Shake-N-Go Fashion Inc., and Model Model Hair Fashion Inc. – wholesale hair product companies based in Port Washington, N.Y. – entered into an agreement today to resolve claims brought by the New Jersey U.S. Attorney’s Office that they enabled the structuring of cash transactions to avoid reporting requirements in violation of the Bank Secrecy Act (BSA), announced U.S. Attorney Paul J. Fishman…
According to documents filed in this case:
SNG willfully engaged in business practices that permitted customers to conduct cash transactions with SNG of more than $10,000 while avoiding the filing of mandatory forms documenting those transactions with the United States Department of the Treasury.
The BSA requires financial institutions involved in cash transactions in amounts greater than $10,000 to file Currency Transaction Reports (CTRs) for each transaction. Similarly, businesses that receive more than $10,000 in cash in one or related transactions are required to file an IRS 8300 form. Many individuals involved in illegal activities, such as tax evasion and money laundering, are aware of these reporting requirements and take active steps to cause financial institutions and businesses to fail to file the necessary forms. These active steps are usually referred to as “structuring,” which is a violation of the BSA.
Although SNG never knowingly received illicit funds, SNG permitted and enabled its customers and employees to structure millions of dollars in cash transactions into SNG’s bank accounts without the filing of CTRs, broke up customer invoices totaling more than $10,000 and willfully failed to file a single 8300 form prior to the government’s investigation.
In 2012, SNG had over $300 million in gross sales receipts. Of that amount, approximately $80 million was made in the form of cash deposits.
Beginning in 2007, SNG instituted a policy that permitted its customers to purchase hair products by depositing cash directly into SNG’s bank accounts. This policy enabled SNG’s customers to regularly structure cash deposits into SNG’s accounts. SNG’s employees also structured funds into SNG’s accounts after collecting the funds from customers. SNG employees were instructed not to issue an invoice or receipt that exceeded $10,000, even when a customer ordered more than $10,000 in hair products at one time.
USDOJ press release link: click here