Recently by Simon Black: Another Consequence of Economic Decline
Last week, the US governments Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department, published its 2011 annual report. There are a few numbers that are pretty startling.
Weve discussed before that FinCEN is the executive agency tasked with ensuring that every US banker is an unpaid government spy through Suspicious Activity Reports.
A Suspicious Activity Report, or SAR, includes details of any transaction that may be deemed suspicious. Naturally, theres no clear guidance on what is/is not considered suspicious. Banks, brokerages, money service businesses, precious metals dealers even casinos are required by law to fill them out.
If you withdraw an unusual amount of cash from your bank account, that could be deemed suspicious. If you set up a new payee in your billpay service, that could be deemed suspicious. Anything and everything is fair game.
Banks and other businesses who do not fill out SARs face hefty penalties, including imprisonment. If they disclose to a customer that s/he is the subject of a SAR, they have hefty penalties, including imprisonment.
When push comes to shove and they have to choose between a nasty penalty, or submitting a SAR about your unusual cash withdrawal, which option do you think theyll pick?
Unsurprisingly, nearly 1.5 million suspicious activity reports were filed across the US banking system in 2011, well over twice the number reported in 2004. On top of this, there were an additional 14.8 million currency transaction reports filed in 2011, a 6% jump over last year.
Its an unfortunate trend which highlights not only the end of financial privacy, but also the massive amount of data being collected by the government to keep tabs on its citizens.
According to this years report, a full 36 distinct federal law enforcement agencies requested information from FinCEN (and even more who havent). Three dozen. And that doesnt include state or local law enforcement.