
When It's a Crime to Withdraw Money from Your Bank - DaveWalk
http://www.nytimes.com/2015/06/06/upshot/when-its-a-crime-to-withdraw-money-from-your-bank.html
======
mikeash
On one hand, this seems almost like a Spinal Tap sort of situation. If you
want to make it illegal to evade the reporting requirements by withdrawing
$8,000 repeatedly, then write the law to require reporting $8,000, or whatever
amount you're after.

On the other hand, the law is written such that it only applies to people who
are aware of the law and intended to circumvent reporting. It seems like an
easy case that withdrawing $1.7 million in increments under $10,000 is
intentional, and that the guy who was Speaker of the House at the time that
the law was updated by Congress would know that the law exists.

As is often the case, it seems like a bad person violating a bad law and it's
hard to get worked up over either.

~~~
belorn
In Sweden, they have created a similar system but which simply limits
withdraws to $1,500 a week unless you visit a bank and ask for permission, for
which takes a minimum of 2 bank days. Withdrawing $1.7 million in increments
would simply be too impractical.

~~~
ersii
Really? Well, the Bankomat AB ("ATM Inc") ATM network page says that each card
issuer issuer (ie. Bank) that is connected are responsible for setting
withdrawal limits individually. Unless the card is from a issuer that is not
connected to their network, in which case the withdrawal is limited to 2000
SEK (currently ~237 USD, ~214 EUR).

Also, as far as I know - I can walk into a FOREX Bank branch office and
withdraw as much as I want to at any time with my current card, as my issuing
bank has a deal with them for cash management.

As far as I know, there's no laws that restrict cash withdrawal in this way or
any laws about reporting cash withdrawal to Skatteverket (Swedish "IRS").

~~~
ersii

      As far as I know, there's no laws that restrict cash withdrawal in this way or any laws about reporting cash withdrawal to Skatteverket (Swedish "IRS").
    

The only restrictions I can think about are for cash deposits. Basically, you
need to declare where the cash is from. It's a checkbox type item where I
usually answer "Savings." (It's that stupid.)

------
gizi
Imagine you have a series S=[[datetime1,amount1], [datetime2,amount], ...,
[datetimek,amountk]] of withdrawals in which the amounts are lower than 10 000
dollars. From there, it should be possible to define the predicate function
isCrime(S)=yes/no for any such S. The way in which they wrote their so-called
law, however, makes it obviously impossible to implement such isCrime()
predicate function unambiguously. In other words, what we can learn from this,
is that there exists a set of people who are pretentious enough that they
insist that they can write laws, but who are obviously too stupid to do that
properly. They are also dangerous because these people use violence in order
to impose their stupidity onto others.

~~~
pjc50
The UK is currently having great difficulty trying to ban "legal highs", which
is obviously impossible to define.

~~~
JupiterMoon
Given the ample evidence that the current UK government don't care about
tricky technicalities like human rights or cutting some slack to law abiding
people and not harassing them I doubt they'll have any trouble sorting this
issue out.

------
ksherlock
This strikes me as a congressional case of the XY problem
([http://mywiki.wooledge.org/XyProblem](http://mywiki.wooledge.org/XyProblem))

Somewhere, long ago, people were committing crimes involving large amounts of
money, but law enforcement couldn't stop it. So they instituted financial
reporting requirements for banks, to help identify crooks. But people can
easily structure their transactions to avoid the reporting requirements.

So now you make it a crime to do that. Regardless of whether there was an
underlying crime in the first place.

Oh, and then when the FBI investigates, you can commit a third crime (lying to
the FBI) without having committed the first crime or second crime.

~~~
nzealand
The police can lie to you. Yet you can not lie to the police. You can refuse
to talk to them however.

~~~
meddlepal
Yes you can and in the process you piss off the prosecutor who for all intent
and purpose might as well be the police. Now you actively have the law working
against you

------
ikeboy
The "lying to FBI" charge is arguably the more important problem with this
story.

See [https://popehat.com/2015/05/29/dennis-hastert-and-federal-
pr...](https://popehat.com/2015/05/29/dennis-hastert-and-federal-
prosecutorial-power/)

~~~
narrator
It seems that the risk of giving incorrect information to FBI agents while
being interviewed, whether intentional or not, is so high that it's better
just to not to agree to an interview, especially if you're innocent.

~~~
akira2501
It can never help you to be interviewed without an attorney present. It's
probably been seen many times before, but I do enjoy this video:
[https://www.youtube.com/watch?v=6wXkI4t7nuc](https://www.youtube.com/watch?v=6wXkI4t7nuc)

------
tantalor
_The government has the burden to prove that the defendant knew about the
reporting requirement and intended to evade it... this is quite unlike many of
the regulatory crimes that can ensnare the unsophisticated._

So this is a situation where ignorance of the law _does_ excuse violating it?

[http://en.wikipedia.org/wiki/Ignorantia_juris_non_excusat](http://en.wikipedia.org/wiki/Ignorantia_juris_non_excusat)

~~~
maxerickson
It's not illegal to make repeated cash transactions less than $10,000.

It's illegal to make repeated cash transactions less than $10,000 with the
intent to evade the reporting requirements.

So if you are not aware of the reporting requirements it is very unlikely that
you are violating the law (you certainly aren't violating the reasonable
spirit of the law, you may not escape prosecution...).

~~~
sliverstorm
In other words the crime is the intent, so it's impossible to commit the crime
without the intent! (Unlike the prototypical crime which is the act)

~~~
maxerickson
I'm pretty sure they only bother prosecuting cases where the act is committed.

I don't think it is so far away from other crimes where intent is evaluated
(like murder vs manslaughter).

~~~
mentat
They've certainly been doing it without evidence of intent. It's been a huge
deal.
[http://www.bizjournals.com/bizjournals/washingtonbureau/2015...](http://www.bizjournals.com/bizjournals/washingtonbureau/2015/02/irs-
seizes-millions-from-law-abiding-businesses-3.html)

~~~
maxerickson
The first business mentioned in that article certainly did structure their
transactions with the intent of avoiding reporting regulations, under the
advice of their accountant:

 _Convenience-store distribution is a cash-intensive business, and Hirsch said
his accountant advised him that he should keep the company 's deposits below
$10,000 because banks didn't like the paperwork involved with Currency
Transaction Reports._

The article states _But there was no evidence of criminal activity_ , not that
there was no evidence of intent (as the section I quoted makes clear, the
intent was obvious).

Please note that I'm not making statements in favor of the law in these
comments, just characterizing the facts as I see them.

ETA: as I keep reading, the second business was also intentionally avoiding
the reporting requirements (after a teller told them how). The third one does
not directly state that they were trying to avoid the reporting requirements.

------
hamburglar
I enjoy contemplating the nuts and bolts of these laws with respect to what
exactly would be allowed and what would not.

For example, if I were to withdraw $15k every friday and re-deposit it every
monday under the guise that I want it available for gambling over the weekend,
that would raise a flag, but it's easily explainable. Would it be considered
"structuring" if I did this for a while just to establish a pattern, or is it
only structuring if you're trying to _avoid_ triggering a report?

If the $15k occasionally didn't show up on monday, would I then need to come
up with another explanation (e.g. "I lost")? Would it fly if I were actually
paying this to a friend by way of intentionally losing to him in a private
card room?

~~~
johngalt
Structuring is withdrawing cash in under 10k increments to avoid the automatic
reports that occur over 10k. You wouldn't be in trouble for structuring for
withdrawing 15k every week, because you would trigger a CTR every week. More
accurately twice a week if you re-deposited the cash. There is nothing
inherently illegal in generating CTRs, or withdrawing cash over $10k.

You overestimate the amount of attention paid to CTRs. There are people and
cash heavy businesses that trigger CTRs all the time. The reporting
requirement is a fixed dollar amount that hasn't been adjusted since 1970.
From a law enforcement standpoint CTRs are spam.

The way to generate attention is by trying to avoid CTRs or the equivalent
rules for cashiers checks and money orders (MIL). That will get you a SAR.
Those might get investigated if you generate a few of them.

[http://en.wikipedia.org/wiki/Bank_Secrecy_Act](http://en.wikipedia.org/wiki/Bank_Secrecy_Act)

~~~
hamburglar
Actually, based on reading that wikipedia article and the related one on
"structuring", it's not clear to me that the scenario I described couldn't be
argued to be structuring. The relevant quote is that you may not structure
transactions "for the purpose of evading the reporting requirements of section
5313 (a) or 5325 or any regulation prescribed under any such section," and my
proposed scheme is designed not to avoid the CTR but rather the Suspicious
Activity Report. So I think it's arguable that they could nail me for
structuring.

------
defen
This is why, if you ever want to extort money from someone, you have your
lawyer talk to their lawyer first. I'm sure they could have set up an LLC for
the extortionist/victim to perform "market research" or something.

~~~
DaveWalk
And don't forget the income tax; according to the article, even extortion must
be taxed as per the Supreme Court, 1952.

~~~
JadeNB
I've always enjoyed the specification in the instructions for the 1040 form
that you must include all sources of income, including illegal income! (Of
course, famously, it was on this count that they got Capone.)

------
vonklaus
Is paying hush money illegal? This is essentially how no-competes and NDAs
work sometimes. An employer offers you some amount of your salary on exit, and
asks you to sign a document agreeing not to disclose things you learned there.

Further, while I am aware that transactions above 10K are flagged, so what? If
you have paid taxes on the money, you can do what you want with it. IANAL but
I think you can withdraw any amount, it is just flagged and reported by the
teller.

~~~
jordan0day
No, I don't believe it's _necessarily_ illegal to pay someone "hush money"
(though it probably depends! laws are awfully vague). I do believe it's
illegal to _demand to be paid_ "hush money", though, normally referred to as
"blackmail".

Presumably the reason the accused used structuring, even if a "hush money"
payment itself was legal, was that they would have had to explain why they
were making such a large withdrawal -- which doesn't really help for keeping
things "hushed".

~~~
JoshTriplett
> I do believe it's illegal to demand to be paid "hush money", though,
> normally referred to as "blackmail".

Depends on the jurisdiction. If the act being covered up is _illegal_ , then
someone knowing about it is obligated to report it or be an accomplice after
the fact, regardless of money changing hands. On the other hand, if the act
being covered up is not illegal, merely embarrassing (classic example: an
extramarital affair), then it would depend on whether blackmail itself is a
crime in itself or only an extension of some other crime.

The description at
[https://en.wikipedia.org/wiki/Blackmail](https://en.wikipedia.org/wiki/Blackmail)
would suggest that, in the US, blackmail would be a crime only when some other
crime is being covered up. I don't know if that's accurate or complete.

------
brewdad
My biggest gripe with this law has to do with the fact that the limit hasn't
changed in at least 22 years. I remember learning about this law when I worked
as a bank teller one summer. $10K isn't what it used to be.

~~~
gregpilling
The "Know Your Customer" rules actually encourage reporting of transactions in
the $2500 dollar range, which is even less.

Source: drinking buddy who was VP of local bank and handled regulatory
compliance

~~~
perfTerm
Yea that's nothing. Probably wouldn't even get you a pound of weed.

------
ccvannorman
I'm surprised no one has mentioned Bitcoin yet -- which like him or not, would
have made this man's life much easier and more private.

~~~
mirimir
I'm not sure how using Bitcoins would have helped. He could have easily
purchased Bitcoins. But using them to anonymously pay his blackmailer(s) would
have been nontrivial. Even if he had known how, or had advice from someone who
did, I suspect that he'd have been pushing the limits of most mixing services.
Also, the US classifies Bitcoins as capital investments. And so he would have
had to report gains and losses in his income tax returns.

~~~
ccvannorman
true, but the 10k withdrawal would have been a non-issue.

~~~
mirimir
I don't think so.

Consider that I want to discreetly give someone $80K. If I withdraw $80K, the
bank must report that. But if I withdraw 10x $8K, I'm arguably structuring to
avoid reporting. So let's say that I want to buy $80K of Bitcoins. If I do
that in one $80K transfer, the bank must report that. And with 10x $8K, I'm
still structuring. And either way, in that year's tax return, I'll need to
report capital gains and losses on the $80K of Bitcoins.

~~~
shakethemonkey
You wouldn't have to report capital gains unless you had sold the asset. But
transferring the asset to your blackmailer, perhaps you might have to pay gift
tax, unless you filed a 1099. [1]

[1] [http://www.irs.gov/Businesses/Small-Businesses-&-Self-
Employ...](http://www.irs.gov/Businesses/Small-Businesses-&-Self-
Employed/Frequently-Asked-Questions-on-Gift-Taxes)

~~~
mirimir
I'm not very familiar with US tax law. But the key point, I think, is that
once I have that $80K Bitcoin asset, the reporting requirements for it will be
comparable to those for $80K in my bank.

Bitcoin only helps if I can buy those Bitcoins without reporting. So I'm in
the same situation as accumulating cash to send via DHL or whatever.

------
jrs235
If the law was [automatically] adjusted with/for inflation, the original
$10,000 limit would be $60,000 today.

------
ghshephard
This situation itself is pretty straightforward, Hastert was clearly
structuring, and, odds are, the person he sent the money to didn't pay taxes
on the money he got from Hastert, which itself is a crime, and finally, he
lied about it to the FBI, also a crime. So, three clear crimes here, one of
which committed by a third party.

So many things in life are "grey" \- this one is pretty straightforward, and
Hastert would have known that what he was doing was wrong. The news coming out
today strongly suggests that he had a good incentive to commit these crimes to
hide evidence of even greater wrongdoing.

~~~
adevine
Hmm, how is blackmail money classified? Gifts are not taxable by the
recipient, but if you're being blackmailed, it hardly sounds like you're
making a gift. Similarly, insurance money that "makes you whole" is not taxed,
and in this case the money kind of sounded like restitution for abuse.

I'm genuinely curious how this money would be treated by the IRS.

~~~
ghshephard
Money from blackmail, otherwise known as extortion, is most certainly taxable
by the IRS: [http://www.irs.gov/uac/Federal-Statutes---Money-
Laundering](http://www.irs.gov/uac/Federal-Statutes---Money-Laundering)

------
splittist
So the offense is, essentially, not arranging your affairs in a way so as to
leave them open to easy scrutiny by the state. With decades of precedent
allowing such laws how can strong cryptography possibly be permissible?

~~~
maxerickson
No, the essence of the offense is to be aware of a certain type of scrutiny
and arrange your affairs specifically to avoid it.

~~~
Zigurd
Actually, some people here will argue that, in fact, the state HAS an inherent
power to inspect anything at all. Math and physics be damned.

~~~
maxerickson
I don't understand why that is an actually.

The financial reporting regulations surrounding structuring are pretty
specific, it really isn't the sort of thing you would use as a salvo in a war
to inspect everything.

~~~
Zigurd
No, it isn't. But some people think the Hobbesian PoV means outlawing strong
encryption is exactly what the government should do.

------
golemotron
This problem should be tackled at the root. The reporting law (report
transactions >10K is antiquated). The federal government can set up other ways
of finding "interesting" transaction patterns that have nothing to do with a
specific threshold that continually lowers in real value due to inflation.

Drop the 10K reporting requirement and there is no need a structuring law
except as a way to "get" people that they can not "get" in another way.

------
jakeogh
And powerful people in the gov/banking complex want to abandon cash. Great
marketing.

~~~
PythonicAlpha
It is not about marketing, it is about control.

I understand your point, but the money laundering laws and the abandoning of
cash all leads into one direction: The government shall be in control, who
uses money and for what reason.

As much I sympathize with the need to control money laundering and tax
avoiding, I fear that our basic freedom rights are in grave danger. When I
have to ask the government, before I can buy a car (with cash ... at least in
Europe it is still normal to buy used cars from private people with cash) or
have to fear the grip of the FBI, because I am reported by the bank, my
freedom rights are hurt.

Also there where even small merchants accused, since they put sums <$10.000
repeatedly in their account. Something that is normal, when you earn <$10.000
in cash during the weak and empty your cash box at the end of week.

Don't make your whole population into offenders, because you want to prosecute
some crimes!

~~~
jakeogh
It's easy to see how you might interpret my snarky comment that way, but I
agree with what you said about control except I would go further. I think
people should be able to do whatever they like with their money (and what they
decide is money), no government involvement whatsoever. Taxes are theft. If
the gov "needs" our property, they should make the case; and if someone
agrees, they can donate.

~~~
PythonicAlpha
I did think, that your comment was mostly ironical.

I also know this thinking, that taxes are theft. But that is just one
viewpoint. The other is, that taxes help to build a community, to build
infrastructure, to build the internet ... (remember: the internet started as
military network). Taxes are necessary, to help those that are weak and have
not so much possibilities in life. To help those, that can not buy their
schooling ... Before (gov. funded) public schooling was started, reading and
writing was a privilege of less than 10% of the society. I would even go as
far, that many of our today's achievements are because of taxes (only taking
schools into account). Without public schools, we might have still steam
machines. The fast successes of science are because so many people have access
to education.

Even you and me might be still life in some underprivileged village and reap
noggins without (tax paid) public schooling.

~~~
jakeogh
Sure they help build community, but paradigms change. There might be a better
way. If a 1/3 of middle class income wasn't stolen and wasted bombing the
manufactured enemy of the week or propping up corrupt banks, it's possible
that even more would be spent on community. People like to give, but put under
financial pressure, it's the first thing to stop. The real problem is this
idea that it's ok to use violence to take someone elses property. It's a
fundamental structural flaw, an asymmetry that undermines the rule of law by
making it legal to steal if you have the right title.

------
jliptzin
I run a business and regularly withdraw > $10k per month as salary. The bank
reports these routine transactions to the government every month? And if I
decide in the future that things aren't going so well and need to cut my pay
down to $9k or so, I might get charged with structuring, despite the fact that
I am not using the money in any illegal way?

------
spinlock
This case is why I believe it's pointless to try to protect your privacy: even
if you just withdraw < $10,000 to avoid notice, you've committed a crime. But,
if you withdraw more than $10k all the time (then deposit it back in) you
haven't committed a crime and that $10k you needed for hush money gets lost in
the noise.

------
stephengillie
From the unfortunately dead post of TEMPLEOS_DEV

 _They don 't have to. Structuring transactions to avoid reporting laws is
also a crime. Periodic withdrawals of $9,999 won't save you._

~~~
hnhivemind
What's up with that shadow banning?

~~~
anigbrowl
Explanation:
[https://news.ycombinator.com/item?id=6308017](https://news.ycombinator.com/item?id=6308017)

~~~
dang
I believe that particular account is someone else pretending to be Terry,
which (if true) is an obnoxious thing to do. We unkilled this one comment
because it was unobjectionable (and in fact did so before seeing this
subthread), but I'm not unbanning the account.

Soon users will be able to unkill comments on a case-by-case basis [1], which
I hope will render superfluous the tedious genre of shadowban outrage
subthread.

1\.
[https://news.ycombinator.com/item?id=9318675](https://news.ycombinator.com/item?id=9318675)

~~~
anigbrowl
Thanks for the clarification Dan, as well as this feature improvement.

------
mikerichards
That's what you get when you elect socialists, statists. They will decided
what you can do with your own money. Why does any government asshole get to
decide how, what, how much you withdrawl from your own money.

You leftists better fucking wake up. You are the cause of this.

------
calebm
How about when it's from your bank but from someone else's account? I think
that satisfies the crime predicate :)

------
kfcm
Let's examine this law via the perspective of speed limits.

In the US, most interstate highway systems have a speed limit of 70 miles/hour
(around 112-113 km/hour). If you go over 70 mph and run into a police officer
having a bad day, you'll get a ticket.

Say you're on a particular stretch of interstate which is populated by
officers with a reputation of consistently coming after drivers traveling even
1 mph over the limit (eg 71 mph).

So, to err on the side of caution, you limit your driving to between 65 and 69
mph.

You're driving along at 65-69 mph thinking all is well in the world, when the
flashing lights appear behind you. You pull over, the officer comes up, and
The Question comes out: "Is there a problem officer?"

The officer looks you over and asks "Do you know how fast you were going?"

You get a puzzled look on your face. "Well, I couldn't have been speeding. I
know you guys are pretty strict about speeding around here, so I set the
cruise control right at 67 mph."

"So you know that speeding around here will get you a ticket, and you
intentionally kept your speed below the speed limit?"

"Yes sir."

"Well, I'll need you to step out of the car please."

"Um sure, but why?"

"We have an anti-evasion law around here which makes it illegal for you to
knowingly and intentionally go below the speed limit in order to avoid the
possibility of going over and getting a ticket. The penalty is 30 days in jail
vs the $100 speeding ticket. Since you admitted to intentionally going under
the speed limit, I'm placing you under arrest."

Insanity, I tell you.

~~~
obstinate
The metaphor is not apt. There would be nothing wrong with him withdrawing
$32,000, nor with him withdrawing $8,000. The crime was withdrawing $32,000
while evading the reporting requirements. It's not remotely the same as
staying under a speed limit.

~~~
steveax
Not to mention lying to the FBI about it. It's not the crime that'll get you,
it's the coverup.

