Guest Post: Why 308,127,404 Americans Are Going To Get Hosed

Tyler Durden's picture

Submitted by Simon Black from Sovereign Man

Why 308,127,404 Americans Are Going To Get Hosed

Last week, the US government’s Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department, published its 2011 annual report. There are a few numbers that are pretty startling.

We’ve discussed before that FinCEN is the executive agency tasked with ensuring that every US banker is an unpaid government spy through Suspicious Activity Reports.

A Suspicious Activity Report, or SAR, includes details of any transaction that may be deemed ‘suspicious’. Naturally, there’s no clear guidance on what is/is not considered suspicious. Banks, brokerages, money service businesses, precious metals dealers… even casinos are required by law to fill them out.

If you withdraw an unusual amount of cash from your bank account, that could be deemed suspicious. If you set up a new payee in your billpay service, that could be deemed suspicious. Anything and everything is fair game.

Banks and other businesses who do not fill out SARs face hefty penalties, including imprisonment. If they disclose to a customer that s/he is the subject of a SAR, they have hefty penalties, including imprisonment.

When push comes to shove and they have to choose between a nasty penalty, or submitting a SAR about your unusual cash withdrawal, which option do you think they’ll pick?

Unsurprisingly, nearly 1.5 million ‘suspicious activity reports’ were filed across the US banking system in 2011, well over twice the number reported in 2004. On top of this, there were an additional -14.8 million- ‘currency transaction reports’ filed in 2011, a 6% jump over last year.

It’s an unfortunate trend which highlights not only the end of financial privacy, but also the massive amount of data being collected by the government to keep tabs on its citizens.

According to this year’s report, a full 36 distinct federal law enforcement agencies requested information from FinCEN (and even more who haven’t). Three dozen. And that doesn’t include state or local law enforcement.

That there are this many federal law enforcement agencies to begin with is mind-boggling… let alone the thought that some knucklehead at the Fish and Wildlife Service has access to bank records.

This is one reason why international diversification is so important– the likelihood of such collection and monitoring is greatly reduced when you bank overseas. Moreover, should one of these dozens of agencies or courts decide that your ‘suspicious activity’ warrants locking you out of your accounts, they have zero jurisdiction overseas.

This is a common tactic in the US; financial activity is one of the many, many areas with a ‘guilty until proven innocent’ burden of proof. You don’t even need to be doing anything wrong (which is the case most of the time this happens) for one of these agencies to freeze your account ‘pending investigation’ with a simple phone call. Good luck getting it unfrozen.

They don’t have that kind of pull overseas. That’s why we’ve been writing for years to more than 100,000 subscribers that the most important thing you can do for your financial security is to have a foreign bank account, no matter where you’re from. Planting a ‘banking flag’ outside of your home country is a very prudent, simple insurance policy.

More and more people are starting to wake up to this reality. FinCEN also tracks the Report of Foreign Bank Account and Financial Accounts, commonly known as the FBAR. This form is required to be submitted by any US taxpayer with foreign financial accounts whose aggregate total exceeded $10,000 at any point during the year.

For example, if you have a bank account in Uruguay with $9,000, and a small brokerage account in Panama with $2,000, you would have to submit the form by June 30th of each year to the Treasury Department.

In 2011, 618,134 US taxpayers filed an FBAR (which would have covered the calendar year 2010). This is more than a 100% increase over the filings just two years ago… a huge jump. I suspect the 2012 figures will show similar growth.

As a percentage of the population, though, the number is embryonic. It still leaves 308,127,404 Americans who have no backup plan, no insurance policy for their hard-earned savings. In other words, 99.8% of the population holds all of their money in an insolvent, corrupted, government-controlled, unsecured (though cleverly disguised) banking system.

Are you one of the 0.2% who is paying attention? If not, what’s holding you back? I’d like to know.

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smiler03's picture

Most European Banks won't let Americans open accounts now. The US has made it too onerous for the banks.

edit: unless they're domiciled of course.

colonial's picture

At CES, one of the themes is advancements in smartphones, which will lead to all kinds of smart appliances that gather and send data is having an increasingly negative impact on privacy in general. 

Far too many people never bother to read the protections they give away when they download an app or a computer program.  Its getting worse, not better. 

Ron Paul should emrace this immediately as his main campaign themes are losing momentum.  If Paul is going to be a truly disruptive force, privacy of americans is a topic he should include in his campaign. 

NotApplicable's picture

Someday every single thing that is plugged into an electrical outlet with a  chip in it will have it's own IP address, and will be controllable via the net.

The day before that, though, the "authorities" will demand a back-door key.

TruthInSunshine's picture

In the year 2014, your car will lock its own doors, forcibly strap its seatbelt around you (if it's not already on), and drive you to your nearest detention center, should it detect any illicit activity happening within the vehicle.

the grateful unemployed's picture

and if its a Toyota it will be full throttle all the way

sgt_doom's picture

(Two days ago....)

"In a tweet early this morning, cybersecurity researcher Christopher Soghoian pointed to an internal memo of India's Military Intelligence that has been liberated by hackers and posted on the Net. The memo suggests that, "in exchange for the Indian market presence" mobile device manufacturers, including RIM, Nokia, and Apple (collectively defined in the document as "RINOA") have agreed to provide backdoor access on their devices. The Indian government then "utilized backdoors provided by RINOA" to intercept internal emails of the U.S.-China Economic and Security Review Commission, a U.S. government body with a mandate to monitor, investigate and report to Congress on 'the national security implications of the bilateral trade and economic relationship' between the U.S. and China. Manan Kakkar, an Indian blogger for ZDNet, has also picked up the story and writes that it may be the fruits of an earlier hack of Symantec. If Apple is providing governments with a backdoor to iOS, can we assume that they have also done so with Mac OS X?"

NaN's picture

Note to self: Open source wins.

my puppy for prez's picture

That's already happening with SMART electric meters.  Texas is one of the big test states, and those bastards installed one on my house while I wasn't home!  My 80 yr old mom told the young technician that she did not want the smart meter when he came, and he said that he would leave, but if she resisted, they would bring the police to enforce the installment!

I will be fighting this as soon as I get a couple of huge jobs done.  There are anti-smart meter groups popping up all over the world on the internet, and not only are they a HUGE invasion of privacy and control mechanism, they are causing people serious health problems and electrical/appliance malfunctions in their homes.

This is about Agenda 21 and the complete global police state.  I am PISSED!

debtandtaxes's picture

Just FYI - they have SpyMeters - aka SmartMeters in Toronto Canada and forced us to allow their iinstallation about a year ago.  I delayed it until they threatened us with fines and prosecution for not complying.  They are used by local cops to look for "above average" usage to get search warrants to look for cultivation of marijuana.  I know.  I'm a criminal defence lawyer and I've seen the search warrant applications.  Lots of them.

geekgrrl's picture

They're rolling them out everywhere here in Oregon. It's the same deal as in Texas. As to your point about their use in drug interdiction, I'm sure you're right. Electrical demand of grow lights is high, and the cycing and period will show up in the consumption and stand out like a sore thumb. I'm curious why you think the policy of using electrical usage as probable cause is being done? As a criminal defense lawyer, do you think it's being done to "help get drugs off the street," or is there some other reason?

The reason I ask is because all this drug interdiction stuff and in fact the whole "War on Drugs," looks to me like the elimination of competition for drug-running government agencies (e.g. CIA) and the pharma companies. The pharma industry very clearly is the best possible example that we as a society don't have any problem with drugs, as long as they are controlled by major corporations. They've even made pills like Marinol that are analogs of THC. So if THC is legal for corporations to produce and doctors to prescribe, why it is it illegal for individuals to produce? I think this question has one and only one answer, but I'm very curious how a criminal defense attorney would see it.

aphlaque_duck's picture

I know they know exactly what I have. But they'll have to kill me for it instead of just stealing it with the stroke of a key.

NotApplicable's picture

Sad thing is, they don't have a problem with that. They need the occasional stand-out to make an example out of in order to scare the rest into silent submission.

aphlaque_duck's picture

Give me liberty, or give me death, bitchez.

smiler03's picture

No problem. Have a nice death.

carguym14's picture

That can work both ways.........

rumblefish's picture

To add on to the authors comments on SAR's........

I work in a financial institution. We get reports from the feds that will say our SARS reporting is low. We get encouraged to increase our reporting. It's very effed up.

NotApplicable's picture

As I just mentioned, they're always looking to increase the fear. After all, what good is violent coercion if you can't leverage it up constantly?

the grateful unemployed's picture

so you've seen a copy of the reporting rules?

you follow the rules?

you fill out the paperwork (pain in the neck, agreed)?

MachoMan's picture

And you probably get just as good of intelligence out of it as you would waterboarding someone who doesn't actually know anything relevant to the particular inquiry... 

DosZap's picture


 We get encouraged to increase our reporting. It's very effed up


So, bottom line it is just one more way to take money under false pretenses from individuals.

They keep this shit up, and ANYONE with a brain will remove all their funds from the banks.

This will definitely decreases the SAR's reports.

In view of ALL else that's going on, I for one  have had about ALL of this shit I am willling to take.I have said this many times, EVERYONE is guilty of something,there are just to many laws in place, for you not to have unknowingly broken them.

God help whoever crosses me first.( I hide zero transactions, and leave a paper trail on every major deal I do), all others purchases are cash,it's just easier than getting huge credit card bill at the end  of the month.

smiler03's picture

will remove all their funds from the banks.

Well that's an immediate SAR for you then buddy.


Gamma735's picture

Do you think this forum is not monitored?  Do you think that is air your are breathing?

lemonobrien's picture

i know its monitored.... shhhh.

the grateful unemployed's picture

are they flouidating the air yet? "Ice Cream mandrake. They're putting flouride in Ice Cream.." Gen Ripper in Dr Strangelove (not as crazy as we thought at the time)

the grateful unemployed's picture

I've seen a copy of the guidelines, they're online probably. the cutoff number used to be $5000. if you paid off your credit card balance of $5000 or more, they put a hold on the check. so yes pay attention, and not sure what the rules are now, but these allegations of bankers reporting "suspicious" activity are crap unless you can show me one instance of a bank rolling over on some poor old lady just to meet their quota. the government spells out the rules, as individual you should be aware and avoid having your payments tagged.

if you deposit a large sum of cash they are obliged to ask you where you got the money. if you spread the deposits out, or you have some documentary evidence, like a 1099, or a bill of sale on an item, save yourself some trouble and tell the man. these laws are meant to catch money laundering operations, which is the defintiion of the Federal Reserve in a nutshell. and they can sell drugs and you can't. but that's the way it works, this is nothing new.

donsluck's picture

Here's what's new. My LOCAL savings bank asks me every time I withdraw $3,000 cash. My business income goes into the savings account, and I take a monthly draw for my bills. They always say "we are required to ask what this money is for". Now I give them, on a rotating basis, the following answers:

I'm going to Nevada, it's for hookers.

Guns and ammo.



Phone sex.

I asked them once, "required by whom"? The teller's answer, "the management".

Go figure!

MachoMan's picture

You have to be sure to smile or laugh while you're saying it so they think you're joking...

akak's picture

I would tell them, indignantly, that it is grossly inappropriate for them to be asking ANYTHING of the sort of their custiomers, and to fuck off.

MachoMan's picture

Don't do that...  just tell them that on second thought you'd like to withdraw the entirety of your balance for their inquiry...  and go on down the road.

Bear's picture

Just to let you know:


Hookers+ammo+liquor+porn+phonesex <> $3000

Scisco's picture

Thank you for adding to my list of reasons to hold gold. Reasonably certain it cannot be sniffed out.

smiler03's picture

The metal detector will get you. Or the guy in leather bondage gear who fondles you. 

blu's picture

Increasingly, it appears that the only meaningful way to remain below the radar of unwarranted government scrutiny is -- to be penniless as well as powerless.

But that won't leave us much leverage, will it.

So sometime before then we'll simply have to start l<1LLi|\|g 7h3m.

A most unpleasant prospect.

Tortuga's picture

  I was in this bar last week were all us local hedgies go for refreshment and pool and overheard a fellow say that every time he went to his coin shop, on a dip, this fellow, John Nadler was always ahead of him in the purchase line. I had hoped to be part of the 2% one day but never made it out of the 47%, alas, it just wasn't meant to be. If only I had bought that lotto ticket, i coulda been a contender.

FutureShock's picture

What's holding me back?

The US is the reserve currency with the strongest military. I would expect things in other countries to fail apart well in advance of us and I don't want to be trying to get my money out of some foreign place that might be under siege.  There will be war from not paying foreign bond holders before Americans loose their money. Of course our banks don't have enough  money for all of us but I assume our gov. print for us and default for them.

Canada is a smart choice. They have great resources and a sound financial system and protection for free from us. I will consider when the warning signs evolve and they will not anytime soon.

The incredible can kicking skills of the Eurozone shows me we will have years and years before things accelerate here in the US. 



Waterfallsparkles's picture

I agree.  If there is no FDIC Insurance in the Foreign Bank then you could lose all of your Money.  There is no quarantee that the Foreign Bank could suffer from a run on the Bank, leaving you without the ability to get your Money.

Yes, the idea that a Foreign Bank would be a safe place to put your money is appealing but I think there are downsides to it also.

Although, I do not have gobbs of cash in savings or at home.  Just a little as most of my Money is in Rental Real Estate.  I suppose that if my Bank froze my account I still would have Rental Income to live on.

Alex Kintner's picture

With FDIC total reserves at about $40B*, I recommend getting in line quick when the banks start failing.

* from a 2010 press release. Ha, could be worse now.

Calmyourself's picture

Uh, yeah until code compliance comes sniffing around sees a ripped screen or two and pulls your co..

mayhem_korner's picture

The US is the reserve currency with the strongest military. I would expect things in other countries to fail apart well in advance of us and I don't want to be trying to get my money out of some foreign place that might be under siege.


The U.S. just might become "that foreign place that might be under seige"

There are states aligned with (or neutral to) the U.S. militarily but who have economies propped up by far more austere fiscal policies.  Canada meets the first criteria, not so much on the second.  Australia and Chile are relatively good on these marks, but each has its own internal issues.  I don't think there are any silver bullets, and every state out there has some shade of entrenched socialism, but there are choices.



Bear's picture

I think you hit upon it ... place all your money in Silver Bullets

Waterfallsparkles's picture

I think this is why you should have cash on hand.  What happens if your account is frozen for no good reason?  Could you lose your house because you did not have access to your Money to pay your Mortgage?  How about getting your car repossessed?

Although, there is a risk having Money at home there is a greater risk if you do not have the Money to pay bills like your Mortgage or Car payment.

Think I will stash a little more cash away.  Not getting any interest in the Bank anyway.

CuriousPasserby's picture

There are safe ways to keep money at home. Fake electrical outlet, door trim moulding, in a book. Just leave a note for your heirs in case you check out early you don't want the electricial or book dealer to get it.

Alex Kintner's picture

Ha. I went to that link to see pics of chinese living in rabbit cages. And down the sidebar of the page were teasers to go read gossip about the lavish lives of rich and famous celebrities.

slewie the pi-rat's picture

"It still leaves 308,127,404 Americans who have no backup plan, no insurance policy for their hard-earned savings."

not really, it just leaves that many w/out simon's plan...

Steaming_Wookie_Doo's picture

And if Simon thinks that all 308 million Americans *have* savings, he is delusional. There's probably 50% of the population that have no/minimal savings. We already know about the 40+million who rely on food stamps. Those people are already de facto "all-in" with the govt.

Alpha Monkey's picture

"If there is any disruption to oil production it would be a serious escalation and the government would be likely to use legal or enforcement means to stop it. But I think it is unlikely oil output will be affected," said Kayode Akindele, partner at Lagos-based investment firm 46 Parallels.

"The government will be fairly confident that as long as the security services can keep things under control then people will have to start going back to work. Most people don't have savings so they can't afford to lose out on days of pay."

Hmmm... now why does this sound familiar....