Federal Structuring Charges (31 U.S.C. § 5324): When Privacy Looks Like a Crime

Under 31 U.S.C. § 5324, making cash deposits below $10,000 with the purpose of avoiding a federal reporting requirement is a federal felony. The law does not require that your money come from an illegal source.

It does not require that you evade taxes, launder funds, or commit any other crime.

A pattern of sub-threshold deposits, motivated by nothing more than a preference for privacy, can be sufficient for a federal prosecution carrying up to 10 years in prison and immediate asset seizure.

For high-net-worth individuals who routinely handle significant cash, understanding where ordinary banking behavior ends and federal criminal exposure begins is not optional. It is essential.

If you are facing charges related to structuring, it is advisable to seek representation from a seasoned California criminal defense attorney at Eisner Gorin LLP to maximize the likelihood of a favorable outcome.

To arrange a consultation, please call (818) 781-1570 or contact us through our website.

The Bank Secrecy Act and the $10,000 Threshold

The structuring prohibition falls within the broader framework of the Bank Secrecy Act, which requires financial institutions to file a Currency Transaction Report (CTR) whenever a customer conducts a cash transaction exceeding $10,000 in a single day.

The purpose is to give federal law enforcement visibility into large cash movements that might indicate money laundering, drug trafficking, or tax evasion.

Structuring, codified at 31 U.S.C. § 5324, makes it a separate and independent federal crime to deliberately break up transactions to avoid triggering that report. The statute covers three categories of conduct:

• Causing or attempting to cause a financial institution to fail to file a required CTR.
• Causing or attempting to cause a financial institution to file a CTR containing a material omission or misstatement.
• Structuring or assisting in structuring any transaction with a domestic financial institution to evade the reporting requirement.

The third category is the one that most commonly ensnares wealthy individuals with no criminal background.

A violation involving less than $100,000 in a 12-month period is a Class E federal felony punishable by up to 5 years in prison, supervised release, probation, and a $250,000 fine.

If the structuring involves more than $100,000 in a 12-month period, or is tied to another criminal offense, the offense is elevated to a Class D federal felony punishable by up to 10 years in prison.

The government does not have to prove that a single dollar came from illegal activity. It only needs to prove that the deposits were deliberately kept below the reporting threshold for the purpose of avoiding the CTR filing.

Why Wealthy, Law-Abiding Individuals Get Charged

The structuring statute is counterintuitive in a way that poses a danger to exactly the kind of client it was never designed to target.

A Treasury Inspector General audit of IRS structuring enforcement reached a striking conclusion: 91 percent of the 278 investigations in its sample in which the source of funds could be determined involved businesses and individuals whose funds were obtained legally.

In other words, the overwhelming majority of people pursued under the structuring statute were not criminals hiding illicit proceeds.

They were business owners, professionals, and individuals who preferred to handle their banking in a particular way, and whose privacy preferences were mistaken for criminal intent.

The reasons that lead otherwise law-abiding, high-net-worth individuals into structuring territory are predictable:

• Discomfort with federal scrutiny: many wealthy individuals who routinely deal in cash, real estate investors, business owners, entertainers, and foreign nationals, are uncomfortable with the idea of the federal government receiving automatic notification every time they make a large deposit. That discomfort, acted upon, is the crime.
• Habitual banking patterns: a client who routinely deposits the proceeds of a cash business in daily increments under $10,000, without ever consciously thinking about the CTR threshold, may still be prosecuted if prosecutors can demonstrate awareness of the reporting requirement and a pattern suggesting avoidance.

Structuring vs Money Laundering Under Federal Law

Key Takeaway

Structuring focuses on depositing money to avoid reporting requirements, even if the funds are legal, while money laundering focuses on disguising or using proceeds from illegal activity. Both are serious federal offenses and are often investigated using financial records and transaction patterns.

How the Government Detects and Investigates Structuring

Financial institutions do not just file CTRs for transactions over $10,000. They also file Suspicious Activity Reports (SARs) for patterns of behavior that suggest intentional threshold avoidance.

Under the Bank Secrecy Act, financial institutions must report suspected structuring even if the transactions are below the $10,000 threshold.

A series of $9,500 deposits over a short period may prompt a bank to file a SAR, alerting FinCEN and potentially the IRS to investigate.

From the moment a SAR is filed, the government's investigative architecture activates. IRS Criminal Investigation works with the Financial Crimes Enforcement Network (FinCEN), the DOJ, and federal task forces.

Agents pull bank records, review timestamps across accounts and branches, examine surveillance footage, and build a transaction timeline designed to show a pattern of deliberate sub-threshold conduct.

By the time an investigator contacts the target, the government has typically already assembled months or years of financial data. T

he first interview, often framed as a routine inquiry, is not routine. Anything said to investigators without counsel present can become evidence of knowledge and intent, the two elements the prosecution needs most.

The Elements the Government Must Prove

To convict under 31 U.S.C. § 5324(a)(3), the prosecution must establish three elements beyond a reasonable doubt:

1. The defendant knowingly engaged in a financial transaction.
2. The transaction involved currency.
3. The defendant structured the transaction with the intent to evade the reporting requirement.

The third element, intent, is where the defense most frequently concentrates its effort.

The government does not need to show that you knew structuring was illegal, only that you were aware the reporting requirement existed and that your deposit pattern was designed to avoid it.

Demonstrating that a client had no actual knowledge of the CTR threshold, or that their banking pattern arose from unrelated business habits rather than deliberate avoidance, directly attacks the purpose element and can defeat the charge entirely.

Federal Penalties for Structuring

Penalties depend on the amount involved and whether other crimes are connected.

• Up to 5 years in federal prison for standard cases
• Up to 10 years if the amount exceeds $100,000 within a 12-month period or is linked to other offenses
• Fines up to $250,000
• Asset forfeiture, including seizure of bank accounts

These penalties can apply even when the funds are legitimate.

Real-World Examples

Example 1
A business owner deposits $9,000 daily to avoid reporting requirements. This pattern may be viewed as structuring.

Example 2
An individual splits a $50,000 deposit into several smaller transactions over multiple days. This may trigger federal charges.

Example 3
A real estate investor deposits rental income in weekly amounts of less than $10,000. If tied to intent to avoid reporting, this may lead to an investigation.

Related Federal Crimes

Structuring charges under 31 U.S.C. § 5324 are often investigated alongside other financial offenses. Even when the underlying funds are lawful, the government may pursue additional charges based on how the transactions were conducted, reported, or connected to broader financial activity.

Money Laundering (18 U.S.C. § 1956)

When funds are alleged to have come from unlawful activity, structuring may be paired with money laundering charges. While structuring focuses on avoiding reporting requirements, money laundering targets efforts to conceal or legitimize illegal proceeds.

Tax Evasion (26 U.S.C. § 7201)

Repeated sub-threshold deposits may raise questions about unreported income. If the government believes income was intentionally hidden from the IRS, tax evasion charges may follow.

Filing False or Misleading Reports (31 U.S.C. § 5324(a)(2))

Providing inaccurate or incomplete information to influence a bank's reporting obligations can lead to additional charges beyond basic structuring.

Bank Fraud (18 U.S.C. § 1344)

If structuring activity is tied to schemes involving deception of financial institutions, prosecutors may pursue bank fraud charges.

Wire Fraud (18 U.S.C. § 1343)

Electronic transfers or communications used in connection with structured transactions may support wire fraud allegations, particularly if they are part of a broader financial scheme.

Conspiracy (18 U.S.C. § 371 or § 1956(h))

If multiple individuals are involved in a structuring activity, the government may allege a federal conspiracy to evade reporting requirements or commit related financial crimes.

Currency Reporting Violations (31 U.S.C. §§ 5316, 5322)

Cross-border currency movements without proper reporting can overlap with structuring investigations, especially in international cases.

Civil Asset Forfeiture (18 U.S.C. § 981; 31 U.S.C. § 5317)

Although not a criminal charge, forfeiture actions often accompany structuring cases. The government may seize bank accounts or assets believed to be connected to structured transactions, sometimes before formal charges are filed.

Key Takeaway

Structuring cases frequently expands into broader financial investigations. What begins as a pattern of deposits can evolve into allegations involving tax violations, fraud, or money laundering, significantly increasing both legal complexity and potential penalties.

Frequently Asked Questions (FAQs)

Is structuring illegal if the money is legal?

Yes. The legality of the funds does not matter if the intent was to avoid reporting requirements.

What is the $10,000 rule?

Banks must report cash transactions over $10,000 through a CTR.

Can I be charged for multiple small deposits?

Yes, if the pattern suggests intentional avoidance.

What is a Suspicious Activity Report?

A report filed by banks when they detect unusual or suspicious transaction patterns.

Can structuring charges be dismissed?

Yes. A strong defense can challenge intent and evidence.

Defense Strategies for Structuring Charges

A structuring defense for a high-net-worth individual requires a precise, document-driven approach that dismantles the government's narrative of intent and presents an alternative, credible explanation for the banking pattern.

Establishing the absence of knowledge

If the defendant was genuinely unaware of the $10,000 reporting threshold, the government cannot establish that the deposits were made for the purpose of avoiding it. 

This defense is the strongest when supported by a consistent banking history, no prior warnings from financial institutions, and no communications indicating awareness of the requirement.

Demonstrating a legitimate business reason

Many sub-threshold deposit patterns arise from the ordinary rhythm of a cash business. Daily deposits from a restaurant, a retail operation, or a real estate enterprise may consistently fall below $10,000 simply because that is the amount taken in each day. A pattern that tracks business receipts tells a fundamentally different story than the one prosecutors want to tell.

Challenging the pattern evidence

Defense counsel scrutinizes transaction records for inconsistencies and alternative explanations that undermine the inference of deliberate avoidance.

Attacking the SAR and CTR evidence chain

The government's documentary case is examined for procedural irregularities, BSA compliance failures, and accuracy gaps in the transaction data it relies on.

Suppressing statements made without counsel

Early interviews with IRS Criminal Investigation agents are a primary source of evidence. If those interviews occurred without proper Miranda warnings or under conditions amounting to custodial interrogation, those statements may be suppressible, removing the government's most direct evidence of knowledge and intent.

Contesting civil forfeiture independently

Even where criminal prosecution is pending, challenging the forfeiture aggressively and seeking a prompt post-seizure hearing can result in the return of funds before trial.

Hypothetical Case Study: Pattern Deposits from a Cash-Intensive Real Estate Business

A private real estate investor with a portfolio of residential rental properties across three states regularly collected cash rents from tenants at the lower end of the market.

He deposited those rents in weekly batches at his local branch, typically in amounts ranging from $6,000 to $9,200, reflecting the cash collected each week. 

After eighteen months, his bank filed a SAR. IRS Criminal Investigation opened a case, and agents appeared at his home for an unannounced interview. He spoke with them briefly before retaining counsel.

Defense counsel was engaged the following morning. Counsel immediately sent a preservation letter to the bank, obtained all transaction records, and conducted a timeline analysis comparing deposit amounts against actual rental ledgers for each property.

The analysis demonstrated that every deposit corresponded to documented rental income within a few hundred dollars for that week, with variation explained by late payments and vacancies.

There was no pattern of deposits clustering just below $10,000. There was no evidence that the client had ever been advised of the CTR threshold or received a bank warning.

And the statements made during the initial interview, while unhelpful, did not include any admission of knowledge of the reporting requirement.

Counsel presented this documentation to the Assistant U.S. Attorney assigned to the case in a pre-indictment meeting. The government declined to prosecute. Civil forfeiture proceedings initiated against two accounts were voluntarily dismissed within 60 days.

The lesson: A structuring defense built on documented business records, a credible alternative explanation for the deposit pattern, and early engagement before indictment can close a federal investigation before it becomes a criminal case.

Protect Your Assets Before the Government Moves First

For high-net-worth individuals, a structuring investigation can freeze accounts, disrupt businesses, and attract the kind of federal attention that can damage reputations regardless of the outcome. 

The time to act is not after an indictment. It is the moment you receive a bank inquiry, an agent contact, or any indication that your transaction history is under review.

Contact Eisner Gorin LLP today for a confidential case evaluation with our federal defense team.

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