http://www.newnetizen.com/various/fincen.htm
Beware of FINCEN
The following is excerpted from Dr. W. G. Hill's "Banking in Silence" Third
Edition for 1997 (UK: Scope International, pp. 93-95).
"Increasingly, computers are used to not only collect data about you, but
more importantly to analyze it with the hope that you will be caught doing
something that has recently been reclassified as illegal behavior. The only
reason that any information about your private affairs has been collected in
the first place is for this express purpose of creating a new class of
criminals. New government police forces have been created to track down and
bankrupt these individuals who have done nothing more than invest their own
money according to their own best interests. In the US, this quasi-secretive
sleuthing operation is known as FINCEN, which stands for the Financial Crimes
Enforcement Network. In the eyes of FINCEN, if you have money you
automatically guilty until proven innocent.
"Since its launch in April of 1990 with a low key champagne reception at the
US Treasury Department, FINCEN has become the most effective financial
investigation unit in the world. It is a state of the art computer snooping
agency and is so effective that when Russian president Boris Yeltsin needed
to locate stolen communist party funds, he asked FINCEN for help. FINCEN was
established by top IRS agent Brian Bruh a few years before his retirement in
October of 1993. In 1991, FINCEN wrote classified reports on 6000
individuals. In 1992, this number had climbed to 12,000 and by 1993, it had
escalated further to a total of 20,000 individuals.
"To date, the agency can boast more than 40,000 confidential snoops as well
as 715 long term investigations known as Strategic Analytical Reports. These
reports invaded the privacy of more than 16,000 other individuals and
entities. Few concerned ever knew that their financial affairs were being the
Pentagon and the CIA. The CIA? Yes, Brian Bruh refuses to discuss his
agency's association with the CIA, but he does not deny that there is one.
His own background includes time at the Pentagon in addition to his many
years with the IRS.
"When facing the public, Brian Bruh claims that FINCEN is all about mapping
the digital trails of dirty money. He lists examples of how the agency has
unearthed profits from drug sales, stolen Savings and Loans money, hidden
political slush funds or the financing conduits of terrorists. He does not
mention that in reality what FINCEN does is far simpler. It involves all of
us, not just terrorists, drug dealers and crooked politicians. It
systematically collates and analyzes public databases on a day to day basis.
It is the only US federal unit devoted solely to this kind of work. The
reason it is so secretive about its operations is that if the public knew
what FINCEN was up to, the public wouldn't stand for it. FINCEN breaches
civil liberties on a day to day basis. In the eyes of Brian Bruh and FINCEN
you need to break a few eggs to make an omelet, invading privacy and peeking
into the personal affairs of each and every one of us is necessary to catch
criminals, so the excuse goes.
"A list of the 40,000 or so 'criminals' that FINCEN has netted, shows that
less than ten per cent of them are bad buys in the moral sense of the word.
The vast majority, or some 35,000 people, were merely trying to keep a bit of
their own money away from the grabbing hands of the taxman. They didn't
succeed. Many more are undoubtedly soon to follow. If you ever find yourself
that target of a FINCEN investigation, your chances of outwitting the agency
are almost nonexistent. To being with, you will not even be aware of the
increased attention pointed in your direction. Furthermore, you will also be
pitted against the following forces:
*The Internal Revenue Service (IRS) *The Federal Bureau of Investigation
(FBI) *The Drug Enforcement Agency (DEA) *The Central Intelligence Agency
(CIA) *The State Department's Bureau of Intelligence and Research (INR) *The
Secret Service *Customs Agents *Postal Inspectors
"Each of these government agencies is pooled together by FINCEN, which acts
as coordinator for the attack on your privacy. According to senior
intelligence officers, these investigative units can access the resources of
the CIA, the Defense Intelligence Agency and the National Security Agency.
The latter is important, as the National Security Agency routinely intercepts
all data on electronic currency movements into and out of the country. This
data then makes its way to FINCEN.
"The implications of having this massive amount of data at the disposal of
one government is staggering. Peter Djinis is the director of the Treasury
Department's Office of Financial Enforcement and one of the few Treasury
officials close to FINCEN's activities. Testifying before Congress about
FINCEN, he said, 'It's the first ever government wide, multi-source
intelligence and analytical network brought together under one roof to combat
financial crimes.' In his view if you help your neighbor repair the leak on
his roof and then let him do you a favor in return without declaring the
value of his transaction as income, you have committed a financial crime.
"As would be expected, bureaucrats love FINCEN. A senior official in the
General Accounting Office (GAO) claims that it is absolutely necessary. His
audit of the agency avoided the host of emerging concerns about privacy,
civil rights and the appropriate role of the CIA and other spies spying on
their own citizens. FINCEN will not reveal how it works or what it is capable
of doing. The few examples that have surfaced have all been very routine
run-of-the-mill jobs that utilize only a fraction of FINCEN's computer power.
One concerns a so-called money launderer called John and was reported by
Anthony L. Kimery, covering financial industry regulatory affairs as an
editor at American Banker Newsletters. Here, with the kind permission of the
publishers, is his report verbatim (Hill, Scope, pp. 93-95)."
HOW TO BUST A JOHN
"There wasn't much to go on. The police salvaged the slip of paper that a
small-time East Coast criminal tried to eat before arrested but on it they
found scribbled only a telephone number and what appeared to be the name
"John." This frustrated the police. They had anticipated more incriminating
information on the man they believed was the supplier not only to the dealer
they had just busted but also to dozens of other street corner crack
peddlers. With two slim leads, the police weren't technically equipped to do
much more than antiquated detective work that probably wouldn't yield
evidence they could use to indict John. So they turned to FINCEN for the
digital sleuthing they needed.
"Less than 45 minutes after receiving the official police request for help,
FINCEN had retrieved enough evidence of criminal wrongdoing from government
databases that the district attorney prosecuting the case was able to seek
indictments against John on charges of money laundering and conspiracy to
traffic narcotics. The local police were impressed. The whiz kids at FINCEN
to pull them out of the electronic-sleuthing quicksand. The case of John is a
good example of one of their less complex assignments, and it illustrates the
adeptness with which the government can collate existing financial data.
"Seated at a computer terminal inside FINCEN's command post, a FINCEN analyst
began the hunt. He started by querying a database of business phone numbers.
He scored a hit with the number of a local restaurant. Next he entered the
Currency and Banking Database (CBDB), an IRS database accessed through the
Currency and Banking Retrieval System. CBDB contains roughly 50 million
Currency Transaction Reports (CTRs), which document all [cash] financial
transactions of more than US$10,000. By law these transactions must be filed
by banks, S & Ls, credit unions, securities brokers, casinos and other
individuals and businesses engaged in the exchange of large sums of money.
"The analyst narrowed his quest by searching for CTRs filed for transactions
deemed suspicious. Financial institutions must still file a CTR, or IRS Form
4789, if a transaction under US$10,000 is considered suspicious under the
terms of an extensive federal government list. There was a hit. A series of
'suspicious' CTRs existed in the restaurant's zip code. Punching up images of
the identified CTRs on his terminal, the FINCEN analyst noted that the
transactions were made by a person whose first name was John. The CTRs were
suspicious all right. They were submitted for a series of transactions each
in the amount of US$9500, just below the CTR threshold of US$10,000. This was
hard evidence that John structured the deposits to avoid filing a Form 4789,
and that is a federal crime.
"Selecting one of the CRTs for an expanded review, the analyst got John's
full name, social security number, date of birth, home address, drivers'
license number and other statistics, including bank account numbers. Plunging
back into the IRS database, the analyst broadened his search for all CTRs
filed on behalf of the suspect, including non-suspicious CTRs. Only 20
reports deemed suspicious popped up on the screen, but more than 150 CTRs
were filed in all. A review of the non-suspicious ones revealed that on
several, John listed his occupation as the owner or manager of the restaurant
identified by the telephone number on the slip of paper taken from the
arrested criminal. The connection between the name and the phone number
originally given to FINCEN was secured.
"The FINCEN analyst then tapped commercial and government databases and
turned up business information on the restaurant showing that John had
reported an expected revenue for his eatery of substantially less than the
money he had been depositing, as indicated by the CTRs. Fishing in a database
of local tax assessment records, the analyst discovered that John owned other
properties and businesses. With the names of these other companies, the
analyst went back into the CTR database and found that suspicious transaction
reports were filed on several of them as well.
"As routine as such assignments as this case may be, the chumminess between
FINCEN and the intelligence community raises serious questions about the
privacy and security of the financial records of citizens John and Jane Doe,
considering the intelligence community's historic penchant for illegal spying
on non-criminals. Given the ease with which the government can now tap into
an individual's or business's financial records on a whim, these questions
have received far too little scrutiny (Hill, Scope Int., pp. 95-96)."
BEWARE OF OPERATION GATEWAY
"It started in July 1993 on a hot and dusty summer day in Texas. Since then,
Operation Gateway has spread throughout every American state. In the process,
lives have been wrecked and families torn apart. Recently, this menace has
moved into other western countries as well. Gateway is inherently prone to
abuse and provides, in the words of one banking professional, a 'disturbing
indication of the direction in which the government is moving.'
"Gateway gives state and local law enforcement officials direct access to
massive federal Financial Database, a huge mountain of personal financial
details known in federal agent speak as the FDB. All of what the enormous FDB
contains can rightly be classified as sensitive information. It contains,
among other things, all of the records that have been filed by financial
institutions under various acts that have been instituted over the last 26
years. In case your're worried, here's the partial list: *Currency
Transactions Reports (CTRs) *Suspicious Transaction Reports *International
Transportation of Currency or Monetary Instruments Reports *Foreign Bank and
Financial Accounts Reports
"Operation Gateway is soon to be expanded so that it can allow for direct
access. In other words, every local trooper or sheriff's hoodlum will be able
to tap into this database. From the massive, FDB, state governments can
download hardcopies of documents principally containing information on
deposits, withdrawals and the movement of large sums of currency. All
Americans are in the base as well as a large number of foreigners. The FDB
has nothing to do whatsoever with the war on drugs or catching criminals.
Beware Operation Gateway. It is Big Brother's electronic eye that watches you
and keeps tabs on every move you make.
"FINCEN state coordinators will handle the log-ons. They think they're the
only ones smart enough to surf the electronic waves. In their eyes, the
50,000 federal agents and 500,000 police officers (NOTE: Clinton added
100,000 more police officers before he left office) would otherwise wreck the
sensitive circuits. Under Gateway, results from all queries are written into
a master audit file that is automatically compared against other requests and
databases to track whether the subject of the inquiry is of interest to
another agency or has popped up in a record somewhere else. If you think this
is bad, hold your horses. Your worst 1984 nightmares have only just begun
(Hill, Scope, 96-97).
