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This article is sponsored by one of our valued partners, Swiss America.
Immediately after his indictment, rumors exploded that former Republican House of Representatives Speaker Dennis Hastert of Illinois paid $1.7 Million in hush money to buy a purported victim’s silence about his alleged sexual misbehavior.
The government’s charges against Hastert, however, thus far have nothing to do with sex….and much to do with the no-longer-private, no-longer-secure world of banking.
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The federal indictment accuses Hastert only of making, and then lying about, bank withdrawals in violation of a relatively-new, almost Orwellian crime called “structuring.”
In our 2014 book Don’t Bank On It! The Unsafe World of 21st Century Banking, we warned that the Federal Government now requires your bank to spy on you and report every withdrawal or deposit you make of $10,000 or more.
The government also created a related crime called “structuring” to snare those deliberately making withdrawals or deposits a few thousand dollars below this widely-known legal threshold in order to avoid triggering a report.
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In other words, it is a crime not to report making a $10,000 withdrawal. And it might also be a crime not to report making multiple withdrawals over a year that, combined, add up to $10,000.
Hastert’s financial sin is that he allegedly made a series of cash withdrawals, at first of $50,000 at a time–but then after bank officials questioned why for their report, of less than $10,000 apiece.
In the words of the federal indictment, the former House Speaker “did knowingly and for the purpose of evading the reporting requirements ….structure and assist in structuring transactions…in United States currency in amounts under $10,000 in separate transactions on at least 106 occasions” that added up to approximately $952,000.
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These rules were justified by the RICO racketeering statutes and, ironically, the 2001 Patriot Act that Hastert helped to pass in order to detect flows of illegal money by drug dealers or, in the words of the Internal Revenue Service, “to help trace funds used for terrorism.”
In this case, however, nobody believes that Mr. Hastert – in whose honor the Illinois legislature was about to spend half a million dollars on a statue – was at age 73 either a drug dealer or a terrorist moving criminal money.
KISS YOUR ASSETS GOODBYE
Other reasons why the government forces banks to spy on you are to gain power and revenue. Government requires banks not only to report your large transactions, but also to tell it anything that might be “unusual” or “suspicious,” such as even a relatively small deposit or withdrawal that is in cash or out of your ordinary banking routine.
The Obama Administration, for example, created “Operation Choke Point,” under which banks – themselves threatened and extorted by government regulatory power over their business – are ordered to report anything in company banking that by any stretch of the imagination might be deemed “suspicious.”
Operation Choke Point, as we documented in Don’t Bank On It!, also orders banks to close the bank accounts of businesses that seem suspicious – even if no evidence of any actual crime or money-laundering exists. Banks have been provided a list of such businesses they are expected to monitor, including some disliked for ideological reasons by the Obama Administration, such as firearms and ammunition sellers. Denying such businesses bank accounts makes it far more difficult for them to stay in business, which appears to be a major reason for Operation Choke Point.
The mere accusation of “structuring” can also open a treasure chest of revenue for the government because it can bring the forfeiture of assets. Even more frightening, as we discussed in a news release last October, your possession of even a relatively small amount of cash can be used to confiscate not only it but also the entire contents of your bank accounts.
You might not be charged with any crime in such cases, but your money and property can be confiscated as a kind of accessory to illegal tax evasion, criminal activity, or structuring….and the legal burden of proof is not on the government, but on you, to prove that you are the legal and proper owner of such assets.
In Hastert’s case, he theoretically could face 10 years or more in prison and up to $500,000 in penalties. In some cases, those found guilty of structuring can be fined three times the amount involved, which in Hastert’s case might run into millions of dollars. Or, as has not yet been reported, an indeterminate amount from his bank accounts might be or already have been forfeited. Government power in such cases can be vast and capricious.
In one recent case in North Carolina, the government seized the working assets of a small store and then offered to return a fraction of the owner’s money if he agreed to let the government keep the rest. (In this one case, the IRS ultimately returned a determined citizen’s money as national media began paying attention to its obvious injustice…but did not reimburse his costs in fighting them. Thus have Progressive politicians made a mockery of the Constitution as well as banking and property rights.
Simply using cash is now enough to get branded as a potential criminal, as we explored in our 2012 book The Great Debasement: The 100-Year Dying of the Dollar and How to Get America’s Money Back.
“BANK” IS A FOUR-LETTER WORD
Our new book, to be published in Summer 2015, will show in terrifying detail how far the confiscation of your assets, including bank accounts, has gone and is about to go.
The easiest of all assets for the government to grab are those you keep in government-controlled banks, which pay you zero or less interest while subjecting your money to 20 major risks, including the bank itself colluding with politicians to spy on you and confiscate your money.
As Dennis Hastert just learned the hard way, the bank we trust to safeguard our money has now become the riskiest place to put it. You have much smarter, safer, and more private alternatives.
Whatever Hastert may have done as a low-income high school wrestling coach from 1965 to 1981 that justified promising someone secret hush payments of $3.5 Million, this longest-serving Republican Speaker did well for himself during his subsequent career as a ‘public servant.’
When he left office in 2007, wrote Politico, Hastert “was worth between $4 million and $17 million, according to financial disclosure statements. Although most of his wealth was tied to real estate holdings, he had a steady flow of cash from different sources as well.”
Like so many ex-politicians of both parties, Dennis Hastert became what the Washington Post called “a high-powered (and highly-paid) lobbyist.” Just one of his several clients, tobacco giant Lorillard, at the prominent lobbying firm Dickstein Shapiro paid “a total of nearly $8 million from 2011 until the third quarter of 2014,” according to Politico, which was unable to determine how much of this Hastert himself pocketed.
Hastert by 2006 had lucrative property sales worth around $6.3 Million, according to the Chicago Tribune. He has been a director of the Chicago Mercantile Exchange since 2008 and in 2014 alone was paid more than $205,000 by the CME, according to its Securities and Exchange Commission filing. Hastert also reportedly receives federal and Illinois pensions that combined are worth at least $100,000 per year.
The government knows that Hastert legitimately owns such money and that he is not involved in organized crime, racketeering, or terrorism.
So why is the government forcing banks to spy not only on what Dennis Hastert does, but also on what you and I do with our own money?
If the rumors prove true and Mr. Hastert was paying extortion money, this could involve crimes that might or might not be past their statutes of limitation for prosecution.
Why is the government not asking if this unidentified person paid taxes on the $1.7 Million? Is this person engaged in the crime of prostitution by demanding money for purported sexual acts engaged in long ago? Is it illegal to sell his or her silence about these potentially criminal acts for money?
Did this person corrupt the political process by demanding a huge amount of money – or perhaps policy changes – from someone still indirectly involved in shaping government policies?
BANKING ON EXTORTION
Journalist Matt Drudge suggested that current Republican Speaker of the House John Boehner has been blackmailed by Democratic President Barack Obama, reports ThePoliticalInsider.com.
The conservative news sites NewsMachete.com and AmericanThinker.com have speculated that Speaker Boehner and Republican Senate leader Mitch McConnell have yielded to Mr. Obama on a host of issues such as illegal immigration and the Iranian nuclear weapons deal because “they have a Denny Hastert problem” and are being blackmailed as Hastert has been.
In 1990, the House of Representatives voted 408-18 to reprimand former Rep. Barney Frank (D.-Massachusetts) after news reports surfaced that his roommate was operating a “callboy” prostitution operation out of their home. Frank, it has been said, quietly responded to fellow lawmakers that if he were censured and expelled from the House, he might make public the little black book of customers.
Suddenly, both parties dropped all efforts to remove Frank. This little black book was never published, but it (and other incriminating evidence like it) presumably still exists.
Barney Frank would survive and go on to become chairman of the powerful House Financial Services Committee and co-author of Dodd-Frank, a law whose massive regulations have virtually nationalized the nation’s banks.
The time has come to seek better, safer, more private places to secure your assets. The confiscation of America’s banked assets has just begun and could soon get much, much worse.
Swiss America has been educating Americans about wise asset diversification strategies for over thirty years.
Craig R. Smith is Chairman of Swiss America Trading Corporation and a monetary expert who appears frequently with Neil Cavuto on Fox and other prominent business journalists.
Lowell Ponte is a former think tank futurist who worked for 15 years as a Roving Editor at Reader’s Digest Magazine.