CASH AND CARRY – It is Now Against the Law to “Almost” Break the Law

By Lowell Ponte, Special for  USDR

How much cash can you now withdraw from your bank and carry in America without risk of being arrested, or of having your assets seized, merely for possessing money in this liquid  form?

The ominous answer is that carrying even one dollar in cash might give the government a pretext for such  actions.

Once upon a time, this question usually mattered only at the border. People were required to declare if they were carrying more than $10,000 in cash or negotiable instruments when entering or leaving the United States.  Failure to make a truthful declaration to U.S. Customs can result in the forfeiture of the money a person is  carrying.

Today, because of anti-racketeering RICO statutes and the 2001 Patriot Act, your bank is required to notify the Federal Government if you deposit or withdraw $10,000 or more in cash. In effect, your bank is required to spy on your financial life in this way for the  government.

Former Republican Speaker of the House of Representatives Dennis Hastert was surprised when his bank asked him to explain why he had made several $50,000 withdrawals.  It used to be that what you did with your money was not the bank’s  business.

Hastert, ironically, helped pass the Patriot Act and should have been aware of this trap he helped make into a law that can now ensnare millions of  us.

After being questioned by his bank – the kind of event we describe in detail in the Introduction of our 2014 book Don’t Bank On It! The Unsafe World of 21st Century Banking — Hastert reportedly then began making smaller withdrawals, at least 106 of which were for cash amounts of less than  $10,000.

Hastert apparently did not know that the government has also created an almost Orwellian crime called “structuring” that allows the arrest or asset seizure of those who deliberately deposit or withdraw less than $10,000 with the “intent” of evading this reporting  limit.

So it is now against the law to “almost” break the law.  What’s next? The IRS penalizing you for “structuring” your spending to evade taxes by giving enough to charity to fall into a lower tax  bracket?

Under these laws, according to The Atlantic’s financial reporter Conor Friedersdorf, even a person who engages in structuring out of “a simple aversion to being monitored,” despite having no intention of using the money for an illegal purpose, is committing a crime. He worries that making it a crime to try avoiding government surveillance “risks criminalizing harmless  behavior.”

Hastert was reportedly withdrawing huge amounts as hush money to pay off a blackmailer. Nobody believes that Mr. Hastert is a terrorist or racketeer, and no one doubts that he legitimately earns and owns the money he was withdrawing. He nevertheless fell into a legal snare and further entangled himself by telling FBI agents that he distrusted the bank and had kept the money himself; lying to the FBI is itself a serious  crime.

The agency that enforces these rules, according to the New York Times, is FinCEN, the Treasury Department’s Financial Crimes Enforcement Network. FinCEN, among other things, has built a capability to monitor internationally your declared taxable earnings and compare them with your lifestyle spending as a way to catch tax  cheats.

Peter Djinis, a lawyer expert in money laundering laws who used to be a FinCEN executive, told the Times that it is “not unusual” to prosecute for structuring those who have committed no other provable  crime.

“In many cases, the most attractive route to take when you can’t prove the underlying crime is to go with the activity that’s in front of you,” Djinis told the Times. This implies that for you to use your money without government knowing where the money goes is a crime. In other words, old-fashioned financial privacy with your own money is becoming a crime, as we explore in our latest research paper, The Secret War, and in our forthcoming book this summer, “I Have Seen The Future…And It Looks Like  Baltimore.”

The real crime that government seems to care about is not racketeering or terrorism, but tax evasion. And the growing use of asset forfeiture in such cases has become even easier than taxation as a source of big revenue for growing and hungry governments. If found guilty of structuring, Hastert might face fines of millions of dollars, and so might an extortionist who failed to pay taxes on the estimated $1.7 Million Hastert  paid.

Banks are now required to report not only your cash transactions of $10,000 or more – but also any financial activity of yours in cash, however small, that the bankers deem “suspicious” or  “unusual.”

President Barack Obama’s Justice Department has also given your banker a long list of “risky” enterprises under what it calls “Operative Choke Point.”  Banks are expected at the first sign of “suspicious” business activity to shut down that business’s checking and savings  accounts.

Operation Choke Point has no need to prove criminal wrongdoing by any business. It merely leans on banks to close their accounts, which would make it difficult for many to remain creditworthy and stay in business. It is a way to shut down politically incorrect businesses via political and regulatory pressure on banks. As you might have guessed, the list of ideologically-targeted businesses includes sellers of firearms and ammunition, an Obama bête  noire.

If forced out of local banks, such enterprises might have to operate in cash to stay in business. But if they operate in cash, they become easy prey for local, state and federal asset forfeiture. Under such laws, the government can seize a business’s assets by charging the assets themselves as accessories to criminal  activity.

If you were charged with a crime, you would have legal rights and a presumption of innocence. Under many asset forfeiture laws, the thing charged may be a pile of money that itself has no legal  rights.

For those whose business working capital has been seized under such laws, the burden of proof is effectively shifted to them to prove that their money is lawfully theirs and has never been used in criminal  activities.

This can be a challenge, as we noted in our 2012 book The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money  Back:

“Merely doing transactions with $100 bills, the standard currency of illicit drug dealers, can attract government attention,” we wrote. “The law has authorized the asset forfeiture of objects carrying detectable traces of cocaine, however small, which reportedly is the case with as much as 90 percent of U.S. currency notes in circulation. This law has been used to confiscate currency on these grounds.”

In other words, 9 of every 10 bills in your wallet have detectable traces of an illegal drug, and this gives government the authority to confiscate those bills – and probably to forfeit any other cash they have rubbed up against. — and possibly to confiscate your wallet itself.  But for all intents and purposes the government has already stolen your  wallet.

The original $10,000 reporting limit on your bank has not changed since 1970, writes New York Times financial reporter Josh Barro, even though inflation since then has reduced the purchasing power of today’s $10,000 to the purchasing power of a mere $1,640 in 1970  dollars.

By NOT adjusting this law for inflation, the government keeps making the real dollar trigger for reporting your transactions smaller and smaller….today, in effect, $1,640 or less in real constant  dollars.

Today a $100 bill has a lot less buying power than a $20 bill did in 1970. Clearly the American people have been robbed through the deliberate debasement of our money – but our government is too busy forfeit-seizing the assets of little people to handcuff the politicians who are looting American earners and  savers.

The government’s aim in indicting former Speaker Hastert may be to discourage people from withdrawing and using their money as cash — in the same way the Internal Revenue Service accuses a few movie stars or business executives of tax evasion during the weeks prior to April 15th in order to frighten  taxpayers.

The larger lesson we should learn is that banks that spy on us for the government — and paper dollars whose value keeps declining — are no longer the safest ways to secure what you have worked so hard to  earn.

Don’t Bank On It! shows 20 major risks your bank account faces, as well as a variety of better, more secure ways to protect your  assets.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.