Re: Blacknet worries

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

C'punks,

David L Womack wrote about several ways he thought the USG could go after 
crypto anarchists and fellow travelers.  While I believe there is much to 
say in agreement with the tools he has identified, in some ways, he is 
still asking the wrong questions.  David wrote:

> 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.

If you have no *seizeable* assets, the burden--in effect--moves back to 
the IRS

> 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. . .
> 
> 3.  CCE (Continuing Criminal Enterprise). . .

Again, without seizable assets, it is highly unlikely any of this neat 
stuff will be used against you.  Only fat or famous targets are worth the 
government's attention.  They aren't in it for their health.

> 4.  IRS-1040, Schedule B, Part III, Foreign Accounts and Trusts. . .

If your total overseas accounts aggregate under $10,000, the correct 
answer to the IRS is "NO."  For amounts over $10k, well, they have to 
find them first, don't they?  *Insurance* and *annuity* policies aren't 
reportable at all.  Give you any ideas?
 
> 6.  RICO. . .
>
> 7.  Did you know that Federal prosecutors have a better than
>     90% conviction rate?

Same answer.  They aren't going to fool with you unless you have bucks or 
are a "name."

> 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?

(a)  You plan to use your "true name"?  (b)  You plan to actually 
transfer the money?  How crude.  Why not just access the goods and 
services without bringing in the moola?  (Paradyme shift required.)
 
> 9.  . . . 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?

Yes, for those who can't keep their business secret, think of it as 
evolution in action.

While David has done some great *linear* thinking about the problems that 
will face us all in the brave new world of crypto anarchy, something more 
is needed.  All the problems that have been suggested have solutions.  
But they require that we not get canalized in our thinking.  The digital 
domain is NOT the real world rendered in electrons.  It has its own set 
of rules that are derived from its unique electronic/cryyptographic nature.


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