What is ‘cash structuring’ in money laundering?

Money laundering investigations often focus on how people move cash. Federal law requires certain banking transactions — especially those over $10,000 — to be reported by financial institutions.

When individuals try to dodge these reporting requirements by dividing up large sums into smaller deposits, withdrawals, or transfers, they may commit financial transaction “structuring.” Federal investigators look for signs of structuring as a red flag for possible money laundering or other financial crimes, often triggering deeper scrutiny and serious legal consequences.

What is structuring? How do investigators detect it, and what can I do if I’ve been unfairly accused or targeted? We’ll explain the basics below and what defenses you have at hand to fight these accusations.

As always, if you have a situation you need legal help with, a skilled federal criminal defense attorney can give you specific advice.

What is cash structuring?

Structuring, sometimes called “smurfing,” refers to breaking down a sum of money into smaller, more frequent transactions to avoid triggering federal reporting or recordkeeping requirements.

The Bank Secrecy Act (BSA) and related statutes make it a crime to “structure” transactions to evade filing Currency Transaction Reports (CTRs) or Suspicious Activity Reports (SARs).

The key elements of cash structuring are:

1. Threshold avoidance

Under federal law, banks must file a Currency Transaction Report (CTR) for transactions over $10,000. Individuals who structure may deposit or withdraw amounts just under $10,000 (e.g., $9,500) multiple times to evade CTR filing.

2. Willfulness

Prosecutors must prove the defendant knew about the reporting rules and intentionally broke up transactions to avoid them. Demonstrating this knowledge is key to a criminal conviction.

3. Cash-based transactions

Most structuring cases involve physical cash, money orders or cashier’s checks. However, any type of financial transaction can be structured if the goal is to keep each portion below a certain threshold.

How investigators identify structuring

Law enforcement agencies, including the IRS and FBI, use various tools and methods to spot unusual banking behavior:

Automated monitoring systems

Banks employ sophisticated software that flags customers who repeatedly deposit or withdraw amounts near $10,000. This automated process triggers an internal review of potentially suspicious activity.

The systems are designed to recognize patterns of activity that deviate from a person’s established transaction history or from the norms associated with their line of business. In doing so, these systems can spot repeated deposits or withdrawals in amounts just under $10,000 and flag this behavior for further investigation.

While the software does not automatically label every suspicious transaction as “structuring,” it does produce alerts or notifications that prompt a bank’s compliance department to review the customer’s account activity in greater detail.

Once the software detects a potential pattern, it compares that data against other variables, such as the customer’s average account balances, their past deposit sizes, the frequency of withdrawals, and how close each transaction is to the $10,000 threshold.

If the pattern appears deliberate — especially if transactions are made on consecutive days or at multiple branches in amounts just under the reporting limit — the bank’s compliance officers will likely file a Suspicious Activity Report (SAR).

Suspicious Activity Reports (SARs)

Suspicious Activity Reports (SARs) are filings that financial institutions submit to government authorities when they detect any behavior that could suggest money laundering, terrorist financing or other forms of financial crime.

These reports are mandated under the Bank Secrecy Act (BSA) and enforced by the Financial Crimes Enforcement Network (FinCEN). Essentially, when a bank notices a transaction that seems out of place, suggests structuring, or otherwise raises concerns about illicit activity, it is legally obligated to file a SAR detailing the suspicious behavior.

Once a financial institution decides to file a SAR, the document is kept strictly confidential. Federal regulations prohibit the bank from disclosing to the individual or business in question that a SAR has been filed.

This secrecy is intended to prevent tip-offs to potential wrongdoers and to ensure the integrity of ongoing or future investigations. While the report itself may not necessarily lead to a criminal case, it can spark further inquiry by law enforcement agencies such as the IRS, FBI or Department of Homeland Security.

The SAR form typically includes information about the account holder, the nature of the activity that raised suspicion, the amounts involved, and a narrative section where the filer explains why the transactions seem unusual. This narrative is often the most critical part of the report, as it provides the context and reasoning behind the bank’s decision to flag the activity.

Regulatory authorities then analyze this information to discern whether deeper investigation is warranted.

Cross-agency cooperation

Law enforcement and other government bodies rely heavily on SARs as a key intelligence tool.

Various federal and state agencies share data. If authorities notice unusual deposits in connection with other red flags — like unreported income or known criminal organizations — they intensify their examination.

Aggregating multiple reports from various banks can reveal patterns of suspicious transactions tied to a single individual or organization. In some cases, SARs offer investigators their first clear look into a broader criminal operation. For instance, if multiple financial institutions simultaneously file SARs on the same entity, it signals a more urgent red flag that often results in swift action from federal authorities.

Defenses against structuring accusations

Although structuring charges can be serious, there are several ways to challenge them:

Lack of willful intent

The government must show the defendant deliberately aimed to avoid federal reporting. If you were unaware of the requirement or the amounts were coincidentally under the threshold, this may be a valid defense.

Legitimate business practices

Certain businesses, especially those dealing in cash (e.g., restaurants, convenience stores), may naturally make frequent, smaller deposits. Demonstrating normal accounting procedures can weaken the government’s case.

Procedural errors by law enforcement

If investigators violated your constitutional rights — for instance, by performing an unlawful search or seizing funds without due process — your attorney can challenge the evidence.

Structuring is often tied to suspected money laundering. Showing that the cash came from legitimate sources can undermine the prosecution’s core argument.

Accusations of structuring or money laundering can turn your life upside down.

If you or a loved one is under federal investigation for structuring, you need an experienced attorney who understands both the law and the nuances of financial cases.

Call Helfend Law Group at 800-834-6434 to discuss your options. We will work closely with you to protect your rights, challenge the evidence, and guide you toward the best possible outcome.

Published February 25, 2025.