Tag Archives: inspector general

The IRS Intentionally Targeted Innocent Small Business Owners in Order to Steal Millions Via Forfeiture Laws

Earlier this month, a report from the Treasury Department’s Inspector General detailed how the Internal Revenue Service used a restriction on deposits to bilk otherwise law abiding individuals and businesses of millions of dollars using asset forfeiture laws. Those restrictions require that any deposits made to a bank above $10,000 be reported to the IRS. The stated intention of that restriction is to draw attention to profits generated by illegal acts, such as terrorism and the violation of drug prohibitions.

In order to escape that scrutiny, many of those involved in such activities employ what is called “structuring,” which consists of splitting large deposits into multiple smaller deposits that are below that $10,000 threshold. However, many others involved in completely legal activities also do the same thing for various innocent reasons. Those reasons include a lack of awareness of those restrictions, insurance policies that limit coverage of deposits to less than that amount, and simply an effort to avoid extra paperwork (often on the advice of bank employees).

While structuring is illegal under the federal Bank Secrecy Act, according to the Inspector General it is really just a technicality that is intended to allow the initiation of an investigation into whether the deposits in question were derived from illegal activities. Instead, the IRS often used the practice of structuring alone as a justification to seize those deposits, via civil asset forfeiture. They also intentionally targeted small businesses and individuals engaged in legal activities due to the fact that they were less likely to be able to fight the forfeitures and in order to avoid “time consuming” investigations of actual criminals.

Via the Washington Post:

They “were not put in place just so that the Government could enforce the reporting requirements,” as the IG’s report puts it.

But according to the report, that’s exactly what happened at the IRS in recent years. The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indications of connections to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents’ suspicions, leading to the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity.

The IG took a random sample of 278 IRS forfeiture actions in cases where structuring was the primary basis for seizure. The report found that in 91 percent of those cases, the individuals and business had obtained their money legally.

“Most people impacted by the program did not appear to be criminal enterprises engaged in other alleged illegal activity,” according to a news release from the IG. “Rather, they were legal businesses such as jewelry stores, restaurant owners, gas station owners, scrap metal dealers, and others.”

More troubling, the report found that the pattern of seizures — targeting businesses that had obtained their money legally — was deliberate.

“One of the reasons why legal source cases were pursued was that the Department of Justice had encouraged task forces to engage in ‘quick hits,’ where property was more quickly seized and more quickly resolved through negotiation, rather than pursuing cases with other criminal activity (such as drug trafficking and money laundering), which are more time-consuming,” according to the news release.

In most cases, the report found, agents followed a protocol of “seize first, ask questions later.” Agents only questioned individuals and business owners after they had already seized their money.

In many cases, the property owners provided plausible explanations for their pattern of deposits. But these explanations appeared to have been disregarded or ignored.

“In most instances, we found no evidence that attempted to verify the property owners’ explanations,” according to the report.

It probably shouldn’t be that surprising that the Feds’ official revenue generators at the IRS jumped on an opportunity to go the extra mile and generate even more cash to fund our disfunctional, violent uncle’s war machine. Nor should it be particulary shocking that they avoided the tedious work of investigating actual criminals in favor of preying on innocent people that lack the ability to fight back.

Incidentally, it’s unknown exactly how much money the IRS stole from innocent businessmen, because they don’t voluntarily disclose those figures and refused to honor Freedom Of Information Act (FOIA) requests for that information even after those requesting it said pretty please.

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Questionable FBI Surveillance Aircraft Fleet Outed by Coalition of Journalists, Activists, And Techies

The following post was submitted to the CopBlock Network by Isiah Holmes, who has been featured several times previously on Cop Block, via the CopBlock.org Submissions Page. In this post, Isiah discusses the use of aircraft FBI to conduct surveillance and the role that private citizens (along with the media) played in uncovering and exposing the program’s existence and just how widespread its use is.

(Note: The FBI’s use of surveillance aircraft to spy on activists and protesters was also discussed by Asa J in an earlier post published in August of last year.)

Mice Chasing The Hawk

There exists a variety of stories notorious — amongst those whom it concerns — for their uncanny quality of illuminating hidden plights and unsung heroes. Such tales, unfortunately, rarely experience veneration in modern western society. For the sake of this piece, think not of the many examples of centuries old legends and fables. Instead, accept the challenge of recognizing just one of this variety’s countless modern manifestations. For instance, when a loose coalition of professional and citizen journalists, activists, and techies blew the lid off the FBI’s questionable, nationwide aerial surveillance program. Blew the lid–only to have the story locked into a press loop where it ultimately succumbed to starvation. This piece might be considered a functional revival of the tale.

It began in Baltimore in 2015, after Freddie Gray’s death in police custody and during the subsequent protests and riots. Cameras were everywhere, whether belonging to Baltimore PD, press, bystanders or active civic dissidents. No one, however, anticipated cameras and cell phone collection tech, for that matter, having circled above them for days. International Business Times reports, Benjamin Shayne, leader of the police radio site www.scanbaltimore.com, was among the first to notice unusual air traffic. Shayne took to Twitter: “Anyone know who has been flying the light plane in circles above the city for the past few nights?” The planes, according to IBT, which flew from April 30th-May 2nd 2015, appeared shortly after Baltimore initiated a city-wide curfew.

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Following Benjamin’s tip, a coalition of Twitter and Reddit users, including one former ACLU employee, united to monitor the planes. According to IBT, a trove of data on the aircraft was compiled through their combined talents. Exact flight paths, docking airports, and owners were tracked. The planes were now being watched back.

According to a Washington Post piece, although one plane appeared to lack a tail number, a second was tracked back to “NG Research.” The company’s website boasts of expertise in air quality, aerosol chemistry, and health effects, but speaks not on why its plane was over Baltimore that day.

Once questions started flooding web feeds, the FBI, surprisingly, released a statement glistening with trepidation. “The aircraft,” officials said; according to the Washington Post, “were specifically used to provide high altitude observation of potential criminal activity to enable rapid response by police officials on the ground.” An Improv Online investigation into suspicious planes had–undoubtedly–forced “The Man” to come forward publicly on this “program.” Perhaps it’s safe to say that information, or rather free information, is power.

Due to the government’s reluctance, as well as technology concerns, the ACLU filed several FOIA requests. In tandem with the ACLU’s push, the Associated Press launched their own in depth investigation on the aircraft’s purpose and origin. As it turns out, an entire FBI controlled surveillance-purposed fleet waited for them at the end of the rabbit hole.

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The manned planes, carrying both powerful cameras, including infrared cameras, and cell phone data collection technology reputedly operate above cities quite often. All the craft, the Huffpost reports, are superficially attached not to a government program, but to fictitious companies used as fronts. Many sources reported on the infrared camera’s capabilities of literally seeing people inside of homes. The very nature of the technology is rather wide reaching and indiscriminate, meaning non-targets frequently are recorded. A 2001 Supreme Court decision, Kyllo v. United States, Washington Post reports, held using thermal imagers to “see details” inside enclosed buildings without a warrant amounts to an unlawful search.

AP journalists also discovered that despite the program’s capabilities, deployments are rarely approved by a judge. In light of this fact, according to the Huffington Post, FBI asserts the planes are deployed only for specific, ongoing investigations. Exactly what sort of investigations is entirely unclear.

In fact, nearly a year later, even basic information on the program is vigorously withheld. In terms of explicit references, the HuffPost reports, little more than already heavily censored Justice Department Inspector General reports is public. “The FBI’s aviation program is not secret”, says spokesman Christopher Allen. “Specific aircraft”, he continues, “and their capabilities are protected for operational purposes.” Allen, according to the HuffPost, asserts the planes are not “equipped, designed, or used for bulk collection activities or mass surveillance.” The FBI also, apparently, allocates the fleet as air support for local departments, on-request.

fbi-spy-plane-2-bSuch statements downplaying the possibility of bulk data collection do nothing, however, to explain the plane’s flight patterns. The AP, the HuffPost reports, uncovered flights orbiting large, enclosed buildings for extended periods of time. These areas, such as Virginia’s Ronald Reagan Washington National Airport and Minnesota’s Mall Of America, made photo surveillance unlikely. Rather, electronic signals collection, the AP found, proves far more effective under such circumstances. The FBI planes, according to the AP’s flight data analysis, by 2015 had flown over at least 40,000 residents.

Conversely, officials did attribute gear capable of identifying people by their cellphones, even when not making calls, to the craft. Officials, the HuffPost echoed, say such devices, which mimic cellphone towers into providing basic subscriber information, are rarely deployed. The FBI’s cryptic program, sources claim, conjures memories of reports of suspicious planes circling US neighborhoods in 2003.

Through its investigation, the Associated Press was able to track 50 planes down to at least 13 fake companies. No, this is not hyperbole. They’re literally fraudulent, not real, lies, or whatever synonym you care to choose. FVX Research, KQM Aviation, NBR aviation, and PXW Services, according to the Huffington Post, were included among the AP’s findings. It’s interesting to note that, at least with these four companies, all have three letter acronym names. Not, of course, unlike the Federal Bureau of Investigations. A 2010 federal budget document, according to the HuffPost, verified the FBI’s fleet size at around 115 craft.

So really, to what extent is the federal law enforcement organization being brazenly, shamelessly deceptive? The FBI, according to the HuffPost, did ask the AP to not include any company names in its reporting. The bureau reputedly used the taxpayer dollars which would go towards replacing the disclosed companies as a kind of blackmail. Classy. The AP, of course, declined the FBI’s request as only publicly accessible information was used.

Most of the aircraft, despite belonging to different “companies”, were registered under a specific name–Robert Lindley. Registration documents signed by Lindley’s hand, HuffPost reports, display at least three distinct signatures. Hoping to verify the man’s existence, the AP has tried and failed to reach Robert through multiple Washington-area phone numbers under that name. FBI officials, to this day, refuse to comment on whether or not Lindley is a government employee.

By analyzing the plane’s flight data, journalists discovered the FBI fleet flew over more than 30 cities over a 30 day period. Since April 2015, two months before the Huffington Post piece, at least 100 flights circled both major cities and rural areas. Associated Press photographers even captured an image of a plane circling like a ghostly hawk in northern Virginia’s skies. The aircraft, the HuffPost reports, sported both a variety of suspicious antenna under its fuselage and a mounted camera.

Cities on the FBI’s flight list include: Houston, Phoenix, Seattle, Chicago, Boston, Minneapolis, and southern California. Some of these cities, a quick google search reveals, were subject to recent protests and/or civil unrest, such as California, Chicago and, of course, Baltimore. Despite any such public data professional and citizen journalists, analysts, or researchers may gleam, fundamental questions abound. What precisely is the purpose or function of this specific program? How long has it been operational, and under what laws is it bound or regulated? Where does excess data and footage go? How far is too far?

FBI Surveillance BaltimoreDespite the FBI’s recent downplaying of its surveillance program, its statement before congress in 2009 really says it all. “Aircraft surveillance has become an indispensable intelligence collection and investigative technique which serves as a force multiplier to the ground teams.” According to the Huffington Post, this was part of the FBI’s bid to Congress for $5.1 million in funding for the so-called “spy plane” program.

Ask yourself, what does this statement and the amount of money the FBI requested, taken either alone or together, say about the program? Does it seem like its aircraft and the technology they’re equipped with would be so rarely utilized as officials claim? “A lot of questions are unclear”, says ACLU staff attorney Nathan Wessler, the Washington Post reports.

Is it safe to suppose at least part of the programs mandate involves surveillance of generously populated protests, rowdy or otherwise? Almost sensing the question lurking about its flank the Justice Department, the HuffPost reports, maintained its “drones” don’t deploy “solely” to monitor First Amendment protected activity. In Baltimore’s case, according to FBI and Federal Aviation Administration documents, both night vision and inferred tech scanned crowds below. The documents, Washington Post reports, were obtained by the ACLU through Freedom Of Information Act requests.

An FBI official, under anonymity due to the programs sensitive nature, claimed the planes were ensuring public safety. The official, according to Washington Post, used a “potential for large scale violence and riots” as justification. “Potential”, suggesting the planes were in the air before the ground atmosphere went agro. In case you’re wondering, documents also showed no evidence of a warrant being obtained prior or after the Baltimore operation.

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If there’s at all a silver lining in any of this, it’s how much independent people really contributed to the story. Most of the information used to track, verify, and ultimately link the planes to FBI’s program hid within a slush of online data. Even the Associated Press wouldn’t have conducted an investigation had Benjamin Shayne not first tweeted about the suspicious planes. A decentralized online contingent of bloggers and Reddit users, not the organized press, was the first to conduct any serious inquiry. It’s an utter travesty that the same headline, “FBI behind mysterious surveillance aircraft over cities”, along with nearly the same AP articles, were published across the board. If that’s not a press loop then a challenge goes out to anyone who can give a more textbook example.

For anyone interested conducting a more concurrent investigation, technologist John Wiseman, Fusion.net reports, has some tips to offer. Wiseman himself used public records to get flight routes, some of which can be found online. One would be surprised what kind of legitimate information floats about the slush untouched simply because no one, except those who care, bothers to look. John also reputedly used a modified radio receiver to pick up aircraft transmissions, and tracked tail numbers, provided by the Washington Post, to a fake company. Wiseman, Fusion.net reports, recommends sites like flightradar20 and flightaware for tracking aircraft registration numbers.

Here’s where this blog gets functional! Anyone willing, able, and/or both are by all means invited to rehash the investigation. Larger news organizations might feel subliminal pressure from the feds to keep quiet, edit stories, or what have you, but the people will not. How hard would it be to, say, check up on new data on the already “found out” planes? Where are they now? Have they traded hands or do the front-companies still stand? Speaking of the “companies”, they’re fair game too! NG Research, for example, has a website which can be easily found by googling the company name. No, there isn’t any product listings on the page. No, the page hasn’t changed for over a year despite it apparently being an actual company. A functional revival of the FBI’s surveillance program, even if not published, may prove uniquely valuable in the days to come.

– Isiah Holmes

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