31 U.S. Code § 5324 – Structuring Transactions to Evade Reporting Requirements
31 U.S.C. § 5324 makes it a federal crime to structure financial transactions to evade currency reporting requirements.
Structuring typically involves breaking up large cash deposits or withdrawals into smaller amounts to avoid triggering federal reporting laws.
Even if the money comes from a legal source, intentionally structuring transactions to avoid reporting can result in federal criminal charges.
Federal prosecutors aggressively pursue structuring cases because the statute is designed to combat money laundering, drug trafficking, tax evasion, and other financial crimes.
If you are under investigation for structuring transactions or have been charged under 31 U.S.C. § 5324, you should consult an experienced federal criminal defense lawyer immediately.
Your best hope for a favorable outcome is with an experienced criminal defense attorney at the Hedding Law Firm in Los Angeles. To schedule a consultation, call (866) 986-2092 or use the contact form here.
What Is Structuring Under 31 U.S.C. § 5324?
Structuring occurs when a person intentionally breaks up financial transactions to prevent a bank or business from filing a required government report.
Under federal law:
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Banks must file a Currency Transaction Report for cash transactions exceeding $10,000.
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Non-financial businesses that receive more than $10,000 in cash must file IRS Form 8300.
If someone deposits $9,900 on consecutive days to avoid triggering the $10,000 reporting threshold, that may constitute illegal structuring.
The key issue is intent. The government must prove that the person acted for the purpose of evading reporting requirements.
What Does 31 U.S.C. § 5324 Prohibit?
The statute prohibits anyone from:
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Causing or attempting to cause a financial institution to fail to file a required report
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Causing a financial institution to file a report containing a material omission or misstatement
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Structuring or attempting to structure transactions with one or more financial institutions
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Assisting others in structuring transactions to evade reporting requirements
The law applies to banks, credit unions, money services businesses, and non-financial trade or business transactions involving large cash payments.
One of the primary goals of 31 U.S.C. 5324 is to prevent money laundering, drug trafficking, tax evasion, and other financial crimes.
What Is “Smurfing”?
Smurfing is a common method used to avoid reporting requirements.
It involves breaking a large cash amount into smaller deposits, sometimes across multiple banks or accounts, to avoid detection.
Even if each transaction is under $10,000, structuring with the intent to evade reporting is illegal under federal law.
Related Federal Reporting Laws
31 U.S.C. § 5324 is part of a broader federal framework under Chapter 53 governing currency transaction reporting.
Related statutes include:
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31 U.S.C. § 5313, reports on domestic currency transactions
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31 U.S.C. § 5331, reports relating to coins and currency received in non-financial trade or business
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31 U.S.C. § 5322, criminal penalties
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31 U.S.C. § 5321, civil penalties
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31 U.S.C. § 5332, bulk cash smuggling
Structuring charges are often connected to investigations involving money laundering, tax crimes, fraud, or drug trafficking.
What Must the Government Prove?
To convict someone of structuring under 31 U.S.C. § 5324, federal prosecutors must prove beyond a reasonable doubt:
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The defendant engaged in structured transactions
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The defendant knew about the reporting requirements
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The defendant acted with the specific intent to evade reporting
Intent is the central issue in most structuring cases.
Simply depositing money in amounts under $10,000 is not automatically illegal. The prosecution must show deliberate efforts to avoid triggering reporting laws.
Penalties for Structuring Transactions
If convicted of violating 31 U.S.C. § 5324, potential penalties include:
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Up to five years in federal prison
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A fine of up to $250,000 for individuals
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A fine of up to $500,000 for organizations
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Forfeiture of the structured funds
Enhanced penalties may apply if the structuring is part of a pattern of illegal activity involving more than $100,000 within a 12-month period. In those cases, fines and prison exposure may be doubled.
Federal forfeiture laws allow the government to seize funds involved in structured transactions, even before conviction in some cases.
Common Defenses to Structuring Charges
Because intent is required, many structuring cases turn on the defendant's state of mind.
Potential defenses may include:
Lack of Intent
The defendant did not know about reporting requirements or did not intend to evade them.
Legitimate Business Practices
Deposits were made in installments as funds were received in the ordinary course of business.
Safety Concerns
The defendant deposited smaller amounts to avoid carrying large amounts of cash due to fear of theft.
Insufficient Evidence
The government lacks proof that the defendant acted knowingly and willfully.
Each case is fact-specific, and careful review of bank records, communications, and transaction history is essential.
Frequently Asked Questions About Structuring Charges
Is it illegal to deposit less than $10,000?
No. It is legal to deposit any amount of money. It becomes illegal only if the transaction is structured with the intent to evade reporting requirements.
Can you be charged even if the money was earned legally?
Yes. Structuring is illegal regardless of whether the funds came from lawful activity.
What happens to the money involved?
The government may seek forfeiture of funds allegedly involved in structured transactions.
Is structuring the same as money laundering?
Not necessarily. Structuring is a separate offense but is often charged alongside money laundering or tax crimes.
Can structuring charges be reduced or dismissed?
Yes, depending on the evidence of intent and the circumstances of the case.
Speak With a Federal Criminal Defense Lawyer
Structuring charges under 31 U.S.C. § 5324 carry serious consequences, including prison time and forfeiture of funds.
If you are under investigation or have been charged with structuring transactions to evade reporting requirements, early legal intervention is critical.
The Hedding Law Firm represents clients nationwide in complex federal criminal cases involving financial crimes and white-collar investigations. The firm is located in Los Angeles.
For a confidential consultation, contact us to discuss your case and defense options.
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