Litigation

Deposit the "Wrong" Amount of Cash in Your Bank, Go to Jail

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Sometime Reason magazine contributor William L. Anderson at Lew Rockwell.com delivers an infuriating tale of a lawyer, Johnny Gaskins, who had often succeeded against state prosecutors. Gaskins has been convicted and faces possible lifetime imprisonment for violating federal law against "structuring" financial transactions.

In real-world terms, this means he's screwed for depositing money in his bank in increments of less than $10,000 per deliberately in order to avoid reporting requirements triggered by that amount.

Was he doing this to hide some criminal activity? Not even the prosecutors thought so. As Anderson relates, quoting a Raleigh News and Observer story:

This law was passed as an "ancillary crime" to give prosecutors leverage in cases where people had amassed huge amounts of cash via drug sales or other illegal activities and were trying to avoid detection as well as avoid paying taxes on their money. However, that clearly was not the case here, as the N&O continues:

Gaskins filed forms to the IRS accounting for more than $450,000 in cash payments, according to evidence at trial. Prosecutors agreed that he had filed and paid his taxes.

He didn't dispute that he intentionally divided his money, but he testified that it was for innocent reasons. His habits, he said, were born of an exposure to a criminal world that most people only see on television dramas.

Prosecutors did not offer evidence of any other motive for Gaskins' behavior. They said at trial that Gaskins should have known better.

"The point of the law is to make sure we don't have people who try to fool the bank," federal prosecutor Randall Galyon told jurors last week. "The fact that he was trying is against the law."

So, we had an attorney who was paid legally in cash, decided he might be robbed, so he deposited the money in a bank. Furthermore, he already had paid taxes on his cash earnings, so it is clear that he had no criminal motives.

Furthermore, I can guarantee the readers that there was a motive that was not mentioned, but well should be: prosecutors would have tried to frame Gaskins had he deposited all of his money at once. That kind of a deposit – which prosecutors insist that he had to make in order to be legal – would have sent alerts to the police and prosecutors, who would have tried to make a drug case against him, claiming he actually had received that money illegally. The question is this: Why were prosecutors hell-bent on going after him? The answer lies in the success that Gaskins had in his career:

He had received death threats and had been harassed for more than a decade after he persuaded a jury to spare the life of a client convicted of killing a popular Raleigh police detective. Some of Gaskins' clients were robbed and tortured, targeted because they carried large amounts of cash, court filings show.

Anderson and Candice Jackson wrote in Reason magazine's April issue about federal prosecutors turning sports rulebreaking into a federal offense.

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  1. What the-? How can a person possibly be facing a life sentence for a victimless “crime”?

    1. This ain’t the only victimless crime police prosecute, Art-POG.

      Though the life sentence seems wildly over the top even compared to, say, crack cocaine sentencing guidelines.

  2. To be fair, I also make it a habit to deposit cash into my account in sub $10,000 increments. But I’m willing to break it if anyone’s interested.

    1. Don’t. People are interested.

  3. Oh, great, now Doherty is depressing us with tales of prosecutorial conduct in addition to all the shite Radley Balkow details.

    1. You beat me by 45 min!

      Brian,

      I always wondered what that stupid law was for. Thank you for clearing it up.

    2. It’s not too late for Radley to dig up a story on a little boy and his kitten who were arrested by a SWAT team for illegally frolicking through a meadow without a permit and for possible terrorism links. Oh, and they shoot the kitten.

      I think that would be a nice double-kick in the nuts for this morning.

      1. Yeah, I heard about that kid and his drug Czar Kitten, apparently the cops mistook the lilacs for poppies.

  4. More and more people are awakening to the truth that there are enough laws on the books to make a criminal of anyone for pretty much any innocent reason, given an ambitious and determined prosecutor. So what can these people do about that? Whom can they defeat at the polls? Which propositions can they veto (or approve) via the initiative and referendum processes (where available)?

    The rabble seems to be rousing. What can they DO?

    1. This is a very good question.

    2. They’ll vote for the other political party in the next election. Stickin’ it to the man, oh yeah!

    3. What people can do is not make enemies, because the laws aren’t applied aginst just anyone for no reason of any kind (whether related to the law or not). In some cases that might make the world nicer, in other cases less nice.

    4. A few heads on poles would be a good start.

      The rest of the cowards would get the message.

  5. When I was a bank teller, I never understood how the $10,000 reporting requirement could possibly be legal.

    1. Bank Secrecy Act of 1970

      But, just because it’s legal doesn’t make it right.

      1. Amen. I work behind the scenes at a financial institution, so I’m regularly trained re: the BSA but (happily) don’t have to mess with it myself. Besides forcing us to treat customers like criminals without actual evidence of wrongdoing, it also essentially makes us forced, uncompensated workers for the federal gubmint. Wasn’t there some constitutional amendment a while back that hinted that was a no-no??

        1. Yea, something about involuntary servitude?

          1. Not a lawyer, but couldn’t someone make the argument that it infringes on interstate commerce? I know the banks aren’t willing, but could someone else sue the fed gov’t ie deposite $$ in one state, take it out in another and go to court about it?

    2. It’s not legal, but until and unless someone sues to get it declared unconstitutional, the government can continue to pretend that it is.

      -jcr

  6. By the logic of the prosecutor in this case, the bimonthly pay check that I put in the bank (which totals less than $10,000) is really my attempt at illegally laundering my massive drug profits.

    Of course, if I were willing to give my drugs away, then obviously it would legal. Cash has magical powers, such as the power to put innocent people in jail for depositing money into their accounts.

    1. By the logic of the prosecutor in this case, the bimonthly pay check that I put in the bank (which totals less than $10,000) is really my attempt at illegally laundering my massive drug profits.

      Not quite.

      My understanding is that you would have to get paid in Cash, and deposit it monthly though.

      Checks are traceable back to who paid you. It’s cash deposits that are the red flag for money laundering

  7. Fucking goddamn. I’m not sure what else there is to say about this, unless it’s said from the top of a barricade.

  8. Gee, when hyper-inflation hits I hope congress doesn’t forget to increase the legal deposit amount.

    But apparently it doesn’t matter.

    Couldn’t Gaskins have given the powers-that-be a note from his mother or something?

  9. Also: Doherty, is Balko off today, or something? You’re totally stepping on his turf if not. His horribly depressing and incredibly scary totalitarian turf.

  10. the first thing we do is kill all the lawyers…and the ones we don’t kill we put in jail…

  11. Another reason to hate the media. If someone would cover this, they would shame the government into backing off. But, no better to cover Michelle Obama’s garden or the balloon boy rather than actual you know injustice. The next time you read some thumb sucking piece from some dying media outlet about the media’s charished roll as a watchdog, remember this case and the lack of coverage.

  12. I live in the Raleigh area — the News & Observer certainly doesn’t question the unthinking support of law enforcement and prosecutors that so dominates this region. Case in point? The title of this article:

    “Lawyer’s career ends in crime”

    /Facepalm

    1. The media is filled with brain dead morons. What the hell is the matter with people?

    2. Amen to that.

      1. Easy John.

        1) It isn’t their money.

        2) It happened to a lawyer, and a defense atty. at that. Brain dead folks with immediately determine he is not on the up & up, reagardless of the facts of the case.

        1. with=will

          grammar fail. Damn, I have been having a LOT of fails lately. Maybe I should not have gone on vacation.

  13. I wish I could say this is unbelievable. Alas, it’s all too easy to believe.

    1. Why, sometimes I’ve believed as many as six impossible things before breakfast.

      1. It’s called dreaming

      2. Ill meet you for lunch. Depositing my penny now.

  14. Why is he facing life imprisonment? Couldn’t they just forfeit his money. Is it really possible that just depositing money means you will be convicted of drugs if there are no drugs?

  15. Is it really possible that just depositing money means you will be convicted of drugs if there are no drugs?

    In a word, yes. Welcome to the drug war.

    1. In a word, yes. Welcome to the drug war.

      Yes, but you have to admit that is a pretty obvious red flag, although this case is really egregious.

      1. And we have to keep in mind that when applied properly these laws can do society good: Al Capone was convicted on tax evasion… That said, clearly the gov’t has too much power and abuses it.

      2. Hey you don’t have to convince me. The drug war is a reality I grudgingly accept, but a reality nonetheless.

  16. He should have just deposited it as he made it. Depositing it all at once is an obvious red flag for drug activity and would have probably have resulted in having his money forfeited. Depositing small amounts is structuring and is illegal under federal law, which he should have known.

    1. Depositing small amounts is structuring and is illegal under federal law, which he should have known.

      True, but doesn’t make the law or prosecution right.

    2. Again though, the point of that law was to combat illegal money laundering, not to punish someone who is depositing legally earned money.

      We should be able to conduct our finances however we see fit when every cent earned is legitimate.

      1. We should be able to conduct our finances however we see fit when every cent earned is legitimate.

        True, but the law says that structuring is illegal and he broke the law.

        I understand why he didn’t deposit it all at once, because that would have resulted in forfeiture, but you can’t commit the crime of structuring to avoid detection. It was a dilemma for him that could have been avoided by depositing it as he made it.

        1. Are you insane? Think about what you are saying. They guy lawfully made money but couldn’t put it in a bank in large chunks because the government would come and take it as drug money even though it wasn’t. So because prosecutors take money from anyone regardless of whether they are drug dealers, he deposited it in smaller amounts which is illegal because the govenrment doesn’t want anyone avoiding forfeiture, even though he shouldn’t have had any of his money forfeited in the first place. Yeah, that makes sense. “It’s the Law” doesn’t make it just or in anyway right. At best you can say that this guy should have known the laws were insane and that the feds are scumbags so he can’t complain. That is crazy.

          1. Good point John. So rationally trying to avoid a catch-22 is illegal?
            As, you’ve said before, we’re doomed.

        2. Dude, your an idiot. Pray that some federal prosecutor doesn’t look into you life. Because they will find something.

  17. Dude should’ve become a drug lord, apparently, because he’s going to be screwed just as badly for doing nothing illegal. It just looks fishy, so he must pay.

    1. He totally should’ve just gone into the drug trade. Then he’d have made enough to buy off the prosecutor.

  18. If there’s no underlying criminal motive that can be proven, how is “structuring” a crime? We’re not obligated to put money in the bank, after all, so the quantity deposited can’t be deemed criminal in and of itself–not in any sane reading of the law and of reality.

    I can understand large cash deposits triggering some investigation, though I object to banks acting as government agents, but that’s a far cry from saying that an activity that should be legal is made illegal and massively penalized because, well, I don’t know why.

    1. Right. At the most, “structuring” should trigger some sort of investigation, similar to the large single deposits. It should not be a crime in and of itself.

      1. Look, they can take your car, your house, your cash and anything else you have without you every having been convicted of a crime is you have more money than they think you should have and you have no documentation to demonstrate that you should have it. They can do whatever they want, so complaining about this is like complaining about the weather. Like George the Great said – You have no rights.

  19. an activity that should be legal is made illegal and massively penalized because, well, I don’t know why.

    Because its gives Our Masters another stick to beat us with, that’s why. No further justification is needed, Pro L.

    1. Another stick? Don’t they have too many sticks already?

  20. Like I’ve said before, anyone of us can be convicted of some obscure federal crime. All they need is a motive.

    1. I repeatedly violated The Mann Act in high school.

      1. Wow … I live on the Pennsylvania and New York boarder. The Feds just arrested a guy for that for luring a 16 year old to Binghamton. He was 47(or around there). In Pennsylvania the age of consent is 16 so they could not get him on state charges. I wonder if a 17 year old “lured” another 17 year old across the border if they really could be charged.

    2. With a lot of these crimes, they don’t even need a motive. Just the fact that you did it is enough.

  21. Damn, this is really fucked up. What if you just simply don’t earn that $10,000.00 threshold? These pigs will still go after you? I think the think that inuriates me the most is the federal judge…like the spineless fucks federal judges are… is just going to go along with this tragedy. If life in prison without one iota of criminal intent isn’t cruel AND unusual punishment, I don’t know what it. I don’t know why I get so infuriated. This is a system that put a class of people in concentration camps.

  22. I want to be outraged about this, but I can’t. This is a guy who knows it is illegal to intentionally break up deposits specifically to avoid the reporting rules, and then he intentionally breaks up deposits specifically to avoid the reporting rules.

    As far as the argument that he would have had his money seized as drug proceeds, keep in mind most criminal lawyers get paid in cash. He would have kept track of his hours & services rendered, have an invoice, and then a matching payment of the same amount. The bar requires you to keep very precise records of retainers and charges against retainers. With all that documentation, it would be very hard for authorities to show the payments were for anything else other than legal services.

    From the article, he was keeping $200k in cash at home (!), got worried he would get robbed during renovations, and started depositing the money. His reason for breaking up the payments was not because he thought the govt would seize it (he knew better than that), but because “He didn’t dispute that he intentionally divided his money, but he testified that it was for innocent reasons. His habits, he said, were born of an exposure to a criminal world that most people only see on television dramas.” You have to admit, that does sound a little odd.

    Yes, this is an ancillary kind of crime, but there are good reasons to have this law on the books: to allow the govt to be aware of suspicious financial activity. Should people be allowed to commit perjury in testimony if they think there is no underlying crime? No. Should the deposit reporting rules be followed even if there is no underlying crime? Yes.

    Now, if this had been little Aunt May doing this because she saw it on the Sopranos, I don’t think the full force of the law would have been brought down on her. Plus, the grudge factor against this guy probably, and wrongly, influenced how they went after him. There is no way he should go to jail for this, more like being suspended from the bar for 6 months and pay a heavy fine (and who knows, maybe something like this was offered to him and he decided to fight it out). Prosecutorial discretion should not be used to pursue a vendetta.

    But he did knowingly commit a crime, a crime that is on the books for good reason.

    1. Man, people like you are scary. You know, “meerdahl” sounds suspiciously Islamic. I think I will do an I-report to the authorities, and let the “experts” decide whether you are a threat.

      1. You have to admit, that does sound a little odd.

        Umm, no we don’t. I don’t find it the least bit odd that the guy would want to avoid prying government eyes; he’s seen first-hand what the criminal justice system can do to innocent people, especially when drug crimes are involved. Not odd in the least.

        there are good reasons to have this law on the books: to allow the govt to be aware of suspicious financial activity

        Again though: shouldn’t behavior like this simply trigger an investigation, rather than a crime itself? That’s how we treat the large deposits that this “structuring” is sometimes used to avoid. Why should we treat structuring more severely than we treat huge, one-time deposits?

        You can make a case that structuring should trigger an investigation — an investigation, of course, that Gaskins would have had no problem satisfying. You cannot make the case that structuring is a crime by itself.

      2. Knowingly avoiding a pointless and harassing hassle when you are not structuring to hide a criminal activity is hardly adequate mens rea for getting locked up for life. If prosecutors and law enforcement didn’t frequently abuse their powers, perhaps this would be a different matter.

        Defense counsel can suck, too, assuredly, but the damage they do is much more limited, and they don’t have the power that the government does. It’s not uncommon for a successful defense counsel to specialize, so the fact that a guy represents lots of criminals doesn’t make him one. Scott Turow does (or did) white collar criminal work. Does that make him an embezzler? Should the government harass him for defending criminals. . .providing the defense they are constitutionally entitled to? Messing with counsel to screw up the defense is illegal, unethical, unconstitutional, and a violation of everything we stand for.

      3. Is this the kind of thing you did when you were a prosecutor?

    2. You are wrong. First, you have to understand that the current 10k threshold reporting is wrong. The 9th amendment right to privacy covers bank deposits.

      1. I used to advise banking clients on BSA, OFAC, AML, etc. (not that I can remember much of it anymore–I must’ve wanted to forget), and I always thought most of those laws were, at the very least, ill-advised and inappropriate. Why should lenders and banks be doing police work? Isn’t that doing an end-run around Fourth Amendment protections? How about focusing effort on people who have provided probable cause for the issuance of warrants?

        What’s funny about the OFAC list is that there are lots of Arabic and Hispanic names on the list. Dios/Allah forbid you have the same name.

      2. Well it should and it does – to honest people, but the government can always find some way to double-talk its way out of constitutional limitations. The discussion of the BSA violating the Bill of Rights guarantees of privacy and security in one’s papers and property was had at the time the law was passed back in 1970 and even before.

        1. That was a reply to robc.

    3. So, what’s the good reason this “crime” is on the books?

      1. So the government can harass or prosecute someone who they don’t have adequate evidence to prosecute for anything else.

        I’ve spoken to law enforcement personnel about this before, and they usually say that they get way too many false positives from this stuff to be of any use in detecting criminal activity. It’s more useful with people they know are committing crimes. Which, of course, makes you wonder why we need such laws in the first place, if the practice is only good with people who are otherwise generating probable cause in their other activities.

        1. So the government can harass or prosecute someone who they don’t have adequate evidence to prosecute for anything else.

          What, the drug laws aren’t enough? That lawyer probably had some pseudephedrine somewhere in his house.

          -jcr

  23. Oh, this is the motive of prosecutors:

    In recent years, though, Gaskins carved a niche representing clients in massive federal drug conspiracy cases.

    1. So essentially, even though the Costitution guarantees legal representation for defendants, if that representative is too successful, he himself might be prosecuted under some chickenshit law (and one can always be found.) The message is plain: you are entitled to a lawyer if charged with a crime, but he had better not be a very good lawyer – if he knows what’s good for him. (Constitution’s just a goddamned piece of paper to the government bastards.)

      1. The attempted lesson here, is not to show mercy to cop killers, or else.

        1. Right, exactly. “You’re either with us or against us.” Nothing more than that.

  24. In a stretch, I could see structured deposts as reasonable suspicion. But for it to be a crime is rediculous. You should be able to deposit your money any way you want.

  25. Fucking goddamn. I’m not sure what else there is to say about this, unless it’s said from the top of a barricade belltower.

  26. I’m surprised the prosecutors didn’t just seize all his assets, as illegal drug profits passed through to him by his clients.

    1. They could have done that, and skipped the prosecution, because I am sure he couldn’t document how his clients got their money and if taxes were paid on it. Seizing clients money is an important tool in the war on drugs in order to prevent clients from affording adequate representation, not that it is right.

  27. Lesson learned: deposit money in euros instead of dollars.

    1. That is tax evasion. Foreign banks are required under US law to report deposits of US citizens, look at the USB case. The point is, stay away from drugs and you are OK.

      1. Do as we say and nobody gets hurt, see? This is a new world, full of hope and change, see? Laws is laws, chump, and ya better wise up if you wanna make it in this town.

        Point is: Bow down to your overlords and everything will turn out A-OK. Sounds like the American dream to me!

  28. I wonder if they realize how many hits $450,000 can buy.

  29. I bet this will be overturned on appeal. If he wasn’t trying to avoid detection of an illegal act and wasn’t trying to avoid paying taxes ( he paid the taxes) then he wasn’t “structuring” his deposits. The jury either didn’t understand the nuances of the law or his defense sucked.

  30. Using the logic behind this conviction, anybody who goes to the range and fires a weapon could be tried for attempted murder. You weren’t shooting at anybody, but you could have been. And you know it’s wrong.

    Just because you were intentionally shooting at an earth embankment with a paper target in front of it is no excuse.

  31. 2 thoughts come to mind:

    1) Was he structuring his deposits to avoid triggering an IRS report (the apparent crime), or to avoid his local tellers knowing how much he was worth?

    2) If I’m depositing less than $10,000, can I INSIST that the bank report the amount to the IRS, even though they are not required to, thus negating the “to avoid reporting” issue? After all, he HAD ALREADY REPORTED IT and paid taxes on it.

    1. The $10,000 report (Called a Currency Transaction Report – CTR) doesn’t go to the IRS, it goes to the Treasury Dept, who gives it to the FBI.

  32. Our government isn’t scared enough by us, that’s the problem.

    1. That kind of talk will put you on the SPLC radar.

  33. I think that this country needs a new motto. “E pluribus unum” is SO 18th Century. What is the Latin for “damned if you do and damned if you don’t”?

  34. How about Nemo me impune lacessit as the new slogan?

    Or maybe Raptus regaliter?

  35. Many banks require employees to report transactions that are “inconsistent” with a person’s normal banking habits. The $10k limit is meaningless — if you normally deposit a thousand dollars a week for 10 years, and then suddenly make a deposit of $5000, you will be flagged.

    1. That is a requirement of law, and it is a felony for them to tell you they reported you.

  36. Ok, the lesson I take away from this is that if you’re paid in cash, you should buy Krugerrand and either stash them in your house or put them in a safety deposit box. Depositing money in an ordinary bank account is just too fucking dangerous.

    -jcr

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