Surprise! Controversial Patriot Act power now overwhelmingly used in drug investigations

No f*cking surprise to me.



Surprise! Controversial Patriot Act power now overwhelmingly used in drug investigations

http://www.washingtonpost.com/news/the-watch/wp/2014/10/29/surprise-controversial-patriot-act-power-now-overwhelmingly-used-in-drug-investigations/

By Radley Balko October 29 at 11:32 AM

One of the more controversial provisions of the Patriot Act was to broaden the “sneak-and-peek” power for federal law enforcement officials. The provision allows investigators to conduct searches without informing the target of the search. We were assured at the time that this was an essential law enforcement tool that would be used only to protect the country from terrorism. Supporters argued that it was critical that investigators be allowed to look into the lives and finances of suspected terrorists without tipping off those terrorists to the fact that they were under investigation.

Civil libertarian critics warned that the federal government already had this power for national security investigations. The Patriot Act provision was far too broad and would almost certainly become a common tactic in cases that have nothing to do with national security.

But this was all immediately after the terrorist attacks of Sept. 11, 2001, and there was little patience for civil libertarians. The massive Patriot Act of course passed overwhelmingly, including the sneak-and-peek provision, despite the fact that only a handful of members of Congress had actually read it. (Not to mention the public.)

More than a decade later, the Electronic Frontier Foundation has published an analysis on use of the sneak-and-peek power. Just as critics predicted, it’s now a ubiquitous part of federal law enforcement.

Law enforcement made 47 sneak-and-peek searches nationwide from September 2001 to April 2003. The 2010 report reveals 3,970 total requests were processed. Within three years that number jumped to 11,129. That’s an increase of over 7,000 requests. Exactly what privacy advocates argued in 2001 is happening: sneak and peak warrants are not just being used in exceptional circumstances—which was their original intent—but as an everyday investigative tool.

And as critics predicted, it is overwhelmingly used in cases that have nothing to do with terrorism. But even if you’re a cynic, it’s pretty shocking just how little the power is used in terrorism investigations.

Out of the 3,970 total requests from October 1, 2009 to September 30, 2010, 3,034 were for narcotics cases and only 37 for terrorism cases (about .9%). Since then, the numbers get worse. The 2011 report reveals a total of 6,775 requests. 5,093 were used for drugs, while only 31 (or .5%) were used for terrorism cases. The 2012 report follows a similar pattern: Only .6%, or 58 requests, dealt with terrorism cases. The 2013 report confirms the incredibly low numbers. Out of 11,129 reports only 51, or .5%, of requests were used for terrorism. The majority of requests were overwhelmingly for narcotics cases, which tapped out at 9,401 requests.

So since the Patriot Act passed, the number of of sneak-and-peeks each year has grown from about 16 per year to over 11,000 in 2013. Meanwhile, not only have the number of sneak-and-peek investigations unrelated to terrorism increased on a massive scale, the percentage of sneak-and-peeks that have anything to do with terrorism continues to drop. In other words, sneak-and-peek is increasingly ubiquitous while the justification for granting the government this power in the first place — terrorism — is not only irrelevant to the tactic’s increasing pervasiveness, it gets more irrelevant every year.

Lots of lessons here. A few that immediately come to mind:

Washington establishment types are often dismissive and derisive of the idea that members of Congress should actually be required to read legislation before voting on it — or at the very least be given the time to read it. There’s also a lot of Beltway scorn for demands that bills be concise, limited in scope and open for public comment in their final form for days or weeks before they’re voted on. If you’re looking for evidence showing why the smug consensus is wrong, here is Exhibit A.

This is also an argument against rashly legislating in a time of crisis. On Sept. 11, 2001, the federal government failed in most important and basic responsibility — to protect us from an attack. We responded by quickly giving the federal government a host of new powers.

Assume that any power you grant to the federal government to fight terrorism will inevitably be used in other contexts.

Assume that the primary “other context” will be to fight the war on drugs. (Here’s another example just from this month.) I happen to believe that the drug war is illegitimate. I think fighting terrorism is an entirely legitimate function of government. I also think that, in theory, there are some powers the federal government should have for terrorism investigations that I’m not comfortable granting it in more traditional criminal investigations. But I have zero confidence that there’s any way to grant those powers in a way that will limit their use to terrorism.

Law-and-order politicians and many (but not all) law enforcement and national security officials see the Bill of Rights not as the foundation of a free society but as an obstacle that prevents them from doing their jobs. Keep this in mind when they use a national emergency to argue for exceptions to those rights.

When critics point out the ways a new law might be abused, supporters of the law often accuse those critics of being cynical — they say we should have more faith in the judgment and propriety of public officials. Always assume that when a law grants new powers to the government, that law will be interpreted in the vaguest, most expansive, most pro-government manner imaginable. If that doesn’t happen, good. But why take the risk? Why leave open the possibility? Better to write laws narrowly, restrictively and with explicit safeguards against abuse.

Isn't that law where if you deposit more than $10,000 the bank has to report it to the gov. part of the war on drugs? I have been hearing lately that small businesses are having a tough time, because they are depositing $9999 or less and the gov. is seizing their accounts. They have no idea when they are going to get their money back-IF they are going to get their money back. It sounds just horrible.

WHL wrote:Isn't that law where if you deposit more than $10,000 the bank has to report it to the gov. part of the war on drugs?  I have been hearing lately that small businesses are having a tough time, because they are depositing $9999 or less and the gov. is seizing their accounts.  They have no idea when they are going to get their money back-IF they are going to get their money back.  It sounds just horrible.

This has been going for years now under "asset forfeiture".

In the NY Times just the other day (I'm proud to be a supporting member of IJ by the way):


Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required

http://www.nytimes.com/2014/10/26/us/law-lets-irs-seize-accounts-on-suspicion-no-crime-required.html?_r=0

25 Oct 2014

ARNOLDS PARK, Iowa — For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”

The federal government does.

Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.

“They’re going after people who are really not criminals,” said David Smith, a former federal prosecutor who is now a forfeiture expert and lawyer in Virginia. “They’re middle-class citizens who have never had any trouble with the law.”

On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by “exceptional circumstances.”

Richard Weber, the chief of Criminal Investigation at the I.R.S., said in a written statement, “This policy update will ensure that C.I. continues to focus our limited investigative resources on identifying and investigating violations within our jurisdiction that closely align with C.I.’s mission and key priorities.” He added that making deposits under $10,000 to evade reporting requirements, called structuring, is still a crime whether the money is from legal or illegal sources. The new policy will not apply to past seizures.

The I.R.S. is one of several federal agencies that pursue such cases and then refer them to the Justice Department. The Justice Department does not track the total number of cases pursued, the amount of money seized or how many of the cases were related to other crimes, said Peter Carr, a spokesman.

But the Institute for Justice, a Washington-based public interest law firm that is seeking to reform civil forfeiture practices, analyzed structuring data from the I.R.S., which made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case.

The practice has swept up dairy farmers in Maryland, an Army sergeant in Virginia saving for his children’s college education and Ms. Hinders, 67, who has borrowed money, strained her credit cards and taken out a second mortgage to keep her restaurant going.

Their money was seized under an increasingly controversial area of law known as civil asset forfeiture, which allows law enforcement agents to take property they suspect of being tied to crime even if no criminal charges are filed. Law enforcement agencies get to keep a share of whatever is forfeited.

Critics say this incentive has led to the creation of a law enforcement dragnet, with more than 100 multiagency task forces combing through bank reports, looking for accounts to seize. Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000. But since many criminals are aware of that requirement, banks also are supposed to report any suspicious transactions, including deposit patterns below $10,000. Last year, banks filed more than 700,000 suspicious activity reports. Owners who are caught up in structuring cases often cannot afford to fight. The median amount seized by the I.R.S. was $34,000, according to the Institute for Justice analysis, while legal costs can easily mount to $20,000 or more.

There is nothing illegal about depositing less than $10,000 cash unless it is done specifically to evade the reporting requirement. But often a mere bank statement is enough for investigators to obtain a seizure warrant. In one Long Island case, the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years.

There are often legitimate business reasons for keeping deposits below $10,000, said Larry Salzman, a lawyer with the Institute for Justice who is representing Ms. Hinders and the Long Island family pro bono. For example, he said, a grocery store owner in Fraser, Mich., had an insurance policy that covered only up to $10,000 cash. When he neared the limit, he would make a deposit.

Ms. Hinders said that she did not know about the reporting requirement and that for decades, she thought she had been doing everyone a favor.

“My mom had told me if you keep your deposits under $10,000, the bank avoids paperwork,” she said. “I didn’t actually think it had anything to do with the I.R.S.”

In May 2012, the bank branch Ms. Hinders used was acquired by Northwest Banker. JoLynn Van Steenwyk, the fraud and security manager for Northwest, said she could not discuss individual clients, but explained that the bank did not have access to past account histories after it acquired Ms. Hinders’s branch.

Banks are not permitted to advise customers that their deposit habits may be illegal or educate them about structuring unless they ask, in which case they are given a federal pamphlet, Ms. Van Steenwyk said. “We’re not allowed to tell them anything,” she said.

Still lawyers say it is not unusual for depositors to be advised by financial professionals, or even bank tellers, to keep their deposits below the reporting threshold. In the Long Island case, the company, Bi-County Distributors, had three bank accounts closed because of the paperwork burden of its frequent cash deposits, said Jeff Hirsch, the eldest of three brothers who own the company. Their accountant then recommended staying below the limit, so for more than a decade the company had been using its excess cash to pay vendors.

More than two years ago, the government seized $447,000, and the brothers have been unable to retrieve it. Mr. Salzman, who has taken over legal representation of the brothers, has argued that prosecutors violated a strict timeline laid out in the Civil Asset Forfeiture Reform Act, passed in 2000 to curb abuses. The office of the federal attorney for the Eastern District of New York said the law’s timeline did not apply in this case. Still, prosecutors asked the Hirsch’s first lawyer, Joseph Potashnik, to waive the CARFA timeline. The waiver he signed expired almost two years ago.

The federal attorney’s office said that parties often voluntarily negotiated to avoid going to court, and that Mr. Potashnik had been engaged in talks until just a few months ago. But Mr. Potashnik said he had spent that time trying, to no avail, to show that the brothers were innocent. They even paid a forensic accounting firm $25,000 to check the books.

“I don’t think they’re really interested in anything,” Mr. Potashnik said of the prosecutors. “They just want the money.”

Bi-County has survived only because longtime vendors have extended credit — one is owed almost $300,000, Mr. Hirsch said. Twice, the government has made settlement offers that would require the brothers to give up an “excessive” portion of the money, according to a new court filing.

“We’re just hanging on as a family here,” Mr. Hirsch said. “We weren’t going to take a settlement, because I was not guilty.”

Army Sgt. Jeff Cortazzo of Arlington, Va., began saving for his daughters’ college costs during the financial crisis, when many banks were failing. He stored cash first in his basement and then in a safe-deposit box. All of the money came from paychecks, he said, but he worried that when he deposited it in a bank, he would be forced to pay taxes on the money again. So he asked the bank teller what to do.

“She said: ‘Oh, that’s easy. You just have to deposit less than $10,000.’”

The government seized $66,000; settling cost Sergeant Cortazzo $21,000. As a result, the eldest of his three daughters had to delay college by a year.

“Why didn’t the teller tell me that was illegal?” he said. “I would have just plopped the whole thing in the account and been done with it.”

"How can this happen?" she asks. "Who takes your money before they prove that you've done anything wrong with it?"

How?

Because millions of people just like you have not been paying attention.

Who?

The government, that people just like you vote for more and more and more of, every year.

That's the one I have been hearing so much about lately. I know it is an old law, for some reason it is being brought up on the news lately. Wonder why they are talking about it so much all of a sudden?

WHL wrote:That's the one I have been hearing so much about lately.  I know it is an old law, for some reason it is being brought up on the news lately.  Wonder why they are talking about it so much all of a sudden?

Cos' the "Old Grey Lady" reported it, not us nutters on the lunatic fringe who have been screaming blue murder about this for years now.

And Boobus will scratch, and belch, and maybe raise a little hell, and it will keep on...

Here's a jaw-dropping report from two years ago, from TN.

What is really stunning is not the cops shaking down people for their cash like highway bandits, that's old news and happens all the time.

No, in this case, the cops had enough information to know what routes were being used to bring drugs in and which routes were used to bring the money out.

They intentionally (and I'm assuming still are) let the drugs go and busted the cash on the way out.

Of course, they swept up an awful lot of innocent people in the process.

But this is AmeriKa, where innocence is by no means a reliable defense to keep you out of prison, from being SWATted, or from having your money and property stolen by agents of the state.

Hah, I knew I had posted that Times article here...

https://wolfgil.forumotion.com/t3195-irs-getting-in-on-the-asset-forfeiture-scam

Too many forums...

That's ok. Better twice than never.