Author Topic: Travel hacking - helpful background reading?  (Read 3559 times)

CloserToFree

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Travel hacking - helpful background reading?
« on: December 26, 2016, 06:42:47 PM »
I'm interested in reading up on travel hacking strategies.  Can anyone recommend reading, websites, blogs, or other resources?  I've read and listened to some MadFientist coverage of travel hacking (http://www.madfientist.com/travel-miles-101-interview/) and just signed up for the free 15-day course on Travel Miles 101 (http://www.travelmiles101.com/), and have done some casual reading of The Points Guy, but nothing too methodical. 

We've been signing up for and using various reward-heavy credit cards over the past couple years (without too much effort/research) and have already gotten 3 free r/t flights to Europe and a few other domestic flights (Chase Sapphire for me, Reserve for DH; a Chase Southwest card; and a couple Delta cards, among others).  Now I want to figure out how to step up our game to make this sustainable/get even more out of it.  Travel is one of our biggest annual expenses so I feel like we're prime candidates to benefit from this.  All advice/resources/strategies much appreciated.  Thanks!

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #1 on: December 26, 2016, 09:32:59 PM »
The travelmiles 101 course is a good course that will cover all of the basics.  You probably know all of the generalities but they get into some very good specifics.

Some resources I like:

1.  Flyertalk
2.  Loopholetravel
3.  Onemileatatime
4.  Doctorofcredit
5.  /r/churning
6.  Frequentmiler

There are lots of others and I think there is a lot of cross-references between sites.

My two tips:

1.  Don't be afraid to push the boundaries.  You won't know where the wall is until you reach it, and it's probably further than you think.  And when you get there, you'll know where it is ;-)

2.  Learn about churning / MS.  I've nearly finished my sixth round of this game.  I "spent" $39,225 on 14 cards in the last 46 days.  I *actually* spent about $1,571 between MS fees and annual fees.  I will accrue at least $10,740 in points and miles.

CloserToFree

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Re: Travel hacking - helpful background reading?
« Reply #2 on: December 27, 2016, 10:33:41 AM »

2.  Learn about churning / MS.  I've nearly finished my sixth round of this game.  I "spent" $39,225 on 14 cards in the last 46 days.  I *actually* spent about $1,571 between MS fees and annual fees.  I will accrue at least $10,740 in points and miles.

Thanks so much, will check out those sites.  Have found the Travel Miles 101 course great so far -- basic, easy to understand info that lays out a step by step approach for how to plan and execute your travel hacking strategy.  About halfway through so far.   Would love to hear more about your experiencing with churning/MS (assume this is manufactured spending?).  Sounds like you've made off like a bandit, nice work!

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #3 on: December 27, 2016, 05:29:58 PM »
Sure.  What would you like to know?

Everybody does it a little differently, but my method is spelled out well in various other places - I'm not doing anything exotic.  I buy two $500 gift cards from a local store with the credit card I'm wanting to earn a bonus on.  This costs me $11.90 in gift card fees ($5.95 times 2).  I then take those two gift cards to another local store, where I buy a money order, which costs me another 25 cents to 70 cents in fees.  I then take that money order to my local bank and deposit it into my checking account.  Call that a cycle, and I've basically done about 38 or 39 of those cycles in the past 46 days.

There are ways to reduce the churning costs.  Some people appear to churn/MS in order to make money on doing cycles - which seems like a lot of work for not much payout - rather than using MS as a way to meet signup bonuses, like I do.  Buying the gift cards from online sources through shopping portals is one way; another way is to use credit cards that have, say, 5% bonuses at office supply stores then buy the gift cards at Office Depot - the 5% cashback bonus covers the cost of the gift cards and then some.

While I'm doing this, I also use the credit cards for regular spending.  This makes it less obvious to the credit card company what I am doing - not that my spending pattern would stand up to much scrutiny, but I figure it doesn't hurt.  I also buy other items that I might happen to need along with the gift cards - again, so that my totals look a little more normal than they otherwise would.

This basically allows me to achieve the signup bonuses on more credit cards than I otherwise could with normal spending.  My normal spending is only a few thousand a month, and at least a third of it cannot be put on credit cards.

The other big part about MS'ing is the social engineering aspect of it - in other words, you're doing something weird and the tellers and store clerks may try to thwart you because they think what you're doing is illegal.  I have my own style which seems to work, but there are general tips out there, and common sense will get you a long way.  Mainly I behave in a combination of friendly and bored.  Friendly, because I think it's human nature for people to want to help - rather than be suspicious of - people who are being nice to them.  And bored, so I don't encourage them to think that what I'm doing might be criminal (it isn't).

I have only had one clerk thwart me one time.  She had served me on previous cycles, and I think she just couldn't come up with any legal reason why someone would come to her store five days in a row and buy $1,000 money orders with gift cards.  So she made up a BS policy that her store couldn't do my transaction any more due to "fraud concerns".  I thanked her, left, and went to another branch of her store and did my transaction there.

Some people recommend having multiple methods of MS in case one of them stops working.  I had a method stop working for me mid-stream this time, and it was a bit of a problem as I had some gift cards that only worked with that method, so I had to do some unusual steps to liquidate them.  I guess that is my final point - there is always a risk that you'll end up with gift cards or money orders or whatever other instruments you are using that you can't complete the MS with.  I've also heard of people having gift cards that they bought that had problems - the money wasn't on there, or whatever, which can take a while to straighten out.  Don't ever risk more than you can afford to have tied up for a while in case problems arise.

Ask if you want to know anything else.  I probably won't get uber-specific in public, but I'd also be happy to answer questions via PM.

TealBlue

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Re: Travel hacking - helpful background reading?
« Reply #4 on: December 27, 2016, 05:45:26 PM »
Original poster, make sure you join the travel miles 101 facebook group if you are on facebook.  It's wonderful.

I am posting to follow.  I am a travel hacking newbie, anxious to see my CSR miles pop into my account next statement!  I haven't ventured into the MS world yet, I think it's due to my nature.  I get nervous returning a shirt to the store so that process sounds scary!  However, I would like to get my family of 4 to Cuba or Colombia in the fall and I currently only have 110k chase miles so I may need to start joining the MS game! Thanks for those tips!

NinetyFour

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Re: Travel hacking - helpful background reading?
« Reply #5 on: December 27, 2016, 05:51:53 PM »
Sure.  What would you like to know?

Everybody does it a little differently, but my method is spelled out well in various other places - I'm not doing anything exotic.  I buy two $500 gift cards from a local store with the credit card I'm wanting to earn a bonus on.  This costs me $11.90 in gift card fees ($5.95 times 2).  I then take those two gift cards to another local store, where I buy a money order, which costs me another 25 cents to 70 cents in fees.  I then take that money order to my local bank and deposit it into my checking account.  Call that a cycle, and I've basically done about 38 or 39 of those cycles in the past 46 days.

Did you set up a separate bank account just for depositing these money orders?

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #6 on: December 27, 2016, 06:35:18 PM »
@NinetyFour, no, I did not.

What I did do is talk to the branch manager at my bank before my latest round of MS and ask her if she would be nervous or concerned if I were to deposit a bunch of $1K money orders into my account.  I don't think I explicitly said it, but in my tone I tried to imply that I would be willing to explain what I was doing if needed, and wanted to avoid SARs or having my account closed.

She cheerfully said that there were absolutely no problems or concerns with me doing this.  I think it helps a great deal that I have had an account with this bank for about 23 years and visit this particular branch at least monthly.  I also have never had an overdraft or any problem with my account.  I also chat up the tellers at the branch and know most of them by name.

The other thing I did do is spread out my deposits across five of the branches of my bank.  That way I was "only" depositing maybe $8K in MOs over a 45 day period rather than $39K.  In one case, one teller seemed curious/doubtful about my MO deposit, so I just didn't go back to that branch.  But most of the deposits happened at my "home branch" and they happened without incident.

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Re: Travel hacking - helpful background reading?
« Reply #7 on: December 27, 2016, 07:08:18 PM »
Got it.  Thanks for your detailed answer!

johnny847

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Re: Travel hacking - helpful background reading?
« Reply #8 on: December 27, 2016, 07:13:17 PM »
@NinetyFour, no, I did not.

What I did do is talk to the branch manager at my bank before my latest round of MS and ask her if she would be nervous or concerned if I were to deposit a bunch of $1K money orders into my account.  I don't think I explicitly said it, but in my tone I tried to imply that I would be willing to explain what I was doing if needed, and wanted to avoid SARs or having my account closed.

She cheerfully said that there were absolutely no problems or concerns with me doing this.  I think it helps a great deal that I have had an account with this bank for about 23 years and visit this particular branch at least monthly.  I also have never had an overdraft or any problem with my account.  I also chat up the tellers at the branch and know most of them by name.

The other thing I did do is spread out my deposits across five of the branches of my bank.  That way I was "only" depositing maybe $8K in MOs over a 45 day period rather than $39K.  In one case, one teller seemed curious/doubtful about my MO deposit, so I just didn't go back to that branch.  But most of the deposits happened at my "home branch" and they happened without incident.

If I'm understanding you correctly what you're doing is structuring. Which is illegal. And carries stiff fines and/or jail time.

I would highly recommend you do not structure your transactions

http://milestomemories.boardingarea.com/money-orders-manufactured-spend/

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #9 on: December 27, 2016, 08:04:27 PM »
johnny847, I read through the link you provided as well as the US law linked in that article.  Thank you for providing them and for your concern.

I don't think my actions qualify as structuring (although they do come close).  But reasonable people can disagree, and each person must be willing to evaluate the law and their actions and make sure that they have a clean conscience and are willing to face potential legal consequences, including prosecution, fines, and imprisonment.

Although I already read through most of the relevant law, if you are willing to, I would appreciate a specific paragraph that you think I'm violating so I can read it more thoroughly and carefully and ensure that my actions are legal.  (Thank you.)
« Last Edit: December 27, 2016, 08:08:28 PM by secondcor521 »

johnny847

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Re: Travel hacking - helpful background reading?
« Reply #10 on: December 27, 2016, 08:32:12 PM »
johnny847, I read through the link you provided as well as the US law linked in that article.  Thank you for providing them and for your concern.

I don't think my actions qualify as structuring (although they do come close).  But reasonable people can disagree, and each person must be willing to evaluate the law and their actions and make sure that they have a clean conscience and are willing to face potential legal consequences, including prosecution, fines, and imprisonment.

Although I already read through most of the relevant law, if you are willing to, I would appreciate a specific paragraph that you think I'm violating so I can read it more thoroughly and carefully and ensure that my actions are legal.

Obligatory IANAL (I am not a lawyer)

For the record: I think structuring laws as they are currently written and enforced are stupid. I understand the intent, and I will give the government the benefit of the doubt that they meant well. These reports can be a useful tool in tracking money laundering and other illegal activities. However, the end result of structuring laws is that it is akin to making the conspiracy of an act illegal when the act itself is not illegal. There is absolutely nothing illegal about depositing large amount of cash. I have no moral qualms against you or anybody else who is depositing large amounts of cash. I would have moral qualms if they earned this money through illegal activities, but you have not.

So let's start with the US Code: https://www.law.cornell.edu/uscode/text/31/5324
Quote
(a)Domestic Coin and Currency Transactions Involving Financial Institutions.—No person shall, for the purpose of evading the reporting requirements of section 5313(a) or 5325 or any regulation prescribed under any such section, the reporting or recordkeeping requirements imposed by any order issued under section 5326, or the recordkeeping requirements imposed by any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508—
(1) cause or attempt to cause a domestic financial institution to fail to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by an order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508;
(2) cause or attempt to cause a domestic financial institution to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by any order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508, that contains a material omission or misstatement of fact; or
(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.

Now as you saw in the link, the requirements to file reports under 5313(a) and 5325 are concerning those reports for cash or cash equivalent deposits of greater than $10k.

If I've understood you correctly, instead of depositing $39k in MO over a 45 day period at a single branch, you go to several branches of your bank to deposit less than $10k at a time. This action here is what I see as problematic; you're purposely structuring your transactions not to trigger the $10k alert threshold.


Now here's the scary part. Suppose I ran a cash only business that earned about $8k in cash profit every two weeks (man that's a great business!). And every two weeks I go to the bank and deposit $8000. Clearly there's no structuring going on here. I'm not trying to avoid the $10k threshold - this is just the natural amount of money that I get from my business every two weeks.

But guess what? This looks like structuring. It looks like I have more than $10k cash but I'm depositing less than $10k at at time, spread out over a longer period of time. And because it looks like structuring, I can have my assets seized until an investigation is done.  And even if the investigation concludes I was not structuring because I had no intent to circumvent the reporting requirements (not sure if that would legally hold up, but suppose it does), this investigation can take weeks or months. During this time I can't run my business since the assets are frozen, and will probably have to shut it down. And I'd want to hire a lawyer, but guess what? My assets are seized. (At least, my business's assets are. My personal ones might be too, I'm not sure about this point).

So secondcor521, even if what you're doing isn't actually structuring (for the record I do think you are structuring), it looks like you're structuring. You're making large deposits less than $10k spread out over multiple branches of a bank. Even if an investigation rules in your favor, you're still facing the consequences of civil forfeiture and the headache of an investigation.

What's the solution? Deposit MORE than $10k in MO at a time. This way the bank has to file the report.
Now some banks would rather close your account than do this, especially if you do this regularly. But if you want to be sure you're on the right side of the law, it's the only way to do it.

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #11 on: December 27, 2016, 09:27:17 PM »
johnny847, thank you for the detailed reply.  Very interesting reading.

I think it would be an interesting case for the government to prove (not that it would be interesting enough to submit to being the defendant!).

First, my usual practice was to only do at most $2K at a time - meaning I did not want to get caught with more than $2K total worth of gift cards or money orders at any given time in case the MS method I was using failed.  So I always or nearly always deposited $2K at my bank not to avoid reporting requirements but to avoid risk of being stuck with cash-equivalents that I couldn't liquidate.  (Said cash-equivalents being difficult or impossible to replace if lost or stolen.)

Second, another part of why I used multiple branches was out of convenience - I varied where I bought the money orders to coordinate with my other errands (like picking up my son from school), and so I ended up at various places around town, and wanted to go to the closest branch to deposit the MOs.

Third, I'm not sure if I could be said to try to avoid reporting requirements if I discussed them with my bank branch manager beforehand and did probably close to half of the deposits at that branch.

Fourth, as a result of the time consuming nature of MS - at least the way I do it - I accumulated the MO's over time and thus deposited them over time - typically it was at the rate of $1K per day.  At no point did I have anywhere close to $10K in MO's (as noted above, it was always or almost always $2K at most) that I was holding back from depositing.  I deposited them as I went along.  Although I suppose this argument is similar to your $8K cash business argument, except my deposits were daily or nearly daily vs. weekly and were $2K vs. $8K.

I think it is an interesting distinction between "structuring" and "activities that look like structuring" - the former one can get imprisoned for; the latter one can get investigated (and assets seized - didn't know that part) for.  Something clearly worth knowing about and evaluating.

Using your cash business as an example, I think the business owner could also avoid structuring investigation / prosecution by depositing $8/5K per day or even $8/10K twice daily - what do you think?  I also think he or she could avoid trouble by having a good relationship with his/her banker.  If the banker knows the businessperson and knows they're not a money lauderer or drug dealer, I think the businessperson is safe from investigation and prosecution regardless of the technicalities of structuring law.
« Last Edit: December 27, 2016, 10:24:07 PM by secondcor521 »

johnny847

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Re: Travel hacking - helpful background reading?
« Reply #12 on: December 28, 2016, 07:14:14 AM »
It's up to you, but the law doesn't care about your intent. You've caused the bank to fail to report the transactions by splitting them up. See clause 1 of that part of us code I quoted.

The relationship between the customer and the bank has nothing to do with it. Structuring law is enforced by the government not the bank. If the government gets wind of you engaging in this activity you can be investigated and prosecuted.

Remember what I said at the beginning. Structuring laws are skin to making the conspiracy of an act illegal even though the act itself is not illegal. It is illegal to structure your transactions REGARDLESS of how you obtained the money, legally or otherwise.

Smokystache

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Re: Travel hacking - helpful background reading?
« Reply #13 on: December 28, 2016, 07:30:59 AM »
Thanks for starting the thread. As I've been doing more business-related travelling, it seems silly to not do at least a little bit of travel hacking. Perhaps because I think the topic is overwhelming (or perhaps laziness), I'm curious if there a priority list of steps in travel hacking (I can see myself expending some time/energy on this, but also know that I probably won't be someone who goes 'whole hog' on it).

I'd love to see a brief list of #1, #2 ... where each step is a way to get the maximum benefit for least effort and then following steps for increasing benefit, but increased time/energy. Kind of like the simple steps for retirement accounts like:
1) contribute to  401k for full match
2) max out Roth
3) max out 401k
4) ...

johnny847

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Re: Travel hacking - helpful background reading?
« Reply #14 on: December 28, 2016, 07:35:17 AM »
Thanks for starting the thread. As I've been doing more business-related travelling, it seems silly to not do at least a little bit of travel hacking. Perhaps because I think the topic is overwhelming (or perhaps laziness), I'm curious if there a priority list of steps in travel hacking (I can see myself expending some time/energy on this, but also know that I probably won't be someone who goes 'whole hog' on it).

I'd love to see a brief list of #1, #2 ... where each step is a way to get the maximum benefit for least effort and then following steps for increasing benefit, but increased time/energy. Kind of like the simple steps for retirement accounts like:
1) contribute to  401k for full match
2) max out Roth
3) max out 401k
4) ...

Have you opened 5 or more credit cards in the last 24 months? (you might see this notated as 5/24 in churning circles). If so, you're pretty much guaranteed not to be able to get some of Chase's best cards. There are some ways around this - getting a targeted mailer or being pre approved and applying in branch - but they're not really within your control.

Smokystache

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Re: Travel hacking - helpful background reading?
« Reply #15 on: December 28, 2016, 08:14:20 AM »
Thanks for starting the thread. As I've been doing more business-related travelling, it seems silly to not do at least a little bit of travel hacking. Perhaps because I think the topic is overwhelming (or perhaps laziness), I'm curious if there a priority list of steps in travel hacking (I can see myself expending some time/energy on this, but also know that I probably won't be someone who goes 'whole hog' on it).

I'd love to see a brief list of #1, #2 ... where each step is a way to get the maximum benefit for least effort and then following steps for increasing benefit, but increased time/energy. Kind of like the simple steps for retirement accounts like:
1) contribute to  401k for full match
2) max out Roth
3) max out 401k
4) ...

Thanks Johnny. I've realized that i just need to dive into this topic and I'm starting with some of the links mentioned above.

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #16 on: December 28, 2016, 10:12:34 AM »
It's up to you, but the law doesn't care about your intent. You've caused the bank to fail to report the transactions by splitting them up. See clause 1 of that part of us code I quoted.

The relationship between the customer and the bank has nothing to do with it. Structuring law is enforced by the government not the bank. If the government gets wind of you engaging in this activity you can be investigated and prosecuted.

Remember what I said at the beginning. Structuring laws are skin to making the conspiracy of an act illegal even though the act itself is not illegal. It is illegal to structure your transactions REGARDLESS of how you obtained the money, legally or otherwise.

Again, I want to emphasize that I appreciate the thoughtful dialogue.  My rebuttals are intended as a way for me to think through the issues in word form, and also to solicit your further opinion since you seem knowledgeable on the subject.

I do think the law cares about intent - clause 1 contains the words "for the purpose of", which seems to go to intent to me as a layperson.

Also, I would argue that I didn't split my transactions up.  The classic example of structuring given is someone with more than $10,000 in currency depositing fractions of that currency to get under the $10K limit.  I never had more than $10K in the first place - and not because I didn't want to have more than that, I just didn't.  Now if someone from the IRS wants to argue that an average citizen like me should inconvenience themselves and others by not going to the bank when it is convenient to them, and risk theft and loss of currency when that is something to be reasonably concerned about, all to avoid the appearance of violating a federal law, then I would at least laugh heartily when those arguments would be made in court.

But I also wanted to mention that I did realize a potentially sinister risk that I didn't think of before.  I was either pragmatically or naively figuring that if I wasn't structuring (in my opinion), that even if I were investigated and my assets were seized, that in the end right would prevail (or I'd be disappointed in my attorneys and be scheming a way to appeal from FPMITA prison).  But there would be a somewhat real risk that the IRS would start an investigation, seize assets, and in an attempt to save face and/or pay for the investigation they started, insist on me paying a significant fine.  That would be rotten, but I could see it happening.  Which maybe gets to your earlier point a little more.

johnny847

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Re: Travel hacking - helpful background reading?
« Reply #17 on: December 28, 2016, 01:11:55 PM »
Again, I want to emphasize that I appreciate the thoughtful dialogue.  My rebuttals are intended as a way for me to think through the issues in word form, and also to solicit your further opinion since you seem knowledgeable on the subject.

Sorry If I'm coming off as argumentative here. I don't have anything against you personally (as I said before, I think the end result of these structuring laws are stupid. It makes it hard for a citizen to abide by the law when the law is purposely ambiguous).


I do think the law cares about intent - clause 1 contains the words "for the purpose of", which seems to go to intent to me as a layperson.

I disagree. Congress purposely changed the law to ignore intent.
Quote from: Washington Post
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.
 
...

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.
Taken from https://www.washingtonpost.com/news/the-watch/wp/2014/03/24/the-federal-structuring-laws-are-smurfin-ridiculous/

Also, I would argue that I didn't split my transactions up.  The classic example of structuring given is someone with more than $10,000 in currency depositing fractions of that currency to get under the $10K limit.  I never had more than $10K in the first place - and not because I didn't want to have more than that, I just didn't. 

But you just said you had more than $10k?
The other thing I did do is spread out my deposits across five of the branches of my bank.  That way I was "only" depositing maybe $8K in MOs over a 45 day period rather than $39K.  In one case, one teller seemed curious/doubtful about my MO deposit, so I just didn't go back to that branch.  But most of the deposits happened at my "home branch" and they happened without incident.

Now if someone from the IRS wants to argue that an average citizen like me should inconvenience themselves and others by not going to the bank when it is convenient to them, and risk theft and loss of currency when that is something to be reasonably concerned about, all to avoid the appearance of violating a federal law, then I would at least laugh heartily when those arguments would be made in court.

You should go read more cases of how structuring laws are enforced. Like the others in the washington post article I linked above.

I think you're getting around to my side of the argument though:
But I also wanted to mention that I did realize a potentially sinister risk that I didn't think of before.  I was either pragmatically or naively figuring that if I wasn't structuring (in my opinion), that even if I were investigated and my assets were seized, that in the end right would prevail (or I'd be disappointed in my attorneys and be scheming a way to appeal from FPMITA prison).  But there would be a somewhat real risk that the IRS would start an investigation, seize assets, and in an attempt to save face and/or pay for the investigation they started, insist on me paying a significant fine.  That would be rotten, but I could see it happening.  Which maybe gets to your earlier point a little more.
The investigation itself is an issue because your assets will be seized during the investigation. In all likelihood they will seize all the bank accounts that had large money orders deposited into them. Imagine if one such bank account was your primary account. Now that presents all sorts of issues - you can't use that money to hire a lawyer. Any automatic bill payments from that account are going to bounce and you'll be hit with late payment fines from the billers.

At the very least, if you're engaging in activity that even looks like structuring, don't deposit the money orders into your main bank account to try to avoid the issue of them seizing your main bank account (even then, I don't know - they might just seize all your bank accounts. I certainly hope not, but civil forfeiture laws are ridiculous).

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #18 on: December 28, 2016, 05:42:42 PM »
I didn't and don't think you're being argumentative; I wanted to make sure you didn't think *I* was being argumentative - I can come across that way, especially when I'm arguing ;-P.

Regarding intent, again, in the article you quoted, there is the phrase "makes deposits under that amount *in order to avoid it.*"  Emphasis added.  If that last emphasized phrase were not there, then everyone everywhere would always be guilty of a federal felony.

If I make a random deposit of $23.52 into my checking account, well, that's a deposit under the amount...so am I structuring?  No, obviously not, because I'm not depositing $23.52 into my checking account *in order to avoid the BSA or reporting of stuff*; I'm depositing $23.52 because that's how much my settlement check was from some Advil class action suit or something, and I happened to be going past the bank that day.

So, well, of course the law says structuring can happen over days or even longer.  So if I make a series of random deposits into my checking account that total $10K over the course of several months, am I structuring?  I would say not if it's an extension of the pattern above...maybe a week later I get a generous gift from my rich uncle for $5,000, and want to deposit that right away.  Then my tax refund comes in, and I screwed up my taxes and that deposit is $6,300.  Again, just ordinary behavior and ordinary deposits.

From the article you quoted:  "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."  So did I:

1.  Know about the $10,000 reporting requirement?  Yes.
2.  Know about the $10,000 reporting requirement and make deposits under that amount?  Yes.
3.  Know about the $10,000 reporting requirement and make deposits under that amount in order to avoid it?  No.

On the lack of clarity about the $39K statements I made:  What I did was start day zero with no gift cards and no money orders.  On day 1, I went out and bought $1K in gift cards, then bought $1K of money orders with the gift cards, then deposited that $1K MO into my bank at bank branch A.  On day 2, I did the same thing as on day 1, but deposited the MO into bank branch B.  On day 4, I did the same thing again but used branch A again.  Etc, nearly daily, for a total of $39K over a period of about 45 days.  So when I said I deposited only 8K, I did so in 8 different transactions of $1K each.  Since the bank employees are doing me a favor and I appreciate when they are accommodating my strange banking behavior, I spread it out across multiple branches so that no one employee has to put up with my silliness.

So $39K passed through my hands during that 45 day period, but I started with zero gift cards and zero money orders and never at any point had more than $3K in my possession at any time.

Most of the structuring cases I read about - including the ones in the WaPo article you linked - seemed to be people who had more than $10K at once and then held back part of that money when making their first partial deposit.  I know the law says that's not the only thing that could be considered structuring, but that seems to be the main example given.  The other thing that is common among the examples are people depositing slightly under $10K.  My deposits were almost entirely $1K or $2K, and I never held back any of my currency in order to make my deposits smaller.

"The investigation itself is an issue because your assets will be seized during the investigation."  Right, exactly.  In my situation, I did not use my main account.  I don't know if they could seize other accounts; they probably could.

I'm still curious if you think the successful bartender in the WaPo article example (paragraph 6 if I counted correctly) would be safe from investigation if they made weekly cash deposits of $2K-$2.5K rather than a monthly deposit of $9.5K.  I think yes, personally.  I also think they would be wise to chat up their banker and explain that they're a bartender.

Finally, this is one more reason I'm glad I don't live in Maryland.  (Because of the prosecutor mentioned in the WaPo article.)

johnny847

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Re: Travel hacking - helpful background reading?
« Reply #19 on: December 28, 2016, 06:29:21 PM »
Haha it's all good secondcor521.

The way you phrased it initially, it seemed like you started out with $39k. That was my starting point for stating that you were structuring. I understand now you never had $10k at a time. Which then leads me to conclude you're not structuring.

By the way, structuring only pertains to cash or cash equivalents. Which means cash, money orders, and perhaps other things...but not checks or ACH transfers. Those already leave a paper or electronic trail as to how the money was obtained. The point of the bank secrecy act is to try to track transactions that don't tell you where the money came from. So your examples of depositing checks from a class action lawsuit or a tax refund are not pertinent here. If your $5k gift from your rich uncle was in cash, then it's pertinent.

Would the bartender be safe from investigation? Eh. I'd give 50/50 odds honestly. Structuring law and enforcement is purposely vague. I understand it has to be to accomplish anything - if the government stated that they're only going to pursue investigations for people who deposit $10k spread over a 30 day period, then people would simply spread their deposits over a 31 day period. This of course means it makes it impossible for a citizen to ascertain whether their legally acquired money that they are just depositing in full when they earn it is going to trigger an investigation or not. Which is why I think structuring laws and their current enforcement is dumb.

chasesfish

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Re: Travel hacking - helpful background reading?
« Reply #20 on: December 28, 2016, 06:50:43 PM »
Interesting read between the two of you on structuring..

I think the original poster is fine.  This coming from someone in banking for almost 15 years


Smokystache

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Re: Travel hacking - helpful background reading?
« Reply #21 on: December 28, 2016, 06:59:14 PM »
Maybe it's just the lingering Christmas spirit (or the leftover eggnog), but I just have to say that I love it when people can have a reasonable exchange of ideas using facts and sources (regardless of the eventual outcome). Exchanges like these help me put up with the occasional troll and exchanges that aren't based on respect.

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #22 on: December 29, 2016, 11:43:41 AM »
@johnny847, thanks again for the reply.  I appreciate the dialogue.

I agree with your points about currency vs. checks, and that the law is vague on purpose and dumb.  I think being vague also makes it harder to prosecute, but again I worry more about being investigated/harrassed rather than actually convicted.

@chasesfish, thank you.

Maybe it's just the lingering Christmas spirit (or the leftover eggnog), but I just have to say that I love it when people can have a reasonable exchange of ideas using facts and sources (regardless of the eventual outcome). Exchanges like these help me put up with the occasional troll and exchanges that aren't based on respect.

+1000.

Finally, sorry to the OP for the thread derailment.  If anyone has any questions about MS, feel free to ask here or via PM.

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Re: Travel hacking - helpful background reading?
« Reply #23 on: December 30, 2016, 09:15:51 AM »
No worries secondcor- I've found the dialogue fascinating and also appreciate the civil debate between you two about what constitutes structuring.   One lawyerly observation: I don't profess to have any knowledge of banking laws in particular, but would just point out that in the law there can be a difference between intent in the sense of "I know what I'm doing is illegal" (this seems to be what the case quote above is referring to) and intent in the sense of "I'm doing this for X purpose."  So perhaps this is a dinstinction that could help push your activities more firmly on the lawful camp, if the statute supports it.

secondcor521

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Re: Travel hacking - helpful background reading?
« Reply #24 on: December 30, 2016, 11:36:29 AM »
No worries secondcor- I've found the dialogue fascinating and also appreciate the civil debate between you two about what constitutes structuring.   One lawyerly observation: I don't profess to have any knowledge of banking laws in particular, but would just point out that in the law there can be a difference between intent in the sense of "I know what I'm doing is illegal" (this seems to be what the case quote above is referring to) and intent in the sense of "I'm doing this for X purpose."  So perhaps this is a dinstinction that could help push your activities more firmly on the lawful camp, if the statute supports it.

Right.  I'm not sure about this.  The law is legalese enough to where I honestly don't understand it completely, and different articles written for the lay person say slightly different things.  One I read seemed to imply that to be guilty of structuring one would have to arrange their activities with the primary purpose of avoiding the reporting requirements.  Another implied that it was sufficient to have it be one of among several purposes, and perhaps not even the most important reason for arranging one's activities in a particular way.