Re: Payment mixes for anonymity

[Tim May]

At 10:12 PM -0800 3/4/00, Secret Squirrel wrote:

>Let us keep in mind that it is not illegal to seek financial privacy.
>It is only illegal to launder the results of illegal activity.

The "structuring" laws apply to all financial transactions, not just money coming from "illegal activity."

Granted, there will most likely not be prosecution if someone just "plays around" with arranging transactions to avoid reporting requirements and is otherwise not a lawbreaker or money launderer, but the structuring laws are not solely about the results of illegal activity.

An IRS case won in court is described at http://www.ncjrs.org/txtfiles/assetfor.txt

Some excerpts:

"The Crime

Structuring means breaking transactions larger than $10,000
into smaller increments by making multiple deposits or
withdrawals or by buying cashiers' checks, money orders, or
other monetary instruments for the express purpose of evading
the reporting requirements. These reports, required by the
Bank Secrecy Act (BSA)1 and the Internal Revenue Code,2 must
be filed with the Internal Revenue Service every time a
transaction involving more than $10,000 in cash is carried out
with a financial institution.3

The Conviction

To be convicted of structuring, an individual must knowingly
and willfully transact below the $10,000 threshold level,
intending to evade the reporting requirements.4 This means the
Government must prove that the defendant knew that the
financial institution is required by law to file transaction
reports and knew that breaking transactions into multiples of
less than $10,000 to avoid triggering these reports is
unlawful.5

In Ratzlaf, the petitioners (who had been convicted of
structuring) went to several banks in and around Stateline,
Nevada, and South Lake Tahoe, California, using cash to
purchase, or attempt to purchase, cashiers' checks in amounts
of less than $10,000. They also gave three individuals cash
and asked them to purchase cashiers' checks in amounts of less
than $10,000 from two banks in Oregon. They did this to settle
a $160,000 gambling debt at a casino in Nevada with numerous
payments of less than $10,000 each so as to evade the banks'
and the casino's reporting requirements on cash transactions
involving more than $10,000 in currency."


--Tim May



---------:---------:---------:---------:---------:---------:---------:----
Timothy C. May | Crypto Anarchy: encryption, digital money,
ComSec 3DES: 831-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets,
"Cyphernomicon" | black markets, collapse of governments.