Government Spying on Your Bank Transactions

From http://www.newsmax.com/archives/articles/2006/7/5/212003.shtml?s=lh

Government Spying on Your Bank Transactions

NewsMax.com WiresThursday, July 6, 2006

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The next time you do your banking, be sure you don't do anything out of the ordinary. If you do, you may end up caught in the crosshairs of a government program designed to target terrorists and money launderers.
According to critics, innocent American bank customers who are doing nothing more than conducting their honest financial transactions are being vicitimized by Suspicious Activity Reports, or SARs.

A SAR is a secret filing, triggered by any financial activity the government deems unusual. Specifically, any group of transactions totaling $5,000 or more that "is not the sort in which the particular customer would normally be expected to engage."
According to Bankrate.com, the reports are filed with the Financial Crimes Enforcement Network, or FinCEN, a division of the Department of the Treasury, and shared with law enforcement.

If your transaction is declared suspicious, your funds could be held up for weeks. But get this: You are never told if a SAR has been filed against you - it's against the law for that information to be revealed.
The program has led to the prosecution of crooks, but it has inundated federal agencies with secret reports of dubious value, on ordinary citizens - at a cost of billions of dollars.
About 1 million SARs will be filed in 2006 by depository institutions, money-services businesses, casinos, card clubs, and the securities and futures industries, says Bankrate.
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The SAR was developed in 1996 as a way for banking organizations to report "suspected criminal violations of federal law or a suspicious transaction related to money laundering activity, or a violation of the BSA (Bank Secrecy Act)," according to Federal Financial Institutions Examination Council, or FFIEC, documents.
Financial instituions have reported more and more SARs over the years to protect themselves from any potential legal liability that stems from illegal financial activity conducted through their institutions.

According to Bankrate, SARs filed by banks or other institutions simply to avoid the risk of penalty are referred to as "defensive filings." Banks are under pressure to file, not only from the government but from their attorneys. John Hall, spokesman for the American Bankers' Association, was quoted in the National Law Journal in May 2005 as saying, "Our bank counsel are saying if it smells just the least bit, file. File early and file often."
A major concern regarding the overabundance of SARs is the fear that the government will spy on legitimate private financial business of Americans.

Former Republican Rep. Bob Barr is the chairman of Patriots to Restore Checks and Balances, a group that monitors the government's use of the Patriot Act, and president and CEO of Liberty Strategies, a consulting and public relations firm.

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"The government has an insatiable appetite for getting more information even though they may never get through it," Barr told Bankrate. "Congress ought to be asking how much money is being spent on this, how much time and resources? What are we getting? How many prosecutions have there been? I suspect it's minuscule in relation to the number of reports filed.
"Something is out of whack," Barr stated.