STRUCTURED CASH DEPOSITS: WHAT DO I DO WHEN THE IRS CID AGENT COMES?

“Choose wisely,” the lawyer might say to you. Your choice? Trial or negotiate a deal with the Feds.

If you elect to go to trial and win, great. But if you go to trial and you lose, did you know that you will likely be facing up to ten years in the BOP? That’s right, under 31 USC 5324(d)(2), if the Assistant United States Attorney (AUSA) can show you made or conspired to make at least $100,000 in structured deposits as a part of a pattern of illegal activity over the course of 12 months and those funds were sourced from illegal activities (e.g., Mail Fraud, Wire Fraud, Conspiracy to Distribute or Manufacture Cocaine or Methamphetamine), your cap goes from five years in the BOP to 10 years in the federal prison system.

Federal Sentencing Guidelines for Structuring Cases

What choice should you make? This is where you need to consult with a smart lawyer that understands how the federal sentencing guidelines will apply in your case, and how the sentencing process works in the federal prosecutorial system, BEFORE you start negotiating with the U.S. Attorney’s Office. In the federal system, in order to try and keep federal sentences all across the land as fair as possible by being as uniform as possible (so the same crime gets punished the same in Oregon as Texas, for example), a series of “sentencing guidelines” has been created.

The federal judge is not limited to the specific guidelines; she can make her own calls on a case. However, these guidelines are very influential and powerful. Federal sentencing guidelines will be the general rule that is followed, unless the defense lawyer can show an exception should apply.

Having a lawyer at your side as soon as possible in these situations is extremely important in structuring situations. Why? Imagine that you and your lawyer negotiate a plea deal with the AUSA assigned to you case. In the Doctor’s Office Scenario, for example, say you agree to plead guilty as long as no charges are filed against your best friend, who helped you out in your land purchase plan.

If you plead guilty in federal court to a federal judge, then you will go with your lawyer to see the United State Probation Officer (USPO) assigned to write the “Presentence Report” in your case.

What is a Presentence Report?

Here, the federal Probation Officer must write a report and make a recommended guideline calculation for the Judge to consider before he or she sentences you. Most USPOs will write their report in a way that maximizes the total offense level.

That is, the federal probation officer will look to the so called relevant conduct and the USPO will apply as many guideline enhancements that he can find in the United States Sentencing Guidelines (“USSG”). (You can read the Guidelines online here.)

Now, I know you are going to say: “But the USSG are only advisory.” And you’d be correct. But, my experience is that most Judges will give the USSG calculation a great deal of deference. Having an advocate on your side when you are dealing with the probation officer as well as in the sentencing hearing before the federal judge is both critical and comforting.

Federal Sentencing Guidelines in a Structuring Case

So what are the guideline provisions that typically come into play in these so called Structuring cases? Let’s start off with the applicable guideline provisions.
In the factual Doctor’s Office scenario described above, one could plead guilty to potentially two different criminal violations. One could plead guilty to a violation of the substantive law in Title 31 section 5324(d)(1) or sections 5324(d)(2). Since the latter section deals with an enhanced ten year statutory cap, it’s unlikely you would want to plead to that section.

So, most lawyers will plead their client to the 5324(d)(1) violation. However, that would be a mistake in my opinion in many cases. This will take a little while to explain, so bear with me.

When we calculate your guidelines in USSG 2S1.3 we start off with a level 6 and then add the appropriate theft table level as shown in USSG section 2B1.1.
That’s right, the USSG treat all of the money structured in the same way as if all of that deposited money were stolen or embezzled. Then we add 2 levels under USSG 2S1.3(b)(2) if you were convicted under Title 31 and more than $100,000 if a 12 month period was structured.

Well, that doesn’t seem fair does it? Do I have to plead to a Title 31 violation? The answer is, maybe not.

In the scenario I’ve described, you could also plead in to an 18 U.S.C. section 371 Conspiracy violation. That is, you could also plead guilty to “Conspiracy to Structure Cash Bank Deposits”, not an actual substantive count for Structuring.

Conspiring to do something isn’t the same thing as doing it, so there are two different statutes involved here.

If your lawyer is sharp enough to do this, he just saved you two levels off of your sentence, which could mean more than a year in some cases. What’s more, your lawyer may have saved you up to 8 levels off of your sentence.

In the Doctor’s Office scenario I’ve described above, the source of the funds was lawful. Remember, we are talking about a Doctor’s Office; not wire fraud money, drug money, or racketeering cash.

If you don’t plead to a Title 31 count and the source of the funds were legit, then you could also receive a 6 level reduction under USSG 2S1.3(b)(3). Now let’s do the math in the best case scenario for the Doctor’s Office structuring example above.

Best Case Scenario in Sentencing for the Doctor’s Office

We start off with a level 6 and add 14 levels pursuant to USSG 2B1.1(b)(1)(H) because the total amount structured falls between $400,000 and $1,000,000. We would then reduce by 6 levels under 2S1.3(b)(3) which yields total of level 14, and then take an additional three levels off for acceptance of responsibility under USSG section 3E1.1 (a),(b) which now yields a total of level 11.

Assuming you have no criminal history, we are talking about a “zone B” sentence anywhere from 8 to 14 months. In zone B, the judge will likely be looking to give you home confinement or a combination of home confinement and actual confinement under the recommendations in USSG section 5C1.1.

That’s a great result. Now let’s look at this case from a worst case perspective.

Worst Case Scenario in Sentencing for the Doctor’s Office

In my experience, United States Attorneys like to initiate structuring violations against folks they believe may also be involved in other illegal conduct. That is, the Federal Prosecutor wants to catch someone for structuring even though he/she really believes them to be guilty of some other crime they cannot actually prove beyond a reasonable doubt in front of a jury.

Remember how the federal government finally put Al Capone behind bars for tax evasion after not being able to gather enough facts to prove him guilty of any other crimes? That same strategy is still used all the time by the Feds.

From that perspective, let’s assume the AUSA will claim that you derived the structured cash via some other criminal conduct. In the Doctor’s Office case, that might be Medicare fraud, Medicaid fraud, prescription fraud or any other wire or mail fraud violation the AUSA can come up with.

Now we go to the federal sentencing guideline enhancements. Remember, the federal probation officer will be looking for ways to increase your sentence, not reduce your sentence. That’s why you pay the lawyer big bucks when you are guilty; to help get a lower sentence.

Negotiation here often involves getting the least amount of punishment as possible, not a “get out of jail free card.” The more experienced in negotiating these deals, the better your lawyer will be arguing for the lowest sentence possible.

The USPO will likely claim at least 2 different USSG enhancements in this type of case. First, you will likely see an enhancement under USSG Section 2S1.3(b)(1)(A), wherein the federal probation officer is going to argue that you knew the source of the structured cash was illegal or unlawful activity.
Mind you, they aren’t going to need to prove beyond a reasonable doubt that you committed another crime. They only need to show by a preponderance of the evidence that you knew the loot came from unlawful activity. In making a recommendation, the probation officer doesn’t have the same high burden of proof that the prosecutor would have had to meet at trial.

The second enhancement you will likely see in a case like this Doctor’s Office scenario, is a 2 level role adjustment under either USSG section 3B1.3 because you are a Medical Doctor and you used your position of Public Trust to commit the offense or used some other special skill to conceal it. You may also see another 2 to 4 level enhancement for a role adjustment for being a leader organizer in the Conspiracy to commit Structuring under USSG 3B1.1 “Aggravated Role.”
In summary, the worst case scenario described above, would result in a guideline sentence many, many years higher than the best case scenario described.

Conclusion

From the above, you can see that these cases are very fact dependent, no two structuring cases are the same, and they can be very complex. How the money was generated is a separate issue from how the money was moved through the financial institution. Many professionals are surprised to discover that they are charged with federal structuring violations when they have earned their cash in legitimate ways.

Regardless of where the cash was made, if anyone in Texas is being investigated for violation of structuring statutes, then they will need a lawyer that know all of the facts, has done a reasonable investigation, and has the necessary experience to navigate the Federal Criminal Justice system in the most advantageous manner on their behalf.

About the Author:

Michael Lowe is a Texas trial attorney practicing criminal defense law in the Dallas area for many years after first serving as a felony prosecutor for the Office of the District Attorney for Dallas County. He is Board Certified by the State Bar of Texas in Criminal Law. Mr. Lowe has tried to verdict over 150 criminal trials so far in the state and federal systems.