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Financial Crimes
07/25/2008

Used-car lot owner remains jailed for illegally structuring cash bank deposits

ICE investigation shows businessman structured nearly $500,000 in cash deposits

EL PASO, Texas - A downtown used-car lot owner here, who allegedly structured nearly $500,000 in cash deposits at local financial institutions, remains in federal custody today after U.S. Immigration and Customs Enforcement (ICE) special agents arrested him this week.

The Internal Revenue Service, Drug Enforcement Administration, and the El Paso County Tax Assessor's Office of Enforcement assisted ICE in its investigation.

Magdaleno de la Cruz, 55, owner of Ruby's Auto Sales on 1301 E. Paisano, is named in a 51-count indictment charging him with illegally structuring, or "smurfing," bank deposits totaling nearly $500,000 to avoid filing the required currency transaction reports. De la Cruz has owned Ruby's Auto Sales since 2003.

According to court documents, de la Cruz made multiple cash deposits at several local credit union locations between February 2006 and March 20, 2008 to accounts under his name.

By law, individuals are required to complete a currency transaction report, and submit it to the financial institution when they make cash deposits of $10,000 or more. Financial institutions are required to verify and record the name and address of the person making the transaction, as well as the identity, account number and social security or taxpayer identification number. Financial institutions also must report cash deposits of $10,000 or more to the government.

"Individuals who structure frequent cash deposits, or break them up in amounts slightly under $10,000, often do so to avoid the reporting requirement, which is a federal offense," said Roberto G. Medina, special agent in charge of the ICE Office of Investigations in El Paso. "Structuring cash deposits is often an attempt to hide illegal income or proceeds from illicit activity."

It is a federal crime to knowingly structure transactions with financial institutions, or attempt to conduct one or more cash transactions in any amount at one or more financial institution in one or more days, for the purpose of evading currency transaction report requirements.

As part of its investigation, ICE special agents also seized 68 vehicles from Ruby's Auto Sales, and more than $60,000 from De la Cruz' bank account. In addition, the indictment seeks a monetary judgment against the defendant in the amount of $498,423.

Last month, a federal judge sentenced Jose Martinez, 44, owner of Martinez Autos on 5630 Alameda Ave., to more than two years in federal prison for illegally structuring bank cash deposits totaling more than $740,000 to avoid reporting them to the government.

Assistant U.S. Attorney Brandy Gardes, Western District of Texas, is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendants are presumed innocent unless and until convicted through due process of law.