Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

How safe is your money in a bank?

It's not safe from over eager law enforcement, that's for sure.

Think about this, if you are retired and have a large sum in investments, you could fall into the same trap.


  • Shocking and surprising.
  • edited May 2015
    I hope the guy fights this all the way. Nothing short of a refund of the entire amount should be accepted. The fact that the govt offered him 50% speaks droves.
  • edited May 2015
    Well .... as presented in John's linked piece, that's certainly an interesting law. Makes me glad I rarely carry more than $100 - $150 cash on my person. Here's a similar, but more complete, story from NY Times.

    Yes - The "War on Terror" not only led to enhanced police powers, but also evolved into other "wars" in recent years (ie: wars on drugs, drunk driving, illegal gaming and tax evasion). And, we do seem to be living with ever expanding police power/presence in our lives, whether we like it or not.

  • The user and all related content has been deleted.
  • @hank, Is there supposed to be a NYT link or reference in your link? I've tried twice to find it.
  • edited May 2015
    Thanks John- Here's the NY Times link. I changed the one above too.
  • Thanks hank.

    In years past, I was warned by my bank that too many transactions over $10,000 would catch the attention of the Feds. Now it is less than that.

    I had to change my shifting of assets some. Now I go every 6 months for a lower amount than yearly with a higher amount. This is partly due to this kind of law, but also in my belief that cash is trash now. I don't want a whole years worth of cash sitting and getting nothing.

    I now wonder if some suits will be at the air bridge waiting for me the next time I head to the States?
  • The Bank Secrecy law was originally signed into law by President Nixon in 1970 and enhanced by the Patriot Act signed by President Bush - with the best of intentions, I'm sure. I'm surprised that the bank didn't recognize the problem and alert the taxpayer. Businesses that deal in cash must keep informed of laws affecting their businesses. Of course, the Feds showed a complete lack of common sense in their actions in this case.
  • edited May 2015
    John, You said: "If you are retired and have a large sum in investments, you could fall into the same trap"

    What kind of investments are you referring to? I'm not aware of any fund houses that accept CASH deposits or that would liquidate a fund in CASH. It's always done in the form of check or electronic transfer with proper notification of IRS or other regulatory agency. Not only is that safer than sending CASH through the mail, it also helps insure that everyone pays their fair share of taxes.

    I'm not an attorney. But here's my limited understanding and some reactions:

    --- It's well known that financial institutions are required by law to report unusually large CASH transactions to government regulators.

    --- The people in the stories seemed to be aware of this requirement and were attempting to evade the law by making a large number of smaller CASH deposits.

    --- The reporting laws are intended to allow law enforcement the ability to trace large money flows which could involve money laundering/funding of terrorism, tax evasion and other illegal activities.

    --- It is not illegal to make a large CASH transaction/deposit. What is illegal is to seek intentionally to circumvent the CASH reporting laws.

    --- There exist many electronic methods of making payments. Even the local tackle shop is able to scan my bank card when I buy a dozen crawlers and a quart of outboard motor oil on the way fishing. Checks (tracked electronically) are another payment option. I'm not sure why these people found it necessary to handle $9,999 CASH on a regular basis.

  • @hank,

    Maybe I am off base here, but many mutual fund companies have brokerage arms which for most purposes a very much like banks. I use them exactly as such except for loans. I can write checks, direct deposit etc. If I fund these accounts with large transactions for my cash needs abroad, am I falling into the same trap?

    I still have a normal bank account, if Charles Schwab fits the bill. I also have a small account with Chase just as a backup. In my position I have found that having multiple accounts is prudent when one lives off ATMs Banks these days change the cards due to security hacks or whatever and my card is useless all of a sudden.

    With all the technology these days, I would think the system knows where the money came from and where it is going. In the cases of these businesses, it should have been clear from the beginning. Perhaps tracking cash deposits is not the best way to track terrorists or drug traffickers, since the laws also bring law abiding citizens and businesses into the mix. Finally, it should always be the rule that we are innocent prior to being proven guilty. Sadly, that is not the case anymore.
  • I should explain my story.

    Years ago when I moved to my present location in Asia, I knew I needed a large sum of money to start with. Customs laws in most countries limit cash on hand to $10,000. If caught at the airport, you are in big trouble. So I talked to the branch manager at what was then Washington Mutual. We set up a agreement that I could call and perform a wire transaction over the phone. The manager was very understanding and perhaps going over the line a bit here. She did warn me however that repeated transactions of that amount might and could raise a red flag, considering the end location of that money which was a Philippine bank. So, after I arrived at my destination, I started to call for the wires. The limit was $10,000 each. Washington Mutual allowed one free wire transfer a day for my account. Since I was building a house, I needed much more than that. This was 2008.

    Then, shit hit the fan. I was very fortunate that I could get all my wires out before Chase took over and screwed up the whole operation. I ended up going back to the states and stocked up on cash that way as well. Chase changed all the rules. At that point I pretty much fired Chase but kept the minimum needed to keep that account open.

    I know my situation is not a normal one but sometimes we all go through situations where we need to take a chance so to speak. In talking to expats recently, this money transfer issue has forced many to go through back door operations to send money even though the situation is perfectly legal.

  • edited May 2015
    I see your point John.

    No - I do not believe a bank (or brokerage) dispensing CASH to you is the same. The difference is that there already exists a very long and complete "paper trail" documenting how that money arrived in your account. The bank is simply converting your existing electronic funds already on deposit into CASH for your use.

    Whereas, if I show up at the bank with a sack full of CASH in the form of $10s, $20s and $50s there is no existing "paper trail" documenting where all that money originated. (Remember - It's not illegal for me to make the deposit in CASH. It's my taking extraordinary measures to evade the legally required reporting of unusually large CASH transactions that's illegal.)

    Just my 2 cents. I'll refrain from further comment!

  • I do see your point hank but I don't know of anyone these days who goes into a bank with large sums of money, except businesses with their cash deposits. I may be wrong, and I probably am.:-)
  • I'm confused. I shouldn't make too many transactions over $10000? Or I shouldn't make too many transaction under $10000? I thought the original article is referring to someone who made too many deposits under $10000. However too many over $10000 get reported?


    Basically someone can just come and take my money. That it?
  • It is a bit confusing. Originally transactions 10k and over were scrutinized. It seems that they use a new algorithm since the bad guys obviously adapted to the 10k rule.

    You would think that law enforcement would use some common sense in that rather than taking the persons money and freezing accounts, they would investigate. I sense that most transactions go through with no red flags. So why did these law abiding business owners get tagged?

    Finally, it should not take very long for the Feds to realize their mistake and make it right. When I read that they were willing to settle with the store owner in the article for 50¢ on the dollar, the bells went off in my head. Why not the whole amount? Where did that money go?
  • They ultimate gave back the money. Though they're also supposed to cover costs,which I believe is still in court
  • I thought cops stopping people on the road and randomly seizing dollars was a fluke. Like I keep saying - degeneration of society. Where is that rocket to Mars when you want one?
  • @John Chisum: At what point did you start seeing little green men ? If you look at the update in your original link you'd see he got his money back. ' Sh_ t' happens ! Time to close this thread
  • Don't forget folks, that withdrawals of over $10,000 in cash are required to be reported to the gub'mint as well. If you decide that instead of withdrawing $20,000, you will go to the bank 4 times and take out $5000, then you could be reported for "structuring".
  • I don't believe that update was there when this thread was started. Plenty of comments though.
  • edited May 2015
    Geez - He should have read the MFO Discussion Board first. And credit JohnChisum with a timely posting.

    Excerpt: "Federal prosecutors have indicted former U.S. House Speaker House Dennis Hastert on bank-related charges. A statement from the U.S. attorney's office in Chicago says the 73-year-old Illinois Republican is accused of structuring the withdrawal of $952,000 in cash in order to evade the requirement that banks report cash transactions over $10,000. He's also accused of lying to the FBI."
    PS: @Ted - This one is bigger than little green men.:)
  • edited May 2015
    PS: @Ted - They may not be green, or little. But you'd damned well better believe that they are men and women, on our tax dollars, and they're definitely there.

    Big brother, big sister, hello government. You think the NSA is above helping on this sort of stuff?
  • From the Guardian, Friday 29 May 2015

    A statement from the US attorney’s office in Chicago said [Hastert] was accused of evading the requirements of federal law through the careful and systematic withdrawal of $952,000 from his banks.

    The indictment... notes that between 1965 and 1981, Hastert worked as a high school teacher and coach in Yorkville, Illinois. The indictment then notes that “Individual A”, whom he is alleged to have paid, has known Hastert “most of Individual A’s life”.

    “In or about 2010”, the indictment says, Hastert met with this person and “discussed past misconduct by [Hastert] that had occurred years earlier”. The indictment alleges that Hastert then agreed to “provide” this person $3.5m “in order to compensate for and conceal his prior misconduct” against them.

    According to the prosecution, Hastert systematically withdrew about $1.7m from banks, and then periodically delivered payments to Individual A for four years. His banks, required to report transactions of more than $10,000, questioned Hastert, who then decreased the size of his withdrawals but continued to pay the unnamed person amounts of $50,000 to $100,000.

    Article extracts slightly edited for brevity, and references to political party removed. (OJ)

  • edited May 2015
    Hi OJ - Re Ted. He lives in Illinois and may find himself paying for Hastert's room & board soon. So he's not laughing.

    I'm really conflicted on this. So many issues re: right to privacy vs personal conduct. It doesn't take NSA. Hell - anyone with a cell phone can catch you, a former spouse, a co-worker, etc. in a compromising situation and beam an image up to satellite & around the globe via Internet instantly.

    However, that's big-time hush money if the charges are true. A personal tragedy for sure. We'll see.
  • As with most such, it's the lying and coverup that are the key problem.
  • @Hank & @davidmoran- I'm also really conflicted on this because of the issues that you raise, and I derive absolutely no pleasure from it, either. That's why I edited all mention of the political aspects.

    While he was "from the other side", and I frequently disagreed with his legislative positions, I thought that he was an honorable man, and did a competent job as speaker. It's just tragic to see a life ruined by circumstances such as these, especially when so much else has been accomplished. "A personal tragedy for sure." Indeed.
  • The quoted statement in red seems to indicate that Hastert made an effort to acknowledge his mistake of the past. It doesn't absolve him from that mistake but it shows that he felt guilty about it.

    I was not a big fan of Hastert when he was speaker. We needed someone who could lead but we ended up with someone who probably was not suited for that position. He was probably better as the legislator he was.

  • Such fakakta misidentification:

    Man, is that messed up. AP, MSN, Fox. Wow. Talk about lameass QC.
  • A source like AP prints the story and everyone else just copied it. Happens all the time. It all done by machines,, errors, misspellings and all. No wonder the media is so screwed up and unbelievable.
  • No, someone quickly reviews it most of the time, certainly at a place like MSN and Fox; the point is that that someone has to know some history and some facts and have some memory function. Judgment is good too.
Sign In or Register to comment.