From: dwomack@runner.utsa.edu (David L Womack)
Date: Sun, 20 Feb 94 14:51:27 PST
To: cypherpunks@toad.com
Subject: Re: Blacknet worries
Message-ID: <9402202250.AA24131@runner.utsa.edu>
MIME-Version: 1.0
Content-Type: text/plain


With all due respect....the U.S Government has PLENTY
of tools to go after those deemed to be violators of
various rules and regs...with or without Blacknet,
with or without encryption.

For the purposes of discussion, let's assume perfect,
unbreakable encryption, all undistinguishable (even
in principle) from noise.  Yes, I admit, that is a
big assumption.

What other tools can be used, well...

1.  Imputed income.  If you live well, and don't show
    enough reportable income, the IRS can determine how
    much you are _Really_ making, and figure your tax
    thereon.  You disagree?  Prove it in tax court.
    By the way, the burden of proof is on ...YOU.

2.  Criminal conspiracy.  Elements are
   a.  two or more people
   b.  a prepatory act

    So...if we were talking about any number of possible
    illicit activities, conspiracy is a really viable
    charge.  Even if nobody ever commits the  act.  Think
    about this one next time you talk with anyone
    you don't know really well about anything much
    more controversial than the *_Lovely_* weather
    we've been having!

3.  CCE (Continuing Criminal Enterprise).  Did you
    know that the statute of limitations is suspended
    under this law?  And, testimony from third
    party *_unidentified_* informants is admissable?

4.  IRS-1040, Schedule B, Part III, Foreign Accounts and Trusts.
    Except for one relatively minor loophole, if you fail to
    report a foreign bank account, it is considered prima
    facie evidence of tax fraud.  Sound like a really bad
    day in the making?

5.  If you have more than $10,000 in US Dollar value in
    an offshore account, you are required to fill out a
    special form for the IRS giving your account numbers;
    unless you want to declare that you have more than
    20 such accounts, aggregating to more than $10,000.

6.  RICO.  They got Mike Miliken using this...indeed, Barron's
    magazine did an interesting report on RICO, with the
    conclusion that a determined Federal Prosecutor could
    use the law to convict a ham sandwich.

7.  Did you know that Federal prosecutors have a better than
    90% conviction rate?

8.  HOW does one spend "magic money"?  If you have bunches of
    cash offshore, and bring it in, records are created.  If
    you buy something, potential witnesses are created.  Can
    you really expect that the clerk in wire transfer at XYZ
    bank (who makes $6.50/hr) won't tip off someone when you
    wire in the $20,000 to buy ...whatever?

9.. Spies, criminals, and others often get in trouble due to their
    own and others' lack of discretion.  Can we really expect
    users of a hypothetical blacknet would never drink too much,
    never wish to impress someone, never trust someone unwisely?

NO, I'm not an attorney...by all means, check out what I've
said;  and, wherever you find errors, please correct them.
Hopefully, I've not given offense.  I enjoy encryption, and
I'm all for more of it;  but, I really don't think it will
be anything more than a minor inconvenince for law enforcement
and prosecutors if people engage in wholesale criminal acts.
The rather silly efforts in Waco, where those inside used
assault rifles to shoot at battle tanks; comes to mind as
analogous to use of encryption to stave off prosecution.

Now...your turn.  Let the Flames begin!

Regards,

Dave