Structured Transactions – Definition | Structuring
Structured transactions (also known as structuring) are the process whereby a person or entity conducts banking transactions to avoid reporting requirements.
Structuring or structured transactions are frequently done by money launderers to avoid the Bank Secrecy Act mandate that requires banks to report any single daily transaction that is over $10,000 through a currency transaction report (CTR).
Federal law also requires financial institutions to report multiple transactions that aggregate to over $10,000 in a single day for the same person.
Legitimate Structuring
There are many legitimate reasons why an individual or a business might structure one or more transactions.
Structuring Transactions Definition
However, if the individual conducts structuring in order to avoid being reported to the government, then he or she is committing a crime.
Structuring Examples
The below scenarios are examples of structuring:
1. Doe recently received $16,000 in cash from selling his used truck. Doe is aware that depositing the $16,000 in cash would require his financial institution to file a CTR to the Financial Crimes Enforcement Network (FinCEN).
Doe chooses instead to deposit $8,000 in cash early during the day with his bank and then comes back in the afternoon to deposit the other $8,000, in hopes of evading CTR reporting requirements.
With the above scenario, Doe is said to be structuring his deposits, which is a federal crime if caught.
2. Jane needs $16,000 in cash for her business. She makes an $8,000 withdrawal from her bank on Tuesday, then goes back the next day to withdraw the remaining $8,000. Jane structured the transactions in an attempt to evade CTR reporting.
In this particular scenario, Jane is said to be engaged in transaction structuring, which is a federal crime if caught.
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Criminal Penalties
Structuring transactions to avoid bank reporting is punishable for up to five years imprisonment and up to $250,000 in fines.
However, if the structuring offense involves more than $100,000 within a twelve month period or the structured transactions are performed while violating another U.S. law, then the maximum penalty is doubled.
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