Several Cash Withdrawals Triggered Investigation Into Former Speaker Hastert NPR's Robert Siegel talks with Sharon Cohen Levin, a former federal prosecutor and now a partner at WilmerHale, about the federal law that triggered an investigation into J. Dennis Hastert.
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Several Cash Withdrawals Triggered Investigation Into Former Speaker Hastert

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Several Cash Withdrawals Triggered Investigation Into Former Speaker Hastert

Several Cash Withdrawals Triggered Investigation Into Former Speaker Hastert

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AUDIE CORNISH, HOST:

For more now on the banking laws that paved the way for charges against Dennis Hastert, what got him in trouble was a pattern of cash withdrawals.

ROBERT SIEGEL, HOST:

According to the indictment, Hastert started making large withdrawals $50,000 at a time and provided that cash to individual A. After being questioned by his banks, the former speaker began withdrawing cash in smaller amounts, just under $10,000, and that's where the feds say he broke the law. To help us understand how, we're joined by Sharon Levin. Until recently, she was a federal prosecutor who built a career going after financial crime. She's now a partner at the law firm, WilmerHale. Welcome to the program.

SHARON LEVIN: Thank you very much.

SIEGEL: Explain this federal law, the magic of $10,000, and the origins of this law.

LEVIN: There's actually two laws. The first law requires financial institutions to file currency transaction reports with the government for any transaction that's over $10,000. The second law, which is the criminal offense, provides that it's a crime to break up a single transaction - it could be either a deposit or a withdrawal - but to break up that transaction into several transactions, several deposits or withdrawals for the purpose of avoiding the filing. So that is essentially the crime here, breaking up a $10,000 withdrawal for the purpose of preventing the financial institution from filing a currency transaction.

SIEGEL: So you're saying that if I withdrew $50,000 at once, that would generate a report. The bank would file the report, I assume. I wouldn't do that.

LEVIN: Yes.

SIEGEL: But if I made 10 withdrawals of $5,000 or seven withdrawals of $7,000 and change that, indeed, might get me in trouble?

LEVIN: Yes, if the - your purpose of doing it was to avoid the bank filing that currency transaction report, then that would be a federal criminal offense.

SIEGEL: And what's the origin of this, especially the $10,000 level?

LEVIN: They would - these were passed around the same time as the money laundering laws went into effect. And essentially, the reason behind them was to go after the drug money, the drug dollars, that were coming into the financial system. A drug trafficking offense is generally an all-cash business, so there would be large amounts of cash that needed to get into the financial system. And all different kinds of cash conversion schemes were going on. And one of the most common ones, this structuring - breaking up the cash deposits, depositing them at multiple financial institutions, sometimes by multiple people on the same day. And this was a way of tracking that and getting information on it to build criminal investigations and criminal prosecutions of essentially drug trafficking organizations.

SIEGEL: I believe that in the indictment of Dennis Hastert, it says that after his very big withdrawal, the bank spoke with him. Should one expect to get a call from the bank or straightaway from the FBI if you take out $50,000?

LEVIN: I think the bank for these type of transactions because it was inconsistent with his normal banking pattern. I think that's one of the things that financial institutions look at for their customers. Law enforcement imposes substantial responsibilities on financial institutions to essentially safeguard the financial system, and one of them is that they're required to know their customer. And as part of knowing that customer, if a transaction or a series of transactions is inconsistent with the way that the individual used the account, that may trigger further inquiry. So the bank sort of properly questioned why were these withdrawals made. It's not a crime to withdraw the money in that fashion, but it may have triggered a suspicious activity report.

SIEGEL: What invited law enforcement in was when he started, at least according to the indictment, making withdrawals just under $10,000 - that's when the federal government became interested in it.

LEVIN: Yeah. I mean, it's very interesting. The means to try and avoid the attention of law enforcement was what really invites the attention of law enforcement.

SIEGEL: Sharon Levin, thanks for talking with us today.

LEVIN: Thank you very much.

SIEGEL: Sharon Levin is a former federal prosecutor who used to focus on money laundering and asset forfeiture and now a partner at the law firm WilmerHale in New York.

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