You deposited cash from your business. Maybe a few thousand dollars one day, a few thousand the next. You weren't hiding anything illegal - you just wanted to avoid paperwork. The bank teller suggested smaller deposits would mean less hassle. So you made deposits of $9,000 here, $8,500 there. Normal business owner trying to run a company without drowning in forms.
That's a federal crime. Up to 5 years in prison per deposit.
Structuring is the crime of handling your own legally-earned money in a way that avoids federal bank reporting requirements. The money doesn't have to come from drugs. It doesn't have to be connected to tax evasion. An inspector general found that 91% of the money the IRS seized in structuring cases came from completely legal sources. The government doesn't need to prove you did anything wrong with the cash - just that you deposited it in amounts designed to avoid a form.
Welcome to Spodek Law Group. We handle federal structuring defense under 31 USC 5324 and related Bank Secrecy Act violations. If you're under investigation, if the IRS has frozen your accounts, or if federal agents have contacted you about your banking patterns - this article explains what you're actually facing and what options exist.
What Is Structuring and Why Does It Exist
The Bank Secrecy Act of 1970 created the Currency Transaction Report requirement. Banks must file a CTR with the federal government for any transaction involving more than $10,000 in cash. Deposit $10,001 and the government knows about it.
Heres the part that should concern you. That $10,000 threshold was set in 1970. Adjusted for inflation, it would be over $80,000 today. But Congress has never updated it. A threshold that made sense for catching major criminals in 1970 now captures routine transactions from any cash-heavy business.
Congress kept it low on purpose.
The crime itself is codified at 31 USC 5324. It's illegal to structure - or assist in structuring - transactions to evade the reporting requirement. Breaking up a $25,000 deposit into three deposits of $8,000 is the textbook example. But the law is broader then most people realize.
To convict you, the government must prove three elements. First, that you engaged in structured transactions - breaking up deposits or withdrawals. Second, that you knew the bank was required to report transactions over $10,000. Third, that you acted with intent to evade that reporting requirement. Notice what's missing from that list. There's nothing about the source of the money. Nothing about any other crime.
In 1994, the Supreme Court decided Ratzlaf v. United States and ruled the government had to prove you knew structuring itself was illegal. It was a victory for defendants. Congress responded by passing the "Ratzlaf fix" - they removed the willfulness requirement entirely. Now prosecutors just need to prove you intended to avoid the reporting. They dont need to prove you knew that avoiding the reporting was against the law.
This matters becuase alot of people think "I didn't know structuring was illegal" is a defense. It isn't. Not anymore. The only question is whether you knew about the $10,000 threshold and intentionaly deposited less to avoid triggering it.
How the Government Catches You - And Takes Your Money First
Most people assume they'd know if they were being investigated. An agent would call. Someone would show up. Your being watched and you'd feel it somehow.
That's not how this works.
Banks file Suspicious Activity Reports without telling you. If a teller notices your making multiple deposits just under $10,000, or if there software flags a pattern, the bank files a SAR. It goes directly to FinCEN - the Financial Crimes Enforcement Network. You never see the report. You can't contest it. You might not know it exists until years later when your accounts are frozen.
SARs can trigger IRS Criminal Investigation. They can result in FBI referrals. There the starting point for most structuring cases, and there filed on thousands of Americans every year who have no idea there banking patterns have been flagged.
OK so heres were it gets really troubling.
An inspector general examined IRS structuring cases and found the agency followed a protocol of "seize first, ask questions later." In most cases, agents seized money BEFORE questioning the account holder. When business owners provided legitimate explanations for their deposit patterns - "I run a cash business, I make deposits after busy weekends" - the report found "no evidence that agents attempted to verify the property owners' explanations."
Take Randy Sowers. He's a Maryland dairy farmer. Sold milk at local farmer's markets - customers paid in cash. He made regular deposits from legitimate sales. The IRS seized $60,000 from his account based solely on the deposit pattern. No criminal charges. Just took his money. The source of the funds? Selling milk.
The numbers from 2005-2012 are staggering. The IRS seized more than $242.6 million in structuring cases. Over 2,500 separate seizures. When investigators looked at a random sample, they found 91% of that money had been legally obtained. At least one-third of the cases involved no allegations of any criminal activity beyond the deposits themselves.
Carole Hinders ran Mrs. Lady's Mexican Food in Iowa for 38 years. Made regular deposits from her cash-heavy restaurant. The IRS seized $33,000. No criminal charges filed. She fought for years to get her own money back from the government.
In 2019, Congress passed the Taxpayer First Act, which now requires evidence of other illegal activity before the IRS can seize funds based solely on structuring. But heres the thing - that's civil forfeiture. Criminal prosecution under 31 USC 5324 is unchanged. You can still go to federal prison for depositing your own legally-earned money in amounts under $10,000.
The Penalties Your Actually Facing
The baseline: if your structuring involves less than $100,000 over 12 months, it's a Class E federal felony. Up to 5 years in prison per violation, plus supervised release, plus up to $250,000 in fines.
If the amount exceeds $100,000 over 12 months, or if its connected to another criminal offense, the charge elevates to Class D. Up to 10 years per violation. Double the fines.
But structuring rarely comes alone. Prosecutors stack charges:
- 31 USC 5324 (structuring): 5-10 years per transaction
- Money laundering (18 USC 1956): 20 years
- Bank fraud (if they claim false statements): 30 years
- Conspiracy (18 USC 371): 5 years
One pattern of deposits can create theoretical exposure of decades. Dennis Hastert made 106 structured withdrawals between 2012 and 2014 - each one a separate potential charge.
Speaking of Hastert. The former Speaker of the House withdrew $952,000 in amounts just under $10,000 to avoid CTRs. He pleaded guilty to structuring and received 15 months in federal prison. The judge exceeded the sentencing guidelines, calling him a "serial child molester" based on the reason he was moving the money. But the federal charge wasnt the underlying conduct - it was the structuring itself.
Consider another case. A business owner structured $200,000 over one year. The money was 100% legitimate business proceeds. No drugs. No tax evasion. No fraud of any kind. The crime was making deposits designed to avoid paperwork. Result: asset forfeiture and 2 years in federal prison.
The U.S. Sentencing Commission tracks defendants sentenced under USSG 2S1.3, the primary guideline for BSA offenses. Data shows defendants often recieve sentences below the advisory guideline range. But below the guidelines still means prison for many defendants. Federal judges sentence for structuring regularly - the question is how much time, not whether there will be time.
What to Do If Your Under Investigation
First rule: stop making deposits in the same pattern immediately. If you've been making regular $9,000 deposits and you suddenly realize that might look suspicious, continuing the pattern makes everything worse.
What NOT to do:
- Don't destroy any banking records or business documents. Document destruction becomes a separate charge.
- Don't talk to bank employees about why you're changing your deposit habits. Those conversations get documented.
- Don't make voluntary payments to the government trying to "fix" the problem. This can be used as consciousness of guilt.
- Don't speak with federal agents without counsel present. Everything you say becomes evidence.
Todd Spodek has defended structuring cases in federal court. He understands both the civil forfeiture side - where the government tries to keep your money without criminal charges - and the criminal prosecution side under 31 USC 5324. The strategy differs dramatically depending on which track your case is on.
This is overwhelming. You may have done something that feels completely innocent - depositing your own earnings in a way that avoided hassle. Maybe a bank teller even suggested it. The law doesn't care. The law says you should have deposited the full amount and let the bank file the CTR.
If you're under investigation for structuring - or if you're concerned your deposit patterns might trigger an investigation - Spodek Law Group can evaluate where you stand. Is this still at the civil forfeiture stage where resolution might avoid criminal charges? Has it been referred for prosecution? What does the government's evidence actually show?
Call us at 212-300-5196. The consultation is free. We'll give you an honest assessment of your exposure and your options - not promises we can't keep, but realistic analysis based on how these cases actually play out in federal court.
Don't wait until federal agents are at your door.
