Structuring Arrest in Dallas Results in Plea Deal: What is Structuring and Why is 10,000 The Magic Number?

Many people in today’s economy don’t need to worry about whether or not their bank deposit is $10,000 or more because they’re never depositing that much cash into their bank account at any one time.  On the other hand, many Texas businesses routinely have these big five-digit deposits, and they have bookkeepers or accountants that are aware that there are certain laws and regulations that come into play when a deposit hits that magic number of 10,000.

Maybe Mohamdad Jabal wasn’t so clear on this magic number, or how it’s tracked, because after a IRS Criminal Investigation and a federal charge, he was sentenced last week to 6 months in a federal prison and to thereafter spend 6 months in home confinement in a Dallas Federal District Court for one count of “structuring.”  Jabal made a plea deal, pled guilty, and also paid restitution of around $400,000.

This time next year, things will look a lot better for Mr. Jabal.

Why is 10,000 a Magic Number?

Here’s what happened in Mr. Jabal’s case, according to the press release issued by the U.S. Attorney General’s Office:

According to the factual resume filed in the case, Jabal owns two car washes in the Dallas-Fort Worth area under the name of Avalanche Wash, Inc., and currently has a third one under construction. He maintains two bank accounts related to his car wash business. Between March 15 and April 30, 2012, Jabal made 19 cash deposits for a total of $182,050 into his Avalanche Wash Inc. Interim Construction Account at First National Bank of Burleson. Each of these deposits ranged from $9,000 to $9,800 and many of the deposits were on consecutive days. Jabal admitted that he was aware of the $10,000 reporting requirement and purposefully kept his cash deposits below the requirement so he wouldn’t “raise a red flag.”

Congress has passed a federal law that requires banks, credit unions, and other financial institutions to report to the federal government anytime a deposit is made into an account that is $10,000.00 or more.   Why $10,000?  It’s the number that Congress picked — it’s the “Magic Number” for reporting purposes.

That’s not all.

What is the Federal Crime of Structuring?

If the financial institution notices that there are a series of deposits that come close to $10,000 but are always just under that amount, then the law requires them to report their suspicions, as well.

Doesn’t matter if it’s all honest and above-board.  The bank has got to report it, and the feds are going to investigate the account for possible “structuring” activities.

Structuring is essentially the crime of breaking down a deposit into smaller deposits that total less than $10,000 each so the Magic Number isn’t hit and the reporting requirement kicks in.  The goal of making structuring a crime and having the bank report these big deposits is because the federal government is trying to catch criminals laundering money obtained in illegal activities.

Problem is, sometimes people are caught for the crime of structuring when they’re not laundering money made in criminal activities at all.  Maybe they don’t know the law exists.  Maybe they don’t like the idea of the bank reporting their deposits.

Whatever the reason, structuring is a federal felony and can result in serious jail time and monetary fines unless the defendant has a good criminal defense attorney to help fight against injustice in these situations.

For more on “structuring” and the related crime of “smurfing” read our web page discussing these crimes in detail.  

 


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