Topic: Government Regulation
Banks are Turing Citizens in to the Government for Suspicious Activity Most everyone in America knows that Eliot Spitzer, the former governor of New York, was arrested for soliciting a prostitute. What most people do not realize though is that Mr. Spitzer was turned in by the bank where he conducted the transactions.by Adam Rink
(Libertarian)
Saturday, March 29, 2008
Most everyone in America knows that Eliot Spitzer, the former governor of New York, was arrested for soliciting a prostitute. What most people do not realize though is that Mr. Spitzer was turned in by the bank where he conducted the transactions. HSBC had become suspicious of some of Mr. Spitzer's transactions and reported them to the US Treasury.
The US Bank Secrecy Act of 1970 requires banks to report cash deposits and withdrawals of 10,000 dollars or more. These reports, known as currency transaction reports, are filed with the Treasury department and banks may be fined by the government if they fail to report such transactions. In one case, Broadway Bank was fined 4 million dollars for failing to file currency transaction reports. The Treasury Department received over 16 million currency transaction reports in 2005. If you have ever deposited or withdrawn 10,000 dollars or more, the government has your transaction on file. It is illegal to try to circumvent this reporting by withdrawing or depositing smaller transactions.
Eliot Spitzer issued a wire transfer instead of a cash withdrawal; therefore, the bank was not required to report the transaction under the Secrecy Act of 1970. Unfortunately, for Mr. Spitzer, because of the Patriot Act banks are also required to report any activity that looks suspicious by filing a suspicious activity report (SAR). These reports are then recorded in a Financial Crimes Enforcement Network (FinCEN) database that federal investigators can query. SARs are not only filed by banks but by other businesses that deal with cash, such as casinos and cash advance businesses. Over 1 million SARs were filed last year. Post 9/11 laws allow the government to collect information on individuals under based on a feeling instead of hard data. Suspicious activity is a qualitative term, open for interpretation. In addition, you cannot view any SAR that has been reported against you.
The cost of the Bank Secrecy Act to the US taxpayer is 26 million dollars. Most of this is being used to build better data analysis systems and to tie in the IRS systems. The act was designed the help identify illegal activities, such as money laundering. Unfortunately, today this act is being used to reveal lesser crimes like tax evasion. Tax evasion is a tough crime to pin down because taxes are complicated and it's hard to determine who is hiding something and who just didn't file right? This act also costs the United States because of lost opportunities. How many people with money keep it in other countries that respect privacy, such as Switzerland? It is a lot harder to obtain banking records from a country like Switzerland because their laws forbid handing over banking records of an individual unless a crime can be proven first.
A lot of people are aware that phone companies and email providers are handing over communication records, but the majority of people do not realize that the government is also watching bank records. When government and corporations work together to gather information on Americans, it feels like America is a fascist society. Other countries believe in innocent until proven guilty, unlike the US which seems to think everyone is guilty.
Did you like this article? If you did, Thumb It! 6 thumbs so far
2008 Adam Rink, all rights reserved.
Published: Saturday, March 29, 2008
Last modified: Saturday, March 29, 2008
The views expressed in this
article are those of Adam Rink only and do not represent
the views of Nolan Chart, LLC or its affiliates. Adam Rink is
solely responsible for the contents of this article and is not an
employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
Worst off, I just sold and bought a home plus moved some stock money into a savings account. I had those 4 transactions over 10K in a single month. After doing the research, I worries me to know, I just got flagged for something that should have been a great move on my part. My point is, it happens to every day Americans for I am middle class at best not a millionare.
Want to comment on this
article? Leave your comment here. Your email address is
required to track your comment. However, we will neither
publish your email address nor distribute it to other
organizations or persons. The only reason we might use
it would be if we needed to contact you regarding your
comment. All comments are subject to our
terms of use policy.
2008 Adam Rink, all rights reserved.