Federal law requires that transactions involving sizable amounts of cash, typically more than $10,000, must be reported to the government. This reporting requirement includes the physical moving of money into or out of the United States.
If you attempt to bypass this reporting requirement by concealing cash, or a cash equivalent, in crossing a U.S. border, you could be charged with the federal crime of bulk cash smuggling defined under Title 31 U.S.C. 5332. If convicted of this crime, you could face up to five years in federal prison.
Bulk cash smuggling is often associated with drug trafficking or organized crime. Many accusations of bulk cash smuggling involve an attempt to evade reporting requirements and detection by law enforcement and financial regulators. Under the Bank Secrecy Act, bulk cash smuggling is a reportable offense.
Suppose someone transports more than $10,000 in currency into or out of the United States. In that case, they must report it to Customs and Border Protection (CBP) using the Report of International Transportation of Currency or Monetary Instruments, FinCEN Form 105.
Suppose you failed to report the currency or monetary instrument as required accurately. In that case, the property can be seized and subjected to a forfeiture action, and you might be charged with a crime. However, in most cases, the money is taken for a civil asset forfeiture proceeding, but there is no arrest or prosecution. This is defined under Title 31 U.S.C. 5332(c)(1).
Homeland Security Investigations (HSI) or Customs and Border Protection (CBP) conduct investigations for smuggling large amounts of cash. These investigations focus on the misuse of Money Service Businesses and money launderers who funnel accounts. Let's review this federal law in more detail below.
Bulk Cash Smuggling Explained
Title 31 U.S.C. 5332 makes it a federal crime for anyone to knowingly conceal "more than $10,000 in currency or other monetary instruments" on their person, luggage, or other conveyances when leaving or entering the U.S. "with the intent to evade a currency reporting requirement under section 5316."
The primary goal of this law is to deter and track criminal activities involving large international cash transactions, including drug trafficking, trade fraud, tax evasion, and others. To be convicted of this crime, federal prosecutors must establish the following facts:
- You knowingly concealed more than $10,000 in cash or other monetary instruments;
- You concealed this currency on your person or in some other "conveyance" or container;
- You transported (or attempted to transport) the currency from a place inside the U.S. to a place outside the U.S. (or vice versa); and
- You did so with the intent of bypassing the reporting requirements.
Under this law, the act of "concealing" the currency may include hiding it in any of the following ways:
- On your person (i.e., in your clothes);
- In your luggage;
- In a backpack;
- In a package or other container.
Under this law, "monetary instruments" can refer to any of the following:
- U.S. currency (bills or coins);
- Currency from any foreign nation (bills or coins);
- Traveler's checks;
- Checks, money orders, or promissory notes that have been endorsed made out to a fictitious person, or signed with no payee specified;
- Stocks or securities that may be passed on delivery.
It should be noted that if you carry a check or money order made out to a specific person which has not been endorsed, this does not count as an illegal "monetary instrument" because it cannot be easily converted to cash and can be tracked once it's endorsed.
What Are Some Examples?
EXAMPLE 1: Josh is returning from a business trip where he sold customers overseas $50,000 worth of legal or illegal merchandise. Before getting on the plane home, he converts his earnings to traveler's checks and stuffs them in the lining of his coat to avoid having to report them at customs. As a result, Josh could be charged under 31 U.S.C. 5332 for bulk cash smuggling.
EXAMPLE 2: David raises $15,000 from individuals in the U.S. to support a missionary in Africa. He converts it to a money order made out to the missionary, sticks it in his luggage, and boards a flight intending to deliver it in person. David would not be guilty under 31 U.S.C. 5332 because his money order was made out to a real person and has not yet been endorsed by the payee.
What Are the Related Federal Statutes?
31 U.S. Code Chapter 53 monetary transactions, Subchapter II, records and reports on monetary instruments transactions have several federal statutes that are related to 31 U.S.C. 5332, bulk cash smuggling into or out of the United States, including the following:
- 31 U.S.C. 5311 – Declaration of purpose;
- 31 U.S.C. 5312 – Definitions and application;
- 31 U.S.C. 5313 – Reports on domestic coins and currency transactions;
- 31 U.S.C. 5314 – Records and reports on foreign financial agencies;
- 31 U.S.C. 5315 – Reports on foreign currency transactions;
- 31 U.S.C. 5316 – Exporting and importing monetary instruments;
- 31 U.S.C. 5317 – Search and forfeiture of monetary instruments;
- 31 U.S.C. 5318 – Compliance, exemptions, and summons authority;
- 31 U.S.C. 5318A – Special measures for jurisdictions;
- 31 U.S.C. 5319 – Availability of reports;
- 31 U.S.C. 5320 – Injunctions;
- 31 U.S.C. 5321 – Civil penalties;
- 31 U.S.C. 5322 – Criminal penalties;
- 31 U.S.C. 5323 – Whistleblower incentives and protections;
- 31 U.S.C. 5324 – Structuring transactions to evade reporting;
- 31 U.S.C. 5325 – ID required to purchase monetary instruments;
- 31 U.S.C. 5326 – Records of certain domestic transactions;
- 31 U.S.C. 5329 – Staff commentaries;
- 31 U.S.C. 5330 – Registration of money-transmitting businesses;
- 31 U.S.C. 5331 – Reports relating to coins and currency;
- 31 U.S.C. 5333 – Safe harbor with respect to keeping open directives;
- 31 U.S.C. 5334 – Training regarding anti-money laundering;
- 31 U.S.C. 5335 – Prohibition on concealment of asset source;
- 31 U.S.C. 5336 – Ownership information reporting requirements.
What Are the Penalties for 31 U.S. Code 5332?
The consequences of smuggling cash in bulk can be quite severe. If convicted, you could face up to five years in federal prison per count. In addition, the money and any associated property may be forfeited to the United States government.
However, as noted, in many of these cases, federal agents will seize any currency and subject it to a civil asset forfeiture proceeding even when an arrest is never made.
The forfeiture proceedings involving bulk cash smuggling allegations are governed by the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”), Pub. L. No. 106-185, 114 Stat. 202.
What Are the Defenses for 31 U.S. Code 5332?
When charged with bulk cash smuggling under Title 31 U.S.C. 5332, a few common strategies can be used by a federal criminal defense lawyer to challenge the charge. These are discussed below.
Perhaps we can argue that the currency was less than $10,000. The purpose of this law is not to track all money entering and leaving the U.S. but only to track more significant dollar-value transactions, such as would be likely associated with criminal activity.
If the currency you carry is valued at less than $10,000, it does not meet the federal reporting requirement, and therefore it's not a violation of the law.
Perhaps we can argue that you did not knowingly attempt to smuggle cash. For example, someone may have snuck the "monetary instrument" into your luggage without your knowledge, trying to use you as an unwitting "mule" to get the money into or out of the U.S. If you didn't conceal this money or try to move it knowingly, you aren't guilty under 31 U.S.C. 5332.
Perhaps we can argue that you were unaware of the reporting requirement. To prove you guilty under this law, prosecutors must show you hid the currency to avoid reporting it. If you didn't know you needed to report it and were concealing it only to protect it, you should not be convicted of this crime.
We provide legal representation for federal criminal matters across the United States. You can contact our law firm for an initial case review by phone using the contact form. Eisner Gorin LLP is located in Los Angeles, CA.
Related Content:
