W.G. Hill - Banking in Silence: The Complete Manual on How to Protect Your Money (SCOPE Special Report)

Copyright Scope International Ltd 1995, 1996, 1997

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage or retrieval system without the written permission of the publisher.

Scope International Ltd Forestside House Rowlands Castle Hants P09 6EE England UK 3rd Edition 1997 by Scope International Ltd

Edited by D.J. Morel

British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library

ISBN 0906619475

Typeset by Scope International Ltd.

Printed by Hartnolls, Bodmin, Cornwall, England, UK

Whilst reliable sources have been sought in compiling this book, neither the authors, publisher nor distributor can accept any liability for the accuracy of its contents nor for the consequences of any reliance placed upon it.

Mrs Karl Marx, at the end of a long and bleak life, remarked How good it would have been if Karl had made some capital instead of writing so much about it.

- Will Rogers

The income tax people are very nice. Theyre letting me keep my own mother.

- Henny Youngman

TABLE OF CONTENTS

vii

viii

Part I

Why You Need to Bank in Silence

Youre alone on a dusty desert road. Youve just run out of water. A hot sun bakes down on you relentlessly from above. Your mouth is dry and you wonder how long youll be able to keep it up. The nearest town is a mirage on the horizon, ten miles away. It will be a long walk. You may not make it.

In one hand, you have your car keys. Your car is parked right next to you. Its a beauty. It works, is full of gas and everything about it runs like a dream, even the air conditioning. There is just one problem. The year is 2008 and eco-wackos have taken over this particular stretch of the desert. They dont like technology, they dont like money, and they dont like cars. They havent outlawed cars completely, that would be inconvenient, for they use cars a lot themselves. They realize that without them the world would come to a halt. Nonetheless, for all realistic purposes, cars have been banned. You can only drive one if you fill out a form in advance. Gasoline can only be purchased if you state your purpose on yet another special form. Private ownership of cars has not been made illegal, but the local media still run headline stories about so called eco-criminals. As a result, most cars are kept at home, hidden in the garage. When people venture out, they do so on foot.

Heres the choice you are facing:

Do you hop in your car and zip into town like a breeze? Or do you start the ten mile walk on foot, with no water and only the baking sun for a companion? If you walk, you may not make it. If you drive, the townspeople may label you a criminal because these days anybody driving a car is said to be a bad guy, or so government propaganda would lead us all to believe.

If you think this little tale borders on the absurd, consider what Tom Paine would think of todays regulatory environment were he, by some wonderful time capsule, to arrive at a western financial institution. Tom Paine would want to start a second American revolution immediately if he ever heard of Currency Transaction Reports. Thomas Jefferson would join him before he could comply with the IRS reporting requirements and file a form 8300. And Benjamin Franklin would first demand that his face be removed from the hundred dollar bill and then lecture far and wide on the civil liberties of free men and women, on their inalienable right to handle their money in whatever way they see fit, free from outside interference.

To the founding fathers, the fact that today people can no longer freely do what they want with their money would sound as outlandish as our 2008 eco-wacko story sounds to you. Still, there is a continuing trend in developed countries throughout the world to deny everyone the basic right to financial privacy. In our modem world, with very little effort almost any undesirable (whether a government tax inspector, a disgruntled business partner or greedy exspouse) can form an all too clear picture of your financial affairs. This information can in turn lead to an even more detailed sketch of your personal life, your loves and habits, perhaps even a vice or two you would rather keep private.

Few people seem to realize that many of their everyday activities help others invade their financial privacy on a systematic basis. If your require proof, just review the last few monthly statements you received for your checking account. Almost anything one would care to find about you is inscribed in those hallowed pages. Have you made any recent contributions to a religious or political organization? Perhaps one that is slightly controversial? Your cancelled check is now a permanent record broadcasting your belief system to any who care to listen.

When was the last time you paid your rent or mortgage? Not only does your checking account tell all and sundry how much this payment cost you, meaning they can form a rough picture of your overall net worth, but it also forms a direct path to your front door for any who may care to pay you an unwanted visit.

Have you visited the doctor lately? Perhaps you suffer from high blood pressure or have a weak heart? Well, the amount and pattern of your payments again paints a picture that is clear as day for even the most incompetent of private investigators, a picture of information that really need only concern you and your doctor.

Consider what else your checking account may reveal about you. There it is in black and white, almost anything anyone may care to know about you: the type of insurance you carry, your upcoming travel plans, your favorite restaurants and shops, not to mention the names of your friends and business associates. Furthermore, any holes that may exist in this source can be quickly plugged when combined with your credit card records. With this combined information, one can easily form an overall picture of your character and personality. Almost any information needed is recorded routinely and permanently on bits of paper and silicon chips in offices around the world, locations over which you have absolutely no control.

If someone were really interested in finding out more about you than you care to share, your correspondence would add yet another layer of detailed information. Maybe you think that you need not worry so much about your financial privacy as you have already taken care of it by establishing a trusty offshore bank account, say in the Bahamas. Your monthly statements sent directly to your front door knock a hole the size of Switzerland right into the middle of your attempt at bank secrecy. Governments routinely monitor international mail, particularly that coming from known banking centers. All of them reserve the right to open and examine mail coming from outside of their national borders. For all you know, Big Brother has been opening the bank statements from your secret account, copying them and then resealing and sending them on, all unknown to you. Your attempt at privacy has in the end accomplished exactly the opposite of what you set out to do.

Maybe you dont have a secret account, still what mail you receive and from whom you receive it tells a great deal about you. What mailing lists are you on? What magazines do you receive? Who do you write to frequently and who writes to you? Would any of this information cause someone to form the wrong opinion of you if it were one day made public? Dont think that this is entirely unlikely as one of the standard procedures in any Big Brother investigation is mail surveillance. Even without opening your mail, the government can form a clear idea of the people and places with which you correspond. No search warrant is needed to examine the front and back of any of your correspondence, it is considered to be public information.