How Prosecutors Use Laws Against Lying To Banks

Walter OlsonFinancial technology blogger Patrick McKenzie has written a recommended series in two parts (first,second) on the sorts of Know Your Customer (KYC) and anti ‐​money‐​laundering programs under which “the financial system has been deputized to act as law enforcement.” One of his recurring themes is that these and related laws are“not straightforward in how they achieve their goals.”Take for example the laws against lying to banks. These are extremely stringent federal laws, barbed with stiff criminal penalties. You might assume the main aim of these laws is to keep people from swindling banks themselves. McKenzieexplains how they fit into the wider goal of pulling financial institutions into the service of law enforcement:[Lies told to banks] will be recorded with exacting precision, for years, by one of the institutions in society most capable of keeping accurate records and most findable by agents of the state.This means that if your crime touches money, and much crime is financially motivated, and you get beyond the threshold of crime which can be done purely offline and in cash, you will at some point attempt to interface with the banking system. And you will lie to the banks, because you need bank accounts, and you could not get accounts if you told the whole truth.The governmentwants you to do this. Their first choice would be you not committing crimes, but contingent on you choosing to break the law, theyprefer you also lie to a bank...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs