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Saturday, May 30, 2015

Withdrawal symptoms

While scuttling about the internets looking for anything new on the Hastert situation, I ran across this piece in The American Thinker. The writer made a point which got me to thinking...
The reason the whole affair came to light is the Patriot Act-created ability of the feds to monitor cash transactions, and the criminalization of “structuring” – avoiding mandatory reporting of bank withdrawals of more than $10,000 in cash by withdrawing amounts slightly below that figure multiple times. In other words, taking your own money out of your own bank account is a crime if you act to keep the government’s nose out of your business. The libertarian in me doesn’t like this, though the pragmatist in me realizes this is useful in uncovering terrorist plots and drug dealers. But it seems to me that criminalizing this -- which is what Hastert was indicted on – ought to be contingent on it being related to other underlying crimes. Just keeping the government out of your own business should not be a crime in my book.
Frankly, I agree. And I got to wondering: Instead of making numerous withdrawals below the $10,000 limit (a tactic which aroused the interest of the FBI), what stopped Hastert from simply going to the bank and saying "I'd like to withdraw a million dollars, please"?

What, exactly, happens to someone who does that sort of thing?

As it happens, the writers most likely to address this question are the folks who advise you to withdraw all of your money from the bank NOW NOW NOW because the entire banking system is poised to collapse at any moment. (The first time I heard that prediction was when Nixon was president.) Example:
Federal law requires that the bank file a report based upon any withdrawal or deposit of $10,000 or more on any single given day. The law was designed to put a damper on money laundering, sophisticated counterfeiting and other federal crimes.

To remain in compliance with the law, financial institutions must obtain personal identification, information about the transaction and the social security number of the person conducting the transaction.

Technically, there is no federal law prohibiting the use of large amounts of cash. However, a CTR must be filed in ALL cases of cash transaction regardless of the reason underlying the transaction. This means your cash transaction will be on the radar.
Okay. So it's on the radar. So what?

We are told that Hastert would have had to show ID. So what? Back in the days before ATMs, I had to show ID if I wanted to withdraw ten bucks.

What stopped Hastert from going through all of the necessary hoops to obtain what was, after all, his own damned money? If anyone asked why he needed it in cash, he could have simply said: "I would prefer to keep it in my safe at home." Why should he have to give any reason beyond that? It was his own money.

If he wanted, he could have muttered something about not trusting banks. Or, if he was feeling impish, he could have said: "Hey, do you remember Ghost? Remember the scene where Whoopie Goldberg took out all of that money because the ghost told her to do it? Well, I never believed in the paranormal until a few days ago, when the damnedest thing happened..."

That's the way I would have done it. Probably not Hastert's style.

Added note: Wasn't Hastert the guy who gave us the Patriot Act -- provisions of which allowed the FBI to snoop on him?

If there is a God, he loves irony.
Hastert was Speaker of the House, and mentioned by Sybil Edmonds in her testimony about whet she translated while working for the FBI around the time of 911. She was Turkish and said she found out about "Where drugs, oil and terrorism intersect". Hastert was a lobbyist for the State of Turkey for quite a while. For better or worse, Turkey is an important crossroads for a lot of things- currently ISIS is having an easy time there, some say.
Hastert DID say something about not trusting banks. That got him an additional indictment for lying to the Feds.
Assistant attorney general Leslie Caldwell recently gave a speech to bankers where she asked them to notify the Dept of Justice when customers do a cash withdrawal of $5,000.

If you're a foreign entity and you have the dirt on a politician, it's a lot easier to get him to do what you wish. If you live a lie you're easy prey for blackmail. Think of J Edgar denying that the mafia exists in the US. They had the photos and he did their bidding.
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Michael, how can such a charge stick? If I say that I don't trust banks, how can you prove otherwise?

The best way to pull off the trick, I should think, is to withdraw the money all at once -- a million bucks or however much will do the trick. Don't pay anyone right away. Literally keep it in a safe for a year. Make arrangements to this effect with "Bruce." Tell him that he must wait a year and accept a million bucks, or he can spill the beans and receive nothing. If Bruce had any sense he would go for it.

CBarr, you're right about J. Edgar. But the photo in this case was taken by the CIA. I've heard it described. It was one of the "treasures" in Angleton's safe on the second floor. How a copy got into the hands of the mafia is a part of the story I don't yet understand and probably never will, although I can hazard a guess.

Look, we're all agreed that the WAY Hastert made his millions was probably quite filthy. As the French say: Behind every fortune is a crime. Nevertheless, it seems to me that one should be able to withdraw whatever amount of one's own money from the bank without having to justify that action to the Overseers.

The preceding paragraph may be considered the shotgun wedding of socialist and libertarian thought, eh wot?
I agree. I don't know how it can stick. In fact, one report I heard said that the Feds ASKED HIM if he was doing this because he didn't trust the banks, and he replied 'yes'. That sounds to me like they put the words in his mouth, and/or that perhaps he was just being sardonic.

Nevertheless, one of the charges is precisely this one, i.e. that he lied to the Feds when he told them he didn't trust the banks.

So I come back round to the question of why the Feds are doing this. Is it because they know something terrible that they wish they could charge him for but can't because the statute has run? Or are they charging him to justify the year or two of investigation (and costs!), but because the charges are so specious they feel they must trash his reputation for good measure?

The more I think about it, it seems that the best move would have been to go with the Whoopie Goldberg story.

Or move the money offshore.
"If a person who indulges in gluttony is a glutton, and a person who commits a felony is a felon, then God is an iron." - Spider Robinson, "God is an Iron" (1977).
Hastert was knowledgeable of the law, which is why he intentionally violated it, and voluntarily so. This wasn't the demand of the extortionist, but his own idea.

There is no grace condition in the law that says it's only illegal to structure withdrawals to avoid the cash notification limit if you are doing illicit things with the cash (and not illegal if you are instead the victim of a crime yourself). That mitigating situation (which I agree ought to be mitigating) is something that will come up at trial, or in the sentencing phase, but doesn't matter in the charging phase.

Maybe it's a bad law, but Hastert cannot even claim ignorance of it, and even that is rarely a defense. I also object in principle that simply denying guilt should be a crime itself, but again, that is the state of the law when lying to the Feds. Another thing that Hastert certainly knew.

Depends what kind of branch of what kind of bank. If you try to withdraw a million in cash from an ordinary branch of a mass-market bank, they'll probably say they've got to order the cash, which will take a few days.

Then depending on who you are, they may follow one of several processes for informing the secret police.

Withdrawing a million by electronic transfer is another matter.

If you are Licio Gelli, they'll order 100 million in cash while you wait, if they haven't got it in the building. He was caught in Switzerland with 55 million in his briefcase, if I recall, which is the largest amount of readies I have ever heard of being carried in a briefcase.

The relationship between money deals and informing is an interesting field of enquiry.

Every rich bastard who's involved in business is on the fiddle, one way or another. So is every public servant with a decent-sized budget. But neither the authorities nor the banks want hundreds of thousands of medics, lawyers and bureaucrats in the dock for tax evasion or other crimes.

It'd be bad for the social order. The next thing you know, people'd be chucking pennies at politicians, as they did for a while when the regime was changed, or at least altered, in Italy in the early 1990s.

But the secret police still want to be kept informed about all sorts of actions that aren't crimes and that don't even suggest that someone is committing a crime.

Obviously they are informed about everything anyway; I'm talking about flagging.

They also want to be kept informed about all sorts of actions that ARE crimes, or that DO suggest that someone is committing a crime, but that they have no intention of taking to court.

They also want to protect the rackets they themselves are involved in. They don't want any capos becoming dons unless they give them permission.

I mean what percentage of cash paid into banks is from drug deals? Probably an enormous percentage? Maybe even the majority. No end user buys drugs by cheque or with a card.

A final point: it wouldn't surprise me in the slightest if there are international rules on 'know your customer' and on reporting transactions to security. There may well be a SINGLE MAIN PIECE OF SOFTWARE that's used too.

Any intelligent guesses (don't knock 'em!) for who that software might have a backdoor to?
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