. There businesses were disrupted. There accounts were frozen. There lives were thrown into chaos. And they had to pay lawyers to prove what should never have been in question – that there money was there money.

The Washington Post reported on this scandal. The Institute for Justice sued on behalf of victims. The public outrage was significant. But by the time the system changed, the damage was done. Business owners had lost there savings. Farms had been disrupted. Livelihoods had been destroyed. All becuase of how people deposited legally earned cash. All becuase a law designed to catch drug dealers was being used to steal from restaurant owners.

Dennis Hastert and the Law That Catches Everyone

The most famous structuring prosecution wasnt a drug dealer or a tax cheat. It was Dennis Hastert – the former Speaker of the United States House of Representatives.

In 2015, Hastert was indicted for structuring bank withdrawals. Over four years, he made 106 withdrawals totaling $952,000. Each withdrawal was under $10,000. The money was going to someone identified only as “Individual A” – later revealed to be a victim of sexual abuse Hastert had commited decades earlier when he was a high school wrestling coach.

Hastert couldnt be charged with the sexual abuse itself. The statute of limitations had expired years ago. But structuring has its own statute of limitations. So prosecutors charged him with how he withdrew his money, not what he did with it.

The judge called Hastert a “serial child molester” at sentencing. He got 15 months in prison and a $250,000 fine. The structuring charge was a way to punish crimes that could no longer be prosecuted directly.

This case shows how structuring laws actualy work. There designed to be catchall charges. When prosecutors cant get you for the underlying conduct, they can often get you for how you handled the money. The law that was supposed to catch drug dealers caught a child molester. It also catches dairy farmers and restaurant owners who didnt know the law existed.

The Hastert case also shows something else important: structuring isnt just about deposits. Its about withdrawals too. Any pattern of transactions designed to avoid the $10,000 threshold is potentially criminal. If you need $50,000 in cash for something – even something completly legal – and you withdraw it as five $9,000 transactions, youve structured. The government dosent care why you needed the money. They care that you avoided the reporting.

What Changed (And What Didnt)

The public outrage over innocent seizures eventualy forced changes. In 2015, the IRS announced it would only seize legally-sourced funds in “exceptional circumstances” and only with approval from the Director of Field Operations. Civil structuring seizures dropped dramaticaly.

In 2019, Congress passed a law forbidding the IRS from seizing bank accounts based solely on structuring allegations. The IRS can now only seize funds “derived from an illegal source” in structuring cases, or where structuring was done “for the purpose of concealing the violation of a criminal law.”

But heres what didnt change: these restrictions only apply to the IRS. The Department of Justice can still pursue civil forfeiture in structuring cases without these limitations. The DOJ wasnt bound by the IRS policy changes, and the 2019 law specificaly dosent apply to DOJ actions.

Also unchanged: the criminal penalties. Structuring is still a federal felony. Five years prison for under $100,000. Ten years for over $100,000 or when connected to other crimes. If the government decides to prosecute you criminaly rather then just seizing your money, all those penalties still apply.

What This Means For Cash Businesses

If you run a business that handles significant cash, you need to understand structuring. The crime isnt having cash. The crime is depositing it in a pattern that suggests your trying to avoid reporting.

The safest approach is to deposit whatever amount you actualy have, whenever you have it. If you have $15,000 from a weeks sales, deposit $15,000. The CTR gets filed. Thats fine. The bank reports large transactions all the time. What they also report – and what triggers investigations – is obvious patterns of staying just under the threshold.

Heres what you should actualy do if you run a cash business:

First, deposit your money in the amounts you actualy have. Dont break it up. Dont make daily deposits of $9,000 when your business generates $45,000 a week. Dont think your being clever by keeping transactions small. Your not being clever. Your triggering exactly the pattern the entire system is designed to detect.

Second, keep detailed records of your cash sales. If your deposits ever get questioned, you want documentation showing exactly were the money came from. Point of sale records. Daily sales logs. Anything that proves the money flowing into your account matches legitimate business activity.

Third, talk to your banker. Let them know you run a cash-intensive business. Establish a relationship. A bank that understands your business is less likely to file SARs on routine deposits. There still required to file CTRs on large transactions, but a SAR requires a judgment call about suspicion – and a banker who understands your business has less reason to be suspicious.

Fourth, if you recieve any notice about your deposits – anything at all – dont ignore it and dont try to handle it yourself. The government moves fast on structuring cases. Delay can mean loosing your money permanantly.

Clients come to Spodek Law Group after making exactly the mistakes this article describes. They thought smaller deposits were safer. They thought avoiding the reporting threshold would keep them off the governments radar. Instead, they made themselves targets. There bank reported them for the very pattern they thought was protecting them.

If your already facing a structuring investigation – or worse, if your money has been seized – you need help immediatly. Civil forfeiture has strict deadlines. Miss the window to file a claim and you loose automaticaly. Criminal investigations can be defended, but not if you wait untill charges are filed. The longer you wait, the fewer options you have.

Call Spodek Law Group at 212-300-5196. We understand how these cases work, and we understand how devastating they are for people who thought they were doing nothing wrong. The consultation is free. Loosing your life savings becuase you didnt know the law isnt.