Janet Malone, 68, had $18,775 seized from her — money that was legally earned and was legally bestowed to her by her late husband, Ronald Malone. The problem, according to the government, was the fact that she deposited it in several lumps instead of all at once.
According to the Associated Press, Mrs. Malone deposited the cash in increments between $5,800 and $9,000. The widow's private financial affairs evidently set off red flags under the watchful gaze of the federal government.
The IRS sought out and obtained a warrant in 2013 to seize Mrs. Malone's bank account based on suspicion that the transactions were sized in strategic amounts meant to avoid federal reporting requirements, which take place on transactions valued at $10,000 or more. The crime is referred to as "structuring" one's deposits.
Police State USA described this offensive law in a previous article:
Once accused of structuring deposits, Americans are deprived of their bank accounts and forced to prove their innocence using whatever remaining resources they can scrape together. Some manage to eventually get their money back, after months of fighting in court. Due to the high cost of legal services, the victims sometimes decide to accept the loss and not invest thousands more into the ordeal.The federal government began surveilling Americans' banking activities under President Nixon with the The Bank Secrecy Act of 1970, which required that banks file "Currency Transaction Reports" to the IRS (specifically: FinCEN Form 112) on every individual who deposits or withdraws more than $10,000 in cash to or from a personal bank account on a given day. These reports indicate the financial activities that took place and include the individual's bank account number, name, address, and social security number.
The financial dragnet was pitched to America as a way to catch tax evaders and money launderers. It actually marked the end of financial privacy and soon evolved into a tool used to harass innocent Americans. The IRS enjoyed a battery of new powers, which were increased several times thereafter.
In 2001, the USA PATRIOT Act expanded financial surveillance efforts to the so-called War on Terror. The Patriot Act was said to contain a "package of unconstitutional expansions of the financial police state," according to one of bill's few dissenters, Congressman Ron Paul of Texas. Among other things, the law prohibited bankers from informing customers that they had been reported to the IRS. Paul said the bill had "more to do with the ongoing war against financial privacy than with the war against international terrorism,"
"You won't prosecute a widow," Janet Malone pleaded, according to an affidavit. The government accepted her challenge.
Prosecutors not only declined to drop the civil forfeiture case against Mrs. Malone, but also slapped the widow with federal misdemeanor charges that she willfully structured her deposits.
The AP reported that Mrs. Malone is expected to plead guilty and let the government keep her money, in a plea exchange for her freedom. The charge carries up to one year in jail and a $250,000 fine.
Victims like Mrs. Malone are not unique. Police State USA wrote about another Iowa woman who recently had her entire bank account seized for the exact same reason. These women, and many other victims of forfeiture, harmed no one and were minding their own business.
One might observe the irony of demanding FinCEN reports, as it seems a bit redundant given the government's disturbing ability to surveil bank accounts and detect Americans "avoiding" the reporting requirements.
Reader Comments
Wow, The word freedom has lost it's definition here in this country, I'm planning on leaving , just so
I may live happier else where. Some place like Russia.
She actually deposited money in a Bank! That is a good way of losing it whether in one lump or several. So it seems her crime is to do her part in trying to keep the banks afloat?
Message from the IRS: Do not put your money in a bank.
She should just have bought gold and silver and kept it somewhere safe or just stuck the notes under a mattress.
In the UK to the best of my knowledge and experience the whole system is still running smoothly. There is the odd story of people being denied access to their money unless they can come up with an explanation as to why they want it and when I had a new boiler fitter recently I was asked to make sure the bank would actually let me have the money ($4000) to pay the bill - I didn't bother. So we are moving in that direction but we are not there yet! I have to say even this seems odd. After all the money just passes from one bank to another so on average transactions do not affect bank reserves. I can understand the system not wanting you to take cash out of a bank but the idea the system wants you not to put money in is rather odd.
As for money laundering: HSBC. They of course are allowed to do this in extremis.
... had $18,775 seized from her ... she deposited it in several lumps ...in increments between $5,800 and $9,000.
So 1 deposit is at $5,800
Another is at $9000
That only leave $3975 ... which is less that $5800 yet "incremental"
Sounds like she may have made only 3 deposits, which is sufficient to come under government scrutiny
This is obviously something that is only applied to the "little people" ...
That's the message;all right. I have listened to some friends tell of being questioned and pressed for reasons as to why they are making cash withdrawals, starting at $4,000, in the USA. These friends buy and sell vehicles for extra income. They are also questioned when they make deposits at that price point..., friendly inquiries ?? from your favorite teller ?? just small talk ? That's what they thought the first time...now it is routine, but no paper work is seen being done by the bank at the time.
They are buying RE and gold instead....as of this year.