If you make several cash deposits of less than $10,000 you can be presumed guilty of money laundering or drug trafficking and your assets can be seized — without a trial.
Lyndon McClellan owns and operates L & M Convenience Mart in Fairmont, NC. One day last July more than a dozen federal, state and local law enforcement agents swarmed his business, showing him paperwork indicating that he had made two cash deposits totaling $11,400 within a 24-hour period in his bank account. They said that he had a history of “consistent cash deposits” of less than $10,000, which was a violation of the federal law against “structuring.” They also informed him that the IRS had seized all of the $107,702.66 in L & M’s bank account.
What Mr. McClellan did not know was that it is against the law to make several cash deposits of less than $10,000. Banks are legally obligated to report any deposit of more than $10,000 to the Treasury Department. If you make several cash deposits of less than $10,000 over an unspecified period of time that total more than $10,000, you are presumed to be a money launderer or drug trafficker.
If you are simply suspected –not convicted– of structuring, your bank account can be seized by the IRS under “civil asset forfeiture” laws. They have an incentive to invoke such laws because they can keep the assets and expand their activities without an appropriation from Congress. The IRS even “deputizes” state and local law enforcement agencies to go through bank “suspicious activities reports” in exchange for a cut of the loot subsequently seized by the IRS.
Months after the seizure of his bank account, the federal government offered Mr. McClellan 50 percent of his money back if he agreed to a settlement. He refused and intends to pursue the matter in court. Unfortunately, under civil asset forfeiture laws, he bears the burden of proving his innocence.
As he puts it, “It’s not fair to the American people who work for a living that one day they can knock on the door, walk in their businesses, and say, ‘We just took your money’ … I always thought your money was safe in the bank, but I wouldn’t say that now.”
Randy Sowers built his dairy farm over three decades into a thriving business. But the Maryland farmer’s operation suffered a big setback when the IRS swooped in to seize tens of thousands of dollars from his account, claiming he violated the structuring law. Despite the IRS all but admitting the law they used to seize the cash is flawed, Sowers is still fighting to get his money back.
“We work hard for what we get, and the government can just come in and take it,” Sowers says. “We get a lot of cash from sales at farmer’s markets,” Sowers explained. He said the bank teller told them they’d be “better off” if they kept cash deposits under $10,000, since, said the teller, “there is a lot of paperwork we have to fill out if you have to deposit more than $10,000.”
Doing what the teller suggested is the crime of structuring. So Treasury agents showed up at the creamery with guns. Sowers told them everything he could about his cash transactions, hoping to prove he wasn’t hiding anything. But as soon as they heard he sometimes had more than $10,000 and didn’t deposit all of it to stay under the reporting limits, they seized his $60,000 bank account. Out of fear of a jail sentence and a nearly half-million dollar fine, Sowers settled — letting the IRS keep about $30,000 of his hard-earned money.
These are just two of many cases that have come to light where the feds seized an otherwise law abiding business owner’s cash for supposed “structuring.” Beware.
mises.org
How does one protect themselves from this happening
Sounds like the teller was setting him up.
How do small business owners protect them self’s ?
The only way I know of is to make the deposits no matter what the amount and let the bank report them.