Creating a Bitcoin Economy
There are several ingredients needed to create a working economy in any currency. First, people must have the currency and second, there must be things to spend it on. This doesn’t happen overnight, but Bitcoin is well on it’s way to creating an economy, but there are several hurdles to this that must be overcome before that happens.
As I mentioned above, first, people must get the currency. That can either come through working for it, investing in it, or winning it in games. Naturally, if people work for it, that is the best option, but then there has to be something to spend it on, or it will just all be converted back to fiat. The game option can also work, and already there are gaming sites sticking their big toe into this market.
Next, there has to be something to spend it on, otherwise it just either sits around or is out exchanged to fiat.
I was an early adapter of e-gold, the online gold backed currency that thrived from the late ’90’s until the US government shut it down. E-gold, even at its height, was not a big as bitcoin is now, but it was around long enough to create a vibrant economy. I know because my business at the time revolved around the e-gold market, and I did very well with it. From that experience, beginning in 1997, I watched as a thriving economy developed around the currency. As you may well know, there is a world of difference between e-gold and bitcoin, but most of that will have to wait for another article.
One of the problems bitcoin has is that governments and banks hate bitcoin with a passion, because they are threatened by it. So they have pulled out all stops to try and destroy it. Yet, through all the trials and tribulations, bitcoin is still with us and it is growing by leaps and bounds.
One of the problems with bitcoin, and one of the things that kept me out of it for so long, is that it by itself has no intrinsic value. E-gold, on the other hand, had intrinsic value and therefore had a perceived value of being “as good as gold,” whereas bitcoin has no such value behind it. I believe this is one of the reasons for its market volatility, but I am sure that governments and banks also have a hand in this. Also, the failures of major exchangers hasn’t helped either, which is why it is a very bad idea to leave your bitcoins in the hands of an exchanger. As a matter of prudence, you should immediately withdraw all bitcoins to a wallet that is not affiliated with an exchanger, and you also should not store your coins in one of those web based wallets unless the company behind it is very solid. I myself use the Electrum wallet for various reasons. It’s too much to go into here, but your choice of wallet is very important.
Establishing the Bitcoin Economy
Just how, then, would one go from where we are today to establishing a real bitcoin economy?
As discussed above, people ideally should either earn bitcoin through their work, or, secondarily, get it for playing games or getting a return on an investment. That is the engine that really propels an economy forward.
In the days of e-gold, and later, Liberty Reserve, one of the main drivers was online games. Gambling games, high yield investment programs and other things made up about 70% of their transaction volume. Naturally, this meant that online scams and ponzi schemes were one of their main sources of transaction volume. And sometimes, that volume was red hot. Many exchangers did a brisk business because so many people wanted to get into the “latest investment program,” which most of the time was little more than a scam. I will have to say, though, that some of these old ponzi schemes were very well run and if you got in early enough you were able o do quite well, as many of these scams lasted for a year and sometimes two years. I haven’t seen anything that good in a long time.
In fact, a whole small industry developed covering the latest “investment program,” and they rated them. Some of these schemes did well, others did not. Today it seems that nobody knows how to operate a scam like this, so they just run with your $50.00 when they could have had thousands. I even heard of people mortgaging their houses to “invest” in some of these programs. It was just insane, but that is a function of human nature and it’s desire to get something for nothing. One operator had his scam going for I think about 4 years, but, in the end, they all ran with the money. I think the best one was both it’s own e-currency, called Osgold, and it’s evil twin, Osops. I got in early, so I made a good amount of money there, but at the end, there were thousands of dollars in my Osgold account I couldn’t get out, but by then it didn’t matter because I had already made many times what I initially invested.
But, that is NOT the way to build a “real” economy. I sincerely hope that bitcoin doesn’t turn into the den of thieves that used to inhabit these early e-currencies. No, what I am talking about is the creation of a real economy with legitimate activity, not one based on games and drugs. And that is the hard part.
The first component, then, is to give people a legitimate way to earn money. I have developed a website called Virtual Outsourcing. Right now I am using it primarily as a developer site, but I have hidden pages that can be made public that can turn it into an outsourcing site such as Freelancer and many others, but with the difference that there is actual human interaction so that employers needs can be matched with potential contractors. And payment is primarily through Bitcoin. If you have an interest in this, I need a joint venture partner, so email me or send me a PM.
Your Own Businesses
I have been an offshore service provider for many years, so I know how to best protect yourself and your business. Ideally, you, personally, should be located offshore, but you can start out on the cheap by incorporating your company, using nominees, and using offshore bank accounts or an offshore banking account to get you started.
Our popular Offshore Privacy Power Pack provides all of this. You get a private trust to own your shares, or a nominee service, you get an IBC or offshore LLC, an offshore banking account with optional debit card, and, of course offshore bitcoin webhosting. This is done through our sister company, Bitcoinhostme.com, and you can find a full description of the Power Pack here. With this and an anonymous vpn service, you will be all set up to work on your business wherever you are in the world. You can also use our Privacy Domain registration service, available through Bitcoinhostme.com.
This way, you and your business will be protected from the predations of which ever high tax country you live in. And, since you are not the “owner” of said business, you don’t have to pay the ridiculous worldwide income tax to Uncle Sam. If this is what you want to do, the optional nominee service should be used as you can use the nominee to open either an offshore bank account or the super private offshore banking account. You can find all of this and more at OffshorEarnings.
While the structure of Bitcoin negates most of the need for banks, there is still a need for some kind of financial institutions to make the system usable.
For example, if you aren’t satisfied with the level of privacy afforded by Bitcoin, you would turn to a depository entity to meet that need, and pay many of your bills that way instead of out in the open. You could also mopve funds between accounts in private. As far as the blockchin is concerned, the coins haven’t moved, but, in the background, they could have moved a dozen times or more.
I have a sample system already set up, based on a little known system called Loom. The system works very well, and the admin has no access to your funds or your passphrase. The drawback, of course, is that there is no password recovery possible. However, since the system is fully encrypted and is NOT database driven, even if some government agency did seize the server [unlikely because the server is in an undisclosed location offshore], all they would have is a piece of encrypted junk and even if they broke the encryption, unless the customer is real stupid, there is no personal identifying information.
You can see what I mean by going to our site at Offshore Cashier, which can also double as an exchanger to buy and sell bitcoin and other ecurrencies.
Let me interject here a very important point. At this stage of the game, it is INPERATIVE that both the admin of these businesses as well as the servers be offshore, so that they are all beyond any government’s reach, especially the US government and certain governments in the EU. If the political situation is not taken into consideration, and the businesses are foolishly located in either of these two jurisdictions, then eventualy the government will either enforce its policies on the businesses or shut them down. The attitude of the US government, especially, must be given serious consideration and for a group of businesses like I propose to survive, it simply MUST be located outside both of those places. Even China or Russia would be better, but not ideal. So, that leaves many offshore jurisdictions as the primary choices.
Secondly, the operator[s] of the companies need to be insulated from extradition requests should the US or any other government seek criminal prosecution for alleged crimes being committed. My own personal situation fits that bill, as I am in an offshore jurisdiction and immune to extradition due to my citizenship in said jurisdiction. However, I have taken the further precaution of locating the servers elsewhere and NOT DEALING WITH LOCALS, thus in no way can I have committed a local crime as this country only looks at crimes against it’s own citizens in such cases, and the businesses are located outside the country, thus this country has no jurisdiction over the business activities. This level of planning is absolutely imperative, as the US government has a long track record of making false charges and extraditing people based on those false charges. Then, the person is dragged through the sham “justice system” in the US and thrown in jail when they have done nothing at all. I, for one, have no desire to engage in such games.
Of course, you can hide behind Tor and an encrypted VPN service and use pgp for private communications, but that is your choice. Just make sure the vpn is NOT located in the US and does not keep server logs. After much searching I found one that fits that bill. You can check them out by clicking here, and I can tell you from my own experience that the service works very well, with servers all over the world.
Communications also need to be secured. My two favorites are Confidesk, with servers in Switzerland and Ireland, and Unseen, with servers in Iceland, possibly one of the most secure datahavens of all. If you want to contact me at that address, my email is firstname.lastname@example.org I will include my public key at the end of this article in case someone wants to contact me there. My address at Confidesk is email@example.com. In order to get their protection, though, you should open an account there and contact me internally. The same can be said for Unseen. It is always safest to pass email around through the same system. I would definitely avoid Hushmail, which is located in Canada and so can be forced to “tell all” at the government’s whim, and also safe-mail.net, which has servers in New York. These are both pathetic jokes as far as I am concerned, and you should look with suspicion on any US, Canadian, UK, or Australia based service because all of those countries are now run by Neo Nazi trash.
Unseen also supports p2p chat, voice, and video, and that might be a good platform we can use to have our meetings. Let me know if you are interested in chatting about this and we will work with the interested parties to see if we can agree to a time.
Published time: October 04, 2013 15:04
Edited time: October 06, 2013 18:43
Top-secret national security documents disclosed to the Guardian by Edward Snowden show United States and British intelligence have long attempted to crack the Tor anonymizer network used by human rights workers, journalists, cybercriminals and others.
On Friday, the Guardian published leaked documents attributed to the former intelligence contractor revealing how the US National Security Agency and Britain’s Government Communications Headquarters, or GCHQ, have worked extensively towards compromising the computers of people who browse the Internet with Tor, a program that routes traffic through multiple nodes in an effort to help mask the identities of its users.
According to the Guardian’s James Ball, Bruce Schneier and Glenn Greenwald, the NSA’s “current successes against Tor rely on identifying users and then attacking vulnerable software on their computer.”
“While it seems that the NSA has not compromised the core security of the Tor software or network, the documents detail proof-of-concept attacks, including several relying on the large-scale online surveillance systems maintained by the NSA and GCHQ through internet cable taps,” the writers add.
The Guardian has so far published three top-secret government slideshows used to discuss the Tor network and possible vulnerabilities that might compromise users if properly exploited.
In one document, the NSA notes that Tor, or “The Onion Router,” enables anonymous Internet activity to Iranian and Chinese dissidents, terrorists and “other targets too!” The software has become increasingly used around the globe by privacy-minded individuals of all sorts in recent months. However, previous documents disclosed by Mr. Snowden detailed how the intelligence community have made many successful efforts to compromise other would-be secure modes of communicating.
As RT reported previously, the number of Americans using Tor jumped 75 percent between June 1, just days before the first Snowden leak, and August 27, 2013.
One government document, “Peeling Back the Layers of TOR with Egotisticalgiraffe,” suggests the security of some Tor users can be compromised if the government or other malicious actor can exploit bugs in the Firefox browser and other vulnerabilities.
In another slideshow, “Tor Stinks,” the government claims it already has access to a select number of nodes which anonymized traffic is navigated through.
The “goal,” according to the NSA slide, is to “expand [the] number of nodes we have access to.” To accomplish as much, it’s acknowledged that GCHQ runs Tor nodes under a program of its own, and that other partners may be able to assist with further efforts to deconstruct traffic patterns to narrow-in on otherwise anonymous users.
Other tools used by the NSA involve collecting cookies from Tor users created when they are browsing the Web without the anonymizer software running. One technique, codenamed “QUANTUM,” exists to degrade, deny and disrupt Tor access, according to the documents. Another, “QUANTUMCOOKIE,” “forces client to divulge stored cookies” which could then further aid investigators attempting to hone in on targets otherwise protected by Tor.
Despite the NSA and GCHQ’s efforts, though, Tor itself has proved to be invincible to government attacks thus far.
“Can we exploit nodes? Probably not,” reads one slide which cites “legal and technical challenges.”
Still, the government has considered disrupting traffic over the Tor network to likely draw users off the nodes and into a habitat where their actions could be more easily traced. In one slide, the NSA suggests they could “set up a lot of really slow Tor nodes,” disguised as high bandwidth, “to degrade the overall stability of the network.”
Tor documents, courtesy of Glenn Greenwald:
Note: Some of this may be hard to take, but we must eliminate all vestiges of outmoded statist ideas in order for us to have true freedom. This article is as good a place to start as any.
The Nazi Mind-Set in America
Copyright by Jacob G. Hornberger,
The Future of Freedom Foundation
Before the end of World War II, in 1944, Friedrich A. Hayek, who
was later to win the Nobel Memorial Prize in Economic Science,
startled the Western world with a book entitled “The Road to
Serfdom”. Hayek argued that despite the war against Nazi Germany,
the economic philosophy of the Nazis and communists was becoming
the guiding light for American and British policymakers. In a
later forward to the book, Hayek wrote:
“But after the war broke out I felt that this widespread mis-
understanding of the political systems of our enemies, and
soon also of our new ally, Russia, constituted a serious danger
which had to be met by a more systematic effort. Also, it was
already fairly obvious that England herself was likely to ex-
periment after the war with the same kind of policies which I
was convinced had contributed so much to destroy liberty else-
Opinion moves fast in the United States, and even now it is
difficult to remember how comparatively a short time it was
before “The Road to Serfdom” appeared that the most extreme
kind of economic planning had been seriously advocated and
the model of Russia held up for imitation by men who were soon
to play an important role in public affairs…Be it enough to
mention that in 1934 the newly established National Planning
Board devoted a good deal of attention to the example of plan-
ning provided by these four countries: Germany, Italy, Russia,
Americans must ask themselves a troubling question: Did Hayek’s
concerns become reality – have Americans, in fact, traveled the
road to serfdom the past fifty years? Or, to put it another way,
did the Nazis lose the military battles but win the war for the
hearts and minds of the American people?
Consider, for example, the Nazi economic system. Who can argue
that the American people do not believe in and support most of
its tenets? For example, how many Americans today do not unequi-
vocally support the following planks of the Nationalist (Nazi)
Party of Germany, adopted in Munich on February 24, 1920:
“We ask that the government undertake the obligation above all
of providing citizens with adequate opportunity for employment
and earning a living.”
“The activities of the individual must not be allowed to clash
with the interests of the community, but must take place within
its confines and be for the good of all. Therefore, we demand:
…an end to the power of the financial interests.”
“We demand profit sharing in big business.”
“We demand a broad extension of care for the aged.”
“We demand…the greatest possible consideration of small
business in the purchases of the national, state, and muni-
“In order to make possible every capable and industrious
[citizen] the attainment of higher education and thus the
achievement of a post of leadership, the government must provide
an all-around enlargement of our entire system of public edu-
cation… We demand the education at government expense of gifted
children of poor parents…”
“The government must undertake the improvement of public health –
by protecting mother and child, by prohibiting child labor…by
the greatest possible support for all clubs concerned with the
physical education of youth.”
“[We] combat the…materialistic spirit within and without us,
and are convinced that a permanent recovery of our people can
only proceed from within on the foundation of The Common Good
Before The Individual Good.”
I repeat: How many Americans today do not unequivocally support
most, if not all, of these Nazi economic and political principles?
And if there is any doubt whether the Nazi economic philosophy
did, in fact, win the hearts and minds of the American people,
consider the following description of the Nazi economic system
by Leonard Peikoff in his book “The Ominous Parallels:”
“Contrary to the Marxists, the Nazis did not advocate public
ownership of the means of production. They did demand that the
government oversee and run the nation’s economy. The issue of
legal ownership, they explained, is secondary: what counts is
the issue of control. Private citizens, therefore, may continue
to hold titles to property – so long as the state reserves to
itself the unqualified right to regulate the use of their property.”
What American objects to these principles of the Nazi economic
system? Don’t most Americans favor the planned economy, the
regulated economy, the controlled economy? Don’t most Americans
favor the type of economic controls, and the right of government
to institute such controls, that characterized the Nazi society:
wage and price controls, high taxes, government-business partner-
ships, licensing, permits, and a myriad other economic regulations?
The truth is that Hayek’s warning was ignored. Having defeated
the Nazis in battle, Americans became ardent supporters and advo-
cates of Nazi economic policies.
Why? Part of the answer lies in another feature that was central
to the Nazi way of life: public schooling. “Oh, no! You have gone
too far this time,” the average American will exclaim. “Public
schooling is a distinctively American institution – as American
as apple pie and free enterprise.”
The truth? As Sheldon Richman documents so well in his book,
“Separating School & State,” twentieth-century Americans adopted
the idea of a state schooling system in the latter part of the
nineteenth century from – you guessed it – Prussia! And as Mr.
Richman points out, public schooling has proven as successful
in the United States as it did in Germany. Why? Because it has
succeeded in its goal of producing a nation of “good little cit-
izens” – people who pay their taxes on time, follow the rules,
obey orders, condemn and turn in the rule-breakers, and see
themselves as essential cogs in the national wheel. Consider
the words of Richard Ebeling, in his introduction to “Separating
School & State:”
“In the hands of the state, compulsory public education becomes
a tool for political control and manipulation – a prime instru-
ment for the thought police of society. And precisely because
every child passes through the same indoctrination process –
learning the same “official history,” the same “civic virtues,”
the same lessons of obedience and loyalty to the state – it
becomes extremely difficult for the independent soul to free
himself from the straight jacket of the ideology and values the
political authorities wish to imprint upon the population under
its jurisdiction. For the communists, it was the class struggle
and obedience to the Party and Comrade Stalin; for the fascists,
it was worship of the nation-state and obedience to the Duce;
for the Nazis, it was race purity and obedience to the Fuhrer.
The content has varied, but the form has remained the same.
Through the institution of compulsory state education, the child
is to be molded like wax into the shape desired by the state and
its educational elite.
We should not believe that because ours is a freer, more demo-
cratic society, the same imprinting procedure has not occurred
even here, in America. Every generation of school-age children
has imprinted upon it a politically correct ideology concerning
America‘s past and the sanctity of the role of the state in so-
ciety. Practically every child in the public school system learns
that the “robber barons” of the 19th century exploited the common
working man; that unregulated capitalism needed to be harnessed
by enlightened government regulation beginning in the Progressive
era at the turn of the century; that wild Wall Street speculation
was a primary cause of the Great Depression; that only Franklin
Roosevelt‘s New Deal saved America from catastrophe; and that
American intervention in foreign wars has been necessary and
inevitable, with the United States government required to be a
global leader and an occasional world policeman.”
This brings us to the heart of the problem – the core of the Nazi
mind-set: that the interests of the individual must be subordi-
nated to the interests of the nation. This is the principle that
controls the minds of the American people, just as it controlled
the minds of the German people sixty years ago.
Each person is viewed as a bee in a hive; his primary role in
life is to serve the hive and the ruler of the hive, and to be
sacrificed when the hive and its rulers consider it necessary.
This is why Americans of our time, unlike their ancestors,
favor such things as income taxation, Social Security, socia-
lized medicine, and drug laws; they believe, as did Germans in
the 1930s, that their bodies, lives, income, and property, in
the final analysis, are subordinate to the interests of the
As you read the following words of Adolf Hitler, ask yourself
which American politician, which American bureaucrat, which
American schoolteacher, which American citizen would disagree
with the principles to which Hitler subscribed:
“It is thus necessary that the individual shall finally come
to realize that his own ego is of no importance in comparison
with the existence of this nation; that the position of the
individual ego is conditioned solely by the interests of the
nation as a whole; that pride and conceitedness, the feeling
that the individual…is superior, so far from being merely
laughable, involve great dangers for the existence of the
community that is a nation; that above all the unity of a
nation’s spirit and will are worth far more than the freedom
of the spirit and will of an individual; and that the higher
interests involved in the life of the whole must here set
the limits and lay down the duties of the interests of the
Even though the average American enthusiastically supports the
Nazi economic philosophy, he recoils at having his beliefs lab-
eled as “Nazi”. Why? Because, he argues, the Nazi government,
unlike the U.S. government, killed six million people in concen-
tration camps, and this mass murder of millions of people, rather
than economic philosophy, captures the true essence of the Nazi
What Americans fail (or refuse) to recognize is that the concen-
tration camps were simply the logical extension of the Nazi mind-
set! It does not matter whether there were six million killed –
or six hundred – or six – or even one. The evil – the terrible,
black evil – is the belief that a government should have the power
to sacrifice even one individual for the good of the nation.
Once this basic philosophical premise and political power are
conceded, innocent people, beginning with a few and inevitably
ending in multitudes, will be killed, because “the good of the
nation” always ends up requiring it.
Political killings of innocent people could never happen in
America, our fellow citizens tell us. America is a democracy.
But so was Nazi Germany. Hitler was popularly elected, and his
economic policies were widely favored and acclaimed (by Germans
But there is another basic problem with that assertion: it is
happening here in America. And like the German people of the
1930s, Americans either refuse to see it happening, or they
rationalize what is happening so that they do not have to deal
with it. Now, it is true that the killings do not number in the
millions – but they certainly do number, so far, in the thousands.
Let’s take some examples. The Branch Davidians at Waco, Texas:
U.S. Army tanks and gas were used against peaceful, religious,
well-armed people. More than eighty Americans, including child-
ren were gassed and burned. And is there any remorse – any re-
gret – any independent governmental investigation into this
massacre? Not on your life. The government officials, just like
their Nazi counterparts, think they did “the right thing” in
killing our fellow citizens. And for those of you who look to
the judiciary for protection, you had better look elsewhere:
the federal judge who presided over the trial of the Waco sur-
vivors declared that he would not permit the government to be
“put on trial,” and then slapped forty-year sentences on the
Branch Davidian survivors.
Or take Randy Weaver, his wife, and son, of Idaho. First, they
were set up on an idiotic gun charge. (Weaver sold a shotgun
that was a quarter of an inch too short, at the request of a
U.S. government agent.) Then, they sent Weaver a notice of a
wrong trial date. When he failed to appear, they surrounded his
house and attacked. A government sniper shot his unarmed wife
in the head with a bullet as she was holding her baby. And they
shot Weaver’s son in the back. Then, at Weaver’s trial, they
fabricated evidence and committed perjury. Fortunately, Weaver
was acquitted. But have any criminal charges been brought against
the government agents for the murder of Weaver’s wife and son?
Did the federal judge in the case even cite the agents for con-
tempt for their reprehensible conduct? Well, did the Nazi govern-
ment ever bring charges against the SS? Did Nazi judges ever
punish Nazi officials for killing Jews?
Government officials killed Donald Scott, a millionaire rancher
in California. They claimed that they needed to barge into his
house in the middle of the night to look for marijuana. And when
Scott obeyed their order to lay down the gun he had picked up
in his fear of the intruders, they shot him dead. And it later
turned out that they hoped to find marijuana so that they could
confiscate his land and convert it to a national park.
But Americans either look the other way, the way the Germans did,
or they rationalize what is happening by saying, “The war on
drugs has gotta be won.”
And it is not just killings. Just as the Nazis did, they are
confiscating people’s money, land, boats, cars – anything they
can get their hands on. No longer do they need to depend only on
taxes for their revenues – they just go grab the money and pro-
perty directly and keep it, regardless of the guilt or innocence
of the victims. And, of course, it’s all rationalized because
“the war on drugs has gotta be won.”
And it’s not just confiscation. It is also terror – the terror
of the Internal Revenue Service agents barging into people’s
homes, “visiting” them at work, and levying liens on bank acc-
ounts and real estate without notice, hearing, or other semblance
of due process.
Yes, it’s true – we are not dealing with the killings and mass
confiscations and infliction of terror on millions of people.
It is happening only to several thousands. But that’s today.
What happens in a crisis? Suppose an American ruler decided he
is not going to get “pushed around” by the ruler of North Korea,
Haiti, Panama, Iraq, or Japan? What happens if a war is not over
in a few weeks, but instead drags out into months, even years,
with higher taxes, more controls, and…conscription? What happ-
ens if Americans, who are already being taxed 50 percent of their
incomes, now find taxes at 70 or 80 percent? What happens if
there is a massive tax strike in which millions refuse to pay
their taxes? What happens if hundreds of thousands of American
students refuse to be drafted by a president who refused to be
Will the government meekly surrender? Will it simply agree to
lose “international face”? Not on your life. The Internal Revenue
Service, the Department of Justice, the FBI, and the army will
simply turn their massive powers against the leaders of the tax
revolt and as many of its followers as possible. And they will
do whatever is necessary to teach those “draft-dodging cowards”
a lesson. The American people will learn what the German people
learned: that the omnipotent state that loves the poor and the
needy will remove its velvet glove and use its iron fist to smash
those who interfere with the “good of the nation.”
Let’s look at some more examples of the Nazi mind-set in America –
this time in the Department of the Army. The army conducted nuc-
lear radiation experiments on American soldiers. Why? Because the
good of the nation required it. The army conducted drug experi-
ments on American citizens. Why? Because the good of the nation
required it. The army conducted disease experiments on the
American people. Why? Because the good the nation required it.
The army herded innocent Americans of Japanese descent into
American concentration camps. Why? Because the good of the
nation required it. The army entered into joint ventures with
German Nazis at the end of World War II. Why? Because the good
of the nation required it.
In other words, in the past, U.S. government officials have
engaged in evil, Nazi-like conduct for the “good of the nation.”
Would they do so again? You can bet your life they would, if
the “good of the nation required it”, and even if it entailed
the violation of every single restriction on government power
set forth in the U.S. Constitution. There is nothing inevitable
in all this. Through the power of ideas, we can reverse the
trend. If ideas did not matter, governments would not try to
suppress ideas. Ideas do matter; they do have consequences;
they do influence people into acting, into changing, into
But the rights guaranteed by the First Amendment – the right
to speak, to write, to disseminate ideas – are not sufficient.
The ultimate safeguard against the ultimate tyranny lies instead
with the right to bear arms guaranteed by the Second Amendment.
If this Amendment is destroyed or severely constricted, the rest
of the Constitution becomes worthless, because in a crisis in
which their power base is threatened, and in which there are no
means of forcible resistance, government officials will squash
the things they view as “technicalities” – free speech, habeas
corpus, trial by jury, and the other rights guaranteed in the
Combine a crisis with a disarmed, discontented citizenry, and
the concentration camp for hundreds of thousands becomes a real
possibility. But when the citizenry, together with various pat-
riotic sheriffs, police, and members of the armed forces, have
the means to inflict severe casualties on their potential
oppressors, tyrants think twice before they try to oppress their
own citizens too heavily.
That is why every single effort to restrict or control or manage
the ownership of guns must be resisted. The ultimate barrier to
the ultimate tyranny lies not with the ballot box. It lies not
with the soapbox. It lies not with the jury box. The ultimate
barrier to the tyranny of one’s own government lies with the
Contrary to everything our rulers tell us, and everything that
our schoolteachers are teaching the children of this nation,
the biggest threat to the lives and well-being of the American
people lies not with some foreign government. The biggest threat
to the American people lies with the United States government.
And while gun ownership stands as a barrier to potential, Nazi-
like behavior, the long-term solution is to dismantle, not reform,
the iron fist of the welfare state and the controlled economy.
This includes the end (not the reform) of the IRS, the DEA, the
BATF, the SEC, the FDA, HUD, the departments of HHS, Labor,
Agriculture, and Energy, and every other agency that takes money
from some and gives it to others or interferes with peaceful
behavior. It entails the repeal of all laws that permit such
conduct. And it means the privatization of most of the bureau-
crats who work for the U.S. government.
But it also entails the end of potential oppressors, who, in
the past, have shown no reluctance to engage in evil, malicious,
illegal, Nazi-like conduct against American citizens, such as
the CIA and the standing army.
Would this mean that the U.S. government would not be permitted
to act as the international Roman emperor? That is exactly what
it should mean. But what about threats of invasion of the United
States? Such threats are virtually nonexistent. But if every sin-
gle citizen if free to arm himself to the teeth, any nation con-
templating invasion would know that attacking the United States
would be like swallowing a porcupine.
What about a quick mobilization? There would be no reason why
citizen-soldiers would not quickly mobilize in the event of an
emergency. For example, suppose that the standing army is dis-
banded. The members of the 82nd Airborne Division would not
simply disappear. They would become private, productive citizens,
but ready in times of peril to answer the call. They could be,
and probably would be more than willing to be, at any location
in the country within 24 hours.
Moreover, there would be a doubly positive effect in terms of
economic prosperity. No longer would taxes have to be sucked
out of the pockets of private citizens to support the armed
forces. And the members of the armed forces, now privatized,
would now be economically productive members of society.
In his book “The Road to Serfdom,” Friedrich Hayek warned Ameri-
cans in 1944 that despite their military war against the Nazis,
they were traveling the philosophical and economic road that the
Nazis and the communists were traveling. Our grandparents and
parents ignored Hayek’s warning. Now, we are left with the
consequences; a government of omnipotent size and power using
its power to kill innocent, peaceful citizens and confiscate
millions of dollars of property to feed its insatiable hunger
for more power. Today, the number of victims is in the thousands.
But at the end of this road lie the concentration camps for the
Can the tide be reversed? Can the omnipotent state be dismantled,
rather than simply reformed?
Yes. It will take a return to first principles – the principles
on which this nation, not Germany, was founded: principles that
hold that it is the individual, not the collective, that is
supreme; that each individual has been endowed by his creator
with inalienable rights; that among these rights are life,
liberty, and the pursuit of happiness; that to secure these
rights, governments are instituted among men, deriving their
just powers from the consent of the governed; that whenever
any government, including the American government, becomes
destructive of these ends, it is the right of the people to
alter or abolish it and to institute a new government; and that
no individual – his life, liberty, or property – shall ever be
sacrificed for the good of the nation. As Ayn Rand put it thirty
years ago in her essay, “The Fascist New Frontier”:
“If you wish to oppose [statism], you must challenge its basic
premises. You must begin by realizing that there is no such
thing as “the public interest” except as the sum of the inter-
ests of individual men. And the basic, common interest of all
men – all rational men – is freedom. Freedom is the first re-
quirement of “the public interest” – not what men do when they
are free, but that they are free. All their achievements rest
on that foundation – and cannot exist without it.
The principles of a free, non-coercive social system are the
only form of “the public interest.” Such principles did and do
exist. Try to project such a system. In today’s cultural atmos-
phere, it might appear to you like a journey into the unknown.
But – like Columbus – what you will discover is America.”
Switzerland has long enjoyed a reputation as a bank “secrecy” haven. That reputation continues today, as many U.S. citizens believe they can have a Swiss bank account that is beyond the reach of U.S. authorities. In reality, however, the advantages offered by a Swiss bank account to a U.S. citizen seem marginal, at best, in light of the Treaty between the United States and Switzerland on Mutual Assistance in Criminal Matters (the “Swiss Treaty”) entered into force on January 23, 1977. In comparing Switzerland with the United States in the area of bank secrecy, one must distinguish the mere obtaining of bank account information from the freezing and forfeiting of such accounts. True to its aura of “secrecy,” Switzerland’s banking environment still offers some slight advantage to U.S. citizens in preventing the U.S. government from readily obtaining their Swiss account information and their personal identity. The area of forfeiture, however, is a different matter. Since the implementation of the Swiss Treaty, the legal protections against forfeiture afforded to U.S. citizens’ Swiss bank accounts are often no greater than those received by their U.S. accounts. Accordingly, Switzerland’s reputation of bank secrecy is questionable and to a large extent misleading. This Comment seeks to debunk this myth of Swiss bank account “secrecy.”
Prior to comparing Swiss bank account secrecy (in both the context of obtaining information and freezing or forfeiting such accounts) to protections afforded to domestic bank accounts, Part I of this Comment provides a brief overview of Switzerland’s historical tradition of bank secrecy and its enforcement. Part II addresses several limitations placed upon Swiss banking secrecy, in particular the Swiss Treaty. The mechanism by which the United States government is able to obtain information about Swiss bank accounts and forfeit such accounts under the Swiss Treaty is then analyzed in Part III of this Comment. Part IV compares the U.S. methods of obtaining information about bank accounts with the process of obtaining information pursuant to the Swiss Treaty. Finally, this Comment addresses forfeiture of both domestic and Swiss bank accounts by the U.S. government. A comparison of domestic forfeiture with the Swiss Treaty surprisingly reveals that a U.S. citizen’s money is perhaps best left at home, in a U.S. bank.
I. TRADITION AND HISTORY OF SWITZERLAND’S BANK SECRECY
In analyzing Switzerland’s bank secrecy and in determining precisely how secret a Swiss bank account is today, in light of the Swiss Treaty, it is important to first set forth what Swiss banking “secrecy” has traditionally meant. “Bank secrecy [is] the obligation of a financial institution, and of its officers and employees, to protect and withhold information acquired while handling a client’s business.” The notion of Swiss bank secrecy is based upon three principles: (i) the right to privacy; (ii) the nature of the banking relationship; and (iii) the historical importance of secrecy and its role in affirming Switzerland’s sovereignty.
A. The Right to Privacy
While a general “right to privacy” is viewed as an international human right, the application of that right differs from country to country. One can illustrate these variances by comparing banking in Switzerland with banking in the United States. Such a comparison demonstrates that Switzerland’s right to banking privacy is considerably broader than that which is recognized in the United States. Switzerland’s more inclusive concept of the right to privacy is present on two levels.
First, Switzerland’s right to privacy extends substantively beyond its U.S. analogue. While U.S. bank depositors have little, if any, right to privacy regarding their bank records, the Swiss privacy right encompasses financial privacy, including banking information and records.
Second, Switzerland’s right to privacy is broader than the United States’ because it applies to businesses as well as individual citizens. This broader application is a result of Switzerland’s status as a civil law jurisdiction, as compared to the United States, which is a common law jurisdiction.
Thus, although both the United States and Switzerland grant a right to privacy, the rights afforded are far from similar. It is Switzerland’s broad, inclusive right to privacy that has helped foster its bank secrecy.
B. The Banking Relationship
Banking secrecy in Switzerland derives in part from the nature of the relationship between an account holder and his or her bank and banker(s) (hereinafter “Swiss banks”). Swiss banks owe a duty of confidentiality to their account holders. This obligation is imposed on bankers in three distinct areas of Swiss law. First, bankers are the protectors of the banking privacy rights guaranteed by Swiss civil law. Second, an agency relationship exists between the banker and his or her client with the client acting as the “master of the secret.” Third, Swiss banking law outlines Swiss banks’ duties and provides the basis for account holder remedies for violations thereof. Furthermore, account agreements contain an implied contractual term requiring Swiss banks to uphold these three obligations of secrecy. Remedies for their breach accompany all obligations owed by Swiss Banks.
C. Historical Importance of Secrecy in Switzerland
History has also played an important role in Switzerland’s tradition of bank secrecy. “The Duty of Confidentiality of Banks is as old as Banking institutions themselves,” and a notion of bank secrecy has existed since the Middle Ages. In 1934, the enactment of Switzerland’s Federal Banking Law strengthened Swiss bank secrecy. Article 47 of the Federal Banking Law criminalized the violation of bank secrecy and extended account holders’ protections beyond the civil remedies traditionally available.
The traditional view was that Switzerland enacted its bank secrecy laws to protect the accounts of German Jews from the Nazis prior to and during World War II. Because the world approved of what it perceived as Swiss efforts to thwart the Nazis, Swiss banking secrecy was accepted and respected. As a result, it was believed that Switzerland’s bank secrecy and perceived position of neutrality bolstered Swiss sovereignty.
Recently, however, there appears to be more to the connection between Switzerland’s bank secrecy laws and its sovereignty than its relation to the protections afforded to some Holocaust victims. It appears that Switzerland actually purchased its neutrality, sovereignty, and freedom from Nazi Germany. The price Switzerland paid included laundering hundreds of tons of gold and other “war booty” looted by the Nazis. From 1939-1945, Hitler’s regime deposited 360 tons of gold in Swiss banks and some estimates have placed the amount of stolen items deposited with the Swiss at close to $20 billion (in today’s dollars). This evidence thus indicates that Switzerland and its banks played a central role in financing the Nazi war effort.
The most plausible explanation, in light of recent information, is that Switzerland aided both sides of the war effort by allowing both the Nazis and their victims to avail themselves of its banking protection. From a banking perspective, Switzerland’s actions solidified Swiss banking secrecy and affirmed Swiss sovereignty. Because many have believed for over fifty years that Swiss sovereignty is based upon, and contingent upon, the existence of its bank secrecy laws, it is understandable that the Swiss have vigorously sought to enforce these secrecy provisions.
II. ENFORCEMENT OF SWISS BANKING SECRECY
The enforcement of Switzerland’s bank secrecy is effected through Swiss laws providing for civil, administrative, and criminal accountability. A Swiss bank’s breach of its secrecy obligation may result in liability on each of these levels.
Civilly, Swiss bank secrecy is policed by Article 28 of the Swiss Civil Code. The Swiss Civil Code in general, and Article 28 in particular, protects an account holder’s right to privacy. As mentioned above, this right extends to both individuals and businesses and includes privacy in one’s financial affairs. While Article 28 does not expressly protect bank secrecy, the Swiss Supreme Court has concluded that Article 28, and the right to privacy that it provides, obligates Swiss banks to maintain clients’ banking privacy. Prior to the occurrence of a violation, an account holder may seek a court order preventing the release of information. Post-violation, a client may sue the bank for damages under the Swiss Commercial Code. The Swiss Commercial Code provides a “right to be indemnified” for “damages” (Article 41) and “pain and suffering” (Article 49) associated with a breach of the right to privacy afforded by Article 28 of the Swiss Civil Code.
The Swiss Commercial Code also governs contracts between a bank and its account holder. The account agreement is regulated in Articles 394 to 406 of the Commercial Code “governing an agent’s undertaking to provide services or carry out business transactions on behalf of a principal.” The remedy under the Swiss Commercial Code for breach of an account contract is termination of the agreement and damages.
Breach of Swiss banking secrecy may also have administrative consequences for the breaching banker and his or her bank. First, the violating banker’s association with the bank will likely be terminated. Second, the bank itself is subject to loss of its banking license or loss of its membership in the Federation of Swiss Banks. Bank secrecy is thus afforded a second level of protection by these administrative sanctions for its breach.
In addition to civil and administrative penalties for a breach of bank secrecy, Swiss law also criminalizes the breach. Federal Banking Law, Article 47, establishes the “Duty of Confidentiality” for banks and bankers alike and criminalizes disclosure of bank information. In addition to covering both the banker and the bank, a party seeking to discover confidential information is subject to prosecution under this same provision.
III. THE SWISS TREATY AND ITS LIMITATIONS ON SWISS BANK SECRECY
While Switzerland has established a seemingly formidable set of laws granting and protecting banking secrecy, these laws are by no means absolute. Although virtually all countries supported Switzerland during World War II in what they believed was assistance provided to Holocaust victims (obviously unaware of the other side of the coin), since that time Switzerland’s secrecy provisions have suffered many international attacks. Many fear that Swiss banks are used by money launderers and other criminals worldwide in pursuit of illicit profits. As a result of this international pressure, international obligations entered into by Switzerland, such as the Swiss Treaty, do away with Swiss bank secrecy in many instances.
“The [Swiss] Treaty, when applicable, overrides Swiss laws that would otherwise prohibit disclosure of [bank] information to foreign parties.” The Swiss Treaty intended to address post-WWII concerns that Switzerland’s banking laws were being used by wrongdoers, rather than against them. Specifically, the United States became increasingly aware that Swiss bank accounts were being used by violators of securities laws, tax evaders, and criminal organizations. In the late 1960s, the United States and Switzerland commenced discussions addressing these concerns, ultimately resulting in the bilateral Swiss Treaty.
Both parties intended the Swiss Treaty to provide a mechanism for the United States to bypass Swiss bank secrecy provisions pursuant to the Treaty. “When the conditions of the treaty have been met, bank secrecy is no bar to assistance [from the Swiss].” The Swiss Treaty is analogous to Swiss domestic criminal proceedings because under the Swiss Treaty, bank secrecy does not prevent disclosure on the theory that the “public interest prevails over the private interest of a bank’s client.” Both the Swiss Federal Banking Law and the Swiss Penal Code (with reference to the Swiss Commercial Code) are primarily responsible for permitting this result. First, Article 47 of the Swiss Federal Banking Law, the law criminalizing a breach of bank secrecy, is expressly subject to federal law (i.e. the Swiss Treaty). Second, under Article 321 of the Swiss Penal Code, bankers, unlike other Swiss professionals, are not exempt (by virtue of their Duty of Confidentiality under the Commercial Code) from the obligation to be deposed in criminal matters. Because the Swiss Treaty by its terms applies to criminal matters, bankers must divulge information sought pursuant to the treaty process. Thus, Switzerland’s bank secrecy provisions are subject to the Swiss Treaty and do not inhibit the treaty’s use in most instances.
The parties signed the Swiss Treaty, together with six interpretative letters, on May 25, 1973 and the treaty entered into force on January 23, 1977. The treaty provides both Switzerland and the United States with, inter alia, a basis and a mechanism for assistance in criminal prosecutions. Several chapters of the Swiss Treaty are worth noting. Chapter I outlines several key elements: the countries’ obligations to assist one another; the treaty’s applicability; situations where assistance is discretionary as opposed to compulsory; and the limitations placed upon information received pursuant to the Swiss Treaty. Special provisions for organized crime are provided in Chapter II. The logistics and procedures of a Swiss Treaty request are detailed in Chapters III, IV, and VII.
Annexed to the Swiss Treaty is a Schedule listing thirty-five “Offenses for Which Compulsory Measures are Available.” Included in the Schedule are several finance-related crimes such as embezzlement, fraud, and receiving money or property known to have been embezzled or fraudulently obtained. Additionally, the Schedule contains a litany of other offenses covering a broad spectrum. To receive compliance with a request for assistance under the Swiss Treaty (a “Request”), the offense in the Request must be included in the Schedule and it must be considered criminal by the requestee country.
Although the Swiss Treaty provides a requesting country with assistance in a broad range of scenarios, it does have several limitations. In general, pursuant to Article 2, the Swiss Treaty does not apply to extradition, execution of criminal judgments, or investigations or proceedings concerning: political offenses; violations of military obligations or laws; antitrust violations; or violation of tax laws. However, even these limitations are narrowly defined. For example, the Swiss Treaty applies to situations involving political offenses, antitrust violations, and tax offenses if a criminal organization is involved.
While the Swiss Treaty is a general, bilateral criminal assistance agreement, from a U.S. prosecutorial perspective, the Treaty’s most useful function has been its role in lifting the veil of Swiss banking secrecy. The Swiss Treaty helps U.S. investigative and prosecutorial agencies break through traditional Swiss bank secrecy. The U.S. government routinely obtains information about Swiss bank accounts and has the ability to freeze and/or forfeit them.
A. Information and Forfeiture Under the Swiss Treaty
Under the Swiss Treaty, obtaining information about, freezing, and forfeiting a Swiss bank account are basically straightforward, mechanical processes for the U.S. government. Chapter VII governs the issuance of a Request under the Swiss Treaty. First, the U.S. Department of Justice issues a Request to the Swiss Central Authority, the Division of Police of the Federal Department of Justice and Police located in Bern, Switzerland. This procedure differs from those applicable to an analogous domestic action conducted by U.S. authorities because a Request is not issued by a judge. A Swiss Treaty Request must indicate, among other things, the nature of the investigation or proceeding, the reason for seeking the information or action requested, and the crime that the U.S. government seeks to prosecute. The standard governing the “Obligation to Furnish Assistance” is found in Chapter I, Article I of the Swiss Treaty. “[A]n offense in the requesting State is deemed to have been committed if there exists in that State a reasonable suspicion that acts have been committed which constitute the elements of that offense.”
Upon receipt of a Request, Swiss federal law provides that:
If a petition meets the formal requirements of the [Swiss] Treaty and appears not to be obviously inadmissible for the rendering of legal assistance, the Central Headquarters determines the body to execute it, issues the directives for execution of the petition in accord with Article 5 without a hearing of the parties, and if necessary takes precautionary measures in accord with Article 8, and passes on the files to the executive body. Thereby it judges on the basis of the described facts of the case in the petition or its documentation whether the actions based on American procedure are punishable under Swiss law.
In reviewing a Request, the Swiss are “bound by the account of the facts in the [R]equest and the requesting authority cannot be obliged to furnish proof of the accuracy of the summary of the facts . . . ; it is sufficient if reasonable suspicion is shown” and the Swiss “may deviate from there only if there are obvious errors, gaps or contradictions that can be immediately established.” Additionally, in reviewing a Request, the Swiss do not evaluate any of the United States’ proceedings.
If the judicial assistance is requested by the United States, it cannot be denied just on the basis of deficiencies in the American proceedings, because the [Swiss] [T]reaty does not contain any corresponding provision. Even alleged violations of human rights in the American proceedings form no basis for denying judicial assistance.
Thus, the Department of Justice issues a Request and the Swiss review that Request to determine Swiss Treaty compliance, but in doing so the Swiss take all information at face value.
Most Requests fall within the “Compulsory” provisions of the Swiss Treaty. The requestee country must grant any Request falling within the Compulsory provisions (i.e. a Request to which the Treaty is applicable and for which assistance is not deemed “discretionary” under Article 3). However, the Swiss may deny a Request pursuant to Article 3, which addresses “Discretionary Assistance.” Switzerland may refuse assistance if the subject offense of the Request does not fall within the Treaty; there exists a double jeopardy concern; or execution of the Request is likely to prejudice Switzerland’s “sovereignty, security or similar essential interests.” However, under normal circumstances, disclosure of information typically protected by banking secrecy does not fall within these interests.
Once a Request is determined not to fall within the non-applicability limitations of Article 2 and has not resulted in a discretionary refusal under Article 3, Article 4 provides the “Compulsory Measures” to which the requestee country must adhere. The requestee applies the same measures ordinarily employed in an investigation or proceeding originating in that jurisdiction. A Request need not specifically ask that Article 4 actions be taken because the treaty contemplates that the requestee country “shall” employ them. However, the requestor country also has the ability to request that certain other actions be taken. Included among the “measures” which can be taken is the freezing of Swiss bank accounts.
In the event that a Request pertains to an offense not listed in the Schedule, the requestee country “shall determine whether the importance of the offense justifies the use of compulsory measures.” Thus, even if the underlying offense is not one of the thirty-five enumerated in the Schedule, the potential for cooperation among the two countries still exists.
Once the Swiss have complied with a Request, “any person affected . . . [who] has an interest worthy of protection” may object in writing within ten days. An objection has a “suspensory effect, unless there is danger in delay or the injury substantiated by the objector could only come about as a result of the transmission of the executive order enforcements to the American authorities.” It is important to note that an objection on the grounds that the accused is not guilty will be dismissed because the issue of guilt is the precise issue to be decided in the requestor country’s courts.
While on its face the right to object affords the accused protection from arbitrary U.S. governmental action, one must question its true worth for two reasons. First, the objector must object to Switzerland’s compliance with the Request in Switzerland. This entails obtaining Swiss counsel and proceeding in a Swiss court within the ten day period set forth by Swiss Federal Law. Notwithstanding financial concerns, mounting such an opposition within the allotted time frame is logistically cumbersome. Second, assuming that the logistical hurdles of objecting can be overcome, a U.S. account holder then still faces substantive difficulty. Because an account holder cannot validly object on the grounds of his or her innocence of an underlying crime, in most situations that account holder will be unable to prevent U.S. authorities from seeking information about Swiss accounts, freezing such accounts, or forfeiting such accounts. An objection stands only if based upon a ground other than a plea of innocence. This substantive difficulty in setting forth a valid objection is underscored by the binding effect on the Swiss authorities of the facts as set forth in the original Request.
The end result of the Request process, and the limitations on one’s ability to object to it, allows for potentially arbitrary prosecutorial action by the U.S. government. From a U.S. prosecutorial perspective, this aspect of the Swiss Treaty is particularly appealing. Provided they comply with Swiss Treaty provisions, U.S. authorities have the ability to gather information and freeze and/or forfeit Swiss bank accounts without the accused having an effective measure to stop them. The accused’s only recourse would exist in a U.S. court after the authorities had acted. Thus, an accused party’s remedial action will often become available only after his or her Swiss “secret” is out. Because of these logistical and substantive problems associated with objecting to a Request, in most instances an accused’s right to object is more of a theoretical right than a practical reality.
Upon obtaining the desired information through the Swiss Treaty Request process, the requestor country must then comply with the “Limitations on Use of Information” found in Article 5. Article 5 provides that the requestor country may not use information obtained in a Request for the investigation or prosecution of an offense different from the offense named in the Request. Thus, Article 5 serves to curb arbitrary and free-wheeling action by the requestor country once it obtains the information or action sought in its Request.
However, much like the “check and balance” afforded by the ability of an accused to object to compliance with a Request, the Article 5 “Limitations” are, for practical purposes, not very limiting. In most situations, the U.S. government is able to bypass these provisions. Once information becomes part of the public record in the United States, it can be used for other purposes. Additionally, information obtained may, in certain circumstances, be used against the same suspect(s) in a subsequent proceeding. Thus, because of both U.S. domestic laws and the Swiss Treaty provisions themselves, the United States often operates unhindered in its use of information obtained via the Swiss Treaty.
Overall, the process of issuing and complying with a Request tends to be a highly procedural one involving little substantive debate. The U.S. Department of Justice interacts with its Swiss counterpart, and, provided that the Swiss Treaty provisions are satisfied, or some type of agreement is made in the event that they are not satisfied, the process tends to be very mechanical. The mechanics of the Request process are the same whether the United States is seeking to obtain information about a Swiss account or to freeze or forfeit an account. However, action taken and results achieved under the Swiss Treaty may differ from the results the U.S. government could accomplish in an analogous situation involving a domestic bank account. It is therefore necessary to examine more closely actions taken by the U.S. pursuant to the Swiss Treaty and the results of those actions.
B. Swiss Treaty Actions vs. Domestic Actions
When comparing U.S. prosecutorial action taken pursuant to the Swiss Treaty with prosecutorial action that is solely domestic, both the methods and results may differ. First, this Comment reviews situations where a U.S. prosecutorial agency seeks information about a bank account. A comparison is made between the Swiss Treaty mechanics the U.S. government uses in cases involving Swiss accounts, see Part III.A. above, and methods available to the U.S. government in cases involving domestic accounts. Second, and more importantly, this Comment then analyzes actions taken pursuant to the Swiss Treaty with analogous domestic actions in the context of freezing and forfeiting bank accounts.
IV. OBTAINING BANK ACCOUNT INFORMATION
When a United States prosecutorial agency seeks information about bank accounts, Switzerland does offer a slight “secrecy” advantage over that afforded to a U.S. domestic account. However, this is primarily a result of the seemingly “free access” that the government has in the United States to obtain bank information, as opposed to any broad protection offered in Switzerland. While there does exist an historical common law basis to financial privacy in the United States, little to no privacy remains in today’s domestic banking environment. This is due, in large part, to several exceptions to bank secrecy’s common law basis and two strong weapons the U.S. government has to obtain financial information. First, the government and its agencies have ready access to information that is required to be reported under the Bank Secrecy Act (the “BSA”). Second, for information that does not fall within the purview of the BSA’s reporting requirements (for example, information that is required by BSA record-keeping provisions), the government may use a search warrant (commonly referred to as a “financial search warrant” in the context of bank information).
Banking relationships in the United States took their cue from the English common law. In 1924, the King’s Bench in England held in Tournier v. National Provincial and Union Bank of England that banking relationships contain an implied term that bankers will not disclose a customer’s account information. However, Tournier also contains several key exceptions. A banker may disclose account holder information when: (i) such disclosures are mandated by law; (ii) a public duty to disclose exists; (iii) the bank’s interests necessitate disclosure; or (iv) the account holder, expressly or impliedly, consents. Because of these broad exceptions, the Tournier-based banking “secrecy” in the United States failed to amount to much. While the Tournier case garnered discussion, in reality it conferred little of substance upon U.S. bank account holders, and whatever bank “secrecy” did exist in the United States was virtually eliminated with the passage of the BSA.
The BSA was originally enacted in an effort to address: the need for banks to maintain adequate records of transactions and public concerns about U.S. citizens using foreign bank accounts to evade U.S. laws. Since its enactment in 1970, the BSA has expanded upon the Tournier exceptions. In fact, the label “Bank Secrecy Act” is somewhat of a misnomer, if not “wholly cynical,” because, in reality, the BSA is an anti-secrecy measure that imposes reporting and record-keeping requirements upon banks.
In passing the BSA, Congress intended to assist law enforcement efforts by preserving and making available financial information which might prove useful as evidence. The BSA empowers the U.S. Department of the Treasury (“Treasury”) to require banks to keep certain records and to report certain transactions. Banks are “routinely” required to file several types of reports with Treasury. Further, the BSA and subsequent Treasury regulations require the maintenance of numerous other bank records.
Both BSA reports and BSA records have proven useful to law enforcement and prosecutors. However, “[r]ecords required to be kept under the BSA, unlike the BSA reports, generally may be inspected or reviewed by law enforcement authorities only for the purpose of assuring compliance with the BSA’s [record keeping] requirements; in other cases, the authorities must obtain legal process or comply with other legal provisions.” Thus, law enforcement agents are able to access both BSA reports and records when investigating situations beyond BSA compliance; though the process for obtaining records tends to be more involved.
Despite its seemingly intrusive nature, the Supreme Court has held that the BSA does not violate the Fourth Amendment of the U.S. Constitution. The Fourth Amendment provides that
[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
Four years after Congress enacted the BSA, the Supreme Court of the United States, in California Bankers Association v. Schultz,103 determined that a bank making records pursuant to BSA requirements “neither searches nor seizes records in which the depositor has a Fourth Amendment right.” Less than two years later, in 1975, the Court again addressed a Fourth Amendment challenge to the BSA in United States v. Miller.105 The Miller Court concluded that no “reasonable expectation of privacy” exists in information voluntarily conveyed to banks on things such as negotiable instruments and deposit slips. The Court went on to hold that by obtaining information from a person to whom that information was voluntarily given, the government does not violate the Fourth Amendment. The BSA did not change this; it did not create for a depositor a Fourth Amendment interest in a bank’s records relating to that depositor’s account. Thus, after Schultz and Miller, the BSA appears immune to Fourth Amendment challenges, despite its far reaching provisions.
In response to concerns of eroding financial privacy, in 1978 Congress enacted the Right to Financial Privacy Act (“RFPA”). The RFPA aimed to curb governmental abuse of the BSA. However, the RFPA does not actually provide a right to financial privacy. The RFPA merely requires a bank to inform an account holder prior to turning over requested information to the U.S. government. This provides the account holder with an opportunity to challenge the government’s information request. However, under certain circumstances, the RFPA prohibits banks from notifying the account holder prior to turning over information to the government. The RFPA “right to financial privacy” thus proves illusory.
Not only does the RFPA fail to provide a right to privacy for financial information, it actually expounds the mechanisms by which the government can access bank records. Under the RFPA, law enforcement or a prosecutorial agency can obtain bank record information via the following methods: (i) an account holder’s consent; (ii) an administrative subpoena; (iii) a financial search warrant;(iv) a formal written request; (v) a judicial subpoena; or (vi) a grand jury subpoena. While these requirements offer some protection of an account holder’s privacy, there also exists a major exception. A bank can voluntarily supply the government with account information derived from its records without incurring any liability to the account holder, even if the bank’s suspicions of account holder wrongdoing are later found to be without merit.
Thus, because of the BSA and the RFPA, law enforcement and prosecutorial agencies have broad access to bank information in the United States. The government has ready access to information contained in BSA reports and to information voluntarily provided by banks under the RFPA exception. Moreover, the government can also obtain bank records with a financial search warrant.
A financial search warrant is obtained by law enforcement agencies via the same mechanical process as other search warrants. First, a law enforcement officer seeks an order from a judge or magistrate directing him or her to search for and seize certain property. Upon application, the law enforcement agent must demonstrate probable cause that an underlying crime has occurred and that the subject property is potentially linked to that crime. Typically, a law enforcement officer will submit an affidavit setting forth his or her basis for believing that a crime has been committed and the evidence law enforcement hopes to gather via the warrant.
In comparing the ability of the U.S. government to obtain information relating to domestic bank accounts, as opposed to Swiss accounts pursuant to the Swiss Treaty, the analysis differs depending upon the information sought and the circumstances surrounding the investigation. In light of the Tournier case, the BSA, and the RFPA, the government has virtual “free access” to all but a small percentage of domestic bank information. The government readily obtains information which banks voluntarily turn over pursuant to the RFPA exception and the information contained in BSA reports. When comparing these two categories of information with information accessible under the Swiss Treaty, Switzerland probably does still offer some degree of “secrecy.” However, even this secrecy seems to exist by default. It mostly arises from the administrative process and time involved in processing a Request under the Swiss Treaty, rather than from any substantive benefits afforded by post-Swiss Treaty Swiss law. Although the Request process is straightforward and mechanical, it remains more cumbersome than the “free access” afforded to BSA reports and information which banks voluntarily turn over under the RFPA exception.
With regard to domestic account information not contained in BSA reports or that which is not voluntarily turned over by banks, the comparison of domestic actions with their Swiss Treaty analogues parallels the forthcoming comparison of U.S. civil forfeiture with Swiss Treaty forfeiture. In this small category of information, and in the context of forfeitures, it appears that domestic bank accounts have virtually identical protection from the U.S. government as Swiss accounts do from their government.
V. DOMESTIC FORFEITURE OF BANK ACCOUNTS
It is in the context of bank account freezes and forfeitures that one finds surprising results. Specifically, while overall one’s account information may have slightly more secrecy in Switzerland, once that “secret” is revealed, the U.S. government appears to have the same control over a Swiss account as a domestic account. This section first provides an overview of U.S. forfeiture. The Comment then proceeds to explain why the U.S. government has the same control over a U.S. citizen’s Swiss account(s) as one held in his or her own backyard.
The U.S. government has the ability to seize a domestic bank account via two methods: civil forfeiture and criminal forfeiture. Forfeiture is commonly defined as “a divestiture of specific property without compensation.” Such divestiture normally targets property associated with criminal activity, regardless of whether the forfeiture is criminal or civil in nature. The divestiture itself is usually accomplished pursuant to a statute. While the general notion of forfeiture is the same for both civil and criminal forfeitures, the applications, procedures, and limitations of the two differ remarkably.
A. Civil Forfeiture in the United States
This Comment addresses civil forfeiture first because it is more favorable to law enforcement and, consequently, is used more frequently. The United States has provided for civil forfeiture since 1789, and today’s civil forfeiture proceedings closely resemble those conducted throughout history. Civil forfeiture is an in rem legal action brought by the government against certain property, the res.141 Thus, in such a proceeding the res itself is considered, in theory, to be the “offender” and the “proceeding in rem stands independent of, and wholly unaffected by any criminal proceeding in personam.” At the time of forfeiture, title to the res vests in the government and the “owner,” seeking a return of the property, must file a civil claim against the government. After filing such a claim, the “owner” becomes a “claimant”. The subsequent civil trial takes place in a United States District Court and the claimant must “answer to the government’s forfeiture complaint.”
Significantly, while the government commonly uses civil forfeiture against assets related to criminal activity, no criminal conviction is necessary for the government to civilly forfeit assets. The absence of a required conviction is one of the most attractive qualities of civil forfeiture to prosecutors. Moreover, because the forfeiture proceeding is against the res itself, an individual need not even have criminal charges filed against him or her. The only requirement is that the res be linked with a crime. Generally, such a link for purposes of forfeiture includes: a res whose possession is unlawful; property that is the product of criminal activity; or property that is an “instrumentality” of a crime. Once the property sought to be forfeited is linked to the commission of a crime, the government can seize the property regardless of whether it chooses to prosecute the underlying crime.
Procedurally, civil forfeiture offers a major advantage to prosecutors as well. Although the prosecutor must show that he had probable cause to seize the subject property, once such a showing is made the burden then shifts to the claimant to establish that the property should not have been seized and should be returned. Significantly, “[w]hen a statute provides for civil forfeiture, the forfeiture takes place at the moment the property is used or generated illegally[,] . . .[a]t that moment, all rights and legal title to the property vest in the government . . . [and] [i]n the eyes of the law, subsequent judicial proceedings merely confirm or perfect a forfeiture.” In contrast, criminal forfeiture requires a conviction for an underlying crime prior to instituting a forfeiture action. The standard applied in such a criminal prosecution is that of “beyond a reasonable doubt,” a considerably higher burden than the showing of “probable cause,” law enforcement’s burden in a civil forfeiture. Thus, the burden on the government is considerably lower for civil forfeiture.
Although seemingly not required, in most civil forfeiture cases, law enforcement agents obtain a warrant prior to seizing a bank account. A seizure warrant will be issued by a judge or magistrate upon a showing that there exists probable cause to believe the bank account is subject to forfeiture. The probable cause standard for warrants is mandated by the Fourth Amendment of the U.S. Constitution which holds that “no Warrants shall issue, but upon probable cause.”
In the event the government fails to obtain a warrant prior to seizure, the probable cause standard still governs law enforcement’s conduct. That is, law enforcement, as represented by a prosecutor, will have to demonstrate the existence of probable cause for the seizure at the subsequent forfeiture hearing. A seizure conducted without a warrant is also governed by the Fourth Amendment. Warrantless seizures must not be “unreasonable,” and a seizure undertaken by the government absent a warrant is deemed unreasonable if it is not based upon probable cause. Thus, regardless of whether a warrant exists for a seizure of assets, probable cause remains the governing legal standard in civil forfeiture. Once the government establishes probable cause, the claimant bears the burden of obtaining the return of his or her property.
In seeking the return of property that law enforcement has civilly seized, the claimant must overcome the potential hurdle of “standing.” In other words, the claimant must be the real party in interest to challenge the government’s seizure. This poses potential problems to claimants because, when dealing with assets associated with a crime or derived from criminal activity, legal title is often not in the claimant’s name. “Most courts will not permit forfeitures to be contested by such so-called straw men[;]” “[o]nly those with [a] legitimate possessory interest . . . have standing to challenge forfeitures.” A claimant must establish standing before the prosecution is required to present its evidence justifying the forfeiture.
Another prosecutiorial advantage accompanying civil forfeiture is that it enables a prosecutor to utilize the civil discovery process. Information gathered through civil discovery in a civil forfeiture action can assist a prosecutor in preparing a related criminal case. While this benefit is tempered by the claimant’s Fifth Amendment privilege, an assertion of Fifth Amendment privilege may result in a finding adverse to the claimant’s interests in the civil forfeiture action. Such a factual finding against the claimant is a powerful weapon in the prosecutor’s arsenal because the claimant bears the onus of proving that the property should not have been forfeited. But, on the other hand, for obvious reasons claimants will rarely want to be deposed if criminal charges are pending. Thus, in circumstances where the claimant desires a return of the property, the prosecutor has substantial leverage to depose the claimant, despite the claimant’s desire to assert his or her Fifth Amendment privilege. A claimant’s one defensive move in such a situation is to attempt to obtain a stay of the civil forfeiture proceedings until any underlying criminal case (if one is brought) is resolved. However, this may not prove an effective defense for two reasons: (i) the government may never bring an underlying criminal suit, or (ii) even if the government does proceed with a criminal action, a stay may not be granted. In sum, the discovery associated with a civil forfeiture action provides valuable prosecutorial leverage.
Despite civil forfeiture’s pro-government attributes, “civil forfeiture procedures have been examined by the Supreme Court on several occasions from the time of Chief Justice John Marshall to the time of Chief Justice William Rehnquist and . . . the constitutionality of civil forfeiture has been upheld on each occasion.” However, it is important to remember that claimants are afforded several basic protections. For example, the government must meet the probable cause standard to have assets validly forfeited. Further, the assets must be linked to an underlying crime. Requiring the government to establish probable cause and such a link helps to curb arbitrary government action. Additionally, the claimant has a clearly defined recourse against the government: a civil claim seeking a return of the subject property.
B. Criminal Forfeiture in the United States
Criminal forfeiture is a relatively new practice in the United States. Unlike civil forfeiture, criminal forfeiture of assets is an in personam action, brought against a person as part of a criminal prosecution. For the government to criminally forfeit assets, a criminal must first be convicted of an underlying crime. Further, the subject assets must then be linked to that underlying crime. Once convicted, the government or a court is able to divest a criminal of his or her rights in the subject property pursuant to a criminal forfeiture statute. After divesting the criminal’s rights in the property, the government then cleanses its title to the asset(s) in an ancillary hearing.
Criminal forfeiture’s obvious disadvantage from a prosecutorial perspective is the necessity of obtaining an underlying criminal conviction before the forfeiture of any assets. In an underlying criminal prosecution, the government must prove guilt beyond a reasonable doubt. The “beyond a reasonable doubt” standard requires a considerably higher burden of proof than the “preponderance of the evidence” standard applicable to civil actions. As mentioned above, to civilly forfeit assets the government need only show probable cause in linking those assets to an underlying crime. Then, the onus shifts to the claimant to establish that the seizure was improper. Additionally, the government can civilly forfeit assets without ever bringing an underlying criminal case. Thus, in comparison, the government faces considerably higher hurdles in criminal forfeiture actions than in civil ones.
Consequently, civil forfeiture is used much more frequently by the U.S. government. It thus seems logical to compare U.S. civil forfeiture with forfeiture pursuant to the Swiss Treaty. As the next section illustrates , once the “secret” of the existence of a Swiss account is out, Swiss bank accounts have virtually the same protections against arbitrary government action as domestic bank accounts.
VI. COMPARISON OF DOMESTIC CIVIL FORFEITURE TO SWISS TREATY FORFEITURE
In most contexts, the U.S. government or a U.S. prosecutorial agency has the power to forfeit the Swiss bank account of a U.S. citizen just as easily as it could a domestic account. A Swiss bank account can be forfeited via Swiss compliance with a Swiss Treaty Request. As a prerequisite to Swiss compliance, however, the underlying crime that the Swiss bank account relates to must fall within the scope of the Swiss Treaty. When the prerequisites are met, on its face it appears that the Swiss Treaty actually allows the U.S. government to forfeit a Swiss bank account more easily than it could a domestic account. While this argument has, on at least one occasion, been advanced and accepted, in reality, under the Swiss Treaty one’s Swiss bank account is afforded the same basic legal protections from forfeiture as his or her domestic account(s). That is because, as will be shown, the United States’ procedural and substantive legal burdens in forfeiting a Swiss account are essentially equal to those applicable in domestic civil forfeitures.
While the Swiss Treaty addresses assistance in criminal matters, this section compares the treaty forfeiture process to civil forfeiture in the United States. Although the Swiss Treaty applies only in a criminal context, forfeiture under the Swiss Treaty is conceptually more analogous to civil forfeiture in the United States than it is to U.S. criminal forfeiture. One should also remain conscious of the fact that U.S. civil forfeiture is used frequently in criminal matters, because in the U.S. forfeiture context, use of the term “civil” does not preclude its application to criminal matters. In fact, as mentioned above, civil forfeiture is the preferred forfeiture vehicle of U.S. prosecutors.
Conceptually, U.S. civil forfeiture and Swiss Treaty forfeiture are analogous. While U.S. criminal forfeiture requires prior conviction of an underlying crime prior to forfeiture, U.S. civil forfeiture requires only a showing of probable cause and a showing that the subject asset(s) are linked to an underlying crime. Moreover, U.S. civil forfeiture can occur without a criminal indictment. The Swiss Treaty operates in a similar manner. An account can be frozen and forfeited upon a showing of a reasonable suspicion that a crime has been committed. Thus, under both the Swiss Treaty and U.S. civil forfeiture law, a subject account must be linked to a crime believed to have occurred, but no criminal prosecution or indictment must be obtained prior to seizure of that account.
Procedurally, Swiss Treaty forfeiture also parallels U.S. civil forfeiture. Under the Swiss Treaty, the U.S. Department of Justice is responsible for issuing a Treaty Request to Switzerland’s Division of Police of the Federal Department of Justice and Police (the “Swiss Police”), a Swiss agency comparable to the U.S. Department of Justice. Upon receipt, the Swiss Police review the Request to assure Swiss Treaty compliance. In doing so, except in extraordinary situations, the Swiss Police make no inquiry into the facts provided by the Department of Justice. In essence, a Swiss governmental agency accepts a request issued by an executive agency of the United States; no independent legal evaluation takes place.
In comparison, under U.S. civil forfeiture law, U.S. law enforcement can seize a bank account either with or without a warrant. Swiss Treaty forfeiture closely parallels domestic civil forfeiture commenced without a seizure warrant. When operating without a warrant, law enforcement, under the belief that probable cause exists to do so, simply seizes a suspect bank account. Thus, in both warrantless domestic and Swiss Treaty seizures, no independent third-party review takes place prior to seizure.
While in most U.S. civil forfeitures law enforcement does obtain a seizure warrant, it does so primarily because it is in its own best interest to do so, not because the law requires it. Thus, in terms of procedural legal protection afforded to bank account holders, Swiss bank accounts and U.S. domestic accounts are afforded analogous procedural protection. In both instances, law enforcement has the ability to seize a bank account prior to any independent judicial review. Such review only takes place subsequent to seizure, when the forfeiture is challenged.
While the procedural legal protection afforded under the Swiss Treaty and U.S. domestic forfeiture law are virtually identical, there does appear to exist some differences in the way forfeiture events transpire. However, ultimately, these too do not amount to a difference in legal protection afforded to an account holder.
As discussed supra in Part V.A., domestic civil forfeiture is an in rem action against a res (in this case a bank account or the funds therein). This occurs in a legal action by the government against the account itself (typically denoted “United States v. Bank Account”). In the suit, the government seeks to establish that it had probable cause to seize/freeze the account and, if the government meets this burden, the burden then shifts to the person claiming rightful ownership in the account, the claimant, to establish by a preponderance of the evidence that the account is not subject to forfeiture. In contrast, in a Swiss Treaty forfeiture situation, the Department of Justice (DOJ) (usually at the request of a governmental agency such as the Securities and Exchange Commission (SEC), for example) issues a Request to Switzerland under the Treaty. If the Swiss comply, the account is frozen. Typically, in such a situation the claimant seeks an injunction against DOJ (or the agency that asked DOJ to issue the Request) (typically denoted “Claimant v. Department of Justice”). Specifically, the claimant seeks to have a U.S. federal court enjoin law enforcement’s seizure of his or her assets and asks the court to direct law enforcement to instruct the Swiss government to release the frozen funds. In the event that the claimant’s request for an injunction is denied, as is usually the case, the assets are transferred from Switzerland to the U.S. government and the situation proceeds in a fashion remarkably akin to that of a domestic civil forfeiture. Thus, while the actions may proceed differently, from a practical legal perspective the protections afforded to the account holder do not differ in a meaningful way.
Substantively, it appears at first glance that the burden of showing that a bank account is subject to forfeiture is lower under the Swiss Treaty than that required in domestic civil forfeiture. To obtain compliance with a Swiss Treaty Request, the United States must demonstrate that a reasonable suspicion exists to believe that the elements of an underlying crime are present and that the subject account is linked to that crime. In comparison, in U.S. civil forfeiture actions the government must demonstrate that probable cause exists for an account to be seized. In the United States, “[n]o property may even be seized or arrested for purposes of forfeiture unless the [U.S.] Government has probable cause to believe it is subject to forfeiture.” The Swiss Treaty’s Technical Analysis openly states that the “‘reasonable suspicion’ standard is less stringent than the ‘probable cause’ standard . . . .” Thus, it appears that “on paper” the Swiss Treaty offers less substantive legal protection to U.S. citizens’ Swiss bank accounts than their domestic accounts would receive in an analogous domestic proceeding.
At least one court has grasped this idea and, in doing so, held that a seizure made pursuant to the Swiss Treaty’s reasonable suspicion standard violates the Fourth Amendment. In Colello v. United States Securities and Exchange Commission, the Central District of California held, on motion for summary judgment, that freezing Mr. Colello’s Swiss bank accounts pursuant to the Swiss Treaty violated his Fourth Amendment rights. The Colello court’s reasoning, as set forth below, was fairly straightforward and, given the facts of the case, appears sound.
In general, the U.S. Constitution applies when a U.S. citizen is harmed abroad by the U.S. government. The question then arises whether the Fourth Amendment applies to a U.S. citizen’s assets abroad. The answer seems to be a resounding “yes”, provided the U.S. government is the actor. In other words, the Fourth Amendment provides a “check” against actions taken by the United States government, and this check encompasses actions taken against U.S. assets abroad.
More specifically, the Fourth Amendment’s application must be examined in the context of Swiss bank account forfeiture under the Swiss Treaty. The Fourth Amendment provides that people shall be secure against “unreasonable searches and seizures” and that warrants shall not issue except “upon probable cause.” Property is “seized” when there is a “meaningful interference with an individual’s possessory interest in that property.” Freezing a bank account clearly constitutes a “meaningful interference,” and in Colello, both the DOJ and the SEC (the agency that had requested DOJ to issue the Swiss Treaty Request in the case) conceded that an “asset freeze was in fact a ‘seizure.’” Additionally, a “seizure” is subject to the Fourth Amendment even in instances where no “search” has taken place. Thus, it seems clear that the Fourth Amendment applies to U.S. governmental actions against its citizens’ Swiss bank accounts.
Because, as noted in Colello, the Fourth Amendment applies to seizures by the United States of Swiss bank accounts pursuant to the Swiss Treaty, the question as to the exact meaning of the Amendment’s application then arises. The Fourth Amendment states that the probable cause standard applies to the issuance of warrants. However, under the Swiss Treaty a seizure takes place absent a warrant. Therefore, one must look to the first portion of the Fourth Amendment which protects against “unreasonable searches and seizures.” Thus, in the case of the U.S. government’s seizure of a Swiss bank account pursuant to the Swiss Treaty, the Fourth Amendment requires that the seizure must not be “unreasonable.”
Interestingly, a seizure undertaken by the government absent a warrant is unreasonable if it is not based upon probable cause. “Dispensing with the need for a warrant is worlds apart from permitting a lesser standard of cause for the seizure than a warrant would require, i.e., the standard of probable cause.” Thus, despite the lack of a warrant requirement under the Swiss Treaty, the Fourth Amendment mandates that the probable cause standard governs U.S. forfeiture actions under the Swiss Treaty.
In Colello, the DOJ, at the request of the SEC, seized Mr. Colello’s Swiss bank accounts pursuant to the Swiss Treaty. DOJ satisfied the Treaty’s reasonable suspicion standard, and the Swiss complied with the Request, freezing Mr. Colello’s bank account. The court, on motion for summary judgment, held that the SEC violated Mr. Colello’s Fourth Amendment rights by not having probable cause to commence such an action. Despite compliance with the terms of the Swiss Treaty, the U.S. government’s actions in Colello were unconstitutional. Because the Fourth Amendment applies to U.S. citizens’ assets abroad, the government cannot end run the U.S. Constitution by merely complying with a treaty’s standard. The Swiss Treaty, like all treaties to which the United States is a party, is subject to the U.S. Constitution. Thus, notwithstanding compliance with the Swiss Treaty’s standard of reasonable suspicion, the U.S. government may not seize a Swiss bank account without probable cause. Because the government lacked probable cause in Colello, its seizure of Mr. Colello’s account violated the Fourth Amendment of the U.S. Constitution.
While it is clear that “on paper” the Swiss Treaty offers U.S. citizens’ Swiss bank accounts less protection than that afforded to their domestic accounts, in actuality the protection afforded is virtually the same. It is clear that, despite the language of the Swiss Treaty, the appropriate standard to be applied under the Treaty is one of probable cause. After all, the Fourth Amendment does not distinguish between Swiss Treaty forfeitures and domestic civil forfeitures, and neither do the courts in applying the Fourth Amendment. Thus, after Colello reaffirmed what U.S. law enforcement should have already known, it will not likely proceed in the future under the Swiss Treaty without probable cause, regardless of what the Swiss Treaty purports to allow. The end result is that, for practical purposes, U.S. citizens’ Swiss bank accounts have the same substantive legal protection against forfeiture that is afforded to their domestic accounts; therefore, Swiss accounts will not be seized absent probable cause.
In light of the Swiss Treaty, the real “secret” in today’s Swiss banking environment is the distinct lack of advantages it offers to U.S. account holders. Admittedly, in the context of merely obtaining information about a Swiss bank account, Switzerland does still offer some advantage over a domestic account. However, these benefits occur primarily by default, as Switzerland offers secrecy when compared to the United States, only because the U.S. banking environment offers so little secrecy. Broad domestic access to bank accounts in the United States, coupled with the administrative hurdles under the Swiss Treaty, gives Switzerland a slight advantage in keeping account information secret from U.S. law enforcement. But, even this slight advantage is significantly tempered by the ease and mechanical nature of obtaining compliance with a Swiss Treaty Request.
Moreover, while information may prove slightly more “secret” for a brief time period, once an account holder’s Swiss “secret” is out, he then has forfeiture protection from the U.S. government which is virtually identical to that afforded domestic bank accounts. In today’s banking environment, this is the real “secret” of Swiss bank accounts.
Are you a US citizen? Do you ever embark on international travel
alone? Do you wear loose fitting clothing for the flight? Do you
often arrive at international airports without a bag full of
souvenirs? If so, be careful – you fit the US customs profile of a
A 50 year old woman (a US citizen born in Columbia) recently traveled
to the US from Hong Kong. She was traveling alone, wearing loose
fitting clothing and carrying none of the souvenirs typical of the
On this basis, and because she was judged to have answered some
questions in an “evasive” manner, she was taken in to a side room,
patted down and ordered to strip. Her body cavities were probed and
she was forced to take a series of laxatives, which induced 28 bowel
movements over an 8-hour period.
No drugs were found – but this is unlikely to bring about any changes
to a system under which almost every international traveler could be
drawn under the spotlight as a possible drugs courier and subjected to
intrusive and degrading treatment at the hands of the authorities.
Is Your Bank Account Part Of The Public Record?
I am a financial services professional and as such, am offered lists
of peoples names (for sale) all the time. These ‘list vendors’ usually
tell me that they can pinpoint everything from income to net worth.
Okay, that’s not good. However, last week, it got even worse. A woman
called me and offered a list which, she claimed, was straight from the
SHE: I can sell you names and give you their income, and deposits at
I: How do you know it’s accurate?
SHE: We collect information and separate them by demographics and incomes.
I: Where do you get this information?
SHE: From the banks themselves.
I: Why, do they turn over the names of their clients to you?
SHE: They don’t, it’s part of the public record.
I: How’s that?
SHE: When banks merge, the Gov’t does an audit. They audit everything
from mortgage apps to deposits. Those mortgage apps have, of
course, every bit of financial information about someone. The
government audit is public record.
I: And you can give me the value of these individual accounts?
SHE: No, the government groups them into brackets, like $100,000 to
I: So you get the brackets? Or the actual values?
SHE: We get the brackets. Only the banks and the governments know the
values. So, do you want to buy the list or not?
I: I honestly don’t feel that I can support that.
Boy, do I feel better now, knowing that the government adds my bracket
to the PUBLIC RECORD!
Note: This is an older article, so some of the things mentioned below may not work anymore.
To “live free” means to be able to control your own life and to avoid violence, or the threat of violence, by others. What you do and how you do it will almost always determine whether or not freedom will be yours. But YOU must take the responsibility for creating your own freedom. No one, especially the “government” will do it for you.
To “disappear” means to make it impossible for other people to invade your personal world of freedom. Since most such invasion is by means of electronic data gathering and cross-referencing, you must be able to short-circuit these procedures effectively.
The most efficient method today is through the use of what we call “alternate identification”. If the new names and numbers you plug into the computer networks don’t match the old ones, you have not only “disappeared”, but have also been “reborn”. And being reborn means leaving your past records where they can no longer affect you and your lifestyle.
This “disappearing” of individuals is obviously discomforting to institutions and governments determined to control personal activities in the Land of the Free. To them it appears downright seditious, since in reality their power depends directly on the number of people they can control-through computerized records, of course.
To those who actually “disappear”, however, the act is one of tremendous personal liberation. Free men owe very little to those who restrict opportunities on the basis of past records. An extreme example, which nevertheless applies to all of us, is this: When a person convicted of a felony has served his full sentence, is he then “free”? Hardly. What he will experience is really a LIFE SENTENCE of second-rate opportunity.
And what happens to the convict, in practice, happens to everyone who manages to have negative personal information placed in his “records”. When it comes to the point of a person’s having to live with a condemning past and ever-narrowing opportunities, it becomes easily understandable why he should be willing and anxious to scuttle his labeled identity and take on another.
Becoming a new identity, however, involves many things and requires careful attention to detail, as we shall show. At the heart of this process, though, is the ATTITUDE a person must assume if he is to make it work. He must forget about “his” government; he must become his own government, answerable only to himself, with his own rules, laws, and systems of behavior. This is an existential “moment” few are disciplined enough to experience, but it can be done. The result will be a growing detachment from Big Brother and a corresponding increase of personal freedom.
The individual needn’t worry about what would happen “if everybody else did this” because they WON’T. The object is for individuals, acting as individuals, to declare their mental independence from whatever System is attempting to enslave them. As individuals they are the best judges of what degree of slavery they can accept, how far down the road they can go before becoming robots for Big Brother. Simply put, it’s the Sheep and the Wolves. The Sheep go to slaughter, the Wolves wherever they wish….
There are numerous intermediate tactics between total compliance and complete disappearance, such as refusing to give your Social Security number (or giving it incorrectly), avoiding taxes, obtaining several foreign citizenships and passports, setting up bank accounts in several other countries, and planning at least two routes of escape to other countries, but in the end you will discover there really is no freedom in the world-‘YOU MUST CREATE YOUR OWN. You must learn how to protect your own rights as you define them. No one else will do it for you, NO ONE.
The object of this publication is to suggest ways an individual can, in practice, escape his past and secure a new future, on his own terms. Individuals will vary greatly in how they carry out their disappearances, and it is our hope that the ideas we present here are useful towards those ends. We make no claims of completeness or of exhausting the subject, as that could be potentially dangerous were individuals to rely solely on this information.
We must stress that everyone should think over his situation as carefully as possible, and then pick and choose which among our methods are best suited to his needs. Above all, he must begin using his head, trusting his hunches and instincts, and thinking of himself as separate, different, and even superior to those stuck in the System. He will have to become a Wolf. He must stand alone to be free.
If you need to dump your car, sell it yourself to a private party for cash. Be very careful not to reveal anything to this person about your real plans or reasons for selling. He would be an ideal source of information of this nature for snoopers, thanks to the efficiency of auto registration systems throughout the country. The buyer will, of course, be an excellent place to dump your fake information…
Once you relocate, should you need another car, pay cash for it even if it represents lowering your “status”. Delay registering it as long as possible. By the time you do, hopefully you will have established a new identity completely unknown to the last owner of the car.
Changing completely the “profile” of the type of car you drive might help reinforce your new identity, too. If you last had a large, domestic, expensive car, try for a small, foreign, economy car. Avoid splashy colors and styling, however. Look dull. Red cars get more attention from highway patrols–a proven fact.
If you need to move large amounts of personal property and can’t handle the job yourself, hire some “no name” movers from a city or two away, and have them put your stuff in some kind of public storage where you control access. Days, weeks, or months later, have another mover transfer your goodies to your new address. Plan this latter move for a time when you feel there might be the least chance of surveillance of the storage premises. DO IT QUICK. Avoid any intervening visits to check up on your stored items. Remember, too, to give false and misleading information to the agents who rent the storage space to you.
Sever all ties with any unions, clubs, lodges, or other organizations to which you belong. Become a “lost” member. It’s best to leave these groups “cold”, that is, don’t go around cashing in your interests in special funds or private accounts to the point where it becomes obvious you’re intending to pull up stakes. Leave a few bucks on the books.
Never send in Change-of-Address forms to publishers of magazines or other periodicals, and certainly don’t leave such a form at the local Post Office. Your mail will be returned to senders stamped, “Moved, left no forwarding address”, or “Unable to forward”, or words to this effect.
Never become friendly with a landlord. Hold up your end of the rental agreement, and he will undoubtedly be pleased to leave you completely alone. Landlords are fertile sources of information for snoops, so consider every conversation with them the same as if you were talking with the FBI. In his case, however, you are perfectly free to lie, mislead, and deceive all day long with impunity, so DO IT. Remember, however, that if you burn him for the rent when you split, you will gain not only an unpaid creditor but also an enemy who will bend over twice to help skip tracers.
Life insurance should be cancelled or allowed to lapse. If there is any cash value, take the money before you split. Insurance companies are great gatherers of personal information, so be sure not to tip off agents regarding your plans. Give them believable excuses like deciding to go with another carrier or your employer’s group plan, etc.
When you change houses or apartments, be careful not to leave behind items that might serve as indicators of your past, your interests, hobbies, or lifestyle. Books and clothing items you no longer need should be donated anonymously to the Goodwill, Salvation Army, etc.
If you have grown children make it clear to them they will never know where you really are. Correspond through mail drops and make phone calls from pay booths if you must communicate. Cutting family ties can be painful, but sometimes the alternatives hurt more. Ideally, parents should train their children never to give personal information to third parties. Agents and investigators should be told to “get a warrant”.
Don’t worry about being tracked down by your photo. Tracing by photo isn’t done unless you’re a fairly notorious person, usually with a reward on your head. You’ve got to be “worth” the great effort and expense. It is possible to trace a person this way, but modern cops and dicks don’t do it unless there is no other way and the search is justified. The FBI admits that at any one time there are at least 75,000 fugitives in the U.S., so the Post Office photos can’t really be working all that well, eh?
It can be super-cool to room in someone else’s apartment or home. Check the daily newspapers for ads under heading like “Rooms to share”, “Rentals to share”, or “Apartments to share”. This way all records relating to occupancy will already be in someone else’s name. You will make arrangements with the current occupant only, not the landlord and the various utilities. This arrangement is well suited to someone wanting to put lots of “distance” between one identity and another, a great way to “get lost”, even if only a few blocks away. Once a new identity has been set up–a process that can take several weeks or months for someone wanting foolproof identity—he is much freer to appear, fully reborn, wherever he pleases.
Avoid getting involved in lawsuits or failing to respond to citations. If you have to split in a hurry, and can’t make an appearance, you’ve just bought yourself a possible bench warrant, which will be happily enforced the next time a traffic officer, pulls you over for a “broken tail light”. It is a well-known fact that arrests of most cons and fugitives are made in “circumstances unrelated to their crimes”. Stops for traffic violations are number-one such “circumstances”….
Pets can be a drag if you need to move in a hurry, so consider your situation carefully if you simply must have one. Also, most urban areas require the registering of certain kinds of animals, especially dogs. You can avoid registering them as long as possible, and give totally false information when a canvassing inspector catches up to you.
If you own or are buying a home, but want to disappear, arrange to have an attorney handle the sale and escrow. Attorneys can generally be counted on to follow their client’s instructions, and are usually quite careful about divulging information to third parties (snoops). Short of a court order, data relating to their clients is considered private and “privileged”. You will want to instruct your attorney in the manner of forwarding funds to you. He will have several ideas along this line, such as a trust account, conversion to cask, or deposit made out of state or the country.
There should be no problem in his handling the details of the sale once you grant him power of attorney for this purpose. Don’t be afraid to pay him well for his services, as he will remain a known “link” between your old and new lives. Should other methods of tracing fail, investigators will put pressure on him. Since most attorneys enjoy a good battle of wits, protect yourself by keeping him on your side. Wealthy people have always used smart attorneys to cover their moves, and so can you.
Similarly, if you have recently been the beneficiary of a will or have an interest in an estate, notify the executor that further transactions are to be directed through your attorney. Your address can thus be kept from public records. Since many probate matters can drag on for years, your present address will have to be known to the executor. It shouldn’t bother him that you wish a little privacy. If the estate in question were of great value to you, you would naturally want an attorney to look out for your interests, so this is the perfect excuse. Attorneys should be used.
If minor children are involved in your disappearing act, things can get complicated if they can’t or won’t cooperate with you. You will probably be changing identity, so you will have to get them to accept at least a new surname. Be serious about it and they should get
the message. They will have to cut off contact with old neighborhood friends, and will have to enroll in new schools under their new names. Since most schools require records and transcripts to be sent from the last school of attendance, and enrollment of kindergarteners and first graders to be accompanied by birth certificates, a little ingenuity and cleverness is in order.
First, birth certificates can easily be faked, as there are many sources of blank forms. Check the classified ads in any of the national tabloids (“Midnight”, “The National Enquirer”, etc.) under such headings as “Certificates” and “Miscellaneous”. The ID cards offered by these mail order firms are often accompanied by free birth certificates, too. For more information on birth certificates and alternate identity, order a copy of THE PAPER TRIP II, from Eden Press ($19.95).
In this latter book, you will also get ideas into how to create “records” of past activities, methods that will work in helping you cover your children’s tracks as well. The basic technique is to recreate the records you want, provide the address of a mail forwarding service as that of the source of those records, and handle all correspondence yourself. By using photo duplication of altered documents, a little rubber-stamping, or even some “quick-print” offset printing, you can easily and rather quickly come up with working solutions to some of the most baffling problems in starting a new identity. You can have a field day creating all kinds of “backgrounds”. The only limitation is your own imagination. These methods WORK, too!!
It would usually be a good idea not to give children an advance warning they are about to split the neighborhood, as they will be quick to tell their friends and schoolmates. Once on the move, keep them from communicating until you can arrange for them not to give away your location. Mail forwarding services can help here, too. Have them begin using their new last names right away.
If you belong to an Automobile Association, let your membership lapse. If you decide to rejoin, do it several months later under a new name, or join some other Auto Club under the new name.
If you use a particular barber or beauty shop, give no indication you are about to move or make any kind of radical change in your life. Talk about the weather, politics, or sports, but keep your private thoughts from becoming popular knowledge. Gossip thrives in these places. The same goes for bars, pool halls) liquor stores, and restaurants, which you have frequented in the past. Don’t tip them off.
If you’re planning to remain in the same general area, don’t use your old library card anymore. Chuck it and apply for another at another branch, under another name, of course.
When dealing with any real estate people to set up your new location, use only your new name. Many real estate firms also handle rentals, and are thus good sources for tracers if they have a general idea where you are, or are headed. This underlines the need to begin creating a new identity before you ever decide to “move”.
When you notify the utilities and telephone company to discontinue service, tell them not to send any refunds (if any are due) or closing bills until you notify them, as you are relocating and are not yet sure of the address. This way you will not be leaving any leads in this fer-tile field for investigators.
If you plan to remain in the general area serviced by the same utility company or companies, it would be advisable to have service begun either several weeks before you move (under the new name), or several weeks after you move. Snoops would find “connect” requests within five to ten days of your move worth investigating, dig?
If you ship personal property via UPS or common carrier, don’t give them the address where you intend to locate, not even the city. Simply tell them to ship to one of their pick-up points reasonably nearby your new location. Tell them you won’t have a definite address for several weeks, and that you will pick the stuff up “Will Call”. To put a good kink in pursuers’ trail, collect your items at this latter destination and ship again, via another carrier, to a location nearer your actual destination. Do the “Will Call” number again, though. A cardinal operating procedure is never to establish a link between the new and the old. Use blind addresses, aliases and other covers to screen the actual transactions. Time delays work in your favor also, the longer the better.
If you decide to hawk your possessions before disappearing, be extremely careful not to give away your real reasons for doing so (you could be going into missionary work in Uruguay), and definitely not the destination you have in mind. You could even pretend you are an employee of the person moving, and that the “boss” is moving his business to another state. A gambit used by many fly-by-night employers, such as carnival
operators, is to claim that they can never make decisions (write checks) without their “brother’s” approval and signature. Gee, they’d love to pay you, but their “brother” is tied up out of town until a week from next Tuesday…. Meanwhile, the operator splits.
If you decide to use a pawnshop for certain items, again, be discreet and careful not to divulge helpful information regarding your move. Pawnshops are natural haunts for snoops. Unless you’re used to dealing with them, it might be safest to sell your items openly. Pawnshop operators are very astute observers of people, and you could easily tip them off without intending to. They can sense desperation before you even come through the door.
Although procedures vary from state to state, it is generally possible one way or another to trace a person through his vehicle registration. If you plan to take your car with you, as a first measure simply don’t notify the Motor Vehicle people of your change of address. Sometime before you must pay registration fees again, either sell the car outright, or, arrange a dummy sale to yourself under your new name–a transaction that can often be done by mail.
There is a national clearinghouse for vehicle registrations, which mean a particular vehicle, if properly registered, can be traced through its various sequential owners. It would be a shame that one’s love for his car were greater than for his personal freedom, but many people will want to “take it with them”. A two-stage dummy sale would be much safer, especially if one of the transactions took place in another state. Registering the car in the name of a business could be another ploy to consider. The registration of other personal property, such as boats, trailers, and airplanes should be considered in the same light as that for automobiles.
Allusions to “going back East”, or “returning to college”, can be helpful smoke screens in evading inquisitive landlords. Never let them know where you’re really going.
J. Edgar Hoover stated many times that fully 90% of all arrests by the FBI are due directly to the “helpful cooperation” of neighbors and relatives. Need we say more?
Should you have school-age children and not want them to attend public schools, you can:
a. Find a suitable private school,
b. b. Tell neighbors the children are feeble-minded and that you are
tutoring them at home,
c. Tell the inquisitive you are a transient visitor from Mississippi, Virginia, or South Carolina, states which have repealed compulsory attendance laws,
d. d. Move every three months or so to prevent rumors from spreading
too far, and/or,
e. Keep the children under cover during school hours.
Don’t take the bus cross-country. Terminals are notorious hangouts for snoop informers who appraise bus travelers as “only niggers, spies, college beatniks, and other commie types”. (You’d never believe who said this, but then again, you may very well know…) _^^^^
Keep your home, job, personal activities and hobbies well separated, even self-contained. Don’t let heat in one area endanger any of the others. How? Read on…
Keep the address of where you actually live a well-guarded secret. This is VERY IMPORTANT.
Never carry your actual address on you or in your car.
Let only those who are trustworthy and have a genuine need know your actual address.
Set up a “legal” address somewhere else, such as a closet at a friend’s house, containing some misleading personal effects (books on subjects you have no interest in, and clothes a few sizes away from your own). He can thus point to something if ever questioned, but, of course, he hasn’t the slightest notion when you’ll be returning from India…
Use this “legal” address for all your ID that you plan on using regularly, such as drivers license or state ID. Provide it also for your employer’s records, should it be required.
If you need a telephone, not only have it unlisted, but have the records in a phony name. Let only the address be correct among the facts you are asked to provide. A small cash deposit is a small price to pay for anonymity.
Rent your apartment, house, etc., under yet another phony name, if you wish. Always pay utility bills and rent with money orders or cash. Cash doesn’t have your name on it, and you never have to provide your correct name on a money order. Keep a few receipts with your current alias written on them in case you still haven’t obtained good ID. Virtually any recognizable paper document “with your name on it” can be good enough for you to “identify” yourself if stopped for questioning. When you are between identities, this is the most convenient way of proving you are at least more “substantial” than an escaped convict…
Receive all your mail at a 24-hour Post Office box. Use your “legal” address to obtain the box, or any “friendly” address for that matter. Once you have the box, and continue to pay the rent for it, your can move every day of the week, and the Post Office won’t care.
Instead of a P.O. box you can employ a mail forwarding service. They will generally cooperate fully with you in your efforts to keep a good distance between you and anyone else, whatever your reasons. Most newspapers carry their ads in the classified section under “Personals”. With two or more services you can route your mail in and out of the country, or from one coast to the other and back again, each mailing under a different “code” name. Houdini never had it so easy.
For people (and bill collectors) you want to “lose”, provide a forwarding address out of the country. You can arrange to have letters mailed from foreign countries stating you have no intention of ever returning. If they are to creditors, tell them to write you off and save the collection expenses.
Another ruse for covering tracks is to write “deceased” on the face of incoming mail. Drop unopened into public mailboxes. All but professional snoops will get the hint.
By far the most useful method of learning about a person “cold” is through his driver’s license, a copy of which any investigator has no difficulty in obtaining. A postage stamp and the right request gets him the information in a few days. The best way to make sure snoopers draw a blank is to change your identity via one of the workable methods detailed in THE PAPER TRIP II, from Eden Press.
Thanks to computers and credit cards, virtually everyone has lost his privacy, but the right maneuvers in the personal identity field can liberate an individual rather quickly from such information tyranny. Indeed, resorting to methods of “disappearing” are really the only feasible ways of evading what amounts to electronic control of your life. When you exercise the option of unplugging yourself from the computerized data exchanges, you can in fact “start all over”, or at least regain and maximize your personal privacy. We think it’s well worth it.
It can be good discipline to do without a savings or checking account. If you must have one, set it up under a good alias for which you will need supportive ID. A drivers license or state ID card under a phony name can be obtained using any of the methods shown in THE PAPER TRIP II, and the Social Security “number” you give can be totally fake, even made up right on the spot. Just remember as you recite your “number” that it has nine digits, however. For IRS purposes, the SS# used for your checking account is of no value, and on your savings account serves
only as a crosscheck for the reporting of interest. This latter purpose, it has been revealed, is of little consequence in that the IRS virtually never bothers to verify interest reporting statements sent in by the banks. They have relied on the “basic honesty” of taxpayers…
A solid set of ID in another name is what can truly be called “freedom insurance”. With the growing threat of arrest and prosecution for leading a “free” life, it’s plainly comforting to have the option to cut and run, even if you choose not to.
Obtaining alternate ID should be done before you get into trouble. Take the time to do it right. In an emergency many other matters will compete for your time. In the future first-class ID may become more difficult to obtain, too.
The best ID to obtain is obviously that which is issued directly by government agencies themselves. Using forged, stolen or counterfeited ID is a bust in itself. Privately issued ID is more lightweight, but in lieu of government-issued ID, can serve the same purpose, namely, protection from harassment. It won’t get you a passport, though.
With “legal” ID you will find no trouble in doing many tasks, which would otherwise prove impossible or extremely difficult at best. Also with “legal” ID the risk of detection is reduced to a minimum. When and if you choose to disappear, you can appear instantly “identifiable”.
With government-issued ID you can effectively erase the curse of a jail or prison record. Tens of thousands of “free” Americans carry with them the permanent label of “felon” or “ex-con”. The real crime begins only after a person leaves the joint; legal and social ostracism continue all their lives. What better reason to disappear?
If you had the misfortune to receive a less-than-honorable discharge from the armed forces (thousands do so annually), the acquisition and use of an alternate identity will be your first step in beginning to live free. Even though you may have lost all or most of your G.I. “benefits”, you’ll at least be able to get a decent job–now. Watch out for fingerprinting, however. Big Brother has your prints, and will be only too happy to prove you’re one of those “Dirty, rotten, rat-fink, Commie deserters”. And you thought honest criminals had it bad…?
Using an alternate identity is another way of covering up a bad employment record, too, particularly if the law was involved in some adverse way, such as in cases of theft, embezzlement, etc. In some occupational circles the word gets around efficiently–and fast.
Many young men of draft age split to Canada during the Vietnam
fiasco to escape what they considered the illegal obligation of fighting an immoral war. Their return was often facilitated by the acquisition of alternate identity. And who knows when the next immoral war will be foisted onus? It can’t hurt to be prepared.
By obtaining the right documents individuals can rather easily take on foreign citizenships, too. Most countries have much more lax “safeguards” against the paper penetration of their document systems than the U.S. Although superficially the more centralized countries appear to
have better control of their subjects; it is precisely this bureaucratic patina of confidence and superiority that makes their record systems more vulnerable to subversion. If bribes and theft don’t work (they usually do), then the documents themselves are very susceptible to forgery and counterfeiting. By approaching the right “trade ministers”, many international businessmen have obtained numerous “legitimate” foreign citizenships, passports included. IT CAN BE DONE, U.S. “law” notwithstanding.
Many people have made regular practice collection agencies through the adroit use of identities. They are living proof that debts belong to yesterday. Financially they live quite free–today.
A quick way up the occupational ladder is to combine mail order school diplomas, certificates, and degrees with expert ID. Not only can a clean break with the past be achieved, but a sharp increase in income as well. The only limit here is your imagination and desire.
Some of the sharpest operators create ID as a physician or clergyman and rake in commercial discounts as well as hundreds of free offers and special deals once their names get on “preferred” mailing lists. Such ID can be of great benefit socially, too.
Alternate ID is the quickest way to starting all over in the credit world. The most atrocious credit record is gone forever when your old name disappears. This is an oversimplification, of course, but what else can be said when your aren’t “you” anymore?
Once some form of commercial or consumer credit is established, it becomes very easy to obtain all the various forms of credit cards, from bankcards to the Travel and Entertainment cards. Complete plans for starting all over in the credit game are outlined and detailed in CREDIT, from Eden Press.
II. LIVING FREE
Avoid attending church. If you must, however, use an alias when attending, and make contributions in cash, never by check. If inquisitive neighbors ask you what church you attend, either name one of a different faith than theirs, or deny interest completely. Give the minister totally false information about yourself, as these good folks are great gossips when approached by snoops.
Never tell neighbors where or for whom you work. Give them false information on this subject. If you are paid by check, DON’T deposit the paycheck in any account with your name on it. The best idea is to go to the bank on which it is drawn and cash it there. If you make a regular practice of this, avoid becoming familiar with any tellers or other bank personnel. Vary the times and days for visiting the bank. Visit different branches of the bank, too.
Another check cashing tip: avoid getting it cashed at your favorite bar or tavern. FBI agents probably spend at least a third of their working hours hanging around such places, as they seem to attract the kinds of people they are looking for. Anytime there is a bank robbery, the first places the FBI checks out are all the bars within the immediate vicinity of the robbery. Don’t laugh. It’s true because it works.
Be wary of answering “personal” ads in newspapers, as well as job offers too neatly tailored to the type of work you did before disappearing. If the ad calls for replying to a box number at the newspaper, disregard totally: it’s very likely a trap. Reply only to ads that can guarantee not having to give yourself away, such as offers for appointments at known companies. If phone numbers are provided in the ad, call only from a pay phone. There’s always the possibility you might be calling directly to a bill collector or private investigator that will give you enough patter to smoke you out.
For some really unique ways to find employment, Eden Press distributes HOW TO STEAL A JOB, literally every dishonest way there is to gain honest employment. With the techniques in this book, YOU can call all the shots. Well worth reading even for those who already have a job, too. Someone could be gunning for you. This book will open your eyes.
On the job, avoid giving background information to fellow workers. If you’re planning to stay on the job only a short while, however, make an effort to plant false and misleading information in the minds of the other workers, such as your favorite pastimes, places you’d like to travel to or live someday, and your plans for the future. Insulate your private self by keeping your personal interests and ideas to yourself alone. Share the spurious with the curious.
Don’t subscribe to any local newspapers delivered by carriers. Buy what you need at a news rack. These cute kids have sometimes been “helpful” sources of information about people’s habits at home.
Don’t be obvious in your living habits. Turn lights off at a decent hour, keep stereo music from annoying neighbors, don’t place empty pony kegs on the front porch, and don’t have pets that stray or annoy. Don’t do major engine overhauls in the driveway, either.
Be very careful about who comes to see you at your residence. Avoid anything unusual which might spark the interest of neighbors. If what you do or the people with whom you must deal are “interesting”, it might be best to arrange get-togethers elsewhere. Keep your nest clean–good “criminal” advice.
Avoid using banks except for actually cashing checks given you by other people. Try to conduct your affairs with cash and money orders. When using the latter, never write your name on the face or the line marked “Payer”. Use fake names, account numbers, or business names.
For most purposes money orders can be considered “untraceable”, since the issuing institutions (American Express, banks, US Post Office) file the paid orders by number only, not by other criteria which might tend to give you away. People and businesses to whom you might remit money orders virtually never record this number, either. They are usually happy to be paid by money order and will consider it the same as cash. Individuals wanting to hide income and/or otherwise disguise their financial dealings find money orders most useful in shortchanging the bandits at IRS, too.
Undertakers are another source like ministers, in that they are good talkers. If you have to deal with one, be on your guard with what you tell him. If you are called on to provide information for a death certificate, give him only the data he actually needs. It should be easy to appear too grief-stricken to want to chat…
Whenever you need the services of a physician, dentist, hospital, etc., make it standard practice to use an alias and an address other than where you live. Pay in cash. Recite’-don’t display’-your “drivers license” number and Social Security Number, making sure they are totally fake. Other data requested, such as employer, birthdate, etc., should be misleading. Ignore the “warning” at the top of some hospital forms that federal law requires honest information. We’ve never heard of anyone getting busted for such a “crime” that also paid his bill. Fraud is fraud, but identity is your business. Medical records are very definitely NOT confidential. How else would life and health insurance companies be able to decide so imperiously who “deserves” their coverage, and at what rates…? For most people, medical insurance itself is a fraud.
Don’t have milk or other items delivered to you on a regular schedule. The fewer people seen calling at your residence, the safer. Neighbors will often notice home deliveries, which can prove to be fertile leads for future snoops.
Avoid membership in political groups or other civic organizations. As a rule these groups are filled with super sneaky, nosey individuals more willing than not to stab someone in the back if it suits their selfish purposes. Total snakes.
Arrange to have your mail sent to a 24-hour Post Office box, or to a mail drop or mail forwarding service. This way the only mail to be left at your residence will be the “Occupant” variety. Make it a rule NEVER to sign for certified or registered mail. Tell the carrier that you are not the person named on the receipt, or that so-and-so moved months ago. Where? Austria. . . . , Or was it Australia?
Avoid having arguments or run-ins with neighbors. An old, unresolved grudge might be just the spark that sends an investigator to your new location. “Getting even” is a passion few people can resist.
If a snoop is trying to trace you by telephone he may invite you to call him person-to-person collect. DON’T DO IT. Ignore the request, no matter what the excuse is. You might be tempted with some pie-in-the-sky lie, but what he’s really after is your location. If you don’t give yourself away in the conversation, he will simply call the operator back for time and charges, and while she’s at it, the location of the telephone originating the call. She will be only too happy to help.
If you have to live in a motel, hotel or nosey apartment complex, always make it a point to be ordinary and outwardly polite to any employees on the premises. Give them no reason to remember you other than as a normal person. Freaky behavior is easily noticed and remembered by telephone operators, janitors, maids, superintendents, house detectives, and bellboys. Tips make them TALK, too.
It’s safest not to take in roomers or boarders, even though they can help with expenses and provide companionship. The fact is, they can get “too close” to you by picking up all kinds of information tidbits which could come back to haunt you should certain kinds of third parties start pumping them. Even though you might feel you could trust them, it’s very easy for a friend to give you away. . Innocently.
In changing to a new identity within the same general area, make it your policy to patronize none of the commercial establishments you did before the name change. This would include service-oriented businesses, too, such as shoe repairs, TV repairs, photographers, cleaners, poodle parlors and massage parlors. If you or a member of your family had been assisted by such charity organizations as the March of Dimes or Community Chest, make sure that future aid is obtained from some other organization.
If you need to have prescriptions filled often, do two things: 1) Have them filled by different pharmacies; don’t patronize the same one repeatedly, and, 2) Never give the pharmacist your correct address and/or telephone number. If you are in need of continuing prescription, such as for certain heart conditions or diabetes, consider having it filled by mail from one of the large interstate mail-order pharmacies. These outfits usually offer greatly reduced prices as well, as they are willing to deal in generics, as opposed to strictly name-brand drugs. Check ‘ em out.
Try to avoid all contact with law enforcement people. They are like sponges whenever they deal with the public: they take in endless quantities of information whether you are the victim or the perpetrator. When approached by investigators and spies, they just love to spill out all they know, and sometimes get in on the act themselves. Avoid trouble and avoid cops.
Credit bureaus and department stores will have credit files on you if you’ve used them in the past. It would be safest to avoid using credit in the future, but if you need to get plugged back into the credit scene, it would be advisable first to read our own book, CREDIT, to see how credit can be set up from scratch under new identity. This useful book has the kind of inside information one needs to make the credit-granting system perform to his special situation.
If you follow our suggestions regarding delivery of your mail, you will naturally never accept any Registered or Certified mail at your address. Since the carrier will never know your identity by leaving only mail addressed “Occupant”, you can safely tell him that you are not whoever is named on the piece of mail he is trying to deliver. Don’t be rude or arouse suspicion, simply help him do his job by telling him there is no such person at your address. If he asks who you are, he’s out of line. He will return the letter marked “Unable to Deliver at this Address”, or “Unknown at this Address”, or something else to the same effect.
Sometimes snoops will address mail to a fictitious person “care of” your last known name and address in the hopes it will be forwarded (somehow), and that you will have the stupidity to return it to them with your new address (provided by you). Any suspicious or unfamiliar mail with your new address should simply be marked “Unknown”, “Return to Sender”, etc., and deposited in a public mail box for return.
If the letter doesn’t come back to the sender because you kept it or chucked it, he may well try again with something more enticing, or even pay a personal visit. Tracing by mail is the cheapest route for snoopers, so be on the lockout for any mail you’re not expecting or seems the slightest bit suspicious. This will be the opening salvo in any investigation to determine your whereabouts. Watch your mail!
Providing any information other than return instructions per above can invite disaster, too. Putting on a fake forwarding address, or even a “General Delivery” notice, will tell the sender, when the letter is returned, that someone at the address on the letter knows more than he does. The “Registered Letter”, physical surveillance, or a personal visit will be his next move. You can count on it.
Be especially watchful for any letters with an “Attorney’s” return address. They deserve no more respect than any other letter. If you’re not expecting correspondence from your own attorney, it’s very likely a fake name used by an investigator. This gambit is many times used on third parties (close relatives of yours) in the hopes they know where you really are and that they have the “courtesy” to forward the letter to you. This is a good reason for you NOT to tell relatives where you can be reached. If they don’t know, they can’t tell.
If you can trust a particular person to forward items to your P.O. box or mail forwarding service, at least instruct them to place the letter in another (cover) envelope so that no forwarding instructions are on the face of the original envelope. You can decide what to do with the mail when you get it. If you want it returned, do NOT drop it in a box in your area—the stamp of the main post office near you will likely be on the envelope, much to the glee of the sender. Either send it back to your friend in still another envelope for him to remail locally, or use a mail forwarding service in a distant city to remail per your instructions. Again, BE CAREFUL WITH YOUR MAIL. Knowing how to deal with your mail is vital in disappearing. Think first before acting!!
Avoid drawing attention to yourself. Don’t exhibit “socially unacceptable” behavior PUBLICLY. Cops are programmed to bust anyone who appears “suspicious” (different from them). Jails, psycho wards, and prisons aren’t exactly “free”….
Your appearance, possessions and actions should always justify your presence on a legitimate (conventional) basis. This is the best way to avoid suspicion.
If you are stopped and questioned, always be able to give a reasonable explanation of why you are there, where you are from, and where you are going. Smile and be “helpful”.
A sullen or hostile attitude triggers the cops for a bust–your bust. So go ahead and “Kill the Pigs”–with kindness. You’ll win by keeping your freedom, dig?
Even perfectly legal behavior can arouse suspicion. Avoid such things as solitary walks late at night, or wearing clothing inappropriate for the weather. Store detectives love to follow shoppers wearing oversized clothing, too. The police find it easy, even entertaining, to pin
stray raps on such “suspicious” characters. Days and weeks can go by before they decide they’ve made a “mistake”. Really!
Examine your daily habits and eliminate any that might possibly be regarded as “peculiar”, especially if performed publicly.
Live in a large city where you can have the protection of anonymity. Avoid small towns where the only sport is gossip–about you. Your business should be no one else’s.
Appear to be lower-middle class in your standard of living. Don’t attract the attention given the very poor or the obviously well off.
Rent a house or apartment that appears “respectable”, but no more plush than the average cop can afford.
If you like to live it up, do it somewhere other than around where you live and work. Try Las Vegas, New York, Jamaica, Tokyo, Fiji….
MAY WE RECOMMEND…?
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Dress conventionally. Adopt what you perceive as the broad community standard. Don’t be black or white as long as gray has so many shades. Blend in.
Be clean and neat, never showy or gaudy.
Conformity for guys means neat beard (if any), no long hair or freaky clothes. Biker “colors” are out.
For the ladies, no sexy, convention-flaunting attire such as miniskirts and see-thru blouses without underwear. The man LOVES to drool over “liberated” lassies, and often does more…
Have conventional answers to common questions such as where you are from, where you work, where your family lives, etc. Be vague, however.
There’s less heat in telling plausible lies than in countering with self-righteous silence. The object is to avoid suspicion, so be a “reasonable” person. Lying is not illegal unless you are under oath or perpetrating a fraud.
When confronted by federal agents or other law enforcement officers, you have no obligation to talk to them. If you do, however, make sure you don’t lie. Making false statements to federal officers is a bust! A good way to turn the “meeting” in your favor, is to inform the officer that he should take up the matter with your attorney, whose name and address you are willing to provide. If you don’t have an attorney at present, tell him you are in the process of obtaining one, and that you will so notify him when you do. This will tell the agent-snoop that 1) you are a cool customer who knows how to take care of himself by knowing his rights, and 2) that for him to deal with your attorney will be tantamount to having to take you to court–something he’s obviously not (yet) ready to do. Your talking to the officer could very likely insure you an earlier court date. …If that’s what you want.
It’s perfectly moral to lie to someone who asks about things that are none of his business. HE is the one acting immorally. Don’t forget!
Don’t throw wild parties. Far too many busts come courtesy of tender-eared, blue-nosed, fink-ass neighbors.
Don’t make speed, DMT, THC, acid, or nitro in your kitchen. Windowsills aren’t the safest places to cultivate, either.
Hold your stereo down to “mood level” late at night. Not everyone mellows out with Led Zeppelin or the Stones.
Your neighbors are the most dangerous people you know. You can include relatives here, too. They will ALL snitch without compunction. “Calling the cops” is fair sport in towns of all sizes, so don’t antagonize. Be friendly; stay friendly—but on your terms.
Be superficially “nice” to your neighbors, but have as little as possible to do with them. Ideally, you don’t want them to know anything about you.
Even if you observe all these precautions criminals, both private and public, might still harass you. Whatever you do, don’t blow your cover and thus lead them to suspect you. Keep your temper, be humble and polite, and refrain from shouting matches and/or slugfests. Remember you are a minority of one. “They” still have the guns and bars.
If you’re not content, however, to let vengeance be the Lord’s, at least abided by this cardinal rule of guerrilla warfare: Don’t let the enemy determine your tactics. Retaliate at a time and place with weapons of your choosing.
Any activity that might attract unfavorable attention, such as writing, nude photography, erotic sculpture, etc., should be done under a “nom de plume”. Provide a separate address for any such names. P.O. boxes are fine.
Never express controversial opinions around home or at work. If you preach, do it in another town or state.
Avoid being fingerprinted. Don’t apply for civil service jobs. The FBI would like to have everyone fingerprinted so they could control individual lives, but so far they’ve been stopped.
Stay out of the armed forces. Here again fingerprinting labels you forever with the only method of positive identification.
Don’t apply for security clearances or seek employment in firms, which routinely fingerprint.
Don’t take part in mass demonstrations or dissident activities, which might lead to mass arrests. Fingerprinting would surely follow.
The thumbprint required on applications for driver’s licenses in many states (like California) does not go to the FBI. It is kept with the applications “on file”, and its main purpose seems to be that of psychological deterrence. The states make no efforts to classify the thumbprints, and the FBI is not interested in helping. Applicants who want to make sure their thumbprints are absolutely worthless will press extra hard and make a slight twisting movement with their thumb as it is being printed. The result is a perfect smudge–worthless.
NEVER order utility services in your real name. Utility companies are the first watering hole for skip tracers.
Keep your name out of public records, such as business licenses, permits, tax accounts. Operate under another name or use another person as a front. It’s very easy to file “fictitious firm name statements” using minimal ID.
Always subscribe to magazines and newspapers under alternate names. Pay by mail using money orders. Don’t have your name on the money order.
Likewise, always order merchandise by mail under an alias. Again, pay with money orders without your name on them.
Own real estate under either a cooperative relative’s name, or a fictitious one created especially for the purpose. Names of phony businesses work well here, as it is perfectly understandable and justified for a business to own real property. Since real estate transactions are almost always at “arms length”, it is quite simple to hide behind your agent or broker. In this area money talks more loudly than you do, so it’s not too difficult to arrange things to suit yourself.
If you have to vote use your “legal” address. Just make sure you don’t live there. So-called “voter ID cards” are a snap to obtain, as no proof if identity is required. The only “security” for the registration process is your sworn statement….
Protect the names, addresses and telephone numbers of your friends. Use a code of your own making to disguise the actual names and numbers, or try to memorize what you need to know. You’d be amazed at how much you can remember in this area if you make the effort.
Try to avoid carrying this coded address book with you. Cops always flash on such items, and so-called “rings” are usually busted this way. A smart thing to do would be to carry a dummy book of names and numbers selected at random from the phone book. Keep your working book stashed in a safe place.
This practice protects you, too, inasmuch as suspicion is cast on you should some of your friends be busted and their names appear in your book.
Don’t engage in illegal activity on other people’s property without their express consent. Save the dope and skin scenes for places where no one else can get rousted besides the actual participants.
Don’t ask questions which intrude on the privacy of others. Ask general questions, not specific. One might not want you to know where he works, but wouldn’t mind telling you his occupation.
Adopt the attitude that personal information such as your school background, national origin, interests, politics, family income, etc., is NO ONE’S business but your own. And stick to it!! Snooping will thereby become so difficult that suspicion will be cast on the snooper rather than on you.
When faced with such an inquisitive person, have prepared a set of standard answers that you can deliver without discomfort or concern. But if the person is really obnoxious, give him some out-and-out lies, which, when “reported” in the right places, will make him look more like the ass he is.
Don’t request receipts unless the amount is large. Make them intelligible only to the parties involved. Remember that cash still has no names on it, which is why Big Brother can hardly wait for the day of the “cashless” society.
One CAUTION, however: Most banks have well established policies for recording serial numbers of large denomination bills whenever they are deposited or withdrawn in large amounts. ALL transactions of $10,000 or more are reported to the IRS. So play small and remain inconspicuous.
Payment of taxes of all kinds should be largely a matter of personal convictions. The public debate on “tax protest” is endless, so only a few generally observed practices would be mentioned here.
The basic rule, in which even the IRS concurs, is pay only what you are liable for. This means taking advantage of any and all loopholes to the fullest with the ultimate aim of paying no tax whatever. Don’t forget, however, that most federal prisons have rather distinguished populations of tax-evading accountants, attorneys, businessmen and politicians. If avoiding personal income tax, both state and federal, is your goal, by all means study well or seek competent advice. Texas and Nevada still have no state income taxes, in case you’re thinking of relocating to beat some taxes…
Sales and use taxes can often be avoided by buying consumer items through personal channels such as friends, bazaars, swap meets (some), classified want ads, bartering, and business exchanges. Out-of-state mail order purchases are exempt from local taxes, too.
Sharp practices, such as claiming 10 or 12 exemptions to reduce the weekly bite of withholding, or making a deal with your employer to be paid in cash (which a great many do willingly) are ways of lessening, even eliminating your tax, but can’t be recommended if you plan on remaining in the same job for over a year or so, or if you don’t wish to live with a solid alternate identity.
A “compromise” in the above dilemma is to maintain a minimal tax profile, but plan on earning the bulk of your income through non-recorded means, say, and odd jobs for cash. Lead a “straight” life for the tax vultures, but live “underground” with another trade and/or name.
In seeking employment you are usually asked for former job references. If you know that some of them will be negative DON’T LIST THEM! For the resulting “gaps” in your employment history, have already prepared the names and addresses of your former “employers”. They could be local or out-of-state, in which case they probably won’t be verified except by mail. Of course you will be prepared for this by listing a mail forwarding service’s address as that of your former “employer”. Merely pay the first month’s fee and notify the service of your code name–a company (“employer”). You will then be able to rewrite your own employment history. Oh Happy Day! Using attendance at school can also cover gaps or travel abroad as alternatives to negative job references.
For local job references, a good trick is to ask, or pay, a businessman’s secretary to give all the goody information right over the telephone. Provide the phone number on the application, naturally, but remember that the number may very well be verified first by a call
to Information. When it checks out, your application will appear quite honest, won’t it?
Personal references on either employment or credit applications
are a laugh. They are virtually never verified. Provide them, of course, but feel no compunction whatever in lifting random names and assumed relationships right from the phone book. A locally known doctor or minister is a safe bet, too.
For credit references bear in mind that outfits like big department stores and most credit unions will not give out information to ANYONE on one of their customer’s or member’s accounts. This means you can use any number of these references with impunity when applying for credit as the lender will not be able to verify one way or the other if your application is true–a fact he will definitely NOT tell you, however. A complete guide to establishing credit and obtaining credit cards is our own book, CREDIT! Very useful, indeed.
Consider using a typewriter for all your correspondence, as it is not only more impersonal, but also impossible to be “traced” to you. Whereas handwriting can give you away, typewriting cannot. Only the machine itself can be shown to be the one used for a particular piece of correspondence. Electric machines are even more impersonal than manual in that the striking pressure is uniform for all letters. Manual typewriting can show that you have a weak “a” or a strong “k” or “c”, for example. Be careful, too, of allowing the keys to clog to the point that the enclosed portions of letters begin to fill in. When the “e” and the “o” look alike, it’s time to get out the gum cleaner. Typewriters using the newer carbon ribbons do not have this problem.
As an added layer of protection for your correspondence, consider mailing a Xerox copy of the letter. There will be enough distortion in the copy to make tracing you mighty difficult. Should you begin using a typewriter regularly, you might plan to trade it in every six months or so for another model, different typeface, etc. They are rather cheap to rent, so this is a good possibility, too. Keep ’em guessing….
When going from the “old you” to the “new you”, it is usually a good idea to drop any old hobbies that could provide the basis for an informal “stakeout” of your possible activities. If it is known that you can never pass a museum or fishing pier without indulging yourself, you have an automatic lead to those who might want to go looking for you. Changing activities can be an excellent way of building your new identity. Not only will the old ways fade faster, but also your new acquaintances will provide the support and interest in creating the new identity more rapidly and completely.
Whenever you rent a new place to live, insist on the right to change the locks. Refuse to give the landlord the new key, too. Many times people have arrived home to find a snoopy landlord (lady, too) going through personal belongings, papers, etc. Items and possessions which might tend to give someone the wrong ideas about your identity, activities, interests, etc., should be stored in locked boxes of sturdy construction. Misleading items can be placed innocently in the open. Be observant of items being rearranged or moved, too. Until you’re secure in your new location, you might take the precaution of placing hairs on doorjambs, threads across the threshold, matches on the tops of doors. When choosing locks and keys, select those not readily available in the area.