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Reason Suggests DoJ Closing Porn Stars' Bank Accounts 548

Posted by timothy
from the moral-crisis dept.
MouseTheLuckyDog (2752443) writes "In a recent story on reason.com it was reported that the DoJ is closing down the bank accounts of porn stars. Not knowing the site I googled around and found another site, the Guardian. The story does not end there. It turns out that this is part of a larger scheme (ironically) called Operation Choke Point. Also reported in a Washington Post article that downplays the practice. According to Cryptocoin news. There are thirty industries the DoJ is now targeteting: Ammunition Sales; Cable Box De-scramblers; Coin Dealers; Credit Card Schemes; Credit Repair Services; Dating Services; Debt Consolidation Scams; Drug Paraphernalia; Escort Services; Firearms Sales; Fireworks Sales; Get Rich Products; Government Grants; Home-Based Charities; Life-Time Guarantees; Life-Time Memberships; Lottery Sales; Mailing Lists/Personal Info; Money Transfer Networks; On-line Gambling; PayDay Loans; Pharmaceutical Sales; Ponzi Schemes; Pornography; Pyramid-Type Sales; Racist Materials; Surveillance Equipment; Telemarketing; Tobacco Sales; and Travel Clubs. But more can be added. (I notice alcohol sales is not on the list)." The Reason article stops short of saying that Choke Point is proven to be the reason for the account closures, but it seems very plausible.
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Reason Suggests DoJ Closing Porn Stars' Bank Accounts

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  • by bigmario (3487697) on Friday May 02, 2014 @07:10PM (#46904545)
    Using DoJ resources to force the closure of accounts belonging to "legal but subjectively undesirable business ventures"? There's no way in hell that can be legal. This is a slippery slope situation and should get folks on both sides of the aisle riled up
    • by gweihir (88907) on Friday May 02, 2014 @07:16PM (#46904587)

      It is the way to fascism. Just look at historic precedents. Very, very alarming.

      It also means the DoJ is not concerned with "the law" anymore, but just does what those in power want. Not that "the law" was worth a lot before.

      • by DoofusOfDeath (636671) on Friday May 02, 2014 @07:25PM (#46904631)

        It is the way to fascism. Just look at historic precedents. Very, very alarming.

        It also means the DoJ is not concerned with "the law" anymore, but just does what those in power want. Not that "the law" was worth a lot before.

        Time to leave.

    • by Darinbob (1142669) on Friday May 02, 2014 @07:36PM (#46904717)

      Chilling if true. I can't see evidence that this is happening except for this web site which merely asserts it is happening. Even the guardian article isn't saying accounts are being closed, only that they're sending regulators after businesses that are flagged by the banks. Maybe banks themselves are denying accounts to some people but the connection to DOJ is slippery.

    • by artor3 (1344997) on Friday May 02, 2014 @07:50PM (#46904791)

      As with most stories on Slashdot these days, it's bullshit meant to make you scared and angry.

      prosecutors are investigating whether third-party processors that route payments for merchants through banks are ignoring signs of fraud to rake in fees from transactions.

      They're not trying to shut down porn -- what possible motive could they even have for that? They're trying to stop disreputable businesses from effectively robbing people a few nickels at a time. If innocent companies are getting caught in the crossfire, then the DOJ needs to do its job better. But quit hyperventilating. This is not some evil government plot to wipe out all of the fireworks stores and dating services in the country.

      • by Xebikr (591462) on Friday May 02, 2014 @09:42PM (#46905429)
        prosecutors are investigating whether third-party processors that route payments for merchants through banks are ignoring signs of fraud to rake in fees from transactions.

        There are legal ways to shutdown companies that are breaking the law. They involve judges and due process and an adversarial system, not extra-legal requests from the DOJ to the payment processors. An order to seize property or force a business closure can be appealed and overturned. What's their recourse here? Sue the payment provider? Sue the DOJ? Can't. No business, no money. This *is* horrible. If they are investigating, they should complete their investigation, and then ask a judge to do something, or have someone arrested.
      • by MacDork (560499) on Saturday May 03, 2014 @12:29AM (#46906127) Journal

        Really. Then how do you explain their closing Teagan Presley's personal account, [dailymail.co.uk] and her husband's account?

        The only business I have with Chase is a single credit card account. I'll be closing that as soon my next payment on it clears. I'm also going to be thinking very hard about finding a European bank to move my money into.

    • by LordLimecat (1103839) on Friday May 02, 2014 @08:14PM (#46904915)

      Theyre not. The speculation is that banks are doing it voluntarily at the encouragement of the DoJ, but even that is a huge leap based on hysterical speculation by Reason based on hysterical speculation by vice which is based on a "maybe...?" article on WSJ.

      Noone knows, we only have a handful of pornstars who have lost bank accounts, and some guessing about what "operation chokepoint is".

      This is stupid trollbait, and everyone here is falling for it.

    • by BitZtream (692029)

      Of course its not legal.

      But how stupid are you to believe they are actually doing this based on a slashdot summary, of an article that speculates ... based on the speculation of another article, based on the speculation in another article, based on the speculation of yet another article?

      I'm not kidding, go read them, its literally speculation 4 or 5 levels deep with pretty much nothing but correlation to back it up, and the number of correlated items is so low that no one in their right mind would jump to t

  • by Jane Q. Public (1010737) on Friday May 02, 2014 @07:12PM (#46904555)
    I'm not making any claims, I'm just making an observation:

    Some of the things on DoJ's "Laundry List" of so-called "high financial risk" businesses are historically not high-risk AT ALL.

    Like ammunition and firearms. Far from being "high-risk": manufacturers and retailers have historically been both large and long-lived. There is an ammunition manufacturer not all that far from here and they have been in business for 60 years. And the vast majority of ammunition is sold through major sporting-goods franchises, not mom-and-pop shops. Same with firearms.

    Further, where people DO engage in small-scale ammunition or firearms sales or manufacturing, it is often a perfectly legitimate, specialty product. I know somebody who made and sold custom cartridges, and I have also met a guy who makes firearms. All perfectly legit and legal.

    So pardon me for saying so, and I don't want to be misunderstood as being some kind of right-wing nut or anything, but it kind of looks like some things on this list are in fact Obama agenda items. Which is illegal.
    • by artor3 (1344997) on Friday May 02, 2014 @07:56PM (#46904821)

      The question is "high risk of what?"

      The answer is credit card fraud. That's what the DOJ is trying to go after here. If you google online ammo suppliers, you get a bunch of sites that look like they haven't been updated since '98. I have no doubt that the companies are perfectly reputable. But they might not have the tightest security when it comes to detecting fraudulent transactions.

      No one is saying that they're engaged in anything illegal. No one is saying they're unstable, fly-by-night businesses. What the DOJ seems to think is that the payment processing companies they do business with might be turning a blind eye to fraud in order to make more money.

      • by Amouth (879122) on Friday May 02, 2014 @08:24PM (#46904971)

        The question is "high risk of what?"

        The answer is credit card fraud.

        they might not have the tightest security when it comes to detecting fraudulent transactions

        If this was true, then it should be the industry that goes after the company not the DOJ.. PCI-DSS is extremely clear on what the company needs to do to be able to process credit cards. If they are getting ripped off or that company is by action enabling fraud to happen then that company is liable for the charges and fees.

        Trust me i've gone through PCI-DSS certification, and it isn't easy.. but it is extremely clear what the ramifications are for failure.

        • by artor3 (1344997)

          Ehh, maybe so. Maybe the industry asked the DOJ for support. Maybe the DOJ didn't think the industry was handling it well and wanted to step in. Maybe they're wrong to do so. I don't know.

          What I do know, is that a lot of people here seem to think that this is part of Obama's super-secret conspiracy to eradicate porn and fireworks and dating websites. And that's absolutely bonkers.

      • Re: (Score:3, Interesting)

        by Anonymous Coward

        Speaking as someone who runs an online-business classified as high-risk and has spent years dealing with problems with credit-card processing and banks. High-risk was traditionally meant to refer to businesses with a high-risk of fraud (or charge-backs) but over-time has broadened to include industries that are not accepted by the powers that be and who want to marginalize those businesses by making business increasingly difficult to conduct. If you can not accept credit-cards in this day an age, good lu

    • Yes, Obama clearly was pro-cable box descramblers and pro-fireworks when he ran for office.

      Just one more way he didn't keep his promises!
  • by IonOtter (629215) on Friday May 02, 2014 @07:12PM (#46904563) Homepage

    Pepper the list with plenty of "industries" that the vast majority of people would dearly love to see destroyed, such as pyramid schemes, racist trash and payday loans, but shut down plenty of useful-but-intimidating-to-those-in-power businesses as well.

  • Legal (Score:4, Insightful)

    by Anonymous Coward on Friday May 02, 2014 @07:13PM (#46904573)

    Not sure why merely doing business in the Ammunition Sales; Coin Dealers; Credit Repair Services; Dating Services; Firearms Sales; Fireworks Sales; Home-Based Charities; Life-Time Guarantees; Life-Time Memberships; Mailing Lists/Personal Info; Money Transfer Networks; On-line Gambling; PayDay Loans; Pharmaceutical Sales; Pornography; Racist Materials; Surveillance Equipment; Telemarketing; Tobacco Sales and Travel Clubs industries or combination thereof should automatically flag ones activies as "questionable". What happened to innocent until proven guilty??

  • by sideslash (1865434) on Friday May 02, 2014 @07:14PM (#46904575)
    ...but I can't stand the thought of government deciding that some people (who aren't doing anything illegal) shouldn't be able to have a bank account.

    I reject the excuse that it's all optional on the part of the banks. Having Big Brother breathing down your neck and Strongly Suggesting that you do something is absolutely inappropriate, and I'd love to see Washington, DC held accountable for this in some way.
    • by lpevey (115393) on Friday May 02, 2014 @07:38PM (#46904727)

      Agreed, it is clearly not optional on the part of the banks. This has a very chilling effect on activities where the regs can't actually prosecute for wrongdoing. If they could, they would, and they wouldn't be going this route. This sort of tactic is contrary to the principles of a free society. Banks will "choose" to decline to do business with certain people and companies if they feel they will get sued or have to spend a fortune on a governmental investigation. If there is truly evidence of illegal activities, authorities should go after the people allegedly engaged in those activities, not the banks. But in these cases, often times the activities are not really illegal, even if they are activities not loved by everyone in society. Because the government can't prosecute, should it be allowed to strong-arm banks into doing the dirty work? What does that sort of logic lead to, especially when things like banking are akin to breathing in modern society.

      There are plenty of nefarious behaviors going on at banks that regulators would be wise to oversee, but this is a case of overstepping IMO. Regulators are forcing discrimination. Is it okay for banks to be choosy based on certain parameters (I don't like your business because it's porn and I think porn is ruining our society) and not others (I don't like your business because it supports, say, charter schools, and I the bank president happen to think charter schools are ruining our society)? That's discrimination. At the very same time, regulators would bring proceedings against these very same banks for refusing to do business with certain people/organizations just because they choose to.

      http://www.bloomberg.com/news/... [bloomberg.com]

      "PNC Financial Services Group Inc. (PNC) received a subpoena regarding the return rate for its payment-processor clients from the U.S. Department of Justice. The department’s consumer protection unit is seeking information “for certain merchant and payment processor customers with whom PNC has a depository relationship,” the Pittsburgh-based bank said today in a regulatory filing. “We believe that the subpoena is intended to determine whether, and to what extent, PNC may have facilitated fraud committed by third-parties against consumers.” "

  • BTC (Score:5, Insightful)

    by Z34107 (925136) on Friday May 02, 2014 @07:18PM (#46904593)

    For all the Ponzi-this, tulips-that that gets posted every time Bitcoin makes the news, this is one of the problems they're trying to solve. A prude at Chase or the DoJ can't close your bank accounts if you have no need of a bank in the first place.

  • by RJFerret (1279530) on Friday May 02, 2014 @07:20PM (#46904609) Homepage

    Wait, so they want more of these industries to be cash based and perhaps un/under-report income tax??? I know plenty of people who have been moving more toward cash in the past several years, but it seems counter-intuitive the government would want to track less.

    But seriously, how will this decrease fraud?

    • Wait, so they want more of these industries to be cash based and perhaps un/under-report income tax???

      Yes. That way they can come crashing down and get the businesses totally shut down instead of just economically neutered.

  • by Hamsterdan (815291) on Friday May 02, 2014 @07:26PM (#46904639)

    Drive porn to the black market... That will probably work as well as the war against drugs...

  • by joe_frisch (1366229) on Friday May 02, 2014 @07:27PM (#46904659)

    Considering that investment firms cost the government HUNDREDS OF BILLIONS OF DOLLARS in bailouts, can they really argue that porn stars are "risky"?

  • So, uhh, DOJ guys (Score:5, Insightful)

    by russotto (537200) on Friday May 02, 2014 @07:35PM (#46904713) Journal
    Do you WANT to create a shadow banking system? Because this is how you do it.
  • High risk (Score:4, Insightful)

    by manu0601 (2221348) on Friday May 02, 2014 @08:21PM (#46904959)
    Removing high risk activities? They should close banks!
  • Porn? Really? (Score:5, Insightful)

    by Opportunist (166417) on Friday May 02, 2014 @08:30PM (#46905003)

    As if our weekly fun news didn't have enough material for its "US SPECIAL" corner...

    What is it with the US and Porn? I've never seen a country so obsessed about it, and quite frankly any time some sort of report about some sort of sexual freak show or paraphilia, you may rest assured it's about the US.

    Kinda reinforces my theory that the road to sexual perversion is repressing it.

  • by Hangtime (19526) on Friday May 02, 2014 @08:31PM (#46905009) Homepage

    Frank Keating, former governor of Oklahoma and FBI agent who is now head of the American Banker's Association came out against Choke Point in a WSJ op-ed a week ago.

    http://online.wsj.com/news/art... [wsj.com]

    When you become a banker, no one issues you a badge, nor are you fitted for a judicial robe. So why is the Justice Department telling bankers to behave like policemen and judges? Justice's new probe, known as "Operation Choke Point," is asking banks to identify customers who may be breaking the law or simply doing something government officials don't like. Banks must then "choke off" those customers' access to financial services, shutting down their accounts.

    Justice launched the effort in early 2013 as a policy initiative of the president's Financial Fraud Enforcement Task Force, which includes the Federal Deposit Insurance Corp., the Consumer Financial Protection Bureau and other regulatory agencies. Though details are scant—much of the investigation has been conducted in secret—the probe aims to crack down on fraud in the payments system by focusing on banks that service online payday lenders and other services deemed suspicious by the government....

  • by stenvar (2789879) on Friday May 02, 2014 @08:58PM (#46905161)

    "Nice bank you have there. Wouldn't it be a shame if we had to shut you down and audit you and your best customers for the next six months?"

    "Now, here is a list of people we think you better not do business with. Any questions?"

  • I found two non-fringe or slightly suspect news links: EFF.org [eff.org]. The article completes the circle back to sites like reason.com and The Guardian. The other is CNBC.com [cnbc.com]. It links to entertainment sites like Perez Hilton. Not the sort of thing you expect to find when a secret government operation like this is uncovered.

    What I don't see, is anything linking directly to information about the DOJ's Operation Chokepoint. The list of targets is a bit broad and the tactics are a little suspect. You wouldn't think of a far left liberal like Obama as someone who is anti-porn. We'll have to watch this and see how things develop. Maybe someone will find a few hard government generated facts and write up a 2600 article?

  • by alen (225700) on Friday May 02, 2014 @09:43PM (#46905445)

    thousands? are all of their accounts being closed?
    there are probably hundreds of porn stars at any time being that they go through girls like baseballs at a game. plus all the people behind the scenes.
    is there suddenly a stop to all porn production? because that's what would happen if people can't get paid or companies lose access to banking

  • by alen (225700) on Friday May 02, 2014 @09:50PM (#46905477)

    google it
    chase closed a few accounts
    the porn people went on twitter and a lot of their friends closed their chase accounts in protest
    in reality it was a few accounts

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