To those cheering here, you should remember this next time you try to open a bank account or make a payment, and your bank wants to see a thousand of proofs and certificates before moving a finger.
Did we read the same article?
>Western Union (...) admitted "to aiding and abetting wire fraud" by allowing scammers to process transactions, even when the company realized its agents were helping scammers avoid detection
Furthermore:
>Between 2004 and 2012, the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in disciplining of 2,000 agents, authorities said.
If the prosecutors were able to prove that WU was aware that the transactions were fraudulent your comment makes no sense. They didn't need to be "a quasi-law enforcement agency" because they already knew that the transactions were fraudulent.
If a few WU employees helped a few customers navigate the compliance hurdles, and some of those customers happened to be scammers, the press release would say the same thing.
It's not 100% clear they were able to prove anything versus being able to corner WU into a settlement.
Companies may very well be in the wrong and deserve punishing - but all they get are massive fines. Agencies like it because it looks good and money is always handy. Companies don't mind it as it removes risk (share prices often go up in the aftermath) and individuals don't get punished. That last part is the important bit, the individuals at fault here are able to continue to operate in regulated financial services roles, they can continue to be directors of companies etc.
I'm inclined to say on the record here that actively assisting and rendering aid to someone seeking avoid fraud detection kind of answers that question right off the bat
The prosecution will spin it as in cahoots, when it could have just been good customer service explaining a bunch of stupid rules.
One model is that the authorities get all the info from Western Union and then do the filtering on their side. Then you need to trust the authorities to have all transaction data and use it responsibly. This is the model for, say, license plate reader data.
Another model is that filtering happens at Western Union's end, and only suspicious transaction data get reported.
I infinitely prefer the latter model, even if my bank ends up doing outsourced police work on the side, because at least it's my bank that has the data and not the cops.
Well, I think there is still a third option!
- Someone is still scanning e-mails, except now it's a judge and/or lawyers rather than cops or business
- Moving things to the legal system imposes potentially very high friction costs, since your bank/email provider presumably has context about their relationship with you that the judge (or law enforcement) doesn't have. As we all know, context switches are inherently expensive.
- Emails aren't exactly the same as transmitting money, because reading emails tends to violate more of your privacy than the metadata about who you send money to. Also it's illegal to, say, send money to finance terrorists, so some checking has to happen at some level no matter what. You can say 'get a warrant', but if cops don't have access to data, and banks can't look at who you send money to, then how can cops have sufficient data to find probable cause under which to ask for a warrant? You're putting law enforcement in a situation where it's impossible to lawfully fulfill their duties to the public, unless your model is literally that judges always get all data without a warrant, and a court decides what's suspicious.
You might think that the incremental improvement in liberty is worth the friction cost of having lawyers and judges run everything, but I'm not sure everyone would agree.
You are still starting from the assertion that every email has to be scanned for crime, that every financial transaction has to be investigated for fraud. I disagree with that. And where is the limit? Should the bank also check that the product you are trying to sell is compliant with the latest health & safety regulations and that you didn't violate environmental protection laws? The bank is potentially facilitating a crime if it isn't.
> Also it's illegal to, say, send money to finance terrorists
But it is not illegal to conspire to commit a terrorist attack by email or phone or mail?
> banks can't look at who you send money to
Banks always know who you send money to. Phone companies always know who you call. What banks do not need to know is why I am sending this money. What phone companies do not need to know is what I am discussing about.
> You're putting law enforcement in a situation where it's impossible to lawfully fulfill their duties to the public
Was it impossible to do their work before the internet when law enforcement had to get a warrant to open mail and tap phone lines?
> You might think that the incremental improvement in liberty is worth the friction cost of having lawyers and judges run everything
Again you are still stuck in the logic of either my phone company listens to my calls or the police listens to my calls. Well, neither unless they get a warrant. Same for my emails. Same for my mail. Same for my financial transactions. The content of my calls is none of the business of the phone company. The content of my emails is none of the business of my email provider. The reason for my transaction is none of the business of my bank.
The model of 'wait until someone complains, then get a warrant, then use that data to prosecute' simply doesn't work in practice, and the article notes exactly why. For criminal networks, by the time the judicial gears have started running, the criminals are long gone with their ill-gotten profits. For terrorist enterprises, it's easy and cheap to create puppet companies or non-profits to take donations, and prosecuting terrorists after they've used the money to commit violence is not acceptable to society.
> Should the bank also check that the product you are trying to sell is compliant with the latest health & safety regulations and that you didn't violate environmental protection laws?
No, because you can effectively punish companies that violate health and safety regulations after the financial transaction takes place. For scammers, that's not true.
You might think that having these crimes is simply the price of liberty, but I think many people would disagree. I don't think the rhetorical strategy of denying there is a problem, and claiming that policing strategies from 30 years ago will fix all the problems, is a reasonable one.
> Was it impossible to do their work before the internet when law enforcement had to get a warrant to open mail and tap phone lines?
Yes, because now criminals aren't communicating with mail and phone lines, they're using the internet, which is a completely different beast. You can't run a business like you did 30 years ago and succeed. You can't make a movie like you did 30 years ago and expect to succeed. What makes you so confident and sure that wiretap laws from 30 years ago can be perfectly and successfully applied to the internet today?
- Looking through financial metadata is a couple orders of magnitude less invasive than physically searching everyone's closet every week
All I'm saying here is there is actually a tradeoff between privacy and law-enforcement effectiveness. Of course we should think of ways to have both, but it is not always possible in every case. As engineers, that should be easy to understand.
If we're being honest with ourselves, we should admit that we're willing to pay a cost (perhaps even a substantial one) for greater privacy. We should then have a discussion about which costs we're willing to pay, for which particular forms of privacy, and how to get the most bang for our buck.
We should not simply pretend that the cost of upholding our liberal values is zero, as tempting as that might be rhetorically.
Yes, there are tradeoffs to be made, but existing due process, including warrants, is the legal manifestation of those very tradeoffs.
When police or FBI say that current laws and processes are insufficient to deal with a changed environment and they need help, I've seen that the left tends to demonize them, question their motivations (like of course cops want to set up a surveillance state), and then give a hand-wavy argument that 'well, getting a warrant worked in the past, so it must work fine today'. Basically accusing cops of lying about having problems, or lying about needing new tools and processes.
That doesn't seem very fair, and it's certainly not a way to have a constructive discussion. I mean, these two statements are basically the same:
1. You can't any trust climate scientists, because of course all they want is to scare you into giving them more funding and power
2. You can't any trust cops and the intelligence services, because of course all they want is to scare you into giving them more funding and power
IMHO both these statements are false. Even though they're imperfect, our cops and intelligence agencies by and large try to do right, and it'd be better to understand challenges from their perspective and come up with innovative, privacy-protecting ideas that work, rather than to blindly accuse them of malice when they suggest something that we disagree with.
If you think people are doing things wrong, first try help them do right.
- "We as a society" claims, painting your opponent as out of touch with society. I'd say instead that the ecosystem of recent U.S. politics has been favorable to actors gaining power on those grounds.
- Equating opposing surveillance to pretending the costs of liberty are zero. I didn't see anyone else claim that above, though maybe I should go back and reread it all.
You say "we as a society" but then posit something ridiculous. Regular everyday murderers kill orders of magnitude more Americans than terrorists. They are monsters of the same order and there are more of them. How is it that we have stood to tolerate them for centuries, but now this new threat (which is not actually new at all) suddenly requires a departure from our longstanding principles?
Terrorism isn't new, it isn't unique, it doesn't require an extraordinary response unlike that of every other category of bad in the world. It's just the boogey man du jour that has recently become highly profitable for a wide variety of fear mongers and demagogues.
Don't fear the terrorists. You're letting the terrorists win.
Jeffrey Dahmer wasn't a regular everyday murderer, he was a serial killer - a category which does not kill orders of magnitude more Americans than terrorists, and a distinction which is entirely apropos in this discussion because unlike regular everyday murderers, serial killers are generally quite hard to identify with usual police investigatory methods.
A cynic might speculate that politicians care more about terrorism because gangs kill predominantly poor people while terrorists often kill bankers and government officials.
To put it another way, just because terrorists could use unencrypted email to communicate doesn't mean we have to go and scan everyone's email for threats.
The logic is basically this: Terrorists now are communicating over encrypted p2p systems (or any new tech)! we need to backdoor encryption standards. Then! we will defeat the Terrorists (once and for all).
Crime works in a similar fashion. The police will never "solve crime" no matter how much power they have to invade your privacy. They will become great at catching criminals though.
Typical humans!
It's not like they let the money sit around in the branch. Once it appears they send in the street rat to pick it up and run. These scams aren't just two bit crooks, they were straight up organized crime. It is an industry, one of the most productive in some areas.
Good question.
I mean crime is going to happen right?
Evidence suggests so.
And the cops just trample all over your rights.
Indeed.
Why even bother having laws or society?
Agreed, especially considering that most of what passes for "law" these days is just statutory nonsense which has nothing to with the law[1] in the more general sense.
It just kills your freedom
Agreed.
How about a third way: rather than surveilling all of everyone's private data constantly, law enforcement gets warrants authorizing them to access private data in a limited manner for specific investigations.
They do have that data.
Most Western nations have financial intelligence agencies that require all bank transactions or money wires (if they're over $10,000) to be reported to them. I forget the American equivalent, but Canada has FINTRAC, where I interned a decade ago.
They have all the data. When you move any large sum of money anywhere, they get a report with your name, driver's license number, everything the bank knows about you basically. They can (and do) keep it for up to five years. Ever bought a house or car? A report is in their database, being scrutinized by analysts.
It's been like that for nearly two decades now. FINTRAC at least has seen some success and did major damage to the Montreal Mafia.
From the article, "wiring the money in smaller increments to avoid federal reporting requirements" means they knew why the customers were wiring $9999 twenty times rather then $200,000. They didn't care. That's why they're paying the fine.
No not at all, they are guilty of willfully being a party to criminal enterprise. You might want to read the full DOJ brief:
"In its agreement with the Justice Department, Western Union admits to criminal violations including willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud.
Note the word "willfully."
Further:
"“Our investigation uncovered hundreds of millions of dollars being sent to China in structured transactions designed to avoid the reporting requirements of the Bank Secrecy Act, and much of the money was sent to China by illegal immigrants to pay their human smugglers,” said U.S. Attorney Decker.
“In a case being prosecuted by my office, a Western Union agent has pleaded guilty to federal charges of structuring transactions – illegal conduct the company knew about for at least five years
They structured transactions to avoid detection so they could continue to collect lucrative fees and knowingly did so for years.
Source:
https://www.justice.gov/opa/pr/western-union-admits-anti-mon...
It's the KYC (CIP) and AML laws.
https://en.wikipedia.org/wiki/Know_your_customer
https://en.wikipedia.org/wiki/Customer_Identification_Progra...
https://en.wikipedia.org/wiki/Money_laundering#Anti-money_la...
> The Economist estimated the annual costs of anti-money laundering efforts in Europe and North America at US$5 billion in 2003, an increase from US$700 million in 2000.
> There is no precise measurement of the costs of regulation balanced against the harms associated with money laundering, and given the evaluation problems involved in assessing such an issue, it is unlikely that the effectiveness of terror finance and money laundering laws could be determined with any degree of accuracy.
> One commentator wrote that "[w]ithout facts, [anti-money laundering] legislation has been driven on rhetoric, driving by ill-guided activism responding to the need to be "seen to be doing something" rather than by an objective understanding of its effects on predicate crime. The social panic approach is justified by the language used—we talk of the battle against terrorism or the war on drugs".
https://en.wikipedia.org/wiki/Money_laundering
I'm curious if the drug war ended how much utility it would provide...
If thats the case, what might be easier is tell your bank "ok cancel the transfer", then get your brokerage's bank wire information, physically go to your bank, and initiate a "fed wire transfer" to your brokerage. Fed wire is like moving physical cash, it hits your account in minutes (not overnight like ACH usually is, and no "available balance" vs pending deposit bs)and is absolutely final. And if your bank refuses to move your money when you walk up in line and show them your ID, get a new bank.
My beef is with paypal: the company that wants to look and act like and do everything that a bank does, but without all those pesky bank regulations designed to protect the customer. I quit using them 10 years ago.
Now, not all these criminals are violent or into drugs. Many were illegals sending money home. I get WHY they would use it, but it makes no sense for the US Government to even allow these services to exist.
Also last time I went to open a bank account, I did it online. No one wanted anything.
I'd be curious to see whether or not the proliferation of retirement and investment funds that are geared to profit members in recent would have had an impact on that rising trend.