I’m a little late in getting to this, but last month Radley Balko wrote the definitive blog post on the appalling state of federal bank structuring law, which makes it a felony to arrange bank transactions in quantities of less than $10,000 so as to avoid reporting requirements that kick in at that threshold. He hits virtually every point we’ve made in this space over the past couple of years, including the trend toward “freestanding” structuring prosecutions not arising from any underlying criminal activity, the close connection to forfeiture law, the enlistment of banks as a covert surveillance/informant network not disclosed as such to customers, Congress’s removal of willfulness as a condition of the offense, the unusual concentration of cases coming out of the state of Maryland, the white-knight role played of late by the public-interest law firm Institute for Justice, and of course the jarringly atypical leniency extended to the most famous structurer of all, New York’s Eliot Spitzer.
The immediate news event that prompted the coverage, summarized by Eugene Volokh: a Seventh Circuit decision, in U.S. v. Abair, reversing and remanding for retrial the conviction of an Indiana woman convicted for withdrawing her own money from her bank in violation of the statute so as to finance her purchase of a house; the government took the house from her in forfeiture.
The number of Americans who’ve turned in their passports and renounced citizenship has increased more than tenfold in five years, to 3,000 in calendar 2013. [USA Today] Earlier on the burdensome expatriate tax and regulation measure here, here, here, and generally here.
“…than [against] almost any other group.” Can you guess which new federal agency is being referred to? [National Law Journal]
Headline, from WWJ: “Sterling Heights Gas Station Owner Says IRS Grabbed $70K From His Bank Account For No Reason” Mark Zaniewski, “owner of Metro Marathon in [suburban Macomb County], said the IRS emptied out his bank account twice over the course of a week this spring.” No charges have been filed; Larry Salzman of the Institute for Justice, representing Zaniewski, says the accounts were seized on suspicion of bank “structuring” (knowingly arranging deposits to fall below $10,000), even though some deposits were over that threshold. Salzman says his client has been waiting seven months for his cash and in the mean time is unable to get a hearing before a judge. IJ recently took on a structuring case involving a grocer in nearby Fraser, Mich. Earlier on structuring and its intersection with forfeiture law here, here, here, etc.
Update via Dan Alban on Twitter: “BREAKING: IRS voluntarily dismisses Michigan forfeiture cases, will return seized money to owners of family grocery store and gas station. Doesn’t get feds out of IJ’s separate constitutional lawsuit re: right to prompt hearing, Dehko v. Holder.”
So how exactly did it wind up in the hands of a patent troll? [Mike Masnick, TechDirt]
How “money laundering” regulations give the U.S. Treasury power to destroy foreign banks [Stewart Baker, Volokh] Meanwhile, if Canadians imagine that the Foreign Account Tax Compliance Act (FATCA) is something only Canadian-Americans need to worry about, they should think again [Maclean's]. Excerpt:
To say that FATCA is controversial is an understatement. The law is so complex and onerous to implement that some foreign banks have reportedly kicked out their U.S. clients in order to avoid dealing with it. Americans living abroad are queuing to give up their U.S. passports over it. The other problem with FATCA is that it asks foreign banks to do things that are often illegal in their home countries, such as passing on certain private information.
Earlier on “know your customer” here and on FATCA here.
Kevin Funnell, on “The Long-Range Consequences Of Adopting The Mating Habits Of A Praying Mantis,” quotes Matthew L. Brown in Boston Business Journal on the consequences of slamming the institution that agreed to help rescue WaMu and Bear Stearns, and is now paying for their sins: “It’ll be a long time, indeed, before a big bank answers the federal help line.” Related: Daniel Fisher, Forbes.
My new Cato post tells how on-site feds increasingly direct big business decisions.
P.S. Related thoughts on deferred prosecution agreements from Brandon Garrett and David Zaring at NYT “DealBook.”
The Institute for Justice is defending the owners of a grocery store in Fraser, Mich. who saw their bank account seized under forfeiture law on suspicion of structuring deposits (keeping them below $10,000 on purpose to avoid reporting). Video here. We’ve been covering the results of structuring law, and its intersection with forfeiture powers, for a while now, and its nice to see the issue attracting the notice of a group as formidable and high-profile as IJ.