How Crazy That It's A Crime To Withdraw Your Own Money From The Bank In Government-Unapproved Amounts
Former Speaker of the House Dennis Hastert was paying loads of blackmail money to somebody, and I have to suspect it was for doing something truly terrible.
Monica Davey writes for The New York Times that he was paying $3.5 million to someone for his "misconduct" from years ago.
He has been indicted -- charged with lying to the F.B.I. and making cash withdrawals from banks in a way that was designed to hide the money he was paying. He was accused of "structuring" -- withdrawing less than $10K at a time to avoid bank questions.
About the person he was paying off, Davey reports:
Mr. Hastert, who was once a high school teacher and wrestling coach in Yorkville, Ill., had so far paid $1.7 million to the person, who had lived in Yorkville and had known Mr. Hastert for most of his or her life. Mr. Hastert worked in Yorkville from 1965 to 1981.In 2010, during meetings between Mr. Hastert and the unnamed individual, the two discussed "past misconduct" by Mr. Hastert against the person, according to the indictment.
In those meetings and in later discussions, Mr. Hastert agreed to provide money to the person "in order to compensate for and conceal his prior misconduct," the indictment said. It said he was structuring the cash withdrawals in increments designed to avoid bank reporting requirements. The indictment does not provide details of the misconduct.
...Each of the two charges carries a penalty of as much as five years in prison and a $250,000 fine, the prosecutor's office said.
Again, really does sound like he did something creepy-horrible.
But about the banking law-breaking, it is just insane that we have laws that tell you how you can and cannot withdraw your own money from your own bank account.
It's one more way our rights are being yanked away from us in the name of crime-stopping.
This law on "structuring" -- which has been used to allow government to steal the money of people who are not paying other people off for some prior misconduct -- needs to be repealed.
I personally think this law on structuring is probably unconstitutional.
When he was asked about it, his mistake was not invoking his fifth amendment rights. (But they should not be allowed to ask)
Isab at May 29, 2015 6:43 AM
"But about the banking law-breaking, it is just insane that we have laws that tell you how you can and cannot withdraw your own money from your own bank account. "
That's life in the police state U.S.A. And if you don't believe we live in a police state, you just aren't paying attention.
Matt at May 29, 2015 7:15 AM
Careful what you wish for. The reporting rules for transactions above $10,000 are (among other things) to help deter money-laundering of cash from illegal activities like drugs, prostitution, gambling, etc. Personally, I'd prefer my banks not attract such business, let's keep the criminals working hard and not help them too much.
bkmale at May 29, 2015 7:55 AM
This has probably been inevitable since Al Capone was sent up the river on tax charges. They couldn't get him for murder, but the financial violations were easy to prove. That became too much of a temptation to prosecutors: "we can round up all of the public enemies, and we don't have to do the hard work of investigating murder, kidnapping, or extortion! If we go through their records, we're sure to find a financial violation! The public will cheer us!"
And here we are: there is scarcely an adult in the U.S. who would not be convicted of some kind of tax violation if charged. It's impossible for even most experienced accountants to be familiar with all of the nuances of the tax code. And there are parts of it, like the "structuring" statute, that are impossible to disprove because the criteria is basically "the IRS knows it when it sees it". There is no way for the citizen to know if they are complying with the law or not.
Cousin Dave at May 29, 2015 7:56 AM
My dad used to pay cash for cars. He'd write a check for more than $10,000 and drive away. Car salesmen were usually astonished when he rejected their financing offers and whipped out his checkbook. Today, he'd be in trouble with the FBI and IRS for his fiscal prudence.
Conan the Grammarian at May 29, 2015 8:05 AM
Maybe Hastert sent the IRS an e-mail explaining what he was doing. I understand they have had some trouble recovering e-mails of late.
Seriously, folks, is this clown college the government agency you want to trust with the ability to write and interpret its own laws?
Conan the Grammarian at May 29, 2015 8:08 AM
There are two possible crimes here: blackmail (by the other person), and whatever he's being blackmailed for. Charge those crimes, or charge nothing.
These are just bullshit charges, and any jury with a brain or a soul would nullify them. Of course, the prosecutors work hard to keep anyone off the jury who might even know that to be an option.
a_random_guy at May 29, 2015 8:20 AM
Example umteenth of why when the feds show up to ask questions, you shut up and lawyer up.
Janet C at May 29, 2015 9:37 AM
He has been indicted -- charged with lying to the F.B.I. and making cash withdrawals from banks in a way that was designed to hide the money he was paying. He was accused of "structuring" -- withdrawing less than $10K at a time to avoid bank questions.
So here's the truly splendid catch-22: If you withdraw a large sum, the government gets nosy. If you withdraw smaller sums and attempt to stay below the reporting level to keep things legal and private, the government can accuse you of "structuring."
Kevin at May 29, 2015 10:00 AM
@bkmale, who wrote-
'Careful what you wish for. The reporting rules for transactions above $10,000 are (among other things) to help deter money-laundering of cash from illegal activities like drugs, prostitution, gambling, etc. Personally, I'd prefer my banks not attract such business, let's keep the criminals working hard and not help them too much.'
Oh, spare me. Really? You really believe that these rules have any effect whatever on (any of the activities you listed)? Or ever did?
What you're telling us is that you honestly believe that people engaged in these activities at the kind of level that these sums of money would suggest - are operating their activities using a checking account at Comerica?
This is just laughable. All these activities work on one single basis only - Cash Money - and that cash never sees the inside of any bank that's subject to Federal reporting regulations. All this talk of 'money laundering' is just movie-plot madness. No criminal making tens of thousands of dollars from his crimes will ever take his cash within a country mile of a conventional bank.
Want proof? Look at any recent case of 'structuring'. In every single case, the target of the investigation is an innocent citizen doing innocent things with funds that have not a single thing to do with any sort of crime. Try finding out the last time that the 'structuring' charge was applied to anyone actually involved in any of the crimes you mention. You'll be a long time trying.
The crime of 'structuring' has now joined 'civil forfeiture' as another way for the state to confiscate funds and property without any evidence of wrongdoing by anybody. When there is no objective way to distinguish lawful activity from unlawful activity, then the entire presumption of innocence becomes a mockery, because the state can now charge you with breaking the law even though your activity has no relationship to any sort of crime as normal people would define 'crime'. The Feds have, by this law, effectively criminalized 'possession of more than $10,000 in cash or instruments on more than one occasion.'
To the instant case - there's no evidence that Dennis Hastert (or anyone else) has committed any crime. If (as we presume) he is paying the mother of an illegitimate child for child support and/or silence, well, neither of those things are crimes if it's an arrangement voluntarily entered into by both parties. But now 'making regular payments' is, by itself, with no indication whatever of any wrongdoing, grounds for charging someone with a crime. It's certainly not hyperbole to say that the Feds could legitimately charge you with 'structuring' because you make payments on a mortgage. They are already charging business owners for regularly depositing the day's cash takings. Now think about whether you think this is 'what you wish for.'
llater,
llamas
llamas at May 29, 2015 10:05 AM
I was under the impression that blackmail was a crime. Oh, yes, here it is Title 18, Section 873, US Code.
So prosecutors have knowledge of a crime and decline to investigate it? there's a word for that...oh, yea, corruption.
DoJ. Secret Service. FBI. IRS. Corrupt, the lot of 'em. Also, remember that the IRS has been entrusted with ObamaCare. And your personally identifying information, which they can't seem to keep out of Russian hackers hands...
Corrupt and incompetent is no way to go thru life, son.
I R A Darth Aggie at May 29, 2015 10:13 AM
Question for bkmale: how do you feel about Operation Choke Point? that's the outreach from the Feds to the banks saying "hey, that's a nice bank, be a terrible shame if something bad happened to you because you were doing business with undesirables".
Such business include: gun dealers, pawn shops, porn stars. Pretty much anyone that DoJ doesn't approve of. And like so many other regulatory approaches, evidence of a crime is not necessary.
I R A Darth Aggie at May 29, 2015 10:30 AM
Here's my 2 cent observation (Please note - way below the $10,000 threshold). llamas beat me to the punch with child support or some other legal but embarrassing situation to a Speaker of the House.
The other side of these transactions means the recipient is likely structuring deposits the same way. Do you think the FBI is looking into that?
Goo at May 29, 2015 11:01 AM
@ I R A Darth Aggie - remember, there may not be blackmail involved here at all. Blackmail has a very specific legal definition in US federal law - it is demanding (value, usually money) with threats that if it is not forthcoming, the blackmailer will inform the authorities of a crime committed by the victim. In US federal law, threatening to reveal things which may be immoral or reprehensible, but which are not IAOT a crime (like the fathering of a child out of wedlock) cannot attract a charge of blackmail.
State laws vary, naturally, but it is the Feds who have gone after Mr Hastert.
In any event, all state laws require an element of threat to support a charge of blackmail.
Let us say that this is a case of a child on the wrong side of the blanket - it may not be, but the same principles will apply. If Miss X says to Dennis Hastert 'Unless you pay me $X a month, I'll go to the National Enquirer', that is blackmail under many state laws. But if Dennis Hastert says to Miss X 'I'll pay you $X a month to keep this between ourselves', that is no crime by anybody. Most referable recent case - John Edwards, who paid his mistress to keep the details of their affair and child to herself. No crime. As long as what he is paying for silence about is not itself a crime, no law is broken. Remember, John Edwards was only prosecuted for campaign-finance offences - for using money that was not his to give to pay off his mistress.
If what Dennis Hastert is paying for silence about was a crime, thing get a bit more murky - he may have committed a crime in doing so. But it simply beggars belief that the choice of the Feds is to go after him for 'structuring' - for spending his own money. It's impossible to avoid the conclusion that they were interested only in finding and prosecuting a charge which attracts large fines and is very easy to prosecute - since you don't even have to demonstrate any ill-intent, merely that sums of money were withdrawn that, taken together, exceed the threshold for reporting.
llater,
llamas
llamas at May 29, 2015 11:30 AM
@ Conan & Goo
The issue here is CASH. Not checks, but greenback CASH.
A deposit or withdrawal of more than $10,000 in CASH triggers a "Currency Transaction Report" that goes to the Feds. Those depositors who know this law and try to evade it will "structure" their deposit or withdrawal of cash to smaller sums. This practice is also known as "smurfing" ( from the comic characters " The Smurfs"). Structuring triggers a "Suspicious Activity Report" that goes to the Feds.
This law applies to all businesses who might see an offer of more than $10,000 in CASH in the normal course of business such as car dealerships and title companies. But banks see this more often and will report you because they will not suffer the consequences.
So, Conan, you can write that check above $10,000 to buy a car and that is totally within the law.
Nick at May 29, 2015 1:09 PM
Thanks. As I'm thinking about guying a new car soon, that will help. Now, all I need is >$10,000 in my checking account.
Nice breakdown of the reporting requirements.
"Structuring" sounds like one of those crimes only a government could think of - the crime of making the government's prying into citizens' lives more difficult.
Conan the Grammarian at May 29, 2015 1:52 PM
It's not corruption at the IRS when it involves making Republicans' lives more difficult. Just as Lois Lerner.
No, but fat, drunk, and stupid seems to be working for them.
Conan the Grammarian at May 29, 2015 1:56 PM
Careful what you wish for. The reporting rules for transactions above $10,000 are (among other things) to help deter money-laundering of cash from illegal activities like drugs, prostitution, gambling, etc.
None of those three should be illegal
lujlp at May 29, 2015 2:38 PM
@ Nick - that's a start. However - the reporting requirements apply to any depositor, whether a business or an individual.
And while there is a hard-and-fast rule about reporting transactions in cash of more than $10k, there is also the delightful 'suspicious activity report', the bastard child of the Bank Secrecy Act and Sarbanes-Oxley. This report has no minimum or threshold amount, applies to all banking transactions, and can be instigated by a whole list of activities and conditions, all the way down to 'we think this might be unusual'. This requirement essentially enlists bankers as judges and reporters of your banking activities, with draconian penalties if they fail to report what later turns out to be illegal activity. They are not required to tell you when they make such a report, and there are no consequences for filing a report that turns out to be nothing. The natural consequence is massive over-reporting.
All of this has nothing to do with drugs or hookers, of course - the sole purpose is to try and catch tax evaders. But this level of state intrusion could never be sold on those grounds, so of course it's 'for the children!'.
llater,
llamas
llamas at May 29, 2015 3:28 PM
I saw a story on Facebook awhile back about some lady being investigated after the bank reported her for transferring money. She got a payout from life insurance or an inheritance. She divided it up and had some transferred into savings accounts for each of her kids and kept some for herself. She got flagged for suspicious activity. I never heard further details as to the outcome.
BunnyGirl at May 29, 2015 5:02 PM
If it's anything like civil forfeiture they offered her half of her money to keep quiet.
Ben at May 30, 2015 5:30 AM
Well, here's what Hastert did, according to Crooks and Liars.
You're right, Amy. It was something "creepy-horrible."
Patrick at May 30, 2015 2:33 PM
Personally, I'd prefer my banks not attract such business, let's keep the criminals working hard and not help them too much.
Posted by: bkmale at May 29, 2015 7:55 AM
You might want to look up the Wachovia bank scandal and others that have paid fines to the Feds for laundering drug money. Wachovia paid 200 million or so in fines for laundering billions.
But you know, lets worry about 10k transactions of small businesses and sub 10k "suspicious" activity.
Sio at May 31, 2015 12:56 AM
"This requirement essentially enlists bankers as judges and reporters of your banking activities, with draconian penalties if they fail to report what later turns out to be illegal activity. "
Note the implication here. Every bank transaction is being reported to the IRS. Every single one. Because there are draconian penalties for under-reporting, and no penalty for over-reporting. The government has, somewhere, built a database of the bank transactions and finances of every single person in the U.S. They know at all times exactly how much money you have, where you got it from, what you've bought, and what you've sold. Don't think for a minute that they don't. We've learned via the Snowden revelations that this sort of thing is how the government operates now. It's not paranoid if they really are after you.
Cousin Dave at May 31, 2015 7:15 PM
Ask yourself this: How did a man who was a high school wrestling coach get rich enough to pay millions to a blackmailer?
Hastert (R-Illinois), while he may be the victim in this, is a shining example of our political class getting rich while in office. According to National Review, he entered Congress worth about $275,000 and left worth about $3,000,000.
Ask yourself how Harry Reid (D-Nevada) became as rich as he is while in office taking care of "the people's business." Those private land deal "investments" of his really paid off.
Conan the Grammarian at June 1, 2015 10:08 AM
All you people are missing the big picture. Yes, banks watch the types and values and most importantly *frequency* of withdrawals from their accounts. They must if they are federally licensed for this exact scenario former Speaker Hastert finds himself in. The problem isn't that he shouldn't be allowed to withdraw as much as he wants at any given time, or that he should be reported for small withdrawals. The problem is that he withdrew almost ONE MILLION DOLLARS [/Dr. Evil] over the course of about 18 months. That is most definitely suspicious activity, made worse by the fact that he withdrew lots of smaller amounts *AFTER* the feds questioned him for three withdrawals of $50,000 each.
You have every right to withdraw as much money (or as little) as you like, but after the Feds personally question you on why you need so much cash so quickly and you change your ATM habits to withdraw a literal shit ton of money, you can bet your ass they're gonna be watching you more closely after the first visit. This law has been on the books for decades, I don't know why so many of you seem surprised it was used here.
Rezunn at June 1, 2015 4:58 PM
Rezunn,
The issue isn't that the law was used here. The issue is the law is being used more and more often. Hastert is not the poster child for this issue. As Conan points out he and many of our elected officials make significant sums in ways that are illegal for anyone else to do. But this law has been used against numerous small business people just depositing the days take. Additionally, the habit of cutting a deal where the government keeps half of your money and you agree to not tell anyone is ripe for abuse. The perverse incentives should be obvious.
Ben at June 2, 2015 3:25 PM
@Ben, right but again the law has been on the books for *decades*. Businesses might get caught up in it, but as long as they have a perfectly legitimate reason to have more than $10k in cash (or to withdraw that amount) the bank -- and more importantly the Feds -- is more than willing to let them use their money. The point of the law is to stop criminal enterprises from pushing cash through the US banking system. We're not talking about post-arrest plea bargains, we are talking about criminal investigations. This is one area where the law is working perfectly as intended and probably does not need any tweaking to continue to do its job.
Look at the current case against FIFA for how the law works in action as applied. Please tell me how corruption is supposed to be policed at the federal and international level without using suspicious financial transactions as a jumping-off point for investigations. Even the big spam-bot ring that was broken up a couple years ago used this same type of scrutiny to bring convictions. The investigators followed the money to a couple of shady banks in Eastern Europe to bust the spam ring and got the international banking community to blacklist those banks, thus ending a criminal enterprise that netted hundreds of thousands of dollars per month. You're going to tell me that the law, as written, is too much of a burden on law-abiding citizens that it has to be scrapped?
Rezunn at June 2, 2015 3:41 PM
Rezunn,
You aren't keeping up with the times. This law has been used against family owned restaurants who's only offense is depositing the day's income. The typical plea bargain is they get to keep half of your money and you are legally prohibited from discussing the situation. If you reveal you have been robbed by the government they are free to come after you again.
Prior to the Obama administration this and civil forfeiture laws were rarely invoked. There was great prosecutorial discretion because these laws have such a great capacity for abuse. The guilty till proven innocent nature makes fighting an accusation all but impossible. But the Obama administration has a great appetite for money. They have used these types of laws to essentially tax those too poor to defend themselves.
Yes, the FIFA case shows how some good can come from this. But having cops robbing anyone they pull over and having the IRS hitting up small businesses like the mob for protection money puts a whole lot of bad to balance out a few goods. Yes, it needs to be scrapped.
Ben at June 2, 2015 7:54 PM
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