What Is Structuring and What Are Its Penalties?

 Posted on September 11,2024 in Money Laundering

By federal law, banks are required to report any transactions that are suspected of money laundering or other criminal activity. These include transactions of $10,000 or more. Under the Patriot Act and Bank Secrecy Act (BSA), banks must fill out a cash transaction report (CTR) any time a customer moves that amount of cash in a single day.

To avoid being reported, some customers try breaking up large transactions into smaller ones of less than $10,000 each. This is referred to as "structuring" and is a serious federal crime. In this article, we will explore how structuring works, the penalties for structuring, and how to contact an experienced Illinois money laundering defense attorney.

How Does Structuring Work?

Structuring is when a person tries to avoid anti-money laundering reporting requirements by splitting a transaction into smaller amounts under $10,000. For example: 

• John and Jane sell their family car for $20,000. 
• To avoid being reported to the government, they deposit $8,000 into their joint checking account.
• John deposits another $5,000 into his personal account.
• Jane deposits $7,000 into her mother’s account, which is then transferred to the joint account.

Structuring is illegal regardless of the source of the funds. Even if the money was obtained legally, it is against the law to break it into smaller amounts to avoid being reported to the federal government.

That is why banks often report customers for transactions that come in just under $10,000. This is especially true if a customer performs a series of transactions over several days. Financial institutions report any suspicious transactions by submitting suspicious activity reports (SARs) to the Financial Crime Enforcement Network (FinCen). Approximately two million SARs are submitted to FinCen each year.

Is Structuring Different Than Smurfing?

Structuring is similar to surfing, but the two have significant differences. Smurfing refers to a practice among money launderers that involves breaking up an amount over $10,000 into smaller transactions spread across several accounts and even in several geographical areas. The purpose of smurfing is not only to avoid reporting requirements but also to conceal the origin of the money.

What Are the Penalties for Structuring?

Structuring is punishable by up to five years in prison and a fine of up to $250,000. The penalty may be doubled if:

• The amount of the transactions total over $100,000 in a twelve-month period.
• The structuring was done while committing another federal crime.

Contact a Chicago, IL Federal Crimes Defense Attorney

Structuring is considered a form of money laundering even if the money was obtained legally. If you are facing structuring allegations, contact a Chicago, IL federal crimes defense lawyer right away. As a former prosecutor, attorney Hal Garfinkel is familiar with both sides of the criminal justice system and is ready to create a smart legal strategy to defend your rights. Schedule a free consultation by calling 312-629-0669 today.