Which statement best explains why structuring is illegal?

• A. It is illegal to deposit cash above the CTR threshold.
• B. A deliberate attempt to evade AML laws and regulations.
• C. It is illegal to use multiple banks.
• D. It is illegal to observe CTR reporting thresholds.

Answer: (C)

Structuring is a money-laundering tactic where someone splits a large cash amount into smaller deposits to stay under the reporting threshold and avoid AML scrutiny. It’s illegal because the law requires financial institutions to file currency transaction reports for large cash activity and to monitor for patterns that suggest illicit intent. Deliberately trying to evade those reporting requirements by smurfing deposits is a violation of AML regulations. Using multiple banks can be a tactic, but the illegality comes from the intent to evade the reporting and monitoring duties, not simply from the act of using more than one bank. The idea of observing CTR thresholds would defeat the purpose of structuring, since the whole point is to evade detection and reporting.