agingrebel.com
A furor has erupted in the last two days over the use of open loop debit card readers by the Oklahoma Highway Patrol.
Oklahoma has a sordid history of using
civil forfeiture laws to steal from citizens in order to enrich police
departments and individuals connected to the law enforcement industry.
In 2013, an anonymous district attorney in the state used $5,000 from a
forfeiture fund to pay off his student loans. Another unnamed, Oklahoma
prosecutor lived rent free in a seized house for five years and paid his
utility bills with forfeited money. Two months ago, Wagoner County
Sheriff Bob Colbert and Deputy Jeffrey Gragg were indicted for illegally
seizing $10,000 in cash from a driver after a “routine traffic stop.”
On February 27, greedy and crooked Oklahoma cops seized $53,000 from the
manager of Christian rock band. The manager planned to donate the
money to an orphanage in Myanmar. Cops accused him of being a drug
dealer. The case became a national scandal.
Asset forfeiture is the euphemism that
describes the seizure of private property and money from people accused
of drug crimes. The key word is “accused.” In order to get their money
or property back victims of asset forfeiture must hire a lawyer and sue.
It has become a major source of funding for police departments all over
the country. The cops get to keep what they steal. Seventy percent of
forfeiture expenditures in Oklahoma are used to pay cops.
The Good News
The Oklahoma card readers will be used
by traffic cops who patrol Interstate Highway 40. Numerous commentators
have expressed outrage that police in Oklahoma could simply contrive a
traffic stops, accuse their victim of drug trafficking, pull the debit
cards from their victim’s wallet and use the new card readers to steal
all the money in a victim’s bank account. Wednesday in the Washington Post,
Radley Balko reported “the Oklahoma Highway Patrol has a device that
also allows them to seize money in your bank account or on prepaid
cards.”
“Here’s how it works. If a trooper
suspects you may have money tied to some type of crime, the highway
patrol can scan any cards you have and seize the money.”
Then Balko quoted a cretinous Oklahoma
Highway Patrol spokesman who explained, “We’re gonna look for different
factors in the way that you’re acting. We’re gonna look for if there’s a
difference in your story. If there’s someway that we can prove that
you’re falsifying information to us about your business.”
The good news is that things aren’t quite that bad yet. Balko got it wrong.
Some Details
First, police cannot touch your cards
until after they arrest you. Then, as part of what is often called a
post-arrest “inventory search,” while they make a list of the belongings
on your person, they can scan your debit card.
Secondly, the card readers do not allow
police to steal your bank accounts. The seizures can only be made on
prepaid debit cards – cards that are “loaded” in advance with some
amount of money at an outlet like Green Dot or Walmart. Those are an
alternative to carrying cash. The readers cannot interact with cards
connected to a legitimate bank account.
Prepaid debit cards come in two flavors –
called open loop and closed loop. Closed loop cards are your prepaid
Starbucks or Target card. They can only be used instead of cash for
purchases at one business. Open loop prepaid cards can be used anywhere,
wherever – for example – Visa or MasterCard are accepted. For the last
four years, the Department of Homeland Security has been encouraged to
think of open loop cards as a tool of criminals and terrorists. For
example, one common argument goes, buying an airplane ticket with cash
raises immediate alarms but buying an airplane ticket with an open loop
card does not.
T. Jack Williams
And, the principal alarmist behind this
fear that open loop debit cards are a national threat is a man named T.
Jack Williams. Williams is currently the president of a company called
Paymentcard Services, Inc. According to his resume, Williams clients
“include multiple federal and state law enforcement agencies including
DHS, ICE, and USSS, all of which utilize Mr. Williams as a payment card
subject matter expert. His expertise ranges from global infrastructure
to forensics, targeting the criminal use of prepaid cards to launder
money or finance terrorists.” At a hearing in Carson City, Nevada in
March 2015 Williams described himself as “the inventor of the prepaid
card.”
In 2012, Williams started another
company called ERAD Group, Inc., which is named after the Department of
Homeland Security Science and Technology Directorate’s Electronic
Recovery and Access to Data (ERAD) initiative. The readers have been
around since 2012. Williams landed a contract with Homeland Security
that year. According to Homeland Security, the card readers are supposed
to be used to detect “fraudulent cards.”
“The ERAD Prepaid Card Reader is a
small, handheld device that uses wireless connectivity to allow law
enforcement officers in the field to check the balance of cards,” the
Department states. “This allows for identification of suspicious prepaid
cards and the ability to put a temporary hold on the linked funds until
a full investigation can be completed.”
Oklahoma is buying its card readers from
ERAD Group, Inc., and according to the contract the state signed with
ERAD, Williams will get 7.7 percent of the money seized using the card
readers. And it is all perfectly legal.
The Law
Earlier this year, in a “proprietary and confidential” brochure aimed at law enforcement agencies:
Williams argued that according to US v. Alabi and US v. Bah
“interrogating the magnetic stripe of a confiscated credit, debit or
prepaid card does not violate an individual’s Fourth Amendment rights.”
He reads Riley v. California to mean “individuals do not have
privacy rights with magnetic stripe cards.” And he tells his potential
police customers that the cases Oklahoma v. Eighty Three (83) Walmart Gift Cards and various MasterCards and Visa Cards and US v. Ross William Ulbricht, ak/a “Dread Pirate Roberts,” a/k/a “DPR,” a/k/a “Silk Road” instruct that “prepaid cash cards are…currency.”
The bad news is that this is just the beginning.
