Friday, October 8, 2010

The Criminalization of Making a Bank Deposit

A couple days ago, I wrote about Congressional hearings on the "over criminalization" that seems to be endemic in U.S. "law" these days. One of the "crimes" that has been created in the past few decades and expanded by federal agents has been "structuring," which is another way of describing a simple action: depositing money in a bank. (The slang term is called "smurfing.")

In 1970, tales began to circulate of drug dealers buying cars and houses with suitcases full of cash in an attempt to "launder" the money they had made through illicit deals. (That is, selling a product of which the government disapproves.) Congress, which always advertises itself as being "tough on crime," responded by passing the Bank Secrecy Act that required banks to report currency transactions of $10,000 or more to the government, which then "investigates" whomever made the deposit.

Since people don't like to be investigated (Imagine that!) and treated like criminals by federal officials (Imagine that!), there are times when people will either deposit or withdraw funds under the $10,000 threshold. However, Congress has a law against that, too, the "structuring" law. The idea behind the "structuring" law is that people might have something to hide, such as illegal activity, so the commission of an underlying crime (such as drug dealing) might try to deposit or withdraw money in amounts less than $10,000 in order to avoid detection of their illegal acts.

Unfortunately, federal officials have dispensed with the "underlying crime" reasoning and have decided just to arrest people because they are not depositing all of their money at once. Last year, I wrote about the case against Johnny Gaskins, a North Carolina attorney who had the effrontery to convince a jury not to order the execution of a man convicted of killing a cop. For that "crime" (doing his job as a defense attorney), the "Thin Blue Line" vowed revenge and the feds did their job.

Mr. Gaskins often had been paid in cash and kept the money in a safe in his house, but when he realized that he was a target for robbery, he decided to deposit his money in a bank. Keep in mind that he had reported all of his cash earnings to the IRS and had paid taxes. The money was legal, but because he did not want to have to deal with yet another federal investigation (read that, harassment because he did not willingly give up his client to the executioner), he made a series of deposits of around $9,000 each.

For that, the feds indicted him, and a North Carolina federal jury convicted him. While some people, like columnist Ruth Sheehan of the Raleigh News & Observer were highly critical of the feds, most journalists engaged in their usual worship of federal prosecutors.

The latest news of this madness comes from Baltimore, where the Korean owner of a liquor store was indicted for "structuring" cash deposits under $10,000:
According to the indictment, Park repeatedly made bank deposits from September 2008 to February 2010 in amounts less than $10,000. The deposits were generally made at bank branches in Glen Burnie and Severn for amounts between $8,500 and $9,500.

Prosecutors allege Park illegally deposited a total of $2,150,375 under this structuring scheme.
The newspaper also breathlessly reports that Mr. Park faces up to 40 years in prison, simply for depositing money in a bank. Unfortunately, people really don't understand what is happening, as is expressed in this comment from a reader named Doug Jones from Severna Park, Maryland:
First, the feds do not indict people for a one-time mistake. This guy must have been laundering money.

Second, when someone goes into a bank and plops down more than $10,000 in cash, the bank is required to notify the feds. Therefore, people who launder money, i.e., crooks, will "structure" their deposits to avoid the bank reporting them to the federal government. The crime is attempting to avoid the reporting of the transaction by putting the 10k in the bank piece-meal, instead of at one time.

Third, my understanding is that 98% of people charged federally are convicted. The feds typically do not charge innocent people. I suspect the story just lacks the details of everything this person was involved with.
This falls into the "not exactly" category, as it depends upon one's view of how federal law works. As the great Harvey Silverglate points out in Three Felonies a Day, federal criminal law is written in a way that most of us probably commit federal felonies or do something of which the feds could find a creative way to indict us. That includes the above Mr. Jones (who probably works for the government).

What about people who actually commit the underlying crimes that lead to structuring, people who "structure" precisely because they are wanting to hide criminal actions? Surely the feds will indict them, right?

Uh, ever hear of Elliot Spitzer, the erstwhile "Client # 9" who was involved in prostitution while he was first attorney general and then later governor of New York? It seems that Spitzer made bank withdrawals of less than $10,000 precisely to hide the fact that he was paying money to a prostitution ring, and prostitution is illegal, and to engage in activities with a prostitution ring that is operating over state lines clearly violates federal law.

So, surely the feds threw the book at Spitzer, given he was committing crimes in his own state and also elsewhere, violating state and federal laws. Surely the feds came down hard on the man not only for "structuring," but also for breaking the law, which is ironic, since the media feted Spitzer as a "law and order" guy, a 21st Century Elliott Ness, and he let them down.

Not exactly. No, the feds did nothing. The U.S. Department of Justice, which wants to throw Mr. Park into prison for 40 years because he deposited money in a bank in a way that the feds did not like, completely overlooked Spitzer's transgressions as though they never happened.

Why? I think we know. Some call it "professional courtesy," and some call it hypocrisy. I call it the present state of American "law," in which some are charged and convicted, while others who have the requisite government contacts or wear the appropriate government costumes are given a free pass.

39 comments:

Trish said...

None of us are safe!!!!!!!!!!

KC Sprayberry said...

One way to avoid such troubles is to move your banking to Costa Rica or another overseas location. They don't report to the feds. The real underlying reason for making criminals out of ordinary citizens is to fill up all those new prisons that are constantly under construction. After all, the criminal arm of our government, from local to federal, must somehow prove they really needed those jails and prisons after using our tax money to pay for them.

Throckmorton P. Gidlersleeve said...

How many of you remember the name Richard Jewell? He was the rent a cop who alerted the crowd to the backpack containing a pipe bomb during Atlanta’s 1996 Olympics. The reward for his bravery was endless hounding and harassment by the FBI because they decided he fit the “lone bomber” profile and was guilty. The Fibbies “leaked” their guesses to their toadies in the press until Jewell’s life became a hell on earth. Finally, they were forced to retract the fairy tale they spun to the media.

My favorite story in this completely botched caper was when they told him they wanted his help in making a training film about finding bombs. The gullible Jewell want along with this as his lawyer was in the hallway outside desperately trying to get to his client to convince him to stop talking. His life became a hell on earth as the FBI named him as a “person of interest” and followed him everywhere and predicted his arrest was imminent. Janet Reno was the Attorney General and even she finally was forced by the facts of the case to admit that Jewell was owed an apology.

The lesson from this sterling example of law enforcement at its best? Any and all of us are only one false allegation away from losing everything due to over zealous law enforcers who refuse to consider evidence that contradicts what they know about a case.

Anonymous said...

Oh TPG, that is one of the saddest stories ever. The poor guy lost everything, then ended up with so many medical conditions & depression, he lost his life, literally.

Although I was only 24 at the time, I knew the guy was innocent. You could see it 90 miles away. When he passed away a couple of years ago, it broke my heart.

You are so correct, we are all just one allegation away. Even if we locked ourselves in our homes & never left, someone would come up with something. It's so sickening. Jewell was simply doing his job & helped save lives. In return, he lost his. Makes you wonder if being a good person is really worth it. But then I think about how much God loves good people & the ultimate reward.

Like most of you, I will continue to be a good person. It's just natural. Over the last 20 years though, I've learned a lot of lessons & one, is to not trust our government. If our troll is reading this, this does not mean I am anti-government. In fact, I'm for good government. Maybe someday our prince will come & get this country back. Sadly, it won't be in my lifetime or my child or grandchildren's.

America is a sad place. I still can't figure out why people would risk their lives to come here.

Anonymous said...

Unbelievable but not surprising. Yet another federal prosecutor lies. The new US Attorney for the ED of Tenn., Bill Killian, was recently confirmed by the Senate. In his application for the spot, he confirmed he was fit for the job. However, his request for alimony reduction for his ex says otherwise. He was diagnosed with Parkinsons and claimed it severely hampered his ability to practice law. Last time I checked, making a material misrepresentation to obtain federal dollars was called fraud. www.wrcbtv.com has the story. Yet another free pass.

kbp said...

I keep thinking 'buy guns, ammo and take a few with you'.

Doc Ellis said...

Shared as 'Stash Your Cash, Go to Jail'. Thank you for writing this, Dr Anderson.

Anon 10:16 AM WTF are you talking about when you say 'our prince'? I had no idea that the US had an hereditary sovereign family that includes a prince. When did the US become a kingdom?

Anonymous said...

Costa Rica, funny. If you think 40 years for structuring is bad try depositing more than 10k in a foreign bank acct and not report it to the irs. remeber what the IRS did to the swiss bankers last couple years and their clients. And having some experience in this area, what alot of people are not aware of is that not just banks are required to report but also individuals and businesses. Literally 10's of 1000's of SAR(suspicous activity report) are filed daily. The feds for the most part don't look at them unless they are investigation you for something else. They use these charges to "pile" on to the accused other charges.

Gerhard said...

So if you have a business that earns $30K/week and deposit it 3/4 times a week, you are in trouble. If there was no paper trail generated, how do the feds know exactly how much he deposited?
BTW,The 40 years for the liquor store inditements is actually 5 years according to: http://www.ice.gov/pi/nr/1010/101005baltimore.htm

justiceseeker51 said...

KC, this goes back to the CAPTA we were on. This is GA's for 2010-14. Was just surfing for info on CAPTA bill and ran across it. Thought you gals(guys) would be interested.

http://www.gacfsrpip.org/docs./CAPTA_PLAN_2010to2014.pdf

William L. Anderson said...

To Gerhard,

That is true, but what they did was to multiply 5 times 8 (for the 8 counts, 5 years apiece, the max).

KC Sprayberry said...

Thanks, justiceseeker. Interesting reading but you can't link directly. Cut off everything after .org and you have to look at the home page for the link.

Now, for an interesting but bland read from NCSlime, check out this link: http://www.newschannel9.com/news/craft-995271-lawsuit-suit.html It appears Tonya Craft's civil suit has even them holding back from their usual reporting. They even managed to report the facts without opinion. How strange.

Trish said...

Doc. I believe anon. was referring to the return of Jesus!!

Doc Ellis said...

Trish-

So, anon was talking about the Prince of Peace who said that he brings war and sets folks against one another?

Did anon forget that the Prince of Peace said that His kingdom was not of the earth, but of heaven? Whose country was anon talking about?

A prince consumes a kingdom's resources, and produces nothing but waste.

So does anon propose that this prince should consume a country and excrete waste?

Trish said...

Doc, I don't know for sure what anon. was thinking or saying. Other than I think he/she was referring to the return of Christ to claim his kingdom and his people. Maybe, he/she will post again.

Spokane Matthew said...

Doc and Trish,
Have either of you seen the movie "Snow White and the Seven Dwarfs"?
I think anon alluding to the line "some day my prince will come" in the movie. See
http://www.youtube.com/watch?v=0niwn2pOEno

Regards,
Matthew

Anonymous said...

This is a must see for everyone, especially in n today's world of crooked persecutors, judges, and cops.
Check this out, it is an eye opener.
http://www.youtube.com/watch?v=6wXkI4t7nuc

Anonymous said...

"Individuals and businesses that fail to file the required treasury forms for large cash transactions create a vulnerability that may allow criminals to spend their illicit cash proceeds without detection by law enforcement," said Winter. "Homeland Security Investigations will continue to target individuals and businesses that engage in this type of activity."

"People who earn money through criminal activity, or who lie to the IRS to evade taxes, usually deal in cash and try to avoid leaving a paper trail," said U.S. Attorney Rosenstein. "Federal law requires large currency transactions to be reported in order to create a paper trail that law enforcement can follow, and businesses that break up their cash deposits to avoid currency reporting requirements face federal criminal prosecution."

"Financial institution reporting requirements can expose structuring activity and put tax dollars back into strengthening the U.S. economy," stated Sparkman. "The IRS-Criminal Investigation, along with our fellow law enforcement agencies, are determined to financially disrupt such schemes against our economy."

Anonymous said...

So anon 6:33, are you saying that if a respectable business involved in NO criminal activity who deals in cash transactions and reports ALL income to the IRS and pays all applicable taxes should be arrested, prosecuted and jailed simply because of the manner in which they deposited said cash?

Anonymous said...

Its just and end run around the warrant requirement of the fourth amendment. It gives law enforcement automatic probable cause.

Anonymous said...

7:06 Nope. That's not what occurred in this situation. The store owner purposefully avoided the 10k transaction on a repetitive basis in order to try and skirt the law. In one occasion they showed an owner made two 9k deposits on the same day to two differant branches. This store owner averaged 11k a week in deposits. This guy is doing 1 to 2.5 million a year in sales. This is an attempt to hid money from the IRS. The mob is the reason this statute came about.

Quite trying to find ways around the law and do what is right.

KC their just showing the crap that was added to the suit. This will eventually be dismissed.

KC Sprayberry said...

Anon, 7:26. What NCSlime reported sure seemed a lot more specific. And Sandra Lamb's interview gave credence to the accusations. Also, the presence of a live feed from the courtroom was witnessed by people there. Are you one of those support the LMJC no matter how outrageous their actions are folks? I feel for you. Soon, they'll run of ordinary folks to go after and have to turn on their own. That's called preservation of the strongest.

Anonymous said...

I've never seen a live feed ran to anything other than the news room. If a live feed was ran to any room it would have been done by the news as they were the ones who were recording the trial and ran the lines. Would be easy for Bill to check with any of the news channels and ask if they ran an additional feed to another room in the courthouse. Looks like if channel 3 was aware of a live feed they would have made an issue of it since they would know its inappropriate.

William L. Anderson said...

They already had a witness room in which people were allowed to bring food, cell phones, laptop computers, water, and reading materials. They also did not have to enter through security.

An attorney on a case in another courtroom told me that the bailiff asked her, "Are you for or against Tonya Craft?" When she said "for," he then told her she would have to leave her cellphone in the car.

So, while I don't know if there was a live feed (and would not say to this person one way or another if I knew), nonetheless, a room in which witnesses could gather BEFORE they gave their testimony so that they could get their stories "straight" is a grievous violation of procedure. However, the 12:55 seems to me to be yet another person who believes there should be one rule for prosecutors, police, and government witnesses, and another standard for the rest of us.

By the way, if "structuring" is such a terrible crime, then (1) why did they not charge this person with an underlying crime that such activities were supposed to highlight, and (2) why was Elliot Spitzer, who both broke the Mann Act AND the "structuring" laws was given a free pass?

In your world, the law is not really the law at all. It us just a bunch of rules that some people must follow to the letter, while others don't have to follow at all.

Anonymous said...

You won't say about the feed because you know its not true. I've spoken with several of the media members since the trial and they all state there was one feed to the pool room and no more.

You've obviously never been involved as a witness on a criminal case. It doesn't matter if there is a room or not the witnesses for both sides are placed in an area where the baliffs can locate them. The witnesses are usually seperated by prosecution and defense to keep down trouble. This happens in courthouses all across the country. Crafts witnesses sat together during the trial how is that not inappropriate in your double standard view.

So your anti-structuring position puts you in favor of the mafia, gangs, drug dealers all who try to circumvent the law. This requires no action on the accused part but they put more work into avoiding the filings to hide the money.

The rule of law requires that people should be governed by accepted rules, rather than by the arbitrary decisions of rulers. It would be a perfect world if we needed no laws but unfortunately we have already been there and I'm not ready to return to the wild west where the fastest draw ruled the day.

You see the law as black and white when it is far from that. The law is not a standard but an interpetation that is constantly in flux. Thus the feeling that some are treated special.

Anonymous said...

Superb interview with Catherine Austin Fitts, on topic:

http://bit.ly/cIFTek

William L. Anderson said...

Why were prosecution witnesses allowed to:

1. Skip security
2. Have water, cell phones, laptops, food, and reading materials

when no one else, including media, were permitted to do so? No doubt, you also will defend that. Also, are you going to tell me that Sandra Lamb was telling the truth when she said her daughter had no acting lessons? What about Tim Deal's sudden discovery of the document? What about Suzi Thorne's "I just remembered" testimony?

So, at least we have someone on this board who says that it is OK for cops and prosecutors and their people to commit crimes.

Also, why was Elliot Spitzer not charged with a crime when, in fact, he was "structuring" AND violating the Mann Act? Do you defend that, too?

Basically, people, what we have is a guy who believes that cops and prosecutors are above the law and don't have to obey any of the laws we have to obey. Yep, another liar from the LMJC.

This is the "heads I win, tails you lose" mentality we saw from Arnt and Gregor. This poster now claims that the law is "complicated" whenever government officials like him are committing crimes, but it is quite simple when mere mundanes might run afoul of the rules.

As for his claim I am defending the mafia, he is doing something else: he is endorsing lawbreaking and lying by prosecutors and misconduct by judges, all in the name of "complicated" law. What we have is just another liar and someone who supports lying by the authorities. Nothing else.

Anonymous said...

I don't know if the prosecution witnesses were allowed to skip security but there would be an easy way to find out. Make an open records request for the video footage. You wont do that because you don't care if your accurate and it would be one less bullet you can use to spread contempt.

I don't know about water, food, or the other things but I assume there are water fountains in the courthouse. Can't answer on the testimony either because I was not there and have not read the transcript.

Love how you have assumed my position concerning who can committ crimes. I guess if I was a liquor store owner who was trying to evade my taxes that would be okay by you.

Can't answer to Spitzers charges or sentence although I think he should have received a stiffer sentence.

Love how you try and spin thing around on what I posted instead of trying to defend your position. There is no defence to breaking the law. You want everyone to believe that police, prosecutors, and judges are bad. That juries are stupid when they find a conviction. Defense attorny's do not lie and are of the upmost honorable citizens this country has to offer.

The law is complicated and I don't expect someone as dense and closed minded as you to understand. Ask any two lawyers the same question and you'll get two differant versions of the law. Makes it hard for the law to be black and white.

You are the advocate for law breaking and lying in this blog.

Anonymous said...

5:32 you give yourself away by hinting at rule BY law over rule OF law. BTW the feed to the prosecution witness holding area was an AUDIO feed and yes I'm sure there were water fountains, etc. the point is prosecution witnesses were treated differently and allowed comforts by the officers of the court that those for the defense were denied. It'll come out in discovery for the civil trial.

Anonymous said...

Wow @ Anon 5:32. Dense? Law breaking? Lying? Yet another sad confirmation that you drive by trolls really don't read what is on this blog. It is truly amazing. You have to ignore the facts and research on here to make the sort of claims you do. But that is not surprising given the level of intelligence of some of the trolls.

Anonymous said...

Audio feed? So there were additional microphones set up in the courtroom and feed to a special room so people could hear what was going on. That's beyond the magic bullet for you guys. Who ran this and when? Where were the cables ran?

The civil case will not go to discovery. The judge is about to dismiss that case because the attorney's can't give the specifics that he has asked for. If it does by some miracle go to discovery you'll see there was no audio or video feed. You will also find out that most if not all of the claims made are false. What are you going to do when she is not awarded custody claim that judge is in bed with the prosecutors in Georgia. Why hasn't that worked out for you yet?

Is there a law or case law that states witnesses are entitled to a pack of crackers or bottled water. The prosecution does not subpoena defense witnesses and therefor does not have to treat them to anything. Prosecutors do not know when defense witnesses will be in the courtroom untill they appear in court. Blame the defense lawyers for making them sit there all day when they didn't need them.

There's no research done by Bill he simply gets his information from what someone else has written. The recent article is a perfect example. He just put his own spin on an article written by someone else. If he had done his research he would not have posted this article about the law that put a big dent on what the mafia was doing in the 70's.

William L. Anderson said...

Excuse me, pal. I have good sources. Furthermore, the news people have told me that their cell phones were confiscated, as well as all food, water, reading materials and computers.

On the other hand the prosecution witnesses did not have to go through security, and they and their friend were allowed to have food and the rest. That is not speculation on my part. That is an established fact, and I got that from an insider.

Oh, and Elliot Spitzer got no sentence at all because the feds did not charge him with anything. And how do you know the Korean fellow was evading taxes? Johnny Gaskins paid taxes on his cash income and still was convicted of "structuring."

The "structuring" law did not do as much a number as did RICO. However, just because a law has a certain effect does not mean it is good. We can have summary executions for drug dealers and we can execute speeders and others, and no doubt that would "solve" some problems and that would make you happy.

I remember going to East Germany in 1982 and being told that there was no street crime there because it was a police state. That is where I troll friend wants to take us: to a police state.

Anonymous said...

Our troll was obviously educated in NW Georgia as evidenced by the use of improper verb tense. They are also seemingly intouch with local media, but out of touch with some major national stories. My guess is they are with local public access media or a quasi-educated law enforcement lackey.

Rob said...

Anonymous @ 10/9/10 8:03 PM:

"7:06 Nope. That's not what occurred in this situation. The store owner purposefully avoided the 10k transaction on a repetitive basis in order to try and skirt the law. In one occasion they showed an owner made two 9k deposits on the same day to two differant [sic] branches. This store owner averaged 11k a week in deposits. This guy is doing 1 to 2.5 million a year in sales. This is an attempt to hid [sic] money from the IRS. The mob is the reason this statute came about."

Glad to see that we have a mind-reader among us. If only we all had your ability!

My point with the above is that you cannot logically assert that he purposefully avoided the law. You don't know what he was thinking at the time.

Then again, the traditional mens rea standard has been eviscerated from modern legal practice, as demonstrated by the phrase "Ignorance of the law is no excuse". This means that the law has become a weapon.

Anonymous troll, I challenge you to show otherwise.

"Quite [sic] trying to find ways around the law and do what is right."

That begs the question -- what is right? To always follow "the law"? If "the law" is always changing (which you or another anonymous troll states later), and the number of parts to "the law" (i.e. separate statutes) is not only extremely numerous, but proliferating, then it becomes increasingly difficult to always follow "the law", now doesn't it? So it sounds like you would have us working harder and harder to "do what is right", which conveniently means that more and more of us will become criminals in the eyes of such as you.

Perhaps you don't care about that, though. I'll go out on a limb and figure you as one of those people who simply says "The law is the law". Again, that's very convenient when looking for ways to arrest, convict, and imprison people. Such a mentality seems to betray you as someone working in "law enforcement" or in close association therewith.

Rob said...

Anonymous @ 10/10/10 2:16 PM:

"So your anti-structuring position puts you in favor of the mafia, gangs, drug dealers all who try to circumvent the law. This requires no action on the accused part but they put more work into avoiding the filings to hide the money."

Nice false dilemma there. If you don't know what I mean by that, I'll help you out: being against the "structuring" law in no way equates logically to being in favor of the Mafia, gangs, and/or drug dealers.

"The rule of law requires that people should be governed by accepted rules, rather than by the arbitrary decisions of rulers. It would be a perfect world if we needed no laws but unfortunately we have already been there and I'm not ready to return to the wild west where the fastest draw ruled the day."

Right, and how does one determine whether the rules are accepted as opposed to being arbitrary? The proliferation of statutes and regulations seems to betray their increasing arbitrariness.

Again, you imply a false dilemma, namely one between our current legal situation and having no law at all. This can also be an instance of the fallacy of composition -- opposing one set of legal statutes (that which exists today) is being fallaciously equated to opposing all sets thereof.

"You see the law as black and white when it is far from that. The law is not a standard but an interpetation that is constantly in flux. Thus the feeling that some are treated special."

And those who interpret "the law" are all playing on the same team, as it were. How convenient for them if they want to go after people -- and why shouldn't they? Who can get away with arguing against them?

In all of this, I can't help but notice that no mention has been made by (either of) you about the concept of justice. No, it's all about following "the law", with no question as to what "the law" should be. This is simply a demand for complete and total obedience to any and all commands given out by those who happen to be "in charge". Apparently justice doesn't matter anymore.

Anonymous said...

Doc Ellis, sorry to get back to you so late, but I was on vacation. The "prince" comment was a take on Disney. Meant as a joke. Good Lord you took that too far. If you read it, you can see my sarcasm. Like "Someday, my Prince will come.....". Heaven help me.

Anonymous said...

Rob, you are right on! This "person" actually has zero information about the trial or even about the information in this blog post by Dr. Anderson. Saying, "Can't answer to Spitzers charges or sentence although I think he should have received a stiffer sentence." Wow, if we all were this ignorant, the world would be quite interesting. Seems maybe Joal, Sarah or Sandra have been visiting the site.

I know, very closely & personally for many years, two of the lead reporters from the Craft trial. There was a great deal that went on in there. So to our dear troll, who seriously needs grammar & spelling lessons, please do YOUR research before commenting & accusing people for what we know as facts. It is somewhat entertaining in one sense, but so scary in another. I would like for you to watch the movie "Idiocracy" & see where you & your cronies will have us in years to come if you continue to spew forth bunk.

UGA Mom

Doc Ellis said...

Anon 11.51am,

No harm, no foul. Sarcasm is so hard to do at times. Add that to the fact that I am a f-tard and something as clever as your comment goes right by me. Oh well...

Anonymous said...

LOL. Just got back from vacation & thought, "wth?". No harm, no worries, just wanted to make sure you knew where I was coming from.