'Structuring' of Funds Led to IRS Involvement in Stafford Vets Fraud Scheme, Agent Says

STAFFORD, CT — A practice of hiding money called "structuring" led to Internal Revenue Service involvement in the case of a Stafford man accused of defrauding U.S. veterans.

Deirdre M. Daly, United States Attorney for the district of Connecticut, announced Tuesday that John Simon Jr., also known as “Buzzy Simon,” 69, of Stafford, was sentenced by U.S. District Judge Michael P. Shea in Hartford. He received 18 months in prison, followed by three years of supervised release.

He was charged with collecting retainer money from veterans to act as an agent for enhanced benefits and keeping the money, Daly said.

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More than a half-million dollars were involved, but a total of $36,000 was red-flagged by the IRS, said Amy L. Hosney, a special agent and public information officer for the IRS Criminal Investigation unit in the Boston field office.

Simon structured approximately $36,000 in cash deposits into his bank account from Oct. 2009 to June 2010, according to court papers.

The funds structured were payments he had received from the fraud scheme, prosecutors said.

At the time, Simon knew that the bank was required to issue a report for a currency transaction in excess of $10,000, and that by conducting his financial transactions in amounts less than $10,000.01, he intended to evade the transaction reporting requirements.

That's when the IRS became interested, Hosney said.

Federal law requires all financial institutions to file a Currency Transaction Report for currency transactions that exceed $10,000. To evade the filing of a CTR, individuals will often structure their currency transactions so that no single transaction exceeds $10,000.

Hosney said structuring involves the repeated depositing or withdrawal of amounts of cash less than the $10,000 limit, or the splitting of a cash transaction that exceeds $10,000 into smaller cash transactions in an effort to avoid the reporting requirements.

Even if the deposited funds are derived from a legitimate means, financial transactions conducted in this manner are still in violation of federal criminal law, Hosney said.

In the case of Simon, it was effectively "bank secrecy," she said.

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