Structuring Charges - 31 USC 5324 Explained

Welcome to Spodek Law Group. Our goal here is to give you the reality of federal structuring charges - not the sanitized version prosecutors present, not the technical jargon law schools teach, but the actual truth about what happens when the government decides your bank deposits look suspicious. Because here's what nobody in the legal system wants to admit: ninety-one percent of IRS structuring seizures came from Americans whose money was completely legal. That number comes directly from the Treasury Inspector General. Not drug dealers. Not money launderers. Regular business owners who had no idea they were doing anything wrong.

The federal structuring statute, 31 USC 5324, criminalizes a pattern of behavior that millions of Americans engage in without realizing it. You deposit $8,000 on Monday and $6,000 on Thursday because that's when your cash came in - and you've potentially committed a federal felony carrying five years in prison. The law doesn't care that you earned every dollar legitimately. The law doesn't care that you've never committed another crime in your life. The only thing that matters is weather you broke up transactions to avoid the $10,000 currency reporting threshold. And the government gets to decide what your intentions were.

This is the hidden architecture of financial surveillance that most people discover only when armed federal agents show up at their business. Banks file Currency Transaction Reports for anything over $10,000. But they also file Suspicious Activity Reports on patterns of transactions under that threshold. There is no deposit amount that's safe. There's no frequency that protects you. Your own bank has been building a case file on you for months or years, and they're legally prohibited from telling you about it.

What 31 USC 5324 Actually Says (And What They Dont Tell You)

The statute itself is deceptivly simple. It makes it a federal crime to structure transactions with a domestic financial institution to evade currency reporting requirements. That's it. No requirement that your money came from illegal sources. No requirement that you were trying to hide criminal activity. The structuring IS the crime. As Todd Spodek explains to clients facing these charges, this is what catches people off guard - they think there must be an underlying offense, some other crime the government is really after. But since 1986, structuring has been a standalone federal felony.

Here's the thing about how prosecutors think about these cases. They don't need to prove your money was dirty. They don't need to prove you were evading taxes. They don't need to prove you were hiding anything except the fact that you were making deposits. The only element they need to establish is that you acted with the purpose of evading reporting requirements. And your pattern of deposits - the very same pattern that felt completely normal to you - becomes the evidence of that intent.

The penalties escalate based on circumstances. Basic structuring under 31 USC 5324 carries up to five years in federal prison and fines. But if the structuring involves more then $100,000 in a twelve-month period while violating other laws, your looking at up to ten years. And that's just the criminal side. The government can also pursue civil forfeiture of every dollar you structured, plus any assets they claim are connected to the "scheme."

The 91% Statistic That Changes Everything

Let that number sink in for a moment. The Treasury Inspector General examined a random sample of 278 IRS forfeiture actions where structuring was the primary basis for seizure. In ninety-one percent of those cases, the money came from legal sources. The people targeted were not criminal enterprises. They were jewlery stores, restaurant owners, gas station operators, scrap metal dealers. Buisnesses that deal in cash. People who's only crime was depositing there own legitimately earned money in a pattern the government found suspicious.

Consider Carole Hinders. She ran Mrs. Lady's Mexican Food in small-town Iowa. Cash only business. Her mother told her that keeping deposits under $10,000 would "make life easier for the bank." Motherly advice. So she deposited her daily receipts in smaller amounts. The IRS seized $33,000 - her entire business account. No drugs. No fraud. No underlying crime whatsoever. Just deposits her mother thought would be more conveniant then dealing with the paperwork.

Randy Sowers milked cows for a living. Dairy farmer in Maryland for over three decades. Two armed IRS agents showed up at his farm one day and informed him they had seized his entire business account - more then $60,000. His crime? Cash deposits from selling milk and produce at farmers markets. The money that generations of his family had earned through manual labor, taken becuase of the pattern in which he deposited it.

Jeffrey Hirsch ran a candy and snack wholesale buisness on Long Island. Cash-heavy operation, as most wholesale distribution is. The IRS seized $446,000 from him. Nearly half a million dollars in legally earned money, gone. Not becuase it was connected to any crime. Becuase of how he put it in the bank.

These cases represent the human cost of a statute designed to catch criminals but weaponized against ordinary people. The government has extraordinary power in these situations. They can freeze your accounts, seize your property, and destroy your livelihood - all before you've been convicted of anything. All before you've even been formally charged. The burden then shifts to you to prove your innocence, a complete inversion of how the criminal justice system is supposed to work.

How Your Bank Became the Governments Informant

Here's where most people's understanding of the situation completly breaks down. Your bank is not your ally. Your bank is not neutral. Since 1970, the Bank Secrecy Act has required financial institutions to file reports on customers - and those reports go directly to FinCEN, the same federal database that tracks international terrorism financing and cartel money laundering. Your pizza shop's tuesday night deposit sits in the same system as drug trafficking proceeds.

Banks must file a Currency Transaction Report for any transaction over $10,000. That's the rule everyone sort of knows about. But here's what they don't know: banks are also required to file Suspicious Activity Reports on any transaction or pattern of transactions they deem "suspicious." There is no threshold for SARs. There is no specific trigger. If a bank employee thinks your deposits look odd, they file a report. And here's the kicker - its a federal crime for the bank to tell you they've done it. The "tip-off" prohibition means your bank cannot warn you that you're under investigation. They can smile at you, process you're deposit, and file a report that leads to armed agents at your door.

What this means practically is that there's no winning move. Deposit over $10,000 - CTR filed. Deposit under $10,000 regularly - SAR filed for suspected structuring. Vary your deposits randomly - SAR filed for suspicious pattern. The reporting requirements have created a system where literally any deposit behavior can be flagged. And you wont know until its too late.

Think about what this means for any cash-intensive business. Restaurants, convenience stores, laundromats, food trucks, farmers market vendors - all of these operations deal primarily in cash. They deposit that cash regularly becuase that's how business works. And every single one of them is potentially creating a paper trail that federal prosecutors can later characterize as "structuring."

The Real Consequence Cascade Nobody Warns You About

OK so let's talk about what actually happens when structuring catches up with you. The sequence of events is brutal, and almost nobody facing these charges understands it until they're living through it. Its not like you get a letter asking you to explain yourself. That's not how federal financial investigations work.

First, your bank account gets frozen. No warning. No notice. You go to pay your suppliers and the card declines. You try to transfer payroll and its blocked. You call the bank and they tell you they can't discuss it. At this point, your business is already dying. Employees can't be paid. Vendors stop delivering. Rent comes due with no way to pay it.

Then come the agents. IRS Criminal Investigation, maybe FBI if there's suspected money laundering. They want to talk. They want you to explain your deposits. They are absolutely not there to help you. Everything you say will be used to establish intent. "I was just trying to avoid the hassle of paperwork" - congratulations, you just admitted to structuring. "My accountant told me to do it that way" - irrelevant, bad advice isn't a defense.

The criminal case can take years to resolve. Meanwhile, your assets remain seized under civil forfeiture. You have to prove your money was clean - the burden flips completly. And even if you eventualy win, the legal fees to fight the government often exceed what they took in the first place. This is how the system breaks people who never commited any crime beyond making the wrong size deposits.

Why "I Didnt Know" Isn't a Defense (And What Actually Is)

Think about that for a second. You genuinly didn't know structuring was illegal. You never heard of the $10,000 reporting threshold. You were just depositing your money when it came in, in amounts that felt conveniant. Surely that should matter, right?

It doesn't. Not automatically anyway. The government doesn't have to prove you knew about the specific law. They have to prove you knew about the reporting requirement and deliberately tried to avoid triggering it. But "knowledge of the reporting requirement" can be inferred from circumstances. If you owned a business for years and delt in cash, prosecutors will argue you must have known. If you ever had a large deposit that triggered a CTR and than changed your behavior - thats evidence of knowledge.

So what defenses actually work? At Spodek Law Group, we focus on attacking the intent element from multiple angles. First, legitimate business practices. If your deposits match your actual cash flow - if you deposited money as it came in rather than in a calculated pattern - that undermines the "structuring" characterization. Second, we look at inconsistency. If your deposits were genuinely random with no clear intent to stay under $10,000, the pattern analysis falls apart. Third, we examine whether constitutional violations occured in the investigation or seizure.

The critical point is this: these cases are winnable becuase intent is not easy to prove. The government loves structuring cases becuase civil forfeiture is easy. Criminal conviction is harder. A skilled defense attorney can create reasonable doubt about weather your deposits reflected criminal intent or just normal buisness operations.

What Happens in the First 72 Hours After Seizure

The first three days after federal agents seize your assets determine much of what happens next. Most people make catastrophic mistakes during this window because they're operating from panic rather than strategy. Understanding what to expect can mean the difference between preserving your defense options and destroying them.

Hour zero to twenty-four: Shock and information gathering. You're frozen out of your own money. The instinct is to call the bank, call everyone, try to figure out what's happening. Resist the urge to explain yourself to anyone. The bank can't help you - they're legally prohibited from discussing an active investigation. Any statements you make can and will be used against you.

Day two: The business crisis hits full force. You can't make payroll. You can't pay vendors. Customers are calling and you have no good answers. This is when people make desperate moves - borrowing money, making promises they cant keep, sometimes trying to move other assets before they can be seized. All of these actions can be used as evidence of consciousness of guilt.

Day three: By now you've hopefully contacted a federal defense attorney. If not, do it now. Do it before you talk to anyone else. The RESPECT Act (2019) requires the IRS to notify you within 30 days of a seizure and provide a hearing within 30 days of your request. But criminal structuring charges operate on a seperate track. You need representation that understands both the civil forfeiture process AND the potential criminal exposure.

The Defense Strategies That Actually Work

After handling hundreds of federal financial crime cases, the attorneys at Spodek Law Group have identified the approaches that actually produce results in structuring defense. These aren't theoretical arguments - they're grounded in what works in federal court.

Challenging the pattern analysis. Prosecutors build structuring cases around deposit patterns. But patterns can be explained by business realities. A restaurant that makes cash deposits after busy weekends isn't structuring - they're depositing when they have cash. A vendor who deposits customer payments as they arrive isn't evading anything - they're running a normal operation. We bring in forensic accountants to demonstrate that deposit patterns matched actual business activity.

Attacking the knowledge element. Did you actually know about the $10,000 reporting threshold? When did you learn about it? Did your behavior change after that knowledge? If we can show your deposit patterns predated any awareness of reporting requirements, the intent argument collapses.

Constitutional challenges. How did the investigation start? Was there an unlawful search? Was the seizure conducted properly? Evidence obtained in violation of your Fourth Amendment rights can be suppressed, sometimes gutting the government's entire case.

Legitimate source documentation. In civil forfeiture, proving your money came from legal sources shifts everything. We compile comprehensive evidence - tax returns, business records, customer invoices, bank statements from before the "suspicious" period - to demonstrate that every dollar had a legitimate origin.

Here's the reality that prosecutors don't want you to know: federal structuring cases settle all the time. The government would rather take a quick forfeiture than fight a well-prepared defense for years. When you have strong counsel, your negotiating position improves dramatically.

The RESPECT Act and What It Does (And Doesn't) Change

In 2019, Congress passed the Clyde-Hirsch-Sowers RESPECT Act, named after some of the very victims we discussed earlier. This legislation was supposed to fix the worst abuses of civil forfeiture in structuring cases. Understanding what it actually changed - and what it left untouched - is critical for anyone facing these charges.

What the law does: It limits civil forfeiture for currency structuring to cases where the funds are derived from an illegal source or used to conceal illegal activity. It requires the IRS to notify property owners within 30 days of a seizure and mandates a hearing within 30 days of a request. These are meaningful reforms that have reduced some of the most egregious seizures from innocent business owners.

What the law doesn't do: It does not eliminate criminal prosecution for structuring. You can still face five years in federal prison for violating 31 USC 5324 even if your money was completly legal. The RESPECT Act addressed the civil forfeiture side of the equation but left the criminal statute intact. This means prosecutors can still charge you criminally and seek imprisonment regardless of whether your funds came from legitimate sources.

Taking Action Before Its Too Late

The window for effective defense shrinks rapidly once federal agents enter the picture. If you're reading this article because you suspect you're under investigation - or because you just realized your deposit patterns might look suspicious - the time to act is now. Not next week. Not after you "figure things out." Now.

What you should do immediately: Stop making any deposits that could be characterized as structured. Don't change your behavior in ways that look like you're covering your tracks - just return to whatever would be normal for your business without regard to the $10,000 threshold. Document everything about your cash flow and business operations. Gather records that show where your money actually came from.

What you should not do: Don't talk to federal agents without an attorney present. Don't try to move or hide assets - this creates new crimes. Don't assume this will "blow over" - federal financial investigations move slowly but they don't disappear. And don't trust that your bank will warn you or help you - they can't and they won't.

The government has resources. They have time. They have been building a case against you potentially for years before you ever knew about it. The only way to level that playing field is with experienced federal defense representation that understands exactly how these cases work.

Call Spodek Law Group at 212-300-5196. The consultation is confidential. We've defended business owners, professionals, and ordinary people who found themselves caught in the structuring trap through no fault beyond the way they deposited their own money. The 91% statistic exists because innocent people face these charges every day. You don't have to become another number.