Updated September 2026 | The Bulldog Law | Federal and White Collar Defense
Structuring is breaking up cash transactions so that none of them crosses the $10,000 line that requires a bank to file a Currency Transaction Report with the federal government. Under 31 U.S.C. 5324 it is a felony punishable by up to five years, or ten if it involves more than $100,000 in a year or another federal crime, and the structured money is subject to forfeiture. The money does not have to be dirty. A restaurant owner depositing lawful receipts in $9,500 pieces to avoid the paperwork has committed the offense, and the government does not have to prove she knew it was illegal, only that she knew about the reporting rule and acted to get around it. Smurfing is the organized version: recruiting other people to make the sub-threshold transactions. There is no limit on how much cash you can deposit; the crime is the intent to evade the report.
The Bulldog Law's federal defense attorneys see structuring charged in two very different worlds. In one, it rides alongside drug or fraud conspiracies as the mechanism that moved the proceeds, and it is the least of the defendant's problems. In the other, it is the only charge, brought against a small business owner, a landlord, a jeweler, or an immigrant family with a cash economy, who thought they were staying out of the IRS's hair and who learned the meaning of the word when agents froze their accounts. The second group is the one most people don't know exists, and the one our attorneys most often represent. What follows is how the reporting system works, what the statute requires, why legal-source structuring is prosecuted, and what defends it. Call (888) 928-1609 or message our team if a bank has asked questions or an agent has called.
The reporting system the crime is built on
The Bank Secrecy Act requires financial institutions to file a Currency Transaction Report, FinCEN Form 112, for every cash transaction, or set of related transactions, over $10,000 in a single business day. Deposits, withdrawals, exchanges, cashier's checks bought with cash. The report goes to the Financial Crimes Enforcement Network, is not a tax document, and is not a finding of wrongdoing; millions are filed every year on car dealerships, casinos, and grocery stores. Businesses that receive more than $10,000 in cash in one transaction or related transactions must file an equivalent report, Form 8300, with the IRS. And separately, banks must file a Suspicious Activity Report, which the customer is never told about, whenever a transaction looks like it was designed to evade the CTR. The FinCEN guidance on the Bank Secrecy Act is public, and the SAR is the document that starts nearly every structuring investigation.
The structure of the system explains the crime. If banks report cash over $10,000, people who don't want cash reported keep every transaction under $10,000. Congress made that evasion itself a crime in 1986 so that the reporting requirement could not be defeated by arithmetic.
What 31 U.S.C. 5324 prohibits
Section 5324 makes it unlawful, for the purpose of evading the reporting requirements, to cause or attempt to cause a financial institution to fail to file a required report, to cause it to file a report containing a material omission or misstatement, or to structure or assist in structuring, or attempt to structure, any transaction with one or more financial institutions. The parallel provision reaches businesses and Form 8300. The regulations define structuring as conducting or attempting to conduct one or more currency transactions in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading the reporting requirements. In any amount. On one or more days. The breadth is deliberate.
What the government must prove: that the defendant knew of the reporting requirement, and that the defendant structured transactions with the purpose of evading it. What it does not have to prove, since 1994: that the defendant knew structuring was a crime. The Supreme Court held in Ratzlaf v. United States that the statute's willfulness language required knowledge of illegality, and Congress deleted the word within months. Since then, a person who understood that deposits over $10,000 get reported, and who kept deposits under $10,000 to avoid that, has the required mental state, even if they believed they were merely avoiding a form. Nor does the government have to prove any underlying crime; the money's source is irrelevant to guilt, though not to sentencing or to what else gets charged.
Penalties
A basic violation carries up to five years in federal prison and a fine. An aggravated violation, structuring as part of a pattern of illegal activity involving more than $100,000 in a twelve-month period, or while violating another federal law, carries up to ten years. Under the sentencing guidelines, the offense level is driven by the amount structured, with enhancements for a pattern and for knowing the funds were criminal proceeds; our page on federal sentencing explains how the range is computed. A typical legal-source structuring case, first offense, produces a guideline range that our attorneys argue down to probation with some frequency, precisely because the funds were lawful and no one was harmed.
Forfeiture, and the scandal that changed it
Section 5317 authorizes forfeiture of any property involved in a structuring violation, which the IRS long read to mean the entire contents of the account. For years, IRS Criminal Investigation used civil forfeiture, which requires no conviction and shifts the burden to the owner, to seize hundreds of thousands of dollars from restaurants, convenience stores, and dairy farms whose only offense was depositing lawful cash in pieces. Congressional hearings and press coverage in 2014 documented cases in which no crime other than structuring was ever alleged and the owners lost their businesses. The IRS changed its policy that year to pursue structuring forfeiture only where the funds came from illegal sources or where structuring was tied to another crime, and the Taxpayer First Act of 2019 wrote that limit into law, with a requirement that the IRS return legally sourced funds and a hearing right for owners. Forfeiture in structuring cases still happens; it now requires more, and a seizure of legal-source money is defensible in a way it was not before.
Smurfing
Smurfing is structuring done through other people. The person with the cash, usually drug proceeds, recruits runners, the smurfs, to each deposit or convert amounts under $10,000 at different banks and branches, sometimes dozens of them in a day, so that the cash enters the banking system in pieces none of which is reported. Casinos, money service businesses, and cryptocurrency ATMs are used the same way. The smurfs are charged with structuring under 5324 and, because they knew the money was criminal proceeds, with money laundering under 18 U.S.C. 1956; the organizer is charged with both plus the underlying drug or fraud offense, and in large operations with RICO. The smurfs who reach our office are usually the least culpable participants and the ones with the most to lose, because a laundering conviction is an aggravated felony for immigration purposes regardless of sentence.
The people who get charged without a crime behind the money
The cases that surprise clients are the legal-source ones, and they follow patterns. A cash-intensive business, a restaurant, a car wash, a cannabis dispensary that banks cannot serve, a contractor paid in cash, deposits its receipts in amounts that happen to sit just under $10,000, week after week. A landlord collects rent in cash and deposits it in two trips because he doesn't like carrying it. A family that distrusts banks keeps savings at home and moves it in over a year. A bank teller tells a customer that deposits over $10,000 involve extra paperwork, and the customer, wanting to be helpful, comes back with $9,900 the next day. In each case the bank's software flags the pattern, a SAR is filed, and eighteen months later agents appear with a grand jury subpoena for the business records.
Whether those are crimes depends entirely on purpose. The restaurant that deposits daily receipts of $8,000 to $9,500 because that is what the restaurant makes is not structuring. The restaurant that holds cash back so that each deposit stays under $10,000 is. The government's evidence of purpose is circumstantial: the pattern itself, deposits clustered between $9,000 and $9,999, multiple deposits on the same day at different branches, a customer's own statements to a teller, and, most often, the interview in which the owner explains that she kept deposits low because she'd heard big ones got reported. That sentence is the case. The right to remain silent is as important in a structuring investigation as in any other, and the visit from IRS agents who just want to understand your deposits is the moment to use it.
Defenses
No knowledge of the reporting requirement. The statute requires it. A person who did not know that cash over $10,000 was reported cannot have structured to evade the report, and many people, particularly recent immigrants and people outside the banking system, do not know. The government proves knowledge through prior CTRs filed on the defendant, bank disclosures, and statements; where none exist, the element is contestable.
No purpose to evade. Deposits that track the actual cash flow of a business, that vary in amount, that sometimes exceed $10,000, or that were made under $10,000 for reasons unrelated to reporting, insurance limits on cash in transit, a teller's line, a partner's schedule, are not structuring. Our attorneys reconstruct the business's cash receipts and match them to the deposits, and a pattern that reflects revenue rather than a threshold defeats the inference.
Teller advice and bank conduct. A customer who reduced deposits because a bank employee suggested it has a mitigation argument and sometimes a defense, and a bank that watched the pattern for two years without a SAR has a compliance problem the defense can use. Banks are required to report; their failure to do so while continuing to accept the deposits complicates the government's narrative.
Aggregation errors. The government must show transactions that were related and structured; deposits weeks apart from different sources are not a single structured transaction, and the $100,000 threshold for the aggravated offense is frequently reached only by counting everything.
Forfeiture limits. Legal-source funds are protected by the 2014 policy and the 2019 statute, and an owner whose account was seized is entitled to a prompt hearing. Contesting the forfeiture is a separate proceeding from the criminal case and often the more urgent one, because the frozen money is the business's operating capital and the defendant's ability to pay for a defense.
The usual markers of a weak federal case apply with unusual force here, because structuring prosecutions rest almost entirely on inference from a pattern, and a pattern with an innocent explanation is a pattern with a defense.
Structuring versus money laundering, and California's version
Structuring and money laundering are different crimes that travel together. Money laundering under 18 U.S.C. 1956 requires proceeds of a specified unlawful activity and a transaction designed to conceal them or promote the crime; it is about dirty money. Structuring under 31 U.S.C. 5324 requires only evasion of a report; it is about any money. A drug dealer who smurfs deposits commits both. A restaurant owner who splits lawful receipts commits only the second. Prosecutors charge structuring in laundering cases because it is easier to prove and does not require tracing the money to a crime, and they charge it alone when the source is legal and the pattern is clear.
California has its own money laundering statute, Penal Code 186.10, which reaches transactions of more than $5,000 in a seven-day period or $25,000 in a thirty-day period involving criminal proceeds, and its own reporting requirements for businesses. It has no structuring offense as such; the threshold-evasion crime is federal, and state prosecutors who find it refer the case. Related federal offenses that appear in the same indictments include operating an unlicensed money transmitting business, which reaches informal cash-transfer networks and some cryptocurrency operations, and false statements to a bank. Our federal defense attorneys handle the full set, and in cases with a state component, coordinate the two.
Frequently asked questions
What is structuring in banking?
Structuring is breaking a cash transaction into smaller pieces so that no single piece triggers the bank's federal reporting duty. Banks must file a Currency Transaction Report with FinCEN for any cash transaction over $10,000. Depositing $12,000 as $6,000 today and $6,000 tomorrow, to keep each deposit under the line, is structuring. Under 31 U.S.C. 5324 it is a federal felony whether or not the money came from anything illegal.
Is it illegal to deposit less than $10,000 in cash?
No. There is no limit on cash deposits and no crime in depositing $9,000. The crime is splitting up cash for the purpose of evading the report. A person who deposits $9,000 because that's what they have is fine. A person who has $30,000 and deposits it in four pieces on four days to avoid a CTR has structured, even though every deposit was legal on its own. Intent is the entire offense.
What is smurfing?
Smurfing is structuring with helpers: recruiting other people, the smurfs, to each make deposits or purchases under the reporting threshold so that a large amount of cash enters the system without a single report. It is the classic money laundering technique for drug proceeds, and it is charged as structuring under 31 U.S.C. 5324 and, where the money came from crime, as money laundering under 18 U.S.C. 1956 as well.
What is the penalty for structuring?
Up to five years in federal prison and a fine. If the structuring was part of a pattern involving more than $100,000 in a twelve-month period, or was done while violating another federal law, the maximum doubles to ten years. The government can also seek forfeiture of the structured funds under 31 U.S.C. 5317, which for years meant seizing the entire bank accounts of small businesses whose money was legally earned; that practice was curtailed by IRS policy in 2014 and by statute in 2019.
Do I have to know structuring is illegal to be convicted?
Not anymore. The Supreme Court held in Ratzlaf v. United States in 1994 that the statute as then written required proof the defendant knew structuring was unlawful. Congress removed that requirement the same year. Today the government must prove you knew about the $10,000 reporting rule and acted to evade it; it does not have to prove you knew that evading it was a crime. Many people convicted of structuring believed they were avoiding paperwork, not committing a felony.
Related reading from our attorneys
- Racketeering and RICO charges
- Embezzlement and misappropriation in California
- Check fraud, kiting, and bad checks
Agents asking about your deposits? The explanation is the evidence
The Bulldog Law's federal defense attorneys represent business owners, families, and individuals in structuring investigations, forfeiture proceedings, and money laundering prosecutions across California's federal districts, and handle the immigration analysis in-house. Visit our criminal defense page, call (888) 928-1609, or reach us online before the interview, not after.