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Selling a Restaurant - Undeclared Cash Payment

Discussion in 'Consumer Fraud & Scams' started by abcone23, Dec 2, 2019.

  1. abcone23

    abcone23 Law Topic Starter New Member

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    Jurisdiction:
    Texas
    I have a small restaurant that I am looking to sell because it is struggling. I have a potential buyer who is a refugee from Africa. He wants to buy my business in cash. He says that the cash he brought to the States is undeclared so he is looking to invest that money into various businesses.

    My question: Am I legally allow to sell my restaurant and accept the cash from him? If the cash is undeclared, is that his problem or could I be breaking the law in some way?

    Thanks.
     
  2. PayrollHRGuy

    PayrollHRGuy Active Member

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    His reporting of the cash at the time he entered the US isn't really your problem as long as you report it fully when you accept it. Your reporting may well shine a light on the buyer but that really isn't your problem.

    How much money are we talking about and how are you going to be sure it is real money?
     
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  3. abcone23

    abcone23 Law Topic Starter New Member

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    It will be about 80k. I haven't thought about if the money is real or not. I can possibly get one of those markers to check the authenticity. If the cash is not declared, is it possible that the government can seize it from me?
     
  4. Zigner

    Zigner Well-Known Member

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    Step back and think about this...
    Does this REALLY seem like a good idea to you?
     
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  5. abcone23

    abcone23 Law Topic Starter New Member

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    It doesn't matter whether it seems like a good idea to me or not. I'm trying to see if I can legally do it or not. It is a struggling business and i'm losing money so I'm trying to do what is best for myself and my family.
     
  6. justblue

    justblue Well-Known Member

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    Why does the term "money laundering" pop into my head while reading this thread???,,:rolleyes:
     
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  7. Zigner

    Zigner Well-Known Member

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    That's a terrible way to view things, especially since you are trying to do what's best for your family.
     
  8. zddoodah

    zddoodah Well-Known Member

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    Nothing in your post indicates there is any legal prohibition against you doing either of these things.

    Yes.

    You wouldn't be breaking the law, but you are running the risk of someone making an argument along the lines of the following: "'abcone23' was aware -- because Buyer told him so -- that Buyer illegally failed to declare $80,000 in U.S. currency and then used that money to buy 'abcone23's' restaurant. Ladies and gentlemen of the jury, do you really believe anyone would be so naive or downright stupid as to have done this deal without also knowing about Buyer's criminal activities?"

    Why would this buyer tell you that the money he has was undeclared? Did you ask him why he didn't declare it or where it came from? If your answers are "I don't know" and "no," then I think you should think long and hard about doing this deal without at least doing some further inquiry.

    In the abstract, virtually anything, including this, is possible.

    If you're willing to enter into a five figure business deals without considering whether or not it's a good idea, then there's really little point in seeking input from anonymous strangers on the internet.

    Is potentially getting mixed up in some stranger's criminal activities "best for [you] and [your] familiy"?

    Because DUH!
     
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  9. abcone23

    abcone23 Law Topic Starter New Member

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    What I meant is that I don't have much knowledge about this stuff which is why I was asking someone who knows more than me. So really my opinion doesn't matter; what matters are the facts and what's legal. Anyway, I think I have my answer. I will not proceed with this business exchange. I really appreciate everyone's help!
     
  10. army judge

    army judge Super Moderator

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    Several African countries are subject to US financial sanctions.

    You must be very careful when dealing with anyone unknown to you (especially foreign nationals) and the exchange of cash. There is always the prospect of the cash being counterfeit, very good looking counterfeit money by the way. The immigration status of the foreign national can also cause you pain, even IF the person is in the US legally. Some visas don't allow foreign nationals to engage in the type of business dealings you're discussing.

    Furthermore, some of these individuals are "official state actors", although they may appear to be immigrants. Their role is to assume the identity of an immigrant to assist their government in laundering dirty money, creating revenue schemes to fund state terrorism, as well as illicit narcotics and human trafficking.


    As far as I can recall the African countries on the US sanction list are:

    Republic of Burundi

    Central African Republic

    Congo Republic

    Democratic Republic of the Congo

    Republic of Equatorial Guinea

    State of Eritrea

    Gabonese Republic

    Islamic Republic of Mauritania

    State of Libya

    Federal Republic of Somalia

    Republic of South Sudan

    Republic of Zimbabwe

    Proceed with extreme caution.
    Be wary of any traps.
     
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  11. Tax Counsel

    Tax Counsel Well-Known Member

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    Here is the problem. The story he is telling you doesn't ring true, which raises a very big red flag here. It is not illegal to bring in money into the U.S. and there are no taxes on it. But they do have to report it to the federal government on a FinCen 105 form. See the U.S. Customs and Border Patrol page on Currency and Monetary Instruments. Since there is no restriction on bringing in the cash and no tax on it there is no reason not to declare the cash unless one is engaged in criminal activity. So he's hiding this from the federal government for a reason since he evidently knows of the requirement to declare the cash but wants to avoid reporting. And that reason is probably illegal activity.

    Now here's the kicker. If you sell him the business for 80K in cash, you will have to file a Form 8300 currency transaction report with the IRS. See the IRS Form 8300 Reference Guide. This will have a similar effect for the buyer as filing the FinCen 105 would: it will tell the federal government that he had this large amount of cash. So if he is trying to hide that from the federal government he will balk at providing you the information you need to file the Form 8300. You do NOT want to do this sale without first getting all the information needed for the Form 8300. If he won't provide it then tell him you won't sell it to him for cash.

    Oh, and when you deposit the $80k cash that you get from this in your bank account, the bank will complete a FinCen 104 form on you to provide to the feds.

    As you can see, the reporting requirements are set up to track the cash as it moves through the system. Those rules are designed to combat money laundering and other financial crimes, and it would not surprise me if your buyer is indeed involved in money laundering or other illegal activity.
     
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  12. abcone23

    abcone23 Law Topic Starter New Member

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    Thank you for all the wonderful advice! This has been very helpful!
     

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