' A WARNING ABOUT WITHDRAWING CASH
Some of the advice I am hearing about withdrawing cash (currency) gives me
deep misgivings. I fear that ignorance & lack of preparation may run some
people afoul of the cash reporting regulations, earning them a criminal
prosecution.
I'm not an attorney & don't presume to give legal advice, but as I understand it
the law requires reporting by a Cash Transaction Report (CTR) whenever
someone withdraws more than $10,000. Shortly after that law was installed,
congress added the crime of "structuring," i.e., ordering your transactions to
avoid the reporting requirement. It is the crime of structuring if you intend to
withdraw F$12,000 in total, & withdraw F$2,000 a day over six days in "related
transactions" to avoid the reporting requirement, for example.
The danger is that federal courts in most jurisdictions have interpreted these
statutes & regulations as "strict liability statutes." That means that intent (mens
rea) is not necessary to break the law. In fact, you don't even need to know that
it was a crime. The law is being interpreted exactly like a speeding law -- if the
speed limit is 40 & you are driving 50, you're "guilty" whether (1) you intended
to break the law or not, & (2) whether you knew the speed limit was 40.
When people to go to their ATMs & withdraw as much as they can in several
transactions, if they intend to withdraw more than F$10,000 in total, that could
be interpreted as the crime of "structuring," even though they have no criminal
intent or the money is not the proceeds of some specified criminal activity. (Of
course, if you make a habit of withdrawing F$1,000 every time you get paid, or
you and your wife decide to cut up your credit cards and go on a completely
cash budget, I suppose that wouldn't be structuring, but who knows? I'm not
weaseling here, the law is just that vague.)
To protect yourself, I believe people who want to withdraw sums of more than
F$10,000 should approach their bank officer openly & (1) ask him about the
bank's Y2K compliance, (2) tell him that you are concerned about the Y2K
problem & (3) you intend to withdraw some cash for your own protection & (4)
you understand the bank doesn't inventory much cash, so (5) what is the best
way to withdraw the cash to make it easy on them. Afterwards you should send
a letter to the bank officer memorializing the appointment. You can expect the
bank officer to try to convince you not to withdraw any cash. Be always polite,
but firm. After all, it is your money.
At the appointment you should also have one other person (not your spouse)
with you, to act as a witness. If the banker asks you to fill out a Cash
Transaction Report (CTR), FILL IT OUT. DO NOT OBJECT OR REFUSE. I'm
not worried about filling them out anyway, because I'm convinced they just throw
them into some big room in Washington, there to languish unless they have
some other criminal investigation or prosecution in mind. In any event, the
remote danger of filling out the CTR is far, far smaller than the IMMINENT
danger of a criminal prosecution for structuring.
I discussed this concern with a lawyer friend, and he suggested another similar
method. Ask your lawyer to write your banker a letter like this one below.
Attach supporting articles as you think necessary. Note that neither my lawyer
friend nor I am giving legal or financial advice. I'm publishing this letter for
information purposes only. Be sure to consult your own attorney for specific
advice for your own situation.
**************************************************** * * **********
Bank Manager's Name
Address
RE: Cash Withdrawal Procedures
Dear Mr. Manager
My clients, Mr. & Mrs. -----, are customers of your bank. They are concerned
about the "Year 2000 Problem." Congressman James Leach, Chairman of the
House Banking Committee made the following statement in committee
hearings on November 4, 1997:
"Experts also emphasise that the problem must be fixed properly and on time if
Year 2000 related problems are to be avoided. I was intrigued by a statement
Federal Reserve Chairman Alan Greenspan made a couple of years ago. He
pointed out that 99 percent readiness for the Year 2000 will not be enough. It
must be 100 percent. Thus, the message seems clear: all financial institutions
must be ready; federal and state regulatory agencies must be ready; data
processing service providers and other bank vendors must be ready; bank
customers and borrowers must be ready."
Clearly, bankers, both domestically and internationally, are not ready. In a
Reuters article, "Financial Industry Seeks to Avoid '2000' Timebomb," Edward
Yardeni, Chief Economist for Deutsche Morgan Grenfell wrote, "It's a trivial
problem, but it's overwhelming." Mr. Yardeni has also stated that 5% to 20% of
banks may fail in the recession which he predicts will accompany the Year
2000 Problem.
Consequently, my clients wish to begin withdrawing cash from their [list
accounts and CDs as they come due] to safeguard their hard-earned savings.
As you are aware, federal law requires the reporting of cash withdrawals of
more than $10,000.00. In addition, the federal law prohibits "structuring" or
ordering withdrawals so as to avoid this reporting requirement. For example, if
an individual withdraws $2,500 per day over five days with the intent to avoid
the reporting requirement, that individual is subject to prosecution under the
"structuring" statute. The withdrawals are subject to seizure, and, if convicted,
the individual is subject to a five year prison sentence and $250,000.00 fine.
Federal courts in most jurisdictions have interpreted these statutes and their
associated regulations as "strict liability" crimes. This means that the intent
(mens rea) component of a cirme is not necessary to be convicted of
committing the crime. In fact, one need not even know that the action of
making such a series of withdrawals is a crime.
My clients wish to comply with the law in every respect and request your
assistance to do so.
It is understood that your bank does not keep large quantities of small
denomination bills and coin on hand. Please inform me of your bank's policy
for making large cash (or periodic $3,000.00 to $5,000.00) withdrawals. For
example, how much notice is required for you to arrange to have the cash
available? On withdrawals of less than $10,000.00 may the Currency
Transaction Report (CTR) be filed immediately or do you request that it be filed
each time the aggregate withdrawals since the last CTR exceed $10,000.00?
What security do you provide between the teller's window and your parking lot?
I look forward to your prompt response. If you have any questions, feel free to
contact me.
Yours truly
LAWYER
cc: Mr. & Mrs. CLIENT
ONE LAST WORD
Now note carefully that I am not counselling you to run down to your bank in a
sweat and panic, and I'm not saying the Feds will arrive on your front door if you
withdraw a little cash. However, I do think it is prudent to withdraw and keep on
hand some cash, for Y2K and other emergencies, and I don't want you to
ignorantly run afoul of the law. I recommend three (3) months' cash needs, in
bills not larger than $20. If your family needs F$3,000 a month to buy
groceries, pay rent, buy gas, etc., then try to accumulate F$9,000.
Also remember that you will need to secure the cash you withdraw. Think
about installing a safe at home, or at least go to Wal-Mart and buy a
fire-resistant storage box. They cost $20 to $80, depending on size and
specifications. Then find some place to stash it where at least the casual
burglar would never find it.
Franklin Sanders
the-moneychanger.com |
