Olympic figure skater John Baldwin Jr. & his father under federal indictment in San Diego

[madm]

The issue here is under-reporting of one's income, not how you make bank deposits. The $10,000+ reporting requirement by banks to the government is intended to help the Feds track illegal money transactions of things such as drug sales as well as people who have cash earnings (e.g. cars sold for cash) that they are trying to hide from the IRS. If the Baldwins have reported all of their earnings properly to the IRS, then the IRS will not care how that money was deposited in the bank.

Because the Baldwins live in the San Diego area, they are in a place where the IRS and FBI are especially active in looking for patterns of large cash deposits. There is a lot of illegal drug activity there. If they had made only a few cash deposits in one year, that would be no big deal. But to regularly make the deposits for your business in cash, that raises a red flag to the IRS and FBI. They are going to look at whether or not the cash comes from illegal activity, and if not, if all earned income was reported to the IRS. I am not surprised that they are being investigated for doing frequent cash deposits. In order to win their case, they will need to have meticulous bookkeeping showing where the money for the deposits came from and to prove that all of this money was reported as business income to the IRS.

An IRS or FBI investigation can be triggered by any suspicious cash deposits or other bank transactions (e.g. the Stormy Daniels payout). Even people who inherit something of cash value (like a coin collection or jewelry), sell it, and try to hide this money by making a series of small deposits (less than $10,000) into their bank account, may get caught. This practice is called "structuring":

Structuring includes the act of parceling what would otherwise be a large financial transaction into a series of smaller transactions to avoid scrutiny by regulators or law enforcement. Structuring often appears in federal indictments related to money laundering, fraud, and other financial crimes.

 

[madm]

Here is a good description of why "structuring" cash deposits is a federal crime, using the example of a pawnbroker who does a lot of business with cash:
http://www.multibriefs.com/briefs/npba/cash.pdf

There are training courses that help business owners be compliant with anti-money laundering laws:
https://www.thebalance.com/money-laundering-and-your-business-4126857

 

[LarrySK8]

IF they are criminals trying to 'structure' or hide cash business income - they are total idiots!!!!! And GREEDY trying to get interest-bearing accounts (savings or checking) to put the cash into -

Other choices - hide the cash in safe deposit boxes; hide the cash in off-shore banks and safety deposit boxes; invest the cash into a legitimate small business (like a marijuana dispensary in CA) that generates income; buy Gold with the cash in increments less than 5000$; BURY IT IN YOUR BACK YARD in a bomb shelter.

Anything would have been better than ATM at $5000 per deposit. What idiots!

 

[berthesghost]

^^ Further proof of my never being able to own a business. Totally missed that part.

Well, should you decide to open your own business it would probably help not to open one like used car dealership which is always closely watched because of the large cash transactions and long history of being used as a front for illegal activities, but should you decide to do that, it also probably wouldn't be a good idea for you to open it close to the border with Mexico in an area routinely watched because of all the money laundering business fronts. Selling knit hats in Boise, you probably can remain ignorant of much of the tax codes and still be ok.

I just want to pitch this story as a TV movie, as it's like Fargo meets breaking bad.

 

[WillyElliot]

IF they are criminals trying to 'structure' or hide cash business income - they are total idiots!!!!! And GREEDY trying to get interest-bearing accounts (savings or checking) to put the cash into -

Other choices - hide the cash in safe deposit boxes; hide the cash in off-shore banks and safety deposit boxes; invest the cash into a legitimate small business (like a marijuana dispensary in CA) that generates income; buy Gold with the cash in increments less than 5000$; BURY IT IN YOUR BACK YARD in a bomb shelter.

Anything would have been better than ATM at $5000 per deposit. What idiots!

Exactly! It would lead me to believe they have been doing this for years and just got complacent with their criminal conduct that they finally were busted. I'm sure the IRS will be looking for its piece of the pie and level high penalties on them too. Cash businesses are almost immediately on the radar, and to think you can outsmart the feds is on a level of stupidity it's pretty hysterical.

 

[Coco]

I feel like their only defense will be that they had no Criminal Intent because they clearly didn't try and hide anything.

 

[berthesghost]

I feel like their only defense will be that they had no Criminal Intent because they clearly didn't try and hide anything.

Well innocent until proven guilty, but the one thing that makes my Scooby-Doo ears go up is that this has gotten serious and gone public. If it really was just bad bookkeeping, wouldn’t that all be cleared up with a meeting at the irs and a plan for repayment, not media sound bites of refusal to even consider plea bargains? I could see professing your innocence to the guy across the table, but once journalists are asking you about your criminal trial, seems like the “it’s all just a silly misunderstanding” ship has sailed.

 

[Coco]

They don't even have their own attorneys yet though so I do think things are happening really fast. Dealing with the IRS or federal prosecutors is not always an easy, reasonable experience.

 

[barbk]

They don't even have their own attorneys yet though so I do think things are happening really fast. Dealing with the IRS or federal prosecutors is not always an easy, reasonable experience.

This is bizarre. The article says that they've been offered plea bargains before, so I'd think that they would each already have their own attorneys. I don't think one attorney could represent both.

Reading the U-T article, I don't see any data on how much they reported in sales on their income taxes.

I'd guess that there would be a fair amount of both cash sales and purchase of cars by cash at a business like that. It is not in a real affluent area of Escondido.

I occasionally get paid in cash by clients and I'm surprised at the detail now recorded by the credit union if I deposit $300 or more in cash. Same is true at my bank according to a notice they recently provided, though I haven't made cash deposits there. I think there is real pressure to get away from cash.

 

[Garden Kitty]

The structuring laws have some valid reasons and are designed to help stop the financial side of some illegal transactions. But they're also broad enough to highlight some activity that most people would never think of as illegal or wrong. This column from the Washington Post describes some of the ambiguity.

I have no idea what the facts of this case are and if they were willingly doing something wrong, but there are definitely some cases where the structuring laws can seem like an overreach.

 

[madm]

Thanks for the link to the excellent Washington Post article. I learned a lot about how intentionally avoiding the bank reporting laws is illegal, even if one's income is legitimate and it is fully reported on tax returns. Given that the Baldwin's business has many cars listed on their website for more than $10,000, it's going to be hard for them to prove that (1) they didn't deposit the proceeds from large sales in smaller chunks intentionally to avoid having the cash reported to the government, and (2) that they were ignorant of anti-money laundering laws. Honestly, I don't understand why a business like theirs doesn't have a daily cash pickup by a service like Brinks who will then deposit the money at a bank. If the Baldwins actually wanted to take the money themselves to the bank, they should do it during banking hours and deposit all of the money in one transaction, which would be reported to the government. And further, if they want to avoid problems with cash in the future, they could require customers to present a cashier's check to purchase a car. Lastly, they undoubtedly have an accountant who prepares their business tax return ... certainly the accountant must have advised the Baldwins to follow these IRS guidelines for their business:
https://www.irs.gov/businesses/smal...rade-or-business-motor-vehicle-dealership-qas

In my experience most car dealers are reluctant to accept all cash for car purchases. There are a host of potential problems with accepting cash (forgery, govt reporting requirements, bank fees, employee theft, etc). A cashier's check is the safest way for dealers to accept payment.
https://www.quora.com/Will-most-auto-dealers-let-you-buy-a-car-entirely-in-cash

 

[WillyElliot]

Also, the FBI is not stupid. I wouldn't be surprised if they acted as a buyer multiple times to see if the cars they purchased were reported for what they paid for them. Or something similar.

 

[barbk]

Cashier's checks are considered highly suspect due to forgeries. My car dealer wouldn't issue the title to me until several days after the cashier's check was deposited and cleared. This is particularly an issue in California.

 

[Japanfan]

He said the ATM would only let him deposit $5000 at a time which is true for a lot of banks.

Well, maybe he should have been depositing larger amounts direct to the branch. IDK.

It's possible his dad was doing something shady and he was a dupe. It's also possible that he was deliberately depositing under the 10,000+ limit for shady reasons. But why $5000 which is the limit at ATMs and not some other smaller amounts that were under 10k? If he often deposited $5000 or less, that gives credibility to the ATM explanation.

I agree with this.

And according to the article as I understand it, he was depositing the smaller amounts for shady reasons. That's the problem.

 

[MacMadame]

The issue here is under-reporting of one's income, not how you make bank deposits. The $10,000+ reporting requirement by banks to the government is intended to help the Feds track illegal money transactions of things such as drug sales as well as people who have cash earnings (e.g. cars sold for cash) that they are trying to hide from the IRS. If the Baldwins have reported all of their earnings properly to the IRS, then the IRS will not care how that money was deposited in the bank.

Yes, yes. This is what I was trying to say. Your explanation is much clearer!

I just want to pitch this story as a TV movie, as it's like Fargo meets breaking bad.

I, Baldwin

I don't think one attorney could represent both.

Of course one attorney could represent them both. There's no law against and it happens all the time.

The question is more whether or not that would be wise. The answer would depend on what their defense is. If they have the same story, same defense and same evidence, having one trial with one attorney, would work well.

If, OTOH, one can make an argument that they were being misled or their personal actions constitute a lesser crime than the other, then getting their own lawyer so they can present a different argument as to why they aren't guilty or possibly even contradict the testimony of the other one, would be smart.

 

[LarrySK8]

then getting their own lawyer so they can present a different argument as to why they aren't guilty or possibly even contradict the testimony of the other one, would be smart.

But these Baldwins are, for whatever reasons, STUPID people. I doubt they will do anything smart.

 

[aliceanne]

Cashier's checks are considered highly suspect due to forgeries. My car dealer wouldn't issue the title to me until several days after the cashier's check was deposited and cleared. This is particularly an issue in California.

If that's the case then you could just write a personal check. If they are going to wait for the check to clear, what's the difference?

 

[WillyElliot]

If that's the case then you could just write a personal check. If they are going to wait for the check to clear, what's the difference?

I was thinking the same thing. The last two cars I purchased were with a money order, which is better than a check in my experience. I'm sure the dealer immediately called my bank and asked if my money order was legit. I've never had to wait to get my title.

 

[PDilemma]

But these Baldwins are, for whatever reasons, STUPID people. I doubt they will do anything smart.

Exactly. If you're going to run a business, you have to educate yourself on the applicable laws or hire someone who is aware of them. With that kind of revenue, they should have a business relationship with a lawyer who is able to counsel them on such things.
And nothing screams stupid to me in that article louder than the dumb*ss arguing that he is not guilty because he once went to the Olympics. Give me a break.

 

[WillyElliot]

Exactly. If you're going to run a business, you have to educate yourself on the applicable laws or hire someone who is aware of them. With that kind of revenue, they should have a business relationship with a lawyer who is able to counsel them on such things.
And nothing screams stupid to me in that article louder than the dumb*ss arguing that he is not guilty because he once went to the Olympics. Give me a break.

Yes, that's just common sense.

And that quote from Jr where he stated that Olympians get away with crimes but not him... Is he admitting he committed a crime? It's kind of how I feel about this Trump administration: DON'T SPEAK!! When you are under investigation, the ONLY appropriate thing to say is NO COMMENT. Don't go tweeting, don't speak to the press, just SHUT UP! Jeez, it's pretty simple.

 

[BittyBug]

And nothing screams stupid to me in that article louder than the dumb*ss arguing that he is not guilty because he once went to the Olympics. Give me a break.

And that quote from Jr where he stated that Olympians get away with crimes but not him... Is he admitting he committed a crime?

What Baldwin actually said:

“Olympians,” Baldwin Jr. said afterward, “can break the law. I just don’t happen to be one of those Olympians.”

He did not say he is not guilty because he went to the Olympics, and he did not say that other Olympians get away with crimes but not him. What he seems to be saying is exactly the opposite - that being an Olympian is not the same as being a saint - that Olympians are capable of misdeeds just like everyone else - but he did not commit any misdeeds.

 

[PDilemma]

What Baldwin actually said:


He did not say he is not guilty because he went to the Olympics, and he did not say that other Olympians get away with crimes but not him. What he seems to be saying is exactly the opposite - that being an Olympian is not the same as being a saint - that Olympians are capable of misdeeds just like everyone else - but he did not commit any misdeeds.

I think the Olympics is absolutely completely irrelevant to his case. Marching into court with the Olympic pin and pointing out that he was an Olympian to the press is tacky as hell and I doubt that any judge or juror is going to react in any way other than massive eye rolling. And his words do indeed imply that he thinks there is some connection between being an Olympian and being innocent or at least that pointing out his past is somehow helpful to him.

But I've found John Baldwin tacky as all hell for as long as I've been aware of him, so there is that.

 

[aliceanne]

I was thinking the same thing. The last two cars I purchased were with a money order, which is better than a check in my experience. I'm sure the dealer immediately called my bank and asked if my money order was legit. I've never had to wait to get my title.

I recently bought a car and asked if they wanted a bank check, and they said no, a personal check is fine. Nowadays they check your credit online even for "cash" sales.

 

[icie]

Marching into court with the Olympic pin and pointing out that he was an Olympian to the press is tacky

That is tacky. Wasn't there some competition in Russia that John was in & he went out for a drink after. He claimed he as beaten up by a bunch of Russians?

 

[livetoskate]

This is a very educational thread. I always had the impression that John Jr. was arrogant and read that he used to have big tantrums at competitions. He was lucky to find Rena. She used to be premed; what is she doing now?

 

[berthesghost]

That is tacky. Wasn't there some competition in Russia that John was in & he went out for a drink after. He claimed he as beaten up by a bunch of Russians?

Yup

http://articles.latimes.com/2007/jan/23/sports/sp-elliott23

 

[Sylvia]

He was lucky to find Rena. She used to be premed; what is she doing now?

I don't know but there was an article around the time of the Olympics that mentioned Rena and John are the parents of 2 daughters, aged 6 and 2.

 

[WillyElliot]

That is tacky. Wasn't there some competition in Russia that John was in & he went out for a drink after. He claimed he as beaten up by a bunch of Russians?

I'm pretty sure a prostitute was involved too.

 

[Japanfan]

I'm pretty sure a prostitute was involved too.

I seem to recall that as well. If so, YUCK and shame on you Baldwin Jr.

 

[alchemy void]

Unfortunately all I have to add is that the infamous sexy John Baldwin Jr belly flab gif that the amazing @HisWeirness made years and years ago isn't available anymore.

That would have been such an important contribution to this thread.