At Risk Cash Transaction For Business Clients—The Computers Are Watching

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It is Monday morning at your law office, and you get a telephone call from one of your smaller business clients. He is frantic to say the least. Over the weekend, his employee payroll checks bounced at the bank as well as several checks to suppliers. He assures every skeptical recipient of a business check that the checks should be good. In fact, more than a couple of threats of violence along with threats of going to the police are mixed into the conversation.

After the local bank branch opens, the branch manager tells your client that there was a seizure of the business accounts, and that is all that the manager is willing to say. The mystery for your client soon ends when two federal special agents arrive (usually IRS—Criminal Investigation, but sometimes Secret Service) and tell your client that the currency was seized because the currency was involved in a transaction, or attempted transaction, in violation of 31 USC 5324(a) regarding “structuring.” Your client, desperate to clear up the “misunderstanding,” speaks to the special agents further. They explain that the U.S. Department of the Treasury received information that the pattern of cash deposits of the business were suspicious and appear to have been structured to avoid depositing more than $10,000 at one time. See IRS Form 8300 required under IRC 6050I.

Originally Published in the Michigan Business Law Journal - December 20, 2013.

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