What are the legal implications of "finding" money?

Question

What luck! You found $1M in a suitcase while hiking in the wilderness. Because you are a law abiding citizen, you diligently report all your found money to the IRS. No one, including yourself, has any way to prove that you did or did not cause this money to be where it was or that you did or did not know it would be there.

Are you within the law?

Being more serious, is unexplained money in and of itself illegal if you report all your income to the IRS? If an explanation is required, are "I found it", "anonymous gift", or "I decline to explain" a sufficient explanation?

On face, it sounds draconian and absurd to outlaw finding money. On the other hand, it's likely that someone who regularly "finds" large amounts of money is an inept money launderer and engages in other illegal activities. It wouldn't be too surprising if simply having large amounts of unexplained money in and of itself was illegal.

Does the situation change if instead you find a bag of diamonds (or any other asset) while on your hike? What if this happens on a regular basis?

I'm interested in US law.

Answer 1

I am unfamiliar with specifically US laws on this but under common law (which US law is derived from) there is the crime of "Theft by Finding", however, because you turned it over to the authorities who, after the required time period were unable to find the rightful owner, the money becomes yours.

However, you still have to pay your taxes on it: http://www.foxbusiness.com/personal-finance/2014/07/03/found-money-is-awesomebut-must-pay-uncle-sam/

As far as I can see, income is income whether it comes as cash, diamonds or long lost antiques.

As far as the money laundering aspect, that is something the authorities would need to prove - as opposed to you just being lucky.

Answer 2

Answering under Czech Republic jurisdiction (not the United States):

No, you are not permitted to retain the money even if you pay taxes of it. The crime you commit is called Concealement (as in "you keep for yourself things that you found are not yours") and, if you keep an amount as high as $1M, the penalty is 2 to 8 years in prison, the prison sentence being mandatory.

Around here, keeping money you found starts being a crime at the value of $200.

To prevent being sentenced, you must find the owner and return the money to him, or, failing that, hand it over to the police who will attempt to locate the rightful owner, and, if it fails, the money will end up in the local safe, where it must be kept for about 10 years, I think, in case somebody comes back for it.

You do have a right to get some of the money (a finder's fee) that is 10% of the found amount.

Answer 3

Short answer: No.

Long answer: Well, no, but the size of your find is going to cause some legal concerns.

As a rule, any currency is technically a bearer bond, which means it belongs to the person who is holding the physical issue of currency at the moment of transaction, so if you find an amount of cash just lying around on the ground, and pick it up, you are legally the owner. This is why cash is preferred medium of exchange for your bad guys and there is a rumor that all U.S. currency will test positive when looking for a trace amount of a drug on the bill. Cash is difficult to trace by ordinary means.

Large sums may require you to report the find to police who have a window of time (usually a 30 day) window for someone to claim it. Like many legal elements in the U.S. this is based on your jurisdiction as to if there is a statutory period, or if merely showing an attempt to find the legal owner will count as protection against later charges of theft. Either way, once that matter of seeking but not finding the return is shown, it's legally not theft and legally yours. But we must discuss the elephant in the room here, namely, losing a million dollars in cash is actually pretty difficult.

First, despite what movies would have you believe, depending on the denomination of the bills found, a million dollars can weigh as little as 22 lbs (all $100 notes) to 1.1 tons (all $1 notes) and $1 million in the most commonly circulated note in USD ($20) is 110 lbs. Suffice to say, this is a significant and noticeable weight to just drop out of your pocket, but this is just the improbable situation, not anything problomatic.

What's more important is that per US law, banks must record all exchanges of currency to the value of $10,000 or more in a single transaction to federal law enforcement agencies with jurisdiction over money crimes (and don't get clever and move $9,999.99. Banks tend to catch on to these transactions and report them too, just to be safe). It actually takes a while as your standard bank may not even have that much physical cash on hand to minimize the loss from robberies. And often banks will note the serial numbers of some bills in the stacks, just in case that cash winds up in law enforcement hands... There's a very good way to at least track down the rich idiot who can lose $1 million in pocket change. If the money is aggregate, chances are it's related to several criminal transactions and might be siezed as evidence of a crime (and likely would be returned to circulation.

As for the IRS, while I don't know the specific box on the form to tick for found money of significant size, I do know there is a specifc box to check for money earned from criminal enterprise. Contrary to the popular assumption, Al Capone wasn't arrested for tax evasion because he wasn't paying his taxes, but because he was. He however was only reporting his legitimate earnings as taxible income, but clearly was living well above his means based on his reported income. And he wasn't shy about flashing his unreported wealth.

Heck, if you want to really screw the system, check your unlawful income and then claim a Ski-Mask and new super fast sports car as non-taxable business expenses (since they would have contributed to your illegal bank robbery which you no own taxes on). Suffice to say, the government doesn't much care how you got your money so long as it gets it's cut of the take. They'll have a box for ticking for found money.

Answer 4

england-and-wales

In England, the situation you're describing would be classed as 'Theft by Finding' and would be an offence under the Theft Act (1968).

The fact that you found the money, seemingly abandoned or lost, would be no defence under law and is explicitly regarded as 'dishonest' appropriation.

if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps.

and

Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner.

Given the extreme circumstances (e.g. the large sum of money that you stole), you could reasonably expect to be held accountable and for the courts to consider the maximum penalty of 7 years imprisonment, although you would likely receive some leniency for the fact that you didn't actively steal it (e.g. by taking it from someone else's immediate possession) and that there were no aggravating conditions (such as violence or pre-meditation).

Answer 5

In most US states, a person finding lost property, including money, must make reasonable attempts to find the owner, and restore the property, or else turn it over to the police so that they can search for the rightful owner. In some states it is required that the police or some other authority be notified. If, after a period defined by law (and which varies significantly by jurisdiction) the finder may be able to claim the property and obtain title to it, if proper procedures are followed.

Stolen property with an identifiable owner, however, will usually be returned to the lawful owner.

Fimndlaw's article "Do You Have to Return Found Money? " states:

Under several states' laws, if you find more than a certain amount of money, you are required to take it to the police if you can't identify the owner and return it yourself. The amount of money that requires you to do so varies by state. For example, in New York, it is $20, while in California it is $100. Typically, the laws will honor finder’s keepers. If after turning in cash or lost property to the police and the true owner cannot be found, after a period of time, the finder may become the keeper. In some places however, depending on the value of the item, there may be certain restrictions.

...

If you find lost property that is valuable or clearly not abandoned, keeping it could result in you facing theft charges. So like the rule of the playground requiring you to loudly announce finder's keepers, if you find lost property (including cash) in the real world, you need to let the authorities know, especially if you want to legally keep it.

For example, in Maryland general Code § 7-104(d) (theft) provides that:

(d) A person may not obtain control over property knowing that the property was lost, mislaid, or was delivered under a mistake as to the identity of the recipient or nature or amount of the property, if the person:

(d) (1) knows or learns the identity of the owner or knows, is aware of, or learns of a reasonable method of identifying the owner;

(d) (2) fails to take reasonable measures to restore the property to the owner; and

(d) (3) intends to deprive the owner permanently of the use or benefit of the property when the person obtains the property or at a later time.

There is also the special purpose law Code § 13-702 which provides:

(a) Disposition.- Any currency or item of tangible personal property lost or abandoned on property owned, leased, operated by, or under the control of the University System of Maryland and unclaimed for 1 year becomes the property of the University System of Maryland and the Board of Regents may establish procedures to dispose of the property in the best interests of the State.

(b) Funds derived under section.- After deducting any cost incurred in disposing of the property, any funds derived under this section shall be deposited in the General Fund of the State.

(c) Claim of finder.- Notwithstanding subsection (a) of this section, any person who finds any currency or item of tangible personal property lost or abandoned on property owned, leased, operated by, or under the control of the University System of Maryland and brings the currency or item to the University in order that the University can find the true owner, has a superior claim as to the University to the unclaimed currency or item, if the claim is preserved within 30 days following the 1-year period in subsection (a) of this section.

Various local jurisdictions seem to have local laws with provisions somewhat similar to § 13-702.

An Article in the Baltimore Sun "Discovering lost property not always as simple as 'finders, keepers' reads, in part:

"Finders, keepers" doesn't always cut it for lost or mislaid property. So before you start spending the $10,000 you found in the zipper compartment of a handbag you bought at a yard sale, you should know that Maryland law puts a burden on the finder to try to locate the owner before claiming the find.

Some finders end up richer only in experience. A Virginia woman who claimed she bought a Renoir painting at a flea market lost title in a court case early this year. The painting, valued at between $22,000 and $100,000, had been stolen from the Baltimore Museum of Art in 1951. A judge awarded title to the museum.