But if you grew up on the cartoon in the 1980s, or were unfortunate enough to have seen the 2011 movie, you’ll also know that the word smurf itself is rather ambiguous. It can mean whatever the person using the word wants it to mean. And that’s a pretty decent metaphor for how structuring laws function in the hands of federal officials.

First, a little background: Most structuring cases stem from a 1970 law called the Bank Secrecy Act, which requires banks to report any deposits, withdrawals, or transfers of more than $10,000. The law has since been revised several times, but generally it’s intended to make it easier for the government to track tax cheats, money launderers, illegal gambling operations and other criminal enterprises.

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But the Bank Secrecy Act also requires banks to report to the federal government any activity from customers that might be construed as structuring deposits to avoid the reporting requirement. So if you have $100,000 to deposit in your bank account, and you deliberately choose to deposit that money in increments of $9,999 so your bank won’t automatically notify the federal government, you’re guilty of structuring. It’s a felony punishable by a fine and/or up to five years in prison.

Your bank is also required to report any suspicious activity by its customers. Moreover, your bank is prohibited from letting you know that it has reported you to the government. Banks that fail to sufficiently police their customers or banks that notify customers that they’ve been reported for suspicious deposits risk financial sanctions. Bank personnel found to have neglected their duties to report suspicious customer behavior can also be criminally charged and sent to prison. So there’s quite a bit of incentive for your bank to give you up, and to cast a wide net around what constitutes “suspicious activity.” There’s lots of risk in under-policing for structuring, and virtually no risk of losing customers due to a policy of over-reporting them to the government. Most customers will never know.

The problem of course is that when you force banks to cast such a wide net, they’re going to report a lot of people who have done nothing wrong. And some of those people are going to find themselves in legal trouble. A top bartender who makes, say, $2,000-$2,500 per week in tips might make regular monthly deposits of over $9,000, but less than $10,000. It isn’t illegal to deposit $9,500 in your bank account. It’s only illegal if you’re doing so because you don’t want your bank to report the deposit to the government. That’s a pretty thin line between an innocuous activity and a felony.

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There also may be some people who quite understandably don’t want to draw attention to themselves or their businesses, and so might keep their deposits under $10,000 to avoid having those transactions reported, without knowing that doing so is illegal.

In the 1994 case Ratzlaf v. U.S., the U.S. Supreme Court sensibly interpreted the word willfully in the Bank Secrecy Act to mean that in order to convict someone of structuring, the government had to show that the defendant knew that structuring was illegal. It wasn’t enough to show only that the defendant knew about the reporting requirement.

It’s an important distinction. Imagine you’re a small business owner, just getting started. The first few times you go to make deposits, they’re all under $10,000. Your business grows, and eventually you bring, say, $10,500 to the bank. The teller informs you that because you’re depositing more than $10,000, the bank will have to report you to the federal government. Even if you’ve done nothing wrong at all, it isn’t difficult to see how the phrase “report you to the government” might sound a little daunting. You might as well just hold $600 back and avoid drawing attention to yourself.

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I think the structuring law itself is bad public policy. But in the scenario above, it ought to matter a great deal whether or not the small business owner knew that withholding that $600 is illegal. Under the Supreme Court decision Ratzlaf, he’d only be guilty of structuring if the government could show that he knew holding back the $600 was illegal.

Apparently that made things too difficult on federal prosecutors. So Congress responded by dropping the word willfully from the Bank Secrecy Act. Now, prosecutors need only show that a defendant knows about the $10,000 reporting requirement, and makes deposits under that amount in order to avoid it.

Keep in mind, it doesn’t matter if you’ve earned all of your money legitimately. It doesn’t matter if you’ve dutifully reported all of that money at tax time, and paid the government every penny required of you under the law. If you knew about the reporting requirement, and you deliberately deposited less than $10,000 in order to avoid it, you’re guilty of a federal felony. And thanks to asset forfeiture, the government can then move to seize everything in your account. And possibly more.

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All of this brings me to United States v. Abair, a case from the Seventh Circuit Court of Appeals that my fellow Washington Post blogger Eugene Volokh posted about last week. Yulia Abair, an immigrant from Russia, was trying to close on a house. When her bank in Russia wouldn’t wire her the money for her deposit, she instead made a series of withdrawals from that account from ATMs, then deposited the cash in her domestic bank account. The question is whether she deliberately made several deposits of less than $10,000 to avoid having those deposits reported, or if she simply didn’t know about the reporting law. To show that Abair made the deposits willingly, prosecutors brought up unrelated issues about whether she had ever lied on a tax form or student loan application. Because the crime turns on intent, it’s easy to see how these trials could devolve into judgments on a defendant’s general character. Abair was convicted, sentenced to two years probation, and was ordered to sell her new home and turn all proceeds over to the federal government. (Welcome to America!)

The Seventh Circuit did reverse her conviction, but only because it found that the prosecutor improperly brought up the questions about her taxes and loan application. The court didn’t question the law itself. As Volokh notes, even the dissenting judge wrote, “[T]his case shows every sign of being an overzealous prosecution for a technical violation of a criminal regulatory statute — the kind of rigid and severe exercise of law-enforcement discretion that would make Inspector Javert proud.”

Note too that the government didn’t try and didn’t need to show that Abair was covering up a criminal activity. In fact, by all counts, she earned her money running a legitimate business.

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She isn’t the only one. A couple years ago, the South Mountain Creamery, a dairy farm in Frederick, Md., got hit with a similar charge, again with no allegations of any underlying criminal activity. In a report on the case, the Baltimore City Paper found a significant jump in the number of structuring cases, with many of them originating from the U.S. attorney’s office in Maryland.

Historically, the anti-structuring statute has been used by prosecutors as an ancillary charge with other accusations of nefarious behavior, such as drug dealing or terrorism. And it still is. But over the last few years, prosecutors have started to use it more regularly as a standalone charge—an observation noted by defense attorneys that Maryland U.S. Attorney Rod Rosenstein confirms. Syracuse University’s Transactional Records Access Clearinghouse, a data center about federal court cases, reports that in fiscal year 2011 Maryland brought 14 of the nation’s 99 structuring cases, making it the top state for such prosecutions. Nationally, the numbers have been rising; the 2011 figures are up 8.8 percent from the year before and up 57.1 percent from five years ago. Greater prosecutorial emphasis on enforcing the anti-structuring statute has resulted in a rise in money seizures, civil-forfeiture cases, and criminal charges against small businesses and the people who own them. Typical targets handle a lot of cash, and in Maryland gas stations, liquor stores, and used-car dealerships have landed in expensive trouble, losing money through seizures, criminal penalties, and legal bills. South Mountain is not the first seasonal-produce market to find itself targeted for structuring recently. Taylor’s Produce Stand, on the Eastern Shore, was stung last year after the feds seized about $90,000 from its bank accounts. In December, pursuant to a civil-forfeiture settlement agreement after no criminal charges were filed, the stand’s owners got back about half of the seized money.

A defense attorney who handles these cases told the paper:

“The emphasis is on basically seizing money, whether it is legally or illegally earned,” Levin says. “It can lead to financial ruin for business owners, and there’s a potential for abuse here by the government, where they use it basically as a means of seizing money, and I think we’ve seen that happen.”

Last year, the libertarian public interest law firm the Institute for Justice was able to get the IRS to drop its case against Terry Dehko and his daughter, Sandy Thomas. The father and daughter run a small grocery store in Fraser, Mich. Small businesses of course don’t like to keep a lot of cash on hand. But Dehko’s insurer only covered losses of up to $10,000. This is apparently pretty common. You can see where there might be a problem. If small business insurers typically only cover losses up to $10,000, a lot of small businesses will be making frequent deposits of less than $10,000. And that’s going to get them investigated. The IRS seized all the money in Dehko’s bank account and began proceedings to keep it. (By the way, the U.S. Supreme Court just ruled that government agencies are allowed to do this without even a hearing before a judge, even the seizure means you’re left with no resources to defend yourself or to attempt to win your money back.)

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Once again, neither Dehko nor his daughter were accused of any criminal activity other than making frequent deposits of under $10,000. There were no allegations that they had earned the money in any way other than through their grocery store. It’s true that in this case, the government eventually backed off. But only after Dehko was able to obtain the services of the Institute for Justice — and after IJ drummed up a lot of publicity about the case.

So if you’re an immigrant, a dairy farmer, or the owner of a small grocery, the government will come after you for structuring, even if you weren’t aware that it was illegal, and even if your “structuring” wasn’t covering up any underlying crime.