What is Structuring?

Structuring, also known as smurfing, is a financial technique that involves making a series of small deposits to a bank to avoid triggering automatic financial reporting requirements. Both federal and Pennsylvania laws forbid this practice, and it is crucial to be aware of these laws to avoid running afoul of them.

Federal law requires financial institutions to file a Currency Transaction Report (“CTR”) for cash transactions exceeding $10,000 in a single day. Currency reports draw attention to these transactions and can be a hassle for people conducting large financial movements. Those engaging in “structuring” deliberately break down these transactions into smaller chunks, so they do not trigger the automatic reports. For example, suppose someone attempted to move $25,000 into their bank account without triggering the report. In that case, they might divide the transaction into increments of $5,000 over a few weeks.

These automatic financial reports enable the government to track large-scale transactions and spot suspicious financial activity indicative of criminal behavior.

Federal law prohibits people from trying to evade these requirements. Individuals engaged in structuring may be subject to criminal penalties, including fines as high as $250,000 and imprisonment for up to five years. Additionally, structuring charges may also involve the forfeiture of assets related to the charge. If the structuring involves more than $100,000 over the course of a twelve-month period, or if it relates to other criminal behavior, then the penalties are doubled. The mere fact that someone makes transactions that are less than $10,000 but which add up to that amount or more does not constitute a violation of structuring law. If, however, prosecutors can demonstrate that they made these transactions to avoid CTR requirements specifically, then there has been a violation of the law.

Pennsylvania law parallels federal requirements by forbidding attempts to avoid transaction reporting requirements. Pennsylvania law punishes structuring with the threat of prison time and significant fines. Notably, the possible prison time tied to a structuring charge under Pennsylvania law extends to a maximum of twenty years. Since the laws do not explicitly require criminal intent, the mere fact that someone is aware of the financial reporting requirements and attempts to avoid them is sufficient to constitute a violation of the law.

Banks are trained to recognize structuring, and it is possible to inadvertently become the subject of a structuring investigation due to your transaction behavior.

Are you facing structuring charges? An excellent criminal defense attorney can always assist with situations of this kind. It is crucial to find an attorney who can effectively and efficiently combat these charges since it is possible for litigation costs to greatly exceed the original amounts involved. A good attorney can help you fight these charges and recover your money. Call Cornerstone Law Firm to schedule a consultation today.