‘Jacob’ Arrest Shows 8300 Importance

The recent arrest of Jacob Arabov—aka “Jacob the Jeweler”—on conspiracy to commit money laundering has renewed attention to jewelers’ obligations to file Internal Revenue Service Form 8300 for large cash transactions.

Among the things the federal indictment accuses Arabov of is “failure to file Forms 8300” after allegedly receiving cash from a group of accused drug dealers.

The indictment also alleges that Arabov accepted “large sums of currency, money orders, and cashier’s checks from persons he knew to be nominees of [the accused dealers], and, thereafter, submit[ted] Forms 8300 in the names of the nominees even though he knew that the true source of the funds was [the accused dealers].”

Jacob’s lawyer told the New York Times that “all the appropriate IRS forms were filed.” His spokesmen called the arrest a “misunderstanding that we believe will be straightened out in the next several weeks.”

Jewelers Vigilance Committee executive director Cecilia Gardner says she can’t comment on Arabov’s situation and notes he is presumed innocent until proven guilty. She adds, however, that “it is vitally important to file 8300s, and to fail to do so is a criminal offense.” She believes the PATRIOT Act’s anti-money-laundering provisions will result in more attention being paid to the jewelry industry and increased enforcement of the rules regarding Form 8300.

Jewelers are required by law to file a Form 8300 for cash transactions of $10,000 or more. More information about 8300s is available at the JVC Web site, jvclegal.org. In addition, Gardner wrote an article on “The Rules for Filing IRS Form 8300,” which appears in JCK, June 2006, p. 322.