Fifty years ago Monday, Ronald Reagan gave the speech that launched his career in politics and made him a star. The speech, called “A Time for Choosing,” aired to a prime time NBC audience and made him a household name.
Credit Angela Jimenez for The New York Times
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.
Credit Angela Jimenez for The New York Times
“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 multi-agency 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 $10,000cash 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.
Credit Bryan Thomas for The New York Times
“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.”
by Gear Patrol
You’ve heard it before, but here’s another shot: Rye whiskey is on the comeback. We’ve long contented ourselves with corn-based bourbon, and we’re not ready (in the least) to change that habit — but to be sure, rye deserves some serious sipping. Long handcuffed to mixed drinks like the Manhattan, rye’s extra boldness and spice in comparison to corn-heavy whiskey is particularly pertinent after a long day of work. It’s simple, like good things should be, served straight up or over ice, and of course still works beautifully in cocktails.
And something with an extra kick-your-ass? That’s what whiskey’s all about. Rye whiskey sales have tripled in the last five years, so it’s time you jumped on this train. Here’s 10 great rye sippers at price points for the thirsty pauper or the libational prince.
Wild Turkey 101 Rye
This affordable 4-5 year aged rye rendition serves dual threat as a killer Manhattan mixture and a straight sipper with some serious zip. It’s solidly anchored in rye spiciness with a bit of apple and honey. Unfortunately, it’s a bit hard to find right now; the 81 proof iteration is similarly affordable and delicious.
George Dickel Rye Whiskey
Stop giggling at the name. This inexpensive rye whiskey is smoothness incarnate, aged five to six years using 95% rye. Plus, charcoal filtering means lots of tasty flavors, like vanilla, raisin and fruit — all at a poor college kid price.
Knob Creek Rye Whiskey
Knob Creek has long boasted tasty bourbons that won’t break the bank, and their rye blend is no different. Bare spice up front with earthy sweetness make this an interesting sip, and distinctly different at a still-affordable price.
Van Winkle Family Reserve Rye 13 year
With maturity comes layers of depth and intensity that our elderly readers are well aware of. Old Rip Van Winkle’s 13 year aged rye blends “cocoa, vanilla and white pepper” into rye’s standard kick. It’s rare to find this many years of aging at such a low price — you should jump on this discontinued whiskey before all the bottles are gone.
Michter’s US*1 Single Barrel Rye
This single barrel rye whiskey gives both spiciness and fruity flavors like plum and marmalade. Sound interesting? We think so.
Whistlepig Straight Rye Whiskey
Brewed by former Maker’s Mark Master distiller Dave Pickerell, this 100% Canadian rye whiskey is aged for 10 years in oak barrels before it makes its way into your happy stomach. That oak aging mellows the rye bite with vanilla notes, and the utter absence of corn still makes this a distinct, and tasty, drink.
Journeyman Ravenswood Rye
Tasty doesn’t have to mean aged. This young whiskey, made from organic rye and wheat, has bold grain notes and is smooth throughout — sounds perfect for a cocktail drink, doesn’t it?
Buffalo Trace Colonel E.H. Taylor, Jr. Straight Rye Whiskey
This corn-free, to-be-released creation has it all: alcohol burn, caramel, rye spice, cinnamon, and even strawberries. Oh, and it’s named after one of the founding fathers of American whiskey. He’d be proud of this one.
Sazerac 18 year Rye
Balance is key in one of the most sought-after rye whiskeys on the market. 18 years of relaxation mellow the usual oakiness and spice and induce citrus and honey. Only 28 barrels are released per yearly bottling, so if you can sniff this one out, hide it well from moochers.
Masterson’s 10 Year Old Straight Rye Whiskey
For those with a sweet tooth, Masterson’s first foray into whiskey is a treat. The usual spice (have we drilled that point home yet?) in this Canadian import is finished with raisin and orange notes. Not bad, eh?
While many in this country have become extremely fearful over the current Ebola crisis, I still don’t think there’s a reason to panic. While there are some very real reasons to be concerned – any disease outbreak that has a 70% death rate is troubling, to say the least – the real crisis brought forward by this situation is our country’s level of preparedness when it comes to fighting any disease outbreak or pandemic.
Throughout history millions upon millions of people have died as the result of pandemic outbreaks; in fact, almost every recorded civilization has been affected by one of these outbreaks. From smallpox, which killed an estimated 300-500 million people during the 20th century, to things like tuberculosis, the 1918 Flu Pandemic and the Third Pandemic, caused by the Bubonic Plague, which wasn’t fully contained until 1959, pandemics are a very real cause for concern.
While most people, up until this recent Ebola crisis believed our medical system was equipped to deal with these types of outbreaks, because of modern technology and modern medicine, the fact is, we are no more prepared today than we were a hundred years ago. In fact, I believe we are in worse shape today, and I believe our modern world has somewhat set us up for disaster.
The risk of seeing a major Pandemic Outbreak has never been Greater
We live in an interconnected world; this makes it increasingly likely that we will see a major disease outbreak in the very near future. While it may not be this current Ebola outbreak, we will see some sort of pandemic outbreak at some point. It’s a process that’s highly predictable.
When you consider the fact that the 1918 flu pandemic killed an estimated 50 million people, it’s actually quite frightening to think about a disease like that breaking out in today’s world. The 1918 Flu Pandemic took around 6 months to spread throughout the world. In today’s environment, where a disease outbreak is only a plane trip away, this same thing could be accomplished in a single day. The chance of a pandemic strain spreading throughout the world is greater than it’s ever been.
The Government is not ready, and will not be able to help.
I’ve been telling people this for over a decade. In fact, it was the basis for why I wrote my book, The Ultimate Situational Survival Guide: Self-Reliance Strategies for a Dangerous World.
After attending a number of high level conferences with the top government preparedness agencies, I was shocked at how little these people actually knew about preparedness. While I always recognized they wouldn’t be able to adequately respond to a large-scale disaster, it was actually shocking to see their complete lack of experience firsthand.
Even worse were the actual conference tracks. Conference after conference was dedicated to things like handling PR after the agency dropped the ball, how to talk to the media without making the agency look bad, or how to respond to an angry public on social media. Instead of figuring out why things went bad during previous disasters, these people instead choose to focus on how they should have responded in a way that made themselves look better – Simply Disgusting!
Over the years I’ve received a lot of criticism; mostly from unprepared people who were too lazy to take their own health and safety seriously. These people insisted the government was there to help; insisted that the billions of dollars we spend every year on federal preparedness was enough; insisted I was crazy for saying anything to the contrary. Well, after watching the government’s failed response to a single case of Ebola showing up inside the United States, I think most of that doubt has been put to rest.
A lot of really unprepared people are finally waking up to the realization that they need to be their own first responders, because to count on the government to do it isn’t an option that’s going to keep them breathing when the shit hits the fan. Sorry if that may be a little graphic for you, but what’s happening in our government isn’t pretty, and what happens during any crisis in this country, whether it’s a natural or man-made disaster, isn’t pretty when you’re not prepared. In fact, it quite possibly could be deadly.
Things the average person can do to protect themselves.
Understand what threats are out there: Only you can decide what threats to prepare for, but it should be based on a realistic threat assessment. Before spending a single cent on emergency preparedness gear, supplies, or whatever it is you think you need, you need to understand what the most likely threats are that you’ll face, and then formulate a plan to deal with them.
Prepare now! The time for pretending the government can help you, or all those days spent putting it off until tomorrow are over. It’s only a matter of time before you are affected by some sort of disaster, crisis, economic problem, or threat to your health and safety. Whether it’s Ebola, or some future threat we’ve yet to see, you need to start taking steps to protect yourself and your family now.
You need a stockpile of food, water and emergency supplies. Even during small-scale disasters our country’s infrastructure is quick to be affected. How many times have we seen entire grocery stores wiped out in the lead up to a major storm or hurricane? Now imagine a pandemic outbreak that affected the country for 3 – 6 months. If you don’t have an adequate supply of food and water, you’re going to starve or die of dehydration. I don’t mean to be harsh, but there’s simply no way to sugar coat what’s going to happen.
You need to be able to defend yourself. In the case of a deadly pandemic outbreak we are going to see major social unrest. The moment people realize they can’t feed their families, or they see people in their neighborhood dropping dead, all hell is going to break loose. Listen, people riot in this country over a basketball game; imagine these same people when they’re starving, and people are dying around them.
by Simon Black
At present, US dollar accounts for roughly 61% of the world’s foreign exchange reserves.
It’s still a safe bet for most, not because the currency is actually strong, but because so many others are already so reliant on it.
Between those with reserves in and pegs to the US dollar, many countries have given their allegiance, and now have a vested interest in the health of the currency.
Due to this common interest, a sort of unofficial, involuntary alliance has been formed between them all.
Together, they’re all playing along, pretending that everything is fine. If the dollar collapses, they’re all screwed, so they’ve got to get each other’s backs.
From the throne of the world’s reserve currency, the Federal Reserve, with the power to print the US dollar, feels dangerously omnipotent.
They can get away with just about anything. For now.
The central bankers get to print dollars and spend them at current prices, before the stuff hits the wider market and diminishes its overall value.
And for the time being they don’t really face any consequences. The whole world just absorbs it. Other countries really have no other choice.
But they’re getting tired of putting up with this abuse, and the unrest is growing. New alliances are being made, this time to dethrone the dollar.
Just this week yet another currency swap agreement was made between the Chinese and Russian central banks. This time for 150 billion renminbi.
Trade volume between China and Russia will reach $100 billion (600 billion renminbi) next year, and is expected to reach $200 billion in 2020. This latest currency swap agreement will greatly reduce the need for dollars in their transactions.
Currently, 75% of trade between the two countries is settled in dollars. When they signed the agreement for the bilateral currency swap, Russian deputy Prime Ministers said this will “encourage companies from the two countries to settle trade in local currencies and avoid the use of a third country’s currency.”
Who do you think that was aimed at?
Threatened by the growing strength of China and Russia, the US is actively working to vilify the two. Between the headlines of war, both cyber and military, the government is unsubtly trying to bring back the days of yellow peril and the red scare.
However, it can’t use the same tactics on its longstanding ally—Europe.
Even the European Central Bank has started discussions on the possibility of including the renminbi as one of its reserve currencies.
On Tuesday the UK also became the first country besides China to issue a sovereign bond in renminbi.
This coincided with the issuing of 180 million renminbi of corporate bonds by China’s ICBC in South Korea. Another first. South Korea is firmly on the renminbi train as renminbi deposits in the country jumped 55-times in just one year.
It’s very clear where the trend is going. All these news items are pieces of the same puzzle. The US dollar’s throne is shaking as it’s losing its importance and status as the preeminent currency in the world. Renminbi is on the way up.
The whole existing order of a single ruling currency is currently being challenged.
A new financial era is coming.