The truth about erad and credit card seizures money laundering how much cash can i accept

The truth about erad and credit card seizures money laundering how much cash can i accept

From contributor ron hain

EDITOR’S NOTE: after seeing so much sensationalistic press about law enforcement agencies seizing currency from debit cards, credit cards and gift cards, officer.Com was contacted by an officer who actually has used the system in question to battle stolen and counterfeit credit cards as well as money laundering. Read on to get informed in a non-sensationalistic manner.

On june 7 th, 2016, oklahoma’s news 9 put a very slanted piece together on cops stealing money off people’s credit and debit cards right on the side of the road. While we shouldn’t be surprised by a couple of things here: 1) a media outlet took some civil liberties to not tell the whole story in effort to create some sense of drama and 2) this story begins in oklahoma, which has been a battle ground over what some call “unfair” asset forfeiture; it is our duty as american citizens and law enforcement officers to dissect this information and seek the truth.Money laundering how much cash can i accept

The oklahoma 9 news infers this new device they call an “ERAD” gives police the ability to swipe innocent citizens cards and take cash with impunity. Certainly we know that if an officer seized a person’s assets without reasonable suspicion and/or probable cause (depending upon jurisdictional guidelines), they may face severe criminal and civil penalties. In most, if not all, asset forfeiture cases the item of value is held pending a forfeiture hearing…in front of a judge. The police do not make the ultimate decision on the relinquishment of the property…A JUDGE MAKES THE DECISION.

What does the judge consider as factors? A totality of circumstances based on the evidence provided to him. Or more simply, a common sense dictation of the asset being tied to criminal activity.

I have been a sworn sheriff’s deputy since 1998 and ERAD user since 2014. ERAD stands for electronic recovery and access to data.Money laundering how much cash can i accept I have worked at least ten major criminal cases relying on the ERAD system for support and can speak well on its application, function, and purpose.

It all started like most needs for a new resource. Detectives that worked on my interstate interdiction team encountered two men who had traveled a long-ways from out of state for a very short time, expressed some extreme nervousness during contact with the police, and gave grossly conflicting stories about their travel (along with several other indications of criminal activity). The detectives noted those signs of criminal activity and asked for consent to search the men’s rental car. What they came across made us all scratch our heads: bundles and bundles of various credit cards, bundles and bundles of various retail gift cards, a couple of mag stripe reprogramming devices, and the least suspicious instrument in the same bag as the aforementioned items: a laptop.Money laundering how much cash can i accept

What were these guys up to? We sat on the shoulder of the highway knowing it wasn’t right for them to have hundreds of credit cards showing various names. The men didn’t have much to say…OK, nothing to say about the mass amount of retail gift cards. And they claimed to have no idea what the magnetic stripe reprogramming device was, though it was riding along next to the man’s skivvies.

We certainly knew we didn’t have any ability to read the information contained on the magnetic stripe of the cards to determine if they had been altered in some way, as is a violation of our state’s law (as they appeared). After making a myriad of frantic calls, we landed on a homeland security contact who passed me a phone number for his friend, jack williams. I immediately called jack and was introduced to the only solution available to law enforcement to immediately gather intelligence from magnetic stripes: ERAD.Money laundering how much cash can i accept

After enrolling my agency in ERAD, we were able to successfully interdict over 25 major criminals who had traveled to my community and skimmed thousands of local residents’ financial information. Not only were we able to identify our victims with ERAD technology, but we were also able to recover the electronic currency the criminals had laundered onto prepaid loadable cards and retail cards.

We soon realized that many of the drug traffickers we had encountered in the past were turning to this trend of card skimming.

After all, if you found a get-rich-quick alternative to running drugs for violent gangs who may lop your head off for not delivering on your duties or you faced decades of incarceration if intercepted by police during a narcotic delivery, would you not take it? 20 years in jail for heroin trafficking or probation for financial identity theft because you’re an out-of-state resident?Money laundering how much cash can i accept

Violence and death over an unsatisfied contraband delivery or the zero-risk, zero-contact operation of card skimming by bluetooth?

Placing yourself in a criminal’s shoe working through this thought process helps us understand why this is becoming america’s newest and largest crime epidemic. Fortunately, court case decisions already exist that support a law enforcement officer’s ability to interrogate a piece of plastic.

In ERAD-contested oklahoma circa 2013, the state’s supreme court upheld that “currency” is defined as an item that circulates as a medium of exchange, and by that definition stored value cards, gift cards, and prepaid credit cards certainly meet that definition (state of oklahoma v. Eighty three (83) walmart gift cards and various mastercards and visa cards. CV-2013-24). This case law supports the recovery of illicit currency on a loadable payment card in the same fashion as a law enforcement officer would recover a duffle bag full of illicit cash.Money laundering how much cash can i accept

Multiple court decisions support that there is no expectation of privacy in the magnetic stripe of a payment card, as those cards exist for no other purpose than to be provided to others as a method of exchange (US v. Benjamin, 2014 WL 5431349, D.Neb. 14 and US v. Alabi, 934 F. Supp. 2d 1201 (D.N.M. 2013). Think about the cards in your wallet. How many different people have touched them just within the last month?

Finally and most recently, the 8th circuit court of appeals ruled in early june of 2016 that law enforcement can legally scan or swipe a seized credit card, stating that it is not a fourth amendment search, and therefore reading the card information doesn’t require a warrant.

This ruling follows a july 2015 ruling from the 6th circuit court of appeals, which similarly concluded that law enforcement officials can legally read the information from a magnetic stripe card. The 8th circuit court of appeals stated that swiping a card does not constitute a physical search, as the magnetic stripe should only contain the same information visible on the front of the card.Money laundering how much cash can i accept and in this case, the defendant couldn’t have had an expectation of privacy in the card, because he would have used it when he tried to buy something.

The 8th circuit concluded:

There may be an instance, with facts different from this case, where a court reasonably finds a legitimate privacy interest in information contained in the magnetic strip of a credit, debit, or gift card. In such a case, a motion to suppress may well be proper to further explicate the nature and character of privacy interests, if any, that may reside within the confines of these magnetic strips. However, here, where all of the information in the magnetic strip should have been identical to the information in plain view on the front of the card, and where the cards were lawfully possessed by law enforcement officers and established to be counterfeit, we cannot conclude that de L’isle had a privacy interest warranting further investigation into potential fourth amendment protections.Money laundering how much cash can i accept

The foundation of any tools used by a law enforcement officer is discretion. Police have guns. Police now have card readers…Which is more dangerous? Certainly if we’re permitted to carry firearms and are trusted to use discretion, the same rule applies to the rest of our tools. Law enforcement is finally catching up to the country’s newest crime epidemic, with help from ERAD.

Citizens and legislators must understand that police will be required to interrogate magnetic strips as part of modern investigations to protect our country against these new predators. ERAD is the only entity available to aid law enforcement in immediate identification of fraudulent activity and to recover illicit funds laundered onto payment cards. ERAD also has security measures in place to prevent law enforcement from gathering extensive personal financial information or seizing currency without cause, inadvertently or otherwise.Money laundering how much cash can i accept

Ultimately, a police agency must train their personnel in any investigative asset and proper application of an essential tool. Public information release and full disclosure is vital to maintain the trust of the people we serve and the integrity of our mission. However, skewed media reports billed with the intention of creating nothing but drama need to be evaluated and measured as such.

ERAD will continue to ethically and appropriately support police investigations and seek to be final solution to one of the largest crime waves in american history.