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View Full Version : Banks Closing Down Porn Star Accounts - thoughts?



Fionaver
04-28-2014, 02:53 AM
https://news.vice.com/articles/is-the-doj-forcing-banks-to-terminate-the-accounts-of-porn-stars?utm_source=vicefbus

pink_bunny
04-28-2014, 03:02 AM
That is totally unethical! i go thru the bank mentioned so that is creepy

Melonie
04-28-2014, 03:24 AM
This topic has been touched on in previous Dollar Den threads. Essentially ...

- IRS statistics show that the 'adult' industry has an abominable 'track record' in terms of tax compliance

- Banks consider 'adult' industry related clients to represent a 'high risk' ... partly because such clients could be hit with IRS asset ( bank account ) 'freezes' creating extra work for the bank, partly because of 'bad PR' when famous 'adult' industry names are associated with banks in mainstream media, etc.

- Banks have no legal obligation to accept 'adult' industry workers, or any particular individual, as a client ( exception for legally protected class members )

Thus Bank management can argue that the bank has much to lose and nothing to gain when allowing 'adult' industry related persons to open / maintain accounts. This position is amplified if, by unofficially co-operating with the DOJ / IRS to close 'adult' industry related bank accounts, the bank earns 'brownie points' that might be used to help the bank avoid future 'controversies' regarding mortgages, IPO's, prop trading etc. which could otherwise result in the bank being forced to enter into settlements and pay fines.

The 'stated' rationale for banks considering 'adult' industry related persons to represent a 'high risk' is essentially the same as that used to justify insurance companies charging young males under age 25 astronomically high car insurance premiums ... i.e. that a handful of well publicized 'bad examples' wind up being applied to the entire group.

As speculated in this news story, the REAL issue may stem from the US gov't wanting to clamp down on the 'off the books' cash business model which applies to many aspects of the 'adult' industry ... from 'stripper' tips to porn star 'private sessions'.

pink_bunny
04-28-2014, 03:32 AM
Has anyone here personally had a chase or bank of america account shut down? They said in the article - there was no way of knowing if the number was in the 10s or the thousands. I am sensing a bit of propoganda or shock value articles, yanno? IT is a disturbing though.

Melonie
04-28-2014, 03:35 AM
^^^ Chase wound up 'forcing' me to close a credit card account, by shifting me into the 'high risk' interest rate category without a repayment related reason to do so.

Vamp
04-28-2014, 08:59 AM
The "conspiracy theory" sound of the article is ridiculous.

ALL national banks have policies against adult industry accounts. It has been that way for a long long time.
Banks see adult industry accounts as liabilities. Some banks would look the other way if the name of the business didnt sound sleazy.

But with banks having growing losses, they have stopped looking the other way.

At the same time, if you are the only one using your accounts, you keep cash transactions limited, you answer teller questions by having answers already that are acceptable, keep your real name separate from your adult work, etc you should be ok at the same time.

The other option is to have a safe box.

Vamp
04-28-2014, 09:13 AM
Being curious I found some more information about "Operation Choke" .......

"Operation Choke Point is an effort born out of the Financial Fraud Enforcement Task Force .... The theory behind Operation Choke Point is that by cutting off the access that scammers and fraudsters have to banks, there would be less fraud. To determine who the potential fraudsters are, the regulators came up with a blacklist of potential bad guys: credit card schemes, gambling, escort services, Ponzi schemes and payday loans.

There's another characteristic that regulators used to determine potential fraudsters: the amount of (credit card processing) payments that businesses had to (disputes) return to consumers – often because they were not authorized. Government regulators define a "return" as any transaction that had been returned to the consumer’s bank account. It is not strictly limited to unauthorized transactions, which are usually evidence of fraud. Regulators want to set the “transaction return rate of 3% or more in any one month period,”
http://www.theguardian.com/money/2014/mar/23/operation-choke-point-payday-lenders-issa-banks

Stay away from credit card processing lol

Nocturnelle
04-28-2014, 09:36 AM
I could understand if they were targeting a performers business account or sex shops, sites, etc. But to shut down their personal accounts... No, that's discrimination and it's fucked up. Where do you draw the line?

GlamourRouge
04-28-2014, 09:50 AM
I've been noticing a trend that everything has become very... zero tolerance toward sexworkers. Even twitter has started suspending adult accounts, with accounts like @streamate and @SexyLadyShow which were suspended for like a whole week just like 2 weeks ago. Vine, tumblr, basically all social media has a zero tolerance attitude toward anything adult now.

I'm really not surprised to see this. I think the best plan of action is to open a business bank account in the name of something random (you will be required to have a business license, but you'd be better off with an LLC). Have a website for that random thing, and make it seem like you do a completely different type of work, as described by your website. That way, you could legally sue if they closed down your bank account for something like that. However, it will still be really obvious that you are a sexworker, just you can make it seem like your income came from something different.

justanothercamgirl
04-28-2014, 09:58 AM
Wow. I am speechless but not surprised. :(

Vamp
04-28-2014, 10:02 AM
When you open an account with a bank you are signing a contract with the bank. They will give you booklet called the DEPOSIT ACCOUNT AGREEMENT, that is the outline of the contract you signed into.

It says they can close your account for any reason. It doesnt matter if it is personal or business. Because that is included in the contract, it would be very hard to sue them over a closing of an account.

NudeAutoMall
04-28-2014, 10:11 AM
Love to hear some solutions, complaints are easy. Off Shore possibilities. I was researching Iceland since they put all their bankers in jail, thought I might find some honesty there; inconclusive.

I use to work for Charter One myself, and they were Adult Friendly, not any more, fees fees and more fees.

Melonie
04-28-2014, 10:13 AM
I think the best plan of action is to open a business bank account in the name of something random (you will be required to have a business license, but you'd be better off with an LLC).

Indeed a separate 'incorporated' business entity i.e. LLC or S-Corp with its own business bank account ( in a different bank ... better yet in a different bank in a different state ) and EIN does add some 'separation' between your personal bank account / personal financial history and your 'adult' industry activities. But these do involve significant additional costs ... thus may not be 'affordable' for part-time dancers and camgirls.



Love to hear some solutions, complaints are easy. Off Shore possibilities.

For better or worse, new FACTA regulations on foreign banks having to report transaction activities by US citizen account holders to the IRS has made offshore banks VERY unfriendly to US citizens as of late ... or at least unfriendly to those US citizens with less than $100,000 to deposit when attempting to open a new account ! Fortunately, in my own case, I was able to 'beat' the FACTA regulations thus was able to previously open offshore bank accounts ( although my Swiss bank account was closed on be due to FACTA because I don't reside in Switzerland )

One of the 'best' alternatives for camgirls may be to simply 'bypass' the use of a local US bank account altogether for money generated by 'adult' industry related activities, in favor of a 3rd party payment service utilizing a world-branded debit card with ATM withdrawls to cash and the judicious purchase of money orders to pay bills. This avoids US banks potentially picking up on well known 'adult' industry related payer names on personal bank account funds transfers i.e. StreaMates, ManWin, etc. Some 'Corporate Clubs' may be amenable to utilizing 3rd party payment services in the future, if approached by dancers en masse. Undoubtedly, at this point, the US banking industry has a long list of 'adult' industry payer names available to help identify 'adult' industry ties to particular personal bank accounts.

Some pundits would tell you that the new FACTA regulations being 'strong-armed' into place on foreign banks was 'step one' ... and that 'Operation Choke Point' is now 'step two' ...



I've been noticing a trend that everything has become very... zero tolerance toward sexworkers

While not directly related to the specific topic of this thread, self-employed workers in general ... and self-employed 'adult' industry workers in particular ... were already considered to be 'high risk' banking clients. The result of this arbitrary determination typically was that these clients were ( only ) offered high interest rate 'subprime' credit cards, auto loans, mortgage loans etc. in the cases where such clients were actually approved.

With banks now taking a 'public' position that they no longer want to do business with 'adult' industry workers, the proverbial handwriting is on the wall that dancers and camgirls should prepare themselves for the future possibility of being forced into 'cash' purchases of houses, cars etc. due to unaffordable / unavailable credit.

It also remains to be seen whether the 'public' position just taken by banks will be extended to brokerage / investment firms. If so, this would compromise the ability for dancers and camgirls to earn decent returns on their savings / investments ... and effectively reduce 'adult' industry workers to a scenario of retail check cashing services, safe deposit boxes, ATM's, and money orders, which essentially fall outside of the 'mainstream' US financial system.

PhatGirlDynomite!!!
04-28-2014, 06:02 PM
A few months back Chase contacted me via email about some ads I had placed on Backpage. When I called in they wanted to know if I had placed them and then asked me questions about what I did for a living. The rep said they were just "updating my account". Since then I no longer use that account to place ads or receive any of my deposits. I wonder how far back my records go or how far back they are willing to look. Years ago I used to receive checks from phone sex companies that were flagged. Chase would put a hold on my checks. At least 3 days I think? Anyways I've since "cleaned" up my Chase account and now only receive money to prepaid cards and then do transfers. Or withdrawals, then deposits to Chase. They're trying to make it difficult but their still workarounds. Use different phone numbers and emails not associated with your adult persona.

PhatGirlDynomite!!!
04-28-2014, 06:04 PM
Indeed a separate 'incorporated' business entity i.e. LLC or S-Corp with its own business bank account ( in a different bank ... better yet in a different bank in a different state ) and EIN does add some 'separation' between your personal bank account / personal financial history and your 'adult' industry activities. But these do involve significant additional costs ... thus may not be 'affordable' for part-time dancers and camgirls.


I have an EIN and I try to use that as often as I can since about 2010. But I'm not sure how that really benefits me? I don't like giving out my social so I use that instead when possible. How does this protect us?

SophieL
04-28-2014, 07:03 PM
I use a large bank and have been there for years. Last week they wanted to update my info as well "since it had been so long". They asked about my current employer. Since I still have a vanilla employer (albeit different from the one I had for 25 yrs) I gave them that one although I work there infrequently. My problem is that I have been on the hot gossip list so not really invisible. With these recent changes I am wondering if I should get Payoneer direct deposit or would taking my SM checks to a check cashing place be a better option and then deposit cash to bank?

Melonie
04-29-2014, 03:29 AM
I have an EIN and I try to use that as often as I can since about 2010. But I'm not sure how that really benefits me?

Being paid by 'adult' businesses in the name of your business and under an EIN creates a 'bump' in the paper trail leading to your own name and SS#. For businesses and tax agencies sniffing along that paper trail, an 'extra effort' is required to see beyond that 'bump'. I would assume that electronic funds transfers into your personal account at a major bank that are coming from your business account in a different bank wouldn't warrant any 'extra effort' being put forth on the part of the major bank . the major bank will 'assume' that you are employed by your business, without knowing that in fact you own that business !



With these recent changes I am wondering if I should get Payoneer direct deposit or would taking my SM checks to a check cashing place be a better option and then deposit cash to bank?

With payoneer or other 3rd party based direct deposits, you are essentially inserting a different kind of 'bump' in the ( electronic ) paper trail ... i.e. the 3rd party payer's account. In some ways this is even better than the above ... since your own name isn't involved in any way as part of the 3rd party payer's business. Also from a cost standpoint, the fees involved to use a 3rd party payer are likely to be significantly lower than the costs involved to establish and operate your own 'incorporated' business entity. For the pupose of this thread topic, it would be helpful if strip clubs would agree to start using 3rd party payment processing services for dancer money.

Cash deposits are a 'mixed blessing'. On the one hand, the use of cash totally severs any paper trail. On the other hand, the use of cash triggers bank obligations to observe and report to the IRS 'suspicious activity' by customers making regular / sizeable cash transactions. In the case of cashing StreaMates checks at a major bank, versus cashing StreaMates checks at a check cashing service and then depositing cash at the major bank, since StreaMates is such a well known 'adult' company this might be a worthwhile trade-off. However, both appear to involve more risk than a 3rd party payer or channeling funds through a business bank account first on the way to your personal bank account.



I use a large bank and have been there for years. Last week they wanted to update my info as well "since it had been so long". They asked about my current employer

The highly 'co-incidental' timing of these different bank inquiries tends to support the speculation that a systematic effort is now in fact underway to identify particular account holders referenced by Operation Choke Point.

Melonie
04-30-2014, 11:22 AM
some additional 'news' on this issue ... from


(snip)"“Operation Chokepoint” – and as more details of the program become public, more concerns are raised. The “chokepoint” in this operation is the nation’s payments infrastructure, the means by which merchants process nearly $5 trillion in consumer purchases in the U.S. each year. Federal law enforcers are targeting merchant categories like payday lenders, ammunition and tobacco sales, and telemarketers – but not merely by pursuing those merchants directly. Rather, Operation Chokepoint is flooding payments companies that provide processing service to those industries with subpoenas, civil investigative demands, and other burdensome and costly legal demands.

The theory behind this enforcement program has superficial logic: increase the legal and compliance costs of serving certain disfavored merchant categories, and payments companies will simply stop providing service to such merchants. And it’s working – payments companies across the country are cutting off service to categories of merchants that – although providing a legal service – are creating the potential for significant financial and reputational harm as law enforcement publicizes its activities. Thus far, payday lenders have been the most frequent target. Whatever the merits of payday lending – and there are valid arguments on both sides –it is legal in 36 states. And if payday lenders are today’s target– what category will be next and who makes that decision ?

If you’re thinking this is harmful to the flow of commerce, you’re right. Our nation’s payments infrastructure allows more than eight million U.S. merchants to accept credit and debit card payments. Particularly for merchants that sell products and services online, such acceptance capabilities are the only means of accepting payment –(snip)


It appears that we now know the answer to the question asked above i.e. what category of business may be next !!!

Eric Stoner
05-01-2014, 07:21 AM
From yesterday's N.Y. Post - Adult movie star Layton Benton says she is going to sue Chase for closing her account. Chase told her that her account was a "risk". Then they told her she'd have to wait ten days to get the several thousand dollars she had in there. She also wants to know how Chase found out what she did for a living . ( GOOD Question ! How did they find out ? )
Chase has reportedly closed at least four accounts of porn stars. Chase has been flagging payments for work such as camming as "irregular activity ". In a letter to her announcing the closing Chase also said : " We may also report the account to credit reporting agencies , which could discourage other banks from opening an account for you. "

Melonie
05-01-2014, 08:21 AM
She also wants to know how Chase found out what she did for a living . ( GOOD Question ! How did they find out ? )

At this point, one must assume that the DOJ may have provided lists of 'high risk' payer accounts to the big banks. For example, using Vivid's DoJ provided merchant bank account and routing number, for example, a computer search could easily turn up all Chase bank clients who deposited checks drawn against that Vivid bank account and routing number. This is a bit scary, given that the same technique could potentially be applied to, say, StreaMates' payer account at Plaza bank in Seattle.

For the sake of complete accuracy, I would assume that Chase 'meant' that they would be providing info to ChexSystems ... which virtually every bank must cross-check before they will open a new account for a new client.

As to potential lawsuits, as Vamp has previously pointed out, no 'constitutional right' exists which forces banks to open or keep open bank accounts for businesses or individuals. Banks have the right to decline to open or forcibly close bank accounts for businesses and individuals for ANY reason, as stated in every Depostor's Agreement. In one local news media report, however, a bank official did provide the reason his bank forcibly closed an account involving another DoJ 'high risk' business ... From


(snip)when T.R. decided to retire and let Elizabeth take the store online -- under the new name Discount Ammo-N-Guns -- the Libertis found themselves suddenly under fire.

A March 12 letter mysteriously informed them that BankUnited was closing their checking account "pursuant to the terms and conditions listed in our Depositor's Agreement." It gave the Libertis three days to transfer their cash elsewhere. When the Libertis called BankUnited for an explanation, they were politely informed that none would be forthcoming.

"I was very angry," Elizabeth says. "They were very inconsiderate. We had all our credit cards going through that bank. All of a sudden, we had to run and find another bank to keep our business going. We shut down for two weeks, and they wouldn't even tell us why."

After a day of dialing different BankUnited divisions and directors, the Libertis finally found out.

"This letter in no way reflects any derogatory reasons for such action on your behalf. But rather one of industry," wrote Coral Way branch manager Ricardo Garcia. "Unfortunately your company's line of business is not commensurate with the industries we work with."

BankUnited refused to explain the email to New Times, saying only, "We cannot discuss a customer's account."(snip)


It's understandable that Layton Benton might want to instigate a lawsuit for career publicity reasons ( receiving free mainstream media coverage already ), but she has zero chance of actually winning such a lawsuit.

PhatGirlDynomite!!!
05-01-2014, 08:47 AM
Recently several businesses I work with 1 here in the states and 2 abroad have started encouraging people to sign up with Paxum instead of Payoneer. Or to at least have Paxum as a backup. I now wonder if these suggestions have anything to do with these crackdowns and are they forewarning us of things to come?

Melonie
05-01-2014, 08:54 AM
^^^ Paxum is an e-wallet financial service based in Montreal, Canada. This could provide some 'insulation' regarding the potential reach of the US DoJ. Payoneer is headquartered near Wall St in New York, which might be uncomfortably close to the 'action'. Perhap Nissim from Payoneer can offer some additional information.

Eric Stoner
05-01-2014, 08:56 AM
At this point, one must assume that the DOJ may have provided lists of 'high risk' payer accounts to the big banks. For example, using Vivid's DoJ provided merchant bank account and routing number, for example, a computer search could easily turn up all Chase bank clients who deposited checks drawn against that Vivid bank account and routing number. This is a bit scary, given that the same technique could potentially be applied to, say, StreaMates' payer account at Plaza bank in Seattle.

For the sake of complete accuracy, I would assume that Chase 'meant' that they would be providing info to ChexSystems ... which virtually every bank must cross-check before they will open a new account for a new client.

As to potential lawsuits, as Vamp has previously pointed out, no 'constitutional right' exists which forces banks to open or keep open bank accounts for businesses or individuals. Banks have the right to decline to open or forcibly close bank accounts for businesses and individuals for ANY reason, as stated in every Depostor's Agreement. In one local news media report, however, a bank official did provide the reason his bank forcibly closed an account involving another DoJ 'high risk' business ... From http://blogs.miaminewtimes.com/ripti...nating_aga.php

It's understandable that Layton Benton might want to instigate a lawsuit for career publicity reasons ( receiving free mainstream media coverage already ), but she has zero chance of actually winning such a lawsuit.

Agreed BUT she MIGHT have a viable action for invasion of privacy and might be able to cobble together some sort of racial discrimination case.

Afaik porn might be illegal in some jurisdictions but that usually applies to producing or distributing. I don't think that includes acting in a porn film.

Melonie
05-01-2014, 09:00 AM
^^^ maybe, but she has zero chance of prevailing on the sole grounds of having her bank account closed ... which is the only point of direct relevance to this thread. And, obviously, the old show business adage that 'any publicity is good publicity' is probably at the forefront of her upcoming lawsuit ... which applies equally whether she wins or loses.

Circling back on topic, it also appears that Paxum is 'stepping up' to cash in on the Chase bank account closures ...



and Canadian company Paxum is apparently now handling accounts for US adult industry 'bigs' MindGeek ( = ManWin ), Vivid, Playboy etc. in addition to a number of smaller 'adult' businesses. Under the tried and true 'follow the money' theorem, this would tend to indicate that the US adult industry 'bigs' may already know something we don't !

Of course Paxum, like every other 'non-bank' financial entity, extracts a hefty price for their services ( i.e. $5 on the way in, and another $5 on the way out ). And none of these 'non-bank' financial entities are able to offer 'conventional' banking services such as checking accounts ( = online bill payment ), 'market' interest rate loans, etc. So they can't replace the loss of access to a 'regular' bank. However, they may at least provide an ongoing means for camgirls to get paid by webcam hosts etc. !!!

Actually this leads to a question for Vamp or others with direct banking industry intel ... relating to the Chase announcement that they will report 'high risk' activities to ChexSystems for the forcibly closed account holders. What sort of 'regular' banks do NOT depend on a favorable ChexSystems 'report' in their decisionmaking to allow new customer accounts to be opened ? From my experience, every major commercial and savings bank has consulted ChexSystems, as have credit unions.

oldster
05-01-2014, 09:56 AM
I dunno, I would think a bank is pretty much a public accommodation, and refusing to do business wiht a whole class of people is dangerous business

They had better hope they had treated others in the same way, were all males stars dumped etc?

Yet another reason to bank locally

When you can walk into the CEO's office it is a lot harder to treat you like a number

Eric Stoner
05-01-2014, 10:35 AM
I don't know about a "public accommodation " but banks are a highly regulated industry. At least they are supposed to be. I'm not an expert on banking law but there ARE some Federal and state laws barring some discriminatory practices.

A few things I don't get : 1. The Feds and many states want MORE transparency and MORE reportage for incomes. Thus why not encourage adult stars to bank their money ?
Why not generate records and the like plus know where it is ?

2. Chase is afraid of what exactly ? Lots of much shadier types have bank accounts for their legit and semi-legit businesses.

3. Why isn't this an opportunity for smaller and /or local banks ? Not that I'd expect to see an ad campaign : "Valley Bank is porn and stripper friendly " ; "Your money doesn't judge you so why should we ? "

Aurora_Sunset
05-01-2014, 10:47 AM
A few things I don't get : 1. The Feds and many states want MORE transparency and MORE reportage for incomes. Thus why not encourage adult stars to bank their money ?
Why not generate records and the like plus know where it is ?

2. Chase is afraid of what exactly ? Lots of much shadier types have bank accounts for their legit and semi-legit businesses.


This is exactly what I was about to ask. If the concern is that adult entertainers don't pay their taxes properly, how is shutting down their bank accounts and forcing them to use cash going to help that in any way? The only reason I pay taxes is because my income shows up on my bank statements. If the bank took away any proof that I made any sort of income, I wouldn't report a damn cent.

Melonie
05-01-2014, 12:18 PM
My industry acquaintance tells me that, from the bank's perspective, it's much more about banks not having to face another round of subpoenas, investigations, and threatened prosecutions / settlement payments in areas the bank deals in which are totally unrelated to businesses on the FDIC / DoJ 'high risk' list ( like maybe improper mortgage actions, HF prop trading, commodity price fixing, ex-pat Chinese / South American real estate money laundering ??? ) than it is actually about the supposedly 'high risk' businesses like 'adult' entertainment, gun sales, tobacco sales, payday loan services, etc. which are having their bank accounts forcibly closed. Or as he put it, if the bank agrees to do X, the gov't will agree NOT to do Y. If the bank doing X costs bank shareholders millions, but the bank NOT doing X leads to the gov't actually doing Y at a potential cost in the BILLIONS ( last Chase settlement payment cost $13 billion total - see ), it's damn certain that the bank's shareholders will force bank management to do X !!!

Also a topic of speculation is that this Operation Choke Point may actually be intended to try to achieve some of the same purposes as the ( failed ) CISPA/SOPA attempt of a couple of years ago regarding internet businesses, but without the gov't having to face similar public criticism. Keep in mind that it isn't just 'personal' accounts of FDIC / DoJ 'high risk' related business people that may fall under Operation Choke Point targeted bank closures ... but also merchant accounts of the businesses themselves ( see the online gun shop example I posted earlier in this thread ). Theorizing a bit, what happens if, instead of an online gun shop, a US based webcam host company has their merchant account forcibly closed, and as such are unable to collect money from paying US webcam customers ?

Arguably, the porn star related news blurbs may just be the tip of this proverbial iceberg. Except for the NY News blurb from yesterday, everything else 'leaking out' about this is coming from adult industry media, from local news anecdotal coverage etc. But there is some additional info available via different industry related media ...





... which helps provide some additional perspective.

I'm starting to get a bit nervous as this discussion is 'broadening' . All I'll risk commenting on is that I never expected to see the 'adult' industry and the 'guns and ammo' industry on the same side of any issue !!!



If the concern is that adult entertainers don't pay their taxes properly, how is shutting down their bank accounts and forcing them to use cash going to help that in any way?

The only speculation I can offer is something that was observed by a couple of blog sites ... that the DoJ blanket subpoenas dropped on banks allows the DoJ ( thus the IRS ) to take a look at ALL of the transactions which took place relative to a forcibly closed bank account for as many years as that account had existed, without the DoJ having to provide individual 'probable cause' justification. This goes well beyond the bank having to prepare 'cash transaction' reports and/or 'suspicious activity' reports.

If there are any inconsistencies regarding the total amount of deposits made versus the total amount of reported income, it's conceivable that the IRS could then use this bank account data to 'estimate' that the porn star actually earned $100,000+ per year more money than she previously reported on tax returns for the last 3+ years, resulting in some truly gigantic additional tax bills. Let's hope that the porn stars didn't deposit the cash they earned from all of those $1000+ per hour 'private sessions' with fans in their forcibly closed bank account. The bloggers referred to this as the de-facto financial equivalent of 'Stop and Frisk'.

Eric Stoner
05-02-2014, 07:34 AM
On a related note there have been a lot of reported cases of IRS abuse of secret warrants and civil forfeiture. A number of gas stations , convenience stores , small supermarkets and other small businesses who make frequent cash deposits of LESS than $10,000 have had their bank accounts seized. The owners have been forced to go to court to get back their own money.

Was there any unreported income ? No.
Underpaid taxes ? Nope.
Failure to file forms ? No.

The very compliance of these businesses and their banks caused the IRS to suspect that the amounts of the deposits were designed to avoid reporting requirements.In almost every case the business involved was doing nothing more than trying to limit the amount of cash on hand. Many were located in high crime areas. Very often their insurance policies REQUIRED them to limit the cash in their own safes ( a $10,000 limit is standard for most commercial policies .)

As we discussed in another thread in Dollar Den , with the IRS you are guilty until proven innocent. The IRS doesn't even have to show probable cause to get a secret warrant to seize your money. Just "reasonable suspicion" of some sort of non compliance and or evasion.
Here's where it really gets interesting - the banks are apparently tipping off the IRS when to make the seizures. Several lawsuits by the Institute For Justice have shown a pattern of amazing coincidences that the seizure orders occur when the bank balance of these businesses is exceptionally fat i.e. after the deposits are made but BEFORE payroll and vendor checks are honored by the banks. The IJ is trying to show that bank employees are trying to collect the standard IRS reward for reporting tax evasion. Both the IRS and the banks involved have been stonewalling on this issue.
Remember , nobody in any of these cases was charged with let alone convicted of any crime. On the contrary, ALL passed audits and routine examination by the IRS.

Eric Stoner
05-02-2014, 07:37 AM
On another related note , there have been a lot of tax evasion cases brought against porn stars. Ginger Lynn and Janine Lindemulder both did time for tax evasion to name just two.

oldster
05-02-2014, 11:29 AM
i have expressed my opinions on civil forfeiture before, it is an abomination. However, the IRS use of a 'secret' warrant seems only to come up in reference to this particular case, and only in essentially opinion pieces. Not that it does not happen, but considering this business and one across the street were targeted, and apparently not 1000 others, means someone [irs, bank] is up to something shady and with any luck we will find out who

Melonie
05-03-2014, 01:33 PM
^^^ the possible 'flip side' is that the FDIC / DoJ - via bank pressure - has been pursuing an entire list of industries which they have deemed to be 'high risk'. The effects on payday loan companies, gun shops etc. are fairly well documented ... see

(snip)" the United States Department of Justice (DOJ) in January filed an enforcement action and entered into a consent order with Four Oaks Bank & Trust Company, a small North Carolina bank, for what the Justice Department termed the "use of [Four Oaks'] accounts and its access to the national banking system in furtherance of a scheme to defraud consumers."

According to the Complaint, Four Oaks entered into an agreement with a third-party payment processor granting the processor direct access to the Federal Reserve Bank of Atlanta, a clearing house for Automated Clearing House (ACH) transactions. Pursuant to the arrangement, the processor processed more than $2.4 billion in transactions for its merchant customers. The vast majority of the transactions processed were for internet payday lenders. Other transactions involved alleged internet gambling and an alleged Ponzi fraud scheme. The DOJ further alleged that Four Oaks was aware of the fraudulent nature of the ACH transactions as it received substantial numbers of authorization verification requests from the borrower's banks as well as high numbers of chargebacks, or transaction reversals (including a transaction return rate that was allegedly 21 times higher than the industry average). The DOJ concluded that this arrangement violated the requirement found in the Bank Secrecy Act and the USA Patriot Act that Four Oaks have procedures in place to prevent it from providing access to the national banking system to entities engaged in unlawful activity.

According to news reports, Four Oaks agreed to pay a civil penalty of $1 million and to forfeit $200,000 to the United States Postal Inspection Service's Consumer Fraud Fund as proceeds of the fraud alleged in the lawsuit. In addition, the bank is required to assist the federal government in potential criminal investigations arising from the allegations, must commission an independent review of its conduct and must meet specific requirements before it can contract with any third party processors in the future. Specifically, Four Oaks cannot work with any processor that has, in the prior two years, serviced an internet payday lender that has generated transactions in excess of specified return thresholds. Further, Four Oaks must conduct due diligence to verify that any processor is not engaged in any false or deceptive business practice.

The Four Oaks lawsuit is the first enforcement action in the operation the DOJ entitled "Operation Choke Point," a joint action between the DOJ, the Federal Deposit Insurance Corporation and the CFPB to crack down on banks that facilitate allegedly abusive online businesses, including certain online payday lenders. The DOJ issued subpoenas in the Spring of 2013 to more than 50 banks and third-party payment processors in furtherance of the initiative. Additional civil enforcement actions are expected."(snip)

... thus it may simply be a matter of priorities that the DoJ has now gotten far enough down the list of 'high risk' businesses to start targeting 'adult' industry related businesses and individuals.

Also, as Eric Stoner alluded to, please note that no 'proof of wrongdoing' has actually been found, either in regard to Four Oaks Bank, or in regard to the 3rd party payment processors handling transactions for payday loan companies, online gambling sites etc. which were serviced by Four Oaks Bank. Bank management simply ran a cost vs risk equation, and decided that it was 'safer' to pony up $1,200,000 in settlement money for alleged / unproven bank 'wrongdoing', and to co-operate with the DoJ going forward, than to risk additional DoJ actions that could potentially cost the bank far more in administrative / compliance fees, legal fees, future fines, harm to the bank's public image etc.

Of greatest relevance to this thread, under the terms of the settlement, Four Oaks Bank is prevented from entering into future banking relationships with 3rd party payment processing services that exhibit a 'high' rate of chargebacks / reversals. Thus online gaming sites ... and potentially online 'adult' websites ... have permanently 'lost' one bank which their 3rd party payment processors might have used to process their online customer charges. If the actual DoJ situation with Chase bank follows along similar lines, that's yet another 'lost' bank. As this continues, more and more banks are likely to be directly approached by the DoJ ... with lots of other banks seeing what's happening and opting to 'voluntarily' sever their relationships with 'high risk' industries and individuals before DoJ subpoenas and bad publicity starts flying in THEIR direction. Thus at some future point, online gambling sites, online 'adult' websites etc. could wind up with zero options left for their 3rd party payment processors to collect online charges from US customers.

NudeAutoMall
05-04-2014, 08:56 AM
If one were to study the great depression, we see a lot of similar dirty tricks to gather wealth. Force smaller banks out of business and keep people from achieving new money.

Melonie
05-04-2014, 09:31 AM
^^^ true and also fairly relevant. If the pundits are to be believed, this may be a deliberate 'assault' against ( small ) 3rd party online payment processors servicing the 'high risk' industries listed by the FDIC / DoJ, along with an 'assault' on the 'high risk' industries themselves.

Speculating further, as you allude, it may turn out that 'independent' adult websites and webcam hosts may lose their 3rd party online payment processing services, while huge 'corporate' adult websites and webcam hosts ... who can afford to set up direct US online payment processing capabilities via a co-operative US bank ( i.e. Wells Fargo ) or non-US based 3rd party online payment processing capabilities ( i.e. Paxum in Canada ) beyond the direct reach of the DoJ ... remain unaffected.

justanothercamgirl
05-17-2014, 09:28 AM
^^^ true and also fairly relevant. If the pundits are to be believed, this may be a deliberate 'assault' against ( small ) 3rd party online payment processors servicing the 'high risk' industries listed by the FDIC / DoJ, along with an 'assault' on the 'high risk' industries themselves.

Speculating further, as you allude, it may turn out that 'independent' adult websites and webcam hosts may lose their 3rd party online payment processing services, while huge 'corporate' adult websites and webcam hosts ... who can afford to set up direct US online payment processing capabilities via a co-operative US bank ( i.e. Wells Fargo ) or non-US based 3rd party online payment processing capabilities ( i.e. Paxum in Canada ) beyond the direct reach of the DoJ ... remain unaffected.

Paxum is Canadian? I had no idea! Thanks for the heads up. :)