Why is it that people can go to jail for presenting $10,000 or more in cash to a bank?

Answer 1

Presenting $10,000 or any other sum of money is not illegal. However, there are IRS regulations that say any unusually-large currency transactions must be reported. In the old days, there was a reg that said, $10,000 or more gets reported, so bad guys would launder money by bringing in $5000 for two consecutive days.

What sends you to jail is when the IRS asks where the money came from and it turns out to be contraband, like proceeds of a drug sale. Under the regulations that went into effect in the 1990's, there's no magic about $10,000. If it's unusual, the bank is supposed to report it. The bank is also required to have a beefed-up anti-money laundering policy, which will detect patterns of cash transactions that look like underworld/terror cell/drug money and other bad stuff happening. In the post 9-11 world, enhanced financial surveillance is a reality.

And THAT's why you go to jail for turning in tainted cash.

Answer 2

This is to prevent MONEY LAUNDERING.

Banks are required to do a lot of reporting -- they must file Currency Transaction Reports Fin Cen Form 104 http://www.fincen.gov/forms/fin104_ctr.pdf

Note that if it appears that you have been structuring deposits in order to try to avoid the reporting requirement, that becomes a reportable "Suspicious Activity" requiring reporting. Most reporting is now computerized, so don't get the idea that you can go to the Main Street branch of the National Bank and make a deposit and then go out to the Suburban branch and make more deposits. The banks are required to aggregate their reporting.

Certain kinds of businesses which make large cash deposits can get exemptions, but their receiving an exemption from reporting requirements is strictly monitored both by internal auditors and by bank examiners from the various bank regulatory agencies.

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The Money Laundering Control Act is a United States Act of Congress that made money laundering a Federal crime. It was passed in 1984. It consists of two sections, 18 U.S.C. § 1956 and 18 U.S.C. § 1957

Answer 3

I work at a bank. You dont go to "jail" ... not even close. If you withdraw or deposit $10,000.00 or more in cash, on any given calendar day, the teller/representative is required to file a report called a "CTR" - a Cash Transaction Report, to the government. Businesses have to do this as well, unless they have paper work on file with the bank which will facilitate this process.

On this report, is the date and location of this transaction, the amount, what the transaction was, and the identity and occupation of the person doing the transaction.

The government only investigates cases that are suspicious - not every single one of them... It is supposedly done to counter money laundering and terrorism.

Answer 4

I am sorry they can not large cash sums are transfered and deposited all the time.
Two things happen, first any cash transfer larger than 9999 has to be reported to the IRS, so there is a trail of money for tax purpose, next because of a large problem with drug money and also money laundering, large transfers will or can cause the money to be checked, but you don't go to jail for the deposit, it is only if the money isnot legal.

Answer 5

Anything 10k and over is reported. that's a lot of cash and they will want to know how it was obtained. Money Laundering, drug money, or what ever. You will not automatically go to jail, but the IRS will most definitely be notified.

Answer 6

Typically somebody with that much cash probably didn't make that money legally. Secondly there is a law that requires businesses to file reports on transactions of over $5000.00

Answer 7

They need to be able to verify the source of that much cash. Designed to make it difficult for drug dealers to use banks.

In the same way, large cash withdrawals require additional paperwork as well.

Answer 8

They don't necessarily. I personally have done that on occasion. But you need to fill out forms and have valid ID and a reason for the deposit and where it came from.

Answer 9

Money laundering -