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December 17, 2014
Integrated Disclosures - An Implementation Strategy
Mary Beth Guard and Jack Holzknecht

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Loan Review Best Practices for a Community Bank
Bob Fritzlan

December 19, 2014
PREPAID PRODUCTS - Understanding the CFPB Proposal
John Burnett

January 6, 2015
Business Accounts Documentation and Procedures with Beneficial Ownership
Deborah Crawford

January 6, 2015
FFIEC Cybersecurity Initiatives and Observations from the 2014 Assessments
Susan Orr

January 15, 2015
The ABC's of IRAs - The Basic Ingredients
Patrice Konarik

January 20, 2015
B & Z Appraisal Rules - Getting Them Right
Jack Holzknecht

January 21, 2015
HMDA Soup to Nuts
David Dickinson



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#1810119 - 05/02/13 09:15 AM "They never prosecute people for structuring!"
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
Someone actually said that to me the other day. Consider that structuring is a lot easier to prove than the crime that produced the cash...

Massachusetts Man Sentenced for Structuring Cash Transactions

On August 1, 2012, in Boston, Mass., Richard C. Souza, Jr, of South Dartmouth, was sentenced to 51 months in prison and three years of supervised following his conviction for structuring cash transactions. According to court documents, Souza befriended an elderly widower, whose mental health was declining, and persuaded him to use approximately a quarter of his retirement savings to purchase a property in Maine and take out a loan of over $85,000 using the property as collateral. Souza then took the loan proceeds for himself and in less than two hours, he withdrew the majority of the proceeds of the Maine property loan in six separate cash withdrawals of $9,000 each from five different Sovereign Bank branches in the New Bedford area. The withdrawals were structured to conceal his possession of the loan proceeds and to avoid currency reporting rules that require banks to report cash transactions of over $10,000 to the United States Treasury. At the sentencing hearing, the government also presented evidence that from 2004 to 2008, Souza caused the widower’s net worth to decline from over $750,000 to virtually nothing, while also causing the widower to incur liabilities of over $140,000 during the same period. The evidence also showed that Souza pawned the widower’s watch and other valuables after the widower had been placed into an assisted living facility.

Alabama Man Sentenced for Structuring Currency Transactions


On June 22, 2012, in Birmingham, Ala., Jerry Dwayne Lang, of Somerville, Ala., was sentenced to 36 months in prison, three years of supervised release and ordered to forfeit $75,000. Lang was a scrap metal dealer who ran C&J Recycling in Somerville, Alabama. Lang was convicted in December 2011 on 70 counts of structuring cash transactions with two separate banks between April 2008 and October 2008. Lang’s transactions were designed to avoid the legal requirement for banks to report currency transactions in excess of $10,000 to the federal government. According to evidence at trial, he structured his transactions as follows: Lang bought wrecked vehicles at auction and hired American Recycling to crush the vehicles for scrap metal. American Recycling issued multiple checks made out to Lang, not to C&J Recycling, of less than $10,000, instead of one check of more than $10,000. Lang would cash the checks at different times.

Three South Florida Defendants Sentenced for Kickback Scheme in Hurricane Wilma FEMA Fraud

On June 4, 2012, in Miami, Fla., Jeffrey Wayne Aunspaugh, a Port St. Lucie electrical contractor, his wife, Angela Aunspaugh, and Christopher Hale, his brother-in-law, were sentenced for their roles a kickback scheme involving Hurricane Wilma disaster relief FEMA payments. Jeffrey and Angela Aunspaugh were each sentenced to 63 months in prison and two years supervised release. Hale was sentenced to 30 months in prison and two years supervised release. In March 2012, the Aunspaughs were convicted of conspiracies to commit honest services mail fraud, money laundering and structuring financial transactions to evade currency reporting requirements. Hale pleaded guilty to receiving kickbacks. According to evidence presented at trial, Jeffrey and Angela Aunspaugh, owners of Ener-Phase Electric, Inc., obtained more than $1 million from subcontracts with Glades Utilities Services, Inc. for storm-related repairs following Hurricane Wilma in 2005. The Aunspaughs paid more than $200,000 in cash kickbacks to their brother-in-law, Christopher Hale, who was the general manager of Glades Utilities Services, Inc., to obtain the contracts.

Former Florida Bank Manager Sentenced for Structuring Financial Transactions

On May 25, 2012, in Miami, Fla., Carey Robinson, a former bank branch manager in West Palm Beach, was sentenced to 57 months in prison and two years of supervised release. Robinson pleaded guilty to one count of structuring financial transactions and causing the bank to fail to file required currency transaction reports. According to court documents, Robinson was employed as a bank manager from 2008 through May 2011. Beginning in approximately May 2009, Robinson started exchanging small bills for large bills for a bank customer. In a span of two years, Robinson exchanged almost $1 million for this customer. Most exchanges involved between $30,000 and $40,000. Although a bank is required to file currency transaction reports with the Department of Treasury for all cash transactions involving more than $10,000, Robinson ensured that the bank never filed a single currency transaction report for any of these exchanges.

Connecticut Woman Sentenced for Structuring Cash Transactions

On May 14, 2012, in Hartford, Conn., Della Lien, of Cheshire, was sentenced to 24 months of in prison, three years of supervised release, fined $30,000 and ordered to forfeit $125,010 for structuring more than $400,000 in currency transactions to evade reporting requirements. According to court documents and statements made in court, from March 2007 through June 2009, Lien made 14 cash deposits in increments ranging from $8,000 to $9,750, and totaling $125,010, into various accounts she held. At the time, Lien knew that the bank was required to issue a report for a currency transaction in excess of $10,000, and that by conducting her financial transactions in amounts less than $10,001, she intended to evade the transaction reporting requirements. In addition, between April 2006 and October 2009, Lien structured an additional $281,763 in cash deposits at banks in New York.

Former Investment Advisor Sentenced to Prison

On April 6, 2012, in Buffalo, N.Y., Timothy Geidel, of Hamburg, was sentenced to 42 months in prison and ordered to pay $1.3 million in restitution. Geidel pleaded guilty to wire fraud and structuring for defrauding more than 40 investors out of $1.3 million. According to court documents, while working as an investment adviser with Georgetown Capital Group, Inc., Geidel diverted investor funds to his own use. Between 1990 and 2010, Geidel gave victims the impression that he would be investing their money in high yield stocks, bonds, mutual funds and certificates of deposit. Instead of investing funds as he indicated to his victims, the defendant diverted some of the funds to his own use by depositing the money into his personal bank accounts. The defendant also used some of the funds to pay off earlier investors to perpetuate the scheme.

New York Woman Sentenced on Money Laundering Charge


On March 22, 2012, in New York, N.Y., Maribel Lopez was sentenced to 18 months in prison and three years of supervised release for her role in a cocaine distribution conspiracy. In September 2011, Lopez pleaded guilty to one count of structuring. According to court documents, Lopez assisted a narcotics distribution organization by transporting and concealing narcotics proceeds. From October 2006 through June 2009, she made over 80 cash deposits in amounts under $10,000, totaling $155,120

Arizona Man Sentenced for Scheme to Defraud Investors


On March 14, 2012, in Tucson, Ariz., Philip Mark Cain, of Corona de Tucson, was sentenced to 51 months in prison, five years supervised release and was ordered to pay $1,272,943 in restitution. In December 2011, Cain pleaded guilty to one count of mail fraud, one count of engaging in an illegal monetary transaction greater than $10,000 and one count of structuring a transaction to avoid a currency reporting requirement. According to the indictment, Cain solicited funds from his clients to be invested in structured notes from Deutsche Bank. Cain deposited over $1.4 million of client funds into his bank accounts at JPMorgan Chase and did not invest the funds with Deutsche Bank. Between June 2008 and May 2010, Cain withdrew $596,000 of client funds from his JPMorgan Chase accounts in the form of checks or cashier’s checks payable to himself or his family members. Additionally, from June 2008 to June 2010, Cain withdrew over $400,000 in currency from the same accounts with most withdrawals being less than $10,000, which is the currency transaction reporting limit. During the same time period, approximately 62 vehicles were registered to Cain with the Arizona Motor Vehicle Division and Cain paid by cash or cashier’s check for the repair of vehicles at various times. Cain then sold vehicles through classic car auctioneer Barrett-Jackson, receiving approximately $978,000 in wires from Barrett-Jackson between October 2010 through February 2011.

Texas Resident Sentenced for Structuring Financial Transactions

On February 29, 2012, in Amarillo, Texas, Amy Fernandez was sentenced to 12 months in prison and ordered to pay a money judgment of $99,950 for structuring financial transactions to avoid the reporting requirements. According to court documents, Fernandez admitted that she purchased cashier’s checks from four separate financial institutions each day during the week of February 22, 2010 through February 26, 2010. In order to avoid federal reporting requirements, Fernandez purchased these cashier’s checks in either $3,000 or $2,950 amounts, for a combined total of $59,550. Fernandez tendered cash that she removed from large, gallon-sized plastic bags that she carried in her purse. During one transaction, Fernandez stated that she had to make certain that she stayed under the $3,000 threshold.

New Jersey Woman Sentenced for Role in Structuring and Bank Fraud

On January 23, 2012, in Newark, N.J., Kim S. Morris, of Belleville, N.J., was sentenced to 33 months in prison, three years of supervised release and ordered to forfeit $708,855 for participating in a mortgage fraud scheme and structuring money orders to evade transaction reporting and identification requirements. Morris, a part-time court clerk at the Essex County Courthouse, pleaded guilty to an Information charging her with one count of bank fraud and one count of structuring. According to the court documents and statements made in court, Morris admitted that she applied for a mortgage loan from Wells Fargo Bank in January 2008 by completing a fraudulent Uniform Residential Loan Application to procure approximately $624,000 for a home loan. The loan application contained material misrepresentations, including inflating Morris’ personal income and falsifying the name of her employer. These fraudulent misrepresentations caused Wells Fargo to extend a home loan to Morris. Morris also admitted that from March 2008 through late June 2009, she structured approximately 110 money orders, totaling $84,855, for the purpose of evading the reporting and identification requirements.

New York Woman Sentenced for Structuring Millions in Currency Transactions

On January 4, 2012, in Syracuse, N.Y., Rosalie Jacobs, of Hogansburg, N.Y., was sentenced to five years probation, 12 months of home confinement, and ordered to forfeit $2,634,189 to the United States. As part of her plea, Jacobs admitted that she conspired with others to structure a series of cash deposits of U.S. currency in less than $10,000 increments to avoid federal reporting requirements. During the relevant 13 month period, Jacobs ran a business named Jacobs Tobacco on the Akwesasne Indian Reserve and received payments for tobacco products in U.S. currency. Jacobs was aware that any cash deposit into a domestic financial institution in excess of $10,000 caused the financial institution to generate a Currency Transaction Report. In an effort to avoid such reporting requirements, Jacobs caused $2,634,189 to be deposited in accounts held at two financial institutions with each deposit being intentionally in an amount less than $10,000. For each transaction, Jacobs or one of her employees packaged the cash in separate bags at Jacobs Tobacco and then gave it to a person, who was instructed to make the deposits.

More. (Good examples for employee training.)
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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BSA/AML/CIP/OFAC
#1810156 - 05/02/13 10:08 AM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
Little Miss BSA Online
Diamond Poster

Registered: 05/01/07
Posts: 1164
Loc: Miami
I actually used a few of these for our annual BSA/AML training last year...love real life stories to share with them, in particular the one about the branch manager from our neck of the woods...
_________________________
"Never allow someone to be your priority while allowing yourself to be their option!"

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#1810254 - 05/02/13 12:28 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
ACBbank Online
Power Poster

Registered: 07/26/06
Posts: 2690
Loc: New York City
Thanks for posting these examples Ken. This will be very useful for me when I redo some training slides.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#1811749 - 05/07/13 12:24 PM Re: "They never prosecute people for structuring!" [Re: ACBbank]
Compliance Lover Offline
Gold Star

Registered: 08/08/08
Posts: 486
Yes, thanks for posting these. Very useful info.

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#1818466 - 05/30/13 06:57 AM Re: "They never prosecute people for structuring!" [Re: Compliance Lover]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
Did a Google News search for "money laundering" and Texas in preparation for an upcoming program and found this story. I add it to this thread as an example to encourage trainers to do similar searches so they can identify local stories to circulate to their personnel as reminders that this is an ongoing issue.

This particular fact situation had a unique twist. In the last two sentences of the copy (even more so in the vignette from the news cast) it's apparent that the reporter connected a previous news story to this one.

However, it would not surprise me if the Feds made the connection first.

P.S. You will probably be able to buy that Z-28 convertible featured in the news clip at a government auction some time in the next few months. wink
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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#1819355 - 05/31/13 04:06 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2494
Loc: Southeast
Here is a Tennessee structuring case complete with bank name.

Tennessee Structuring Case
_________________________
Politicians are like diapers. They need to be changed often and for the same reason.

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#1819433 - 06/01/13 08:28 AM Re: "They never prosecute people for structuring!" [Re: Retread]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
I'm sure the bank appreciated being mentioned in the indictment and then the story as its identity was not relevant to either.

Whatever other ancillary effects that prosecutions for structuring may entail, they essentially "out" the bank for reporting the activity. If the defendant's bank records were not subpoenaed before the indictment, it's very clear to the defendant's lawyer that the bank supplied the information voluntarily. Even when the records were subpoenaed in advance, it has to occur to the attorney that law enforcement had something very specific that they were expecting to find or they could never have obtained the subpoena.
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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#1819791 - 06/03/13 06:44 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2494
Loc: Southeast
Ken, here is the indictment to go with your story. Doesn't look to me like they have much of a defense.

Texas Indictment
_________________________
Politicians are like diapers. They need to be changed often and for the same reason.

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#1868342 - 11/05/13 10:38 AM Re: "They never prosecute people for structuring!" [Re: Retread]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
Exhumed to link this story. First, note the publisher - not some Internet nutmagnet. Second, note the store owner's rationale offered for the amount and frequency of deposits.

Related fundraising video.

Finally, how obvious is it that "the bank across the street" filed a SAR, perhaps because they had to?
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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#1868435 - 11/05/13 11:59 AM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
NanaK Offline
Junior Member

Registered: 08/23/13
Posts: 48
Loc: Near the water
What a mess! We recently had a conversation with a long-time customer who had the appearance of structuring her cash withdrawals. She is 82 and runs a little check cashing office for locals in her city. She's been there for 4-ever. Everyone knows her. She has been robbed and hit in the head a couple of times. She continues to work because, she said it "keeps her going." When we asked about her withdrawal amounts, she explained that after doing what she's done for decades, she knows who pays their employees on what days and knows about how many people will come in her doors on any given day. She never wants to go above a certain amount to avoid having too much cash on hand. I believer her!! However, she's withdrawn amounts in those even, round-dollar amounts that will send us all to "h-e-double toothpicks" in a handbag. Makes me sick knowing what I do has the potential to ruin someone's livelihood!! Not everyone who brings in or takes out cash in an even, round-dollar amounts is a drug-dealing thug/evader of reporting requirements.
_________________________
A joyful heart is good medicine!

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#1868485 - 11/05/13 12:48 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
BrianC Online
Power Poster

Registered: 11/26/04
Posts: 2938
Loc: Illinois
If you believe her, then document your conversation and another other CDD or EDD you have performed on her and put it in your "SARs not filed" pile.

Unfortunately, many institutions choose not to take the extra steps of due diliegence to get the "Why" question answered and simply make the knew-jerk reaction to file. I understand their reasoning. It's easier to tell an examiner that you identified this activity pattern and filed than it is to say that you identified the activity pattern, but are satisfied with the customer's story.
_________________________
I can do all things through Him who gives me strength. (Phillipians 4:13)

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#1868539 - 11/05/13 02:30 PM Re: "They never prosecute people for structuring!" [Re: NanaK]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
Noting that you have already talked to the customer, I agree with Brian. I recently posted the following anecdote supplied by an IRS/CID agent at LaBA School:

Customer is making multiple cash deposits at different branches on the same day. In the aggregate, they are generally between $25,000 and $30,000. Bank files SAR. IRS sends "Notice of Law Letter" warning customer about structuring. Customer continues pattern of deposits. Bank files more SARs. IRS goes to call on customer.

The customer acknowledges the activity and the letter and says he couldn't care less if CTR's are filed.

Turns out the bank has a policy of requiring customers to use an armored car service if a cash deposit exceeds $25,000. Customer doesn't want to pay an armored car service so he breaks down his deposit. IRS/CID believes him. Me too.


The easiest way around some of this is to ask the customer "What are you doing?" In the instance above, there is nothing that suggests the bank did not do that. As alleged, the forfeiture was contrary to the conclusions reached by the government in its own previous investigation.
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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#1868579 - 11/05/13 03:36 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
Dolly Nugent Offline
Diamond Poster

Registered: 11/02/00
Posts: 1811
Loc: Southern California
Yes, sometimes there is a reason for a customer's behavior. My favorite story was a customer who ALWAYS made cash deposits for $9,800. We finally asked him about it and he explained that 98 was his lucky number. He thanked us for bringing to his attention the FinCEN brochure and immediately stopped making "structured" deposits.
_________________________
Dolly Nugent
CRCM
Opinions expressed are my own.

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#1868589 - 11/05/13 03:44 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 51214
Loc: Galveston, TX
He is lucky that he stopped before he got 98 years for doing it smile
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The opinions expressed are my own, take them or leave them.

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#1869181 - 11/07/13 08:44 AM Re: "They never prosecute people for structuring!" [Re: rlcarey]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
Story where defendants accused of structuring were acquitted by the jury. Note the amount of cash found in their home and the length of the trial.
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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#1869443 - 11/07/13 01:19 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
NanaK Offline
Junior Member

Registered: 08/23/13
Posts: 48
Loc: Near the water
Thanks for posting these very interesting articles.
_________________________
A joyful heart is good medicine!

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#1869445 - 11/07/13 01:21 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 51214
Loc: Galveston, TX
And there is no wonder why there are conspiracy nuts running around the country after reading some of these. I just wish the reporters would report the whole back story, as I think these might be a little better on Paul Harvey.
_________________________
The opinions expressed are my own, take them or leave them.

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#1869458 - 11/07/13 01:47 PM Re: "They never prosecute people for structuring!" [Re: rlcarey]
edAudit Online
Power Poster

Registered: 07/18/08
Posts: 3000
Loc: You are here
How the regulators drive some banks nuts and file defensive SARs?
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Opinions can be considered as coming from anywhere but my employer.

CAMS


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#1886752 - 01/15/14 08:09 AM Re: "They never prosecute people for structuring!" [Re: edAudit]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2494
Loc: Southeast
Thought some of you might be interested.

Man Pleads Guilty to Aggravated Structuring
_________________________
Politicians are like diapers. They need to be changed often and for the same reason.

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#1886762 - 01/15/14 08:28 AM Re: "They never prosecute people for structuring!" [Re: Retread]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
I think there is a bigger story than the one in the headlines.

Yesterday, I talked to a group of bankers representing about 50 different institutions and asked how many had received "seizure warrants" (generally related to structuring). Six raised their hands. I was completely shocked as I was only expecting one or two, but intended to make a point based on that.

If the government wants the money, but does not want to go to trouble of prosecuting, they will just issue the seizure warrant and take it. The only public court battle will ensue if the customer sues to get it back. (Note the story linked in 1868342 in this thread.)

This jurisdiction has more prosecutions for structuring than might be reasonably expected, but it appears they are using the seizure warrant as a stealth tactic.
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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#1886885 - 01/15/14 10:49 AM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
WonderWoman Offline
Diamond Poster

Registered: 03/07/07
Posts: 2008
Loc: gone fishin'
There's been a ton of seizure warrants in Cali. IRS going after the marijuana coops. They've seized Millions (<-- emphasis on Millions & say it like Dr. Evil)
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My opinions are my own, and not that of my employer.

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#1886910 - 01/15/14 11:09 AM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
edAudit Online
Power Poster

Registered: 07/18/08
Posts: 3000
Loc: You are here
It is better than taxing to get governmental funding
_________________________
Opinions can be considered as coming from anywhere but my employer.

CAMS


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#1895226 - 02/08/14 07:39 PM Re: "They never prosecute people for structuring!" [Re: edAudit]
Retread Offline
Diamond Poster

Registered: 10/31/03
Posts: 2494
Loc: Southeast
Thought some of you might be interested in this article on the sentence in a structuring case.

Restitution
_________________________
Politicians are like diapers. They need to be changed often and for the same reason.

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#1895493 - 02/10/14 01:55 PM Re: "They never prosecute people for structuring!" [Re: Ken_Pegasus]
Dr.Ozya Offline
Member

Registered: 03/27/13
Posts: 82
Loc: Phila
If they were withdrawing over $10,000, nobody would learn about their tax evasion or bribery. Lesson for criminals to learn: only break one law at a time.
_________________________
CAMS CRCM

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#1895496 - 02/10/14 01:58 PM Re: "They never prosecute people for structuring!" [Re: Dr.Ozya]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17569
Loc: Another trip around the sun
Structuring is like yelling: HEY!!! I'M over here!! Please notice me!!"
_________________________
"Oh God, thy sea is so great and my boat is so small." Breton fisherman's prayer in JFK's office.

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