Structuring Violations Laws (Assets Seizure for Consistently ‘Suspicious’ Deposits Just Below $10k) Were Originally Passed Because Professional Credit-Card-Fraud & Drug Organized Crime Is Nearly Impossible To Break.
A “Mule” for a top money laundering operation was only caught because a substitute check-cashing clerk he had romanced found him making $2,995 transactions in two different cities.
I made a “top secret” movie of a lecture before a Veterans’ group, “I’d tell you a secret, but then I’d have to kill you” sort of thing, the lecture title was “The Transnational Impact of Financial Crimes”, basically it was a law-enforcement insider’s account of how the top professional credit-card thieves operate. I wasn’t allowed to film the lecturer’s slideshow, all I have to show for it is the audio track, but still, it’s pretty informative.
This comes up with the recent story of an honest, small merchant, Lyndon McLellan of L&M General Store & Grill in Fairmont, North Carolina, whose assets were summarily seized by the IRS to the tune of over $100,000 because he had made the mistake of allowing his niece to make cash deposits in amounts just below the reporting limit of $10,000. McLellan’s bank asked him to make such deposits because it would save the bank added work; then the Feds showed up at the poor guy’s shop, having seized his whole bank account, an egregious excess in what has become a government shakedown, economic sector amounting to hundreds of millions in seized assets that will never be recovered by innocent victims.
The general outlines of the “secret” crime movie are that the real pros at wholesale credit card theft are ex-Soviet intelligence agents, formerly in the business of disrupting whole economies and overthrowing countries, who were thrown out of work with the fall of Communism; they plead the excuse that they don’t have any other craft than illegal variants on the spy trade. This comes at a pivotal time in the development of computers when the law can never begin to keep up with the challenges of ever-proliferating technology. The Red Fellows have an extremely sophisticated, highly organized extension of the old “cell” system in which a spy would only know 2 others, who would directly interact in a kind of honeycomb system, so that if one person were caught, all the others could escape except for the two other immediate persons known to the apprehendee.
Their organization, known as variously as the International Carder’s Alliance, the Shadow Crew and other names, is highly articulated and structurally anonymous. Rather than the theft of your credit card resulting in immediate loss to you, your stolen information is bundled on a wholesale level with perhaps 10,000s of other victims, your pilfered data will sit in an information depot for more than a year, before you might hear that your whole bank, credit card company, medical records or contents of some other supposedly secure system has been compromised. The latent stolen information is activated all at once, the cashing-in period taking only two days at the most, the transactions are instantaneously competed at the speed of light and the principals flee the country before law enforcement knows anything about the long-planned “harvest”. The Red Fellows’ organization is so sophisticated that it is nearly impossible for law enforcement to crack, and when they do come close to catching low level individuals, the penalties are so paltry in comparison with the great profitability and ease of the crime that controls are nearly totally ineffective. The bosses are invincible, untouchable, rajahs of a perfect white-collar criminal empire.
As the story relates to the seizure of L&M General Store’s assets due to Structuring Violations about suspicious deposits, one of the most successful convictions of an actual criminal related to the law’s original purpose, involved an operation in which cash was converted from more portable instruments such as money orders, just below a $3,000 reporting threshold. One small link in the credit-card theft chain was a man, we’ll call Nikolai Pantera, (The Panther), not his real name, whose specialized job was to travel between check-cashing stores up and down the west coast, cashing money orders for $2,995. These had been securely shipped from the next lower level in the money processing chain, the receipts guaranteeing against loss with virtually no risk.
Nikolai was apparently rather good looking and something of a ladies’ man. He was making coochey-coo with a teller at a certain city’s check-cashing branch. The woman was not a regular employee, she was a substitute, called a Rover in the check cashing industry, she traveled between cities at a regional level, she finished work in one city, traveled to another city close by (Clackamas, OR). Nikolai then shows up at the same company, he doesn’t recognize his girlfriend from his 5-minute love affair; the substitute teller then recognizes him, blows the whistle, the panther is now caged.
That only typifies a system which is fundamentally corrupt. The international carders and shadow gangs are just one facet of a larger, hidden crime milieu in which there is lack of functional distinction between governmental secret services, corporate intelligence and organized crime; they have more in common with each other than with the above-ground economy and their victims
This is shown by the story of how Usama bin Laden was located: A former-Soviet intelligence veteran hacked Al Quaeda, he wanted to be accepted by them, they shamed him, he put a fake moustache on bin Laden’s picture, but to make his revenge stick, he turned bin Laden in to a “legitimate” intelligence service. Without organized cyber-crime, bin Laden might never have been caught. Who watches the watchers?
I once saw G. Gordon Liddy speaking at California State University, Sacramento. He had been on the road for a while, had a touch of laryngitis, his voice was raised a bit in pitch so that his normal baritone had strayed into the tenor range, unfortunately, he suddenly sounded a lot like Don Adams of Get Smart. As a smart-aleck kid, I stepped up to the microphone during questions and answers, asked Mr. Liddy, “Is the character of Get Smart based on your persona, or vice-versa?” Mr. Liddy started responding innocuously to the question, the audience meanwhile had started laughing, Liddy suddenly realized he was being ridiculed, he looked around for me and shouted out “Where is that guy?”, but I had disappeared into the crowd without his really noticing me.