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Hastert case exposes flaws in banking laws

When the startling news broke in May that former U.S. House Speaker Dennis Hastert had been indicted, it seemed to come out of nowhere. The soft-spoken former Speaker had been out of politics since 2007, living a quiet life as a lobbyist.

As you'll recall, Orlando news media was saturated with reports that Hastert had been indicted on suspicion of violating banking laws by illegally structuring withdrawals -- and that he had allegedly lied about the withdrawals to federal authorities. Hard on the heels of that news were revelations that Hastert had been making the withdrawals to pay off a former student who accused the politician of sexual abuse decades earlier.

Hastert has not been charged with any sexual offenses.

Hastert's criminal defense attorney recently pointed out in federal court that anonymous government leaks to the media about Hastert's alleged sex crimes have made it nearly impossible for the former Speaker to ever get a fair trial on the charges of evading currency reporting laws and lying to the FBI.

The Hastert arrest opened a lot of eyes to the relatively obscure law that requires banks to report to the IRS any withdrawals or deposits of $10,000 or more. The laws were designed to prevent money laundering, but as the Hastert indictment illustrates, can be used by "creative" prosecutors to go after people withdrawing or depositing legally obtained funds as well.

Your banking activities involving cash in amounts of $10,000 and up are reported, regardless of how you obtained the money. In Hastert's case, he apparently made a number of withdrawals of $50,000 each. The withdrawals were legal -- it was his money being taken from his account -- but bank officials reportedly alerted him to the fact that the withdrawals had to be reported and could draw official attention. He then apparently made smaller withdrawals, under the $10,000 reporting threshold. Bank officials then reported those activities to authorities as suspicious.

No matter how he withdrew his own funds from the bank, he apparently drew attention. The same thing happens to less well-known citizens, of course; people withdrawing or depositing legally obtained money and inadvertently gaining the attention of suspicious officials.

Our Orlando, Florida, criminal defense firm is experienced in helping clients avoid indictment on these types of charges, and also well-versed in vigorous defense of clients' rights and freedom at trial. You can find more information about the Law Offices of Horwitz & Citro, P.A., on our Currency Reporting / Structured Transactionspage.

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