I've written about whether buying money orders could get you convicted of money laundering before. Recent…
Could you get convicted of money laundering buying money orders?
Cindy Omidi, mom to two brothers who owned 1-800-GET-THIN, was convicted of violating a federal law that prevents buying money orders under the reportable amount to avoid reporting. Omidi faces up to 10 years in a federal prison.
Omidi allegedly bought more than 300 money orders of $2,900 each over an extended period of time. The money orders were paid for with cash and then deposited into a business bank account.
Structuring or smurfing
Structuring or smurfing refers to keeping financial transactions below reportable amounts.
Under the Bank Secrecy Act of 1970 (BSA), banks, financial institutions and other places that deal with cash instruments have to report transactions that exceed certain amounts.
Amounts that have to be reported
Here is a list of what must be reported:
- Same day cash transactions of $10,000 or more
- Money order purchases of $3,000 to $10,000
A Currency Transaction Report (CTR) is completed for $10,000 or more same day cash transactions. The CTR is filed with the Internal Revenue Service (IRS).
Anyone buying money orders of $3,000 to $10,000 is listed on the Monetary Instrument Log (MIL) form. The MIL is kept on file for five years.
If you’re suspected of trying to avoid reporting, a Suspicious Activity Report (SAR) is filed with the Financial Crimes Enforcement Network with the US Treasury Department.
Buying money orders with gift cards
If you’re buying money orders with gift cards bought with a miles and points earning or cash back credit card, you shouldn’t be too concerned.
Because you’re manufacturing airline miles and points, not hiding cash by money laundering, you probably can’t be accused of money laundering. Buying money orders is the new US Mint coins, and no one who bought US Mint coins was accused of money laundering.
But it’s a good idea, if you’re not already, to keep all your receipts.
Are you worried that buying money orders could be considered money laundering?
Disclosure: I am not a lawyer. These opinions are my own based on my interpretation of the rules and laws.
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