Friday, May 29, 2015

Former House Speaker Indicted for Structuring and Lying to Federal Agents (5/29/15; 6/3/15)

Former Speaker of the U.S. House of Representatives J. Dennis Hastert has been indictment for structuring bank withdrawals to evade bank reporting for currency transactions (CTRs) and lying to the FBI.  The DOJ announcement is here; the indictment is here.  Although this is not a tax case, it does involve structuring and lying, two crimes that play out in many tax crimes cases.  There is some considerable irony that the structuring provisions of the Patriot Act, enacted under Hastert's leadership, as the basis for a key count in the indictment.  Daniel Marans, Patriot Act That Dennis Hastert Passed Led To His Indictment (Huffington Post 5/28/15), here.

The underlying problem for Hastert seems to have arisen from misconduct that occurred before he became a U.S. representative.  Later, in 2010, he agreed to pay a person aggrieved by the misconduct "$3.5 million as compensation for the misconduct."  (Indictment, par. 1d.)   He withdrew $1.7 million in cash from various bank accounts, but did so, at least for some withdrawals, in a manner to avoid the bank's reporting of those transactions on Currency Transaction Reports, required for deposits and withdrawals of cash in excess of $10,000.. (Indictment, par. 1f - 1m.).  He was indicted for structuring in violation of   Count Two based on 31 USC § 5324(a)(3), here.  In addition, he is indicted for false statements to agents when questioned about the structuring.  Count One based on 18 USC 1001(a)(2), here.

Addendum 6/3/15 12:50pm:

Legal pundit, Jeffrey Toobin, has this article in the New Yorker on line:  The Legal Logic of the Case Against Hastert (New Yorker 6/2/15), here.  Although he is no longer a prosecutor, relying on punditry for a living instead, Toobin presents the law enforcement case for the charges against former House Speaker Hastert.  He also makes the general argument for when the CTR provisions (both criminal and, in other cases, forfeiture) should be deployed.  As I read it, if it had just been a CTR case, Hastert probably would not have been prosecuted.  He was prosecuted because he lied to the agents when they inquired about the cash withdrawals.  (In this regard, I doubt that he would have been prosecuted if his only lie was that he did not have sex with the guy long ago (shades of Bill Clinton); but, he told a lie going to the very purpose of the CTR provisions and thus having a nexus to legitimate law enforcement priorities.

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