The indictment of former Speaker of the House Dennis Hastert highlights the way money laundering rules can affect anyone who deals in under-the-table cash transactions. Hastert was withdrawing millions of dollars in cash, which is exactly the kind of pattern that makes law enforcement officials ask questions. It was surely not money laundering, but Hastert was systematically taking the money out in small amounts that he apparently combined to form larger cash payments. If any of the combined cash payments exceeded $10,000, and if Hastert then failed to report the nature of the cash transactions to bank regulators, that is a violation known (informally) as structuring. The indictment of Hastert says he subsequently made false statements to investigators about the money, which would be a second crime. A retired politician ordinarily would not be indicted just for moving money around, so the indictment is not really just about the money. Wording in the indictment suggests that investigators think Hastert was paying hush money to victims of his earlier misconduct. The episode provides an example of the way investigators try to uncover crime by following the movement of money.
Metropolitan Savings Bank in Pittsburgh failed almost immediately after the real estate boom began to falter in 2005, and the main reason was that a bank executive was secretly taking out loans for houses his construction business was renovating. At the time of the bank failure in February 2007, loans to the executive equaled more than half of the bank’s capital, but bank directors didn’t know because of false accounting records for most of the loans. The executive was sentenced to 12 years for his part in the bank failure. Another officer pleaded guilty and is serving a 6 year sentence for her role in the false accounting. The two were ordered to pay nearly $10 million in restitution.