Although the bulk of the populace, if they even knew about it, accepted the ridiculous provisions of the Bank Secrecy Act with little hesitation, a few saw through the political rhetoric and questioned its legality.
The matter soon made its way to the Supreme Court, but in each case the court sided with the government. This really should come as little sur-prise when one considers who writes the large paychecks received by each of the judges involved. After all, if government revenue were to suddenly take a nose dive, many of those in the employ of government would soon have to start looking for work, perhaps even legitimate work.
The Bank Secrecy Act was first challenged in the case of California Bankers Association v. Schultz. Schultz had brought legal action against
his bank because it had turned over his records to the federal govern-ment. He claimed that in doing so, both his Fifth Amendment rights that protects one from compulsory self-incrimination, and his Fourth Amendment rights, which prohibits unreasonable search and seizure, had been violated.
The courts failed to agree, saying that the records belonged to the bank, not the customer. In other words, as the records were the property of the bank, the rights of its customer cannot be used to prevent the release of such information.
The opinion was not unanimous, however. Justice William O. Douglas lodged a dissent which stated the various problems he saw with the act. It reads in part: “It is, I submit, sheer nonsense to agree with the Secretary [of the Treasury] that all bank records of every citizen “have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.”
That is unadulterated nonsense unless we are to assume that every citizen is a crook, an assumption I cannot make.”
“Since the banking transactions of an individual give a fairly accurate account of his religion, ideology, opinions and interests, a regulation im-pounding them and making them automatically available to all federal investigative agencies is a sledge-hammer approach to a problem that only a delicate scalpel can manage. Bank accounts at times harbor criminal plans. But we only rush with the crowd when we vent on our banks and their customers the devastating and leveling requirements of the current act. I am not yet ready to agree that America is so possessed with evil that we must level all constitutional barriers to give our civil authorities the tools to catch criminals.”
Justice Douglas goes on to compare the requirements of the act with those that would require book stores to keep tabs on the books purchased by customers or the phone company to keep recordings of all calls made.
Although I admire his opinion, I only hope that he has not given the bureaucrats yet more ideas on how to limit our freedom.
The second case to examine this act again succeeded in narrowing the basic rights enjoyed by U.S. citizens. In U.S. v. Miller, the court found that bank customers have no legal right to prevent the release of financial information held by third parties. The court also found that Miller, or any other depositor for that matter, does not even have standing to bring such matters before the court. The court claimed that if anything, it is
the bank that should protest against the release of such records. Yet, in Schultz the court had previously found that the bank could not invoke the rights of its clients.
In short, the court had successfully closed off all possible avenues to prevent the release of such information. This is particularly alarming as such records would not even have existed in the first place had the government not forced banks to start maintaining them.
The death blow came in the case of Payner v. U.S. This case came to light because the IRS used illegal means to gather evidence. After distracting a Bahamian bank customer (a female agent invited him to dinner), the IRS broke into his hotel room and stole his briefcase. In the briefcase evidence was found that was later used to convict Payner of tax evasion.
Did the court have a problem with such subversive tactics? No. In the eyes of the court it was all perfectly legal. If nothing else, this case clearly shows that Big Brother will stop at nothing to get his hands on your money.
He makes the rules and then expects you to follow them. Whether or not he complies is an entirely different issue.
U.S. Government Grabs Offshore Cash in Secret
Robert E. Bauman, JD. The Sovereign Individual, July 2003 It gives me no pleasure to say we told you so. But what is happening was inevitable, given the blind reaction by the U.S. Congress to the ter-rorist attacks on Washington, D.C. and New York City in the aftermath of September 11, 2001.
On May 30, 2003, The New York Times reported: “The Justice Depart-ment has begun using its expanded counter terrorism powers to seize mil-lions of dollars from foreign banks that do business in the United States...
Officials at the State Department, however, have raised concerns over the practice, in part because most of the seizures have involved fraud and money laundering investigations that are unrelated to terrorism.”
The Times explained: “A little noticed provision in the sweeping an-titerrorism legislation passed in October 2001, gave federal authorities
in such cases the power to seize money that passes through banks in the United States without notifying the foreign government. Most overseas banks maintain what are called ‘correspondent accounts’ in American banks, allowing them to exchange American currency and handle other financial transactions in this country. Section 319 of the Patriot Act, as the legislation that grew out of the Sept. 11 attacks is known, allows federal authorities to seize money from the foreign bank’s correspondent account if they can convince a judge that the money deposited overseas at the bank was obtained illicitly.”
So only now, for some uninformed people, is it becoming clear just how far reaching the PATRIOT Act is.
Small wonder since the Congress passed the law without even knowing what was in it. Less than six weeks after the terrorists’ horror, Congress rammed through a 362-page law, sight unseen, with few members having the courage to oppose one of the worst attacks on the American liberties ever enacted into law.
Writing in our sister publication, The Sovereign Society Offshore A-Letter, on November 2, 2001, I said: “The ‘USA PATRIOT ACT’ — Public Law No. 107 56, signed by Pres. Bush on Oct. 26 — devotes 125 of its 362 pages to U.S. and offshore banking and finance under the banner of ‘anti money laundering.’ In the wake of the Sept. 11 horror, ‘anti terrorism’ is the patriotic fig leaf, but, as the fine print makes painfully clear, the real objective is massive expansion of the all purpose prosecutorial crime of money laundering, with tax collection an equal, if unstated, goal.”
Previously, on October 2, 2001, I had said: “Using the newly created terror imperative as their cover, leftist US politicians are scurrying to hang their favorite anti offshore nostrums on the catch all terrorist legislation about to sail though Congress...these opportunists want to ban much of U.S. offshore correspondent banking and give the Treasury power to cut off foreign nations from the U.S. banking system, a radical Clinton proposal that failed in Congress last year. These totalitarian proposals have as their true goals abolition of financial privacy and increased tax collection. The lie is that this is sold as fighting money laundering and terrorism.”
So now, it is happening, and thanks to federal judges who seal the re-cords of the pending cases, America knows little about these cash seizures from the U.S. correspondent accounts of foreign banks.
Law enforcement officials said the U.S. Justice Department had em-ployed the new tool in about a half dozen investigations, seizing money from at least 15 bank accounts. Most of those came in recent months and involved alleged fraud and money laundering cases that had nothing to do with anti terrorism.