What Is Structuring and What Are Its Penalties?

 Posted on September 11, 2025 in Federal Crimes

Structuring is the act of breaking down large cash transactions into smaller amounts to avoid bank reporting requirements, and it is treated as a serious federal crime. Even people handling lawful funds can face harsh penalties if they attempt to sidestep financial disclosure rules.

The government views this conduct as an intentional effort to conceal transactions, and federal agencies devote significant resources to identifying and prosecuting these cases. If you are under investigation, a Chicago, IL federal crimes defense lawyer can help you understand your rights and build a strong strategy to protect your future.

How Does Federal Law Address Structuring?

Under 31 U.S.C. § 5313, the Bank Secrecy Act, financial institutions must file a Currency Transaction Report (CTR) for cash transactions of more than $10,000 in one business day. To avoid this scrutiny, some individuals deliberately break down deposits or withdrawals into amounts just under the $10,000 threshold. This is called structuring, and it is a standalone federal crime under 31 U.S.C. § 5324.

For example, if someone sells a car for $20,000 and then makes three separate deposits under $10,000 into different accounts to avoid detection, that person may face federal prosecution. The source of the money does not matter. Even if the funds are completely legal, dividing the transactions to avoid bank reporting is a crime.

Banks and credit unions are trained to spot these patterns. Under the USA Patriot Act and federal regulations, they must file Suspicious Activity Reports (SARs) if deposits appear unusual. Approximately two million SARs are filed with the Financial Crimes Enforcement Network (FinCEN) every year, and many of these involve suspected structuring.

How Is Structuring Different Than Smurfing?

Structuring often overlaps with another money laundering tactic known as smurfing. Both involve splitting up funds, but smurfing is usually more elaborate. Criminal groups may use multiple people, sometimes called smurfs, to deposit smaller amounts across different banks and in different cities.

The goal of smurfing, unlike simple structuring, is not only to avoid a CTR but also to conceal the origin of the funds. It is common to find smurfing that is linked to drug trafficking or fraud schemes. Smurfing is prosecuted under broader money laundering laws, including 18 U.S.C. § 1956, which makes it a crime to carry out transactions that hide funds received through illegal means.

Can the Government Take Your Money for Structuring?

Structuring investigations can result in immediate asset seizures. Under 31 U.S.C. § 5317(c), the government can seize funds that were involved in suspected structuring before a conviction is secured. This process, called civil forfeiture, targets the property itself rather than the individual.

For those accused, the impact can be devastating. Bank accounts may be frozen, leaving families or small businesses unable to pay bills or make payroll. Even if the money is later proven legitimate, reclaiming seized funds often requires lengthy litigation.

Beyond forfeiture, structuring allegations can damage your credit, cause banks to close your accounts, and make it difficult for you to open new ones. For cash-based businesses, such as restaurants or convenience stores, this disruption can be crippling.

What Are the Criminal Penalties for Structuring?

If convicted, structuring carries serious criminal consequences under 31 U.S.C. § 5324. A conviction carries up to five years in prison and fines up to $250,000 for individuals (or $500,000 for corporations). Under 31 U.S.C. § 5324(d), the penalty rises to up to 10 years if the structured transactions exceed $100,000 in a 12-month period or if the conduct occurs alongside another federal crime such as fraud or drug trafficking. The same increase applies if structuring takes place while you commit another federal crime, such as wire fraud or drug trafficking. These penalties come on top of civil forfeiture, which means you risk losing both your money and your freedom.

What Defenses Can Be Used in a Structuring Case?

Fighting structuring charges depends on proving why the transactions were made and the financial situation behind them. Some possible defenses include:

• Lack of intent: Prosecutors must prove that deposits were split specifically to avoid reporting requirements. If deposits were made in smaller amounts for convenience or business practices, this may not meet the standard for structuring.

• Lawful source of funds: Demonstrating that money came from legitimate activities, such as cash-heavy businesses, can help reduce suspicion.

• Procedural mistakes: If investigators failed to follow proper protocols in seizing assets or gathering evidence, a defense attorney may move to suppress evidence.

• Negotiated resolutions: In some cases, attorneys can work with federal prosecutors to reduce penalties or secure a non-criminal resolution.

Because structuring cases often hinge on patterns in financial records, defense attorneys often use accountants or forensic financial experts to analyze data and provide context.

How Do Structuring Investigations Begin?

Most structuring cases begin with SARs filed by banks. Once FinCEN receives these reports, the information may be shared with agencies such as the IRS Criminal Investigation Division, the FBI, or Homeland Security Investigations.

Investigations are often lengthy, involving subpoenas for bank records, interviews with associates, and quiet account monitoring. Many people do not realize they are under scrutiny until their accounts are frozen or federal agents appear at their home or business. Having an attorney involved early, before charges are filed, can sometimes make the difference between facing years in prison and avoiding charges altogether.

Contact a Chicago, IL Federal Crimes Defense Attorney

Structuring is more than a banking technicality, and allegations can lead to frozen assets, steep fines, and significant prison time. If you are under investigation, you need a Chicago, IL federal crimes defense lawyer who understands federal financial laws and how prosecutors build their cases. 

Attorney Hal Garfinkel at Law Offices of Hal M. Garfinkel LLC, Chicago Criminal Defense Attorney brings nearly two decades of experience to the table. As a former prosecutor, he has taken part in numerous high-profile Illinois criminal cases and continues to apply that insight when defending clients accused of federal offenses. He can anticipate the government’s tactics and develop a strong defense strategy to protect your future. Call 312-629-0669 as soon as you learn that you are under investigation and schedule a free consultation.