1008-IRS_Whistleblower
00:00:00.000 | More isn't necessarily better. At CrowdStrike we understand that a
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00:00:09.400 | active real-time threats. Which is why we created our data-centric platform to
00:00:14.680 | have one agent, one console, and one integrated workflow to focus on our one
00:00:20.160 | mission. Stop breaches. When a cyber attack hits, who do you want power in
00:00:25.800 | your defense? CrowdStrike. We stop breaches. One of the things that we got
00:00:32.120 | to do is when you get something wrong, go back and correct the record. And today
00:00:36.020 | I'm gonna do exactly that. Welcome to Radical Personal Finance, a show
00:00:38.680 | dedicated to providing you with the knowledge, skills, insight, and
00:00:41.040 | encouragement you need to live a rich and meaningful life now, while building a
00:00:44.640 | plan for financial freedom in 10 years or less. My name is Joshua Sheets, I am
00:00:47.920 | your host, and if you were to go back to June of 2021 and listen to episodes 794
00:00:55.640 | and 797 of this podcast, you would find my discussion of the ProPublica articles
00:01:03.800 | titled "The Secret IRS Files, Trove of Never-Before-Seen Records Reveal How the
00:01:08.920 | Wealthiest Avoid Income Tax." This was a famous series of articles at the time,
00:01:13.840 | I think it wound up being about a half dozen or at least that's what I read,
00:01:16.480 | something like that. And these articles were all being written based upon
00:01:21.560 | publicly available, excuse me, based upon leaked IRS tax returns for the some of
00:01:28.760 | the wealthy people in the United States. Now this also was following a period of
00:01:33.080 | time in which President Trump's tax returns to the IRS, which he had famously
00:01:38.520 | refused to disclose publicly as is or was the custom in the United States for
00:01:44.080 | presidential candidates, his tax returns were leaked publicly and that made a big
00:01:48.840 | stir in the political space as well. In those episodes, I myself said, I doubt, I'm
00:01:53.840 | skeptical that anyone would ever be brought to justice, anyone would ever be
00:01:57.640 | found. It just seemed as though it was just too neat of a political trick, there
00:02:02.640 | was too much energy on behalf of the the value of the leaks for the political
00:02:08.520 | cause of the moment, and I didn't think anyone would ever be caught, captured, or
00:02:13.680 | prosecuted. I stand corrected. We go now to Justice.gov official press release
00:02:19.760 | from the Office of Public Affairs for Justice.gov, date January 29, 2024.
00:02:25.680 | Headline, former IRS contractor sentenced for disclosing tax return information to
00:02:32.000 | news organizations. A former IRS contractor was sentenced today to five
00:02:36.920 | years in prison for disclosing thousands of tax returns without authorization.
00:02:41.960 | Charles Littlejohn abused his position as a consultant at the Internal Revenue
00:02:46.520 | Service by disclosing thousands of Americans' federal tax returns and other
00:02:51.040 | private financial information to news organizations. He violated his
00:02:55.240 | responsibility to safeguard the sensitive information that was
00:02:58.040 | entrusted to his care and now he is a convicted felon, said Acting Assistant
00:03:03.240 | Attorney General Nicole M. Argentieri of the Justice Department's Criminal
00:03:07.960 | Division. Today's sentence sends a strong message that those who violate
00:03:12.960 | laws intended to protect sensitive tax information will face significant
00:03:17.480 | punishment. According to court documents, Charles Littlejohn, 38, of Washington, D.C.,
00:03:23.800 | while working at the IRS as a government contractor, stole tax return information
00:03:29.280 | associated with a high-ranking government official, Public Official A.
00:03:33.120 | Littlejohn accessed tax returns associated with Public Official A and
00:03:37.760 | related individuals and entities on an IRS database after using broad search
00:03:43.720 | parameters designed to conceal the true purpose of his queries. He then uploaded
00:03:49.240 | the tax returns to a private website in order to avoid IRS protocols established
00:03:54.520 | to detect and prevent large downloads or uploads from IRS devices or systems.
00:04:00.360 | Littlejohn then saved the tax returns to multiple personal storage devices,
00:04:05.280 | including an iPod, before contacting News Organization One. Between around August
00:04:11.680 | 2019 and October 2019, Littlejohn provided News Organization One with the
00:04:17.760 | tax return information associated with Public Official A. Littlejohn
00:04:21.840 | subsequently stole additional tax return information related to Public Official A
00:04:26.560 | and provided it to News Organization One. Beginning in September 2020, News
00:04:32.240 | Organization One published a series of articles about Public Official A's tax
00:04:36.200 | returns using the tax return information obtained from Littlejohn. "This sentence
00:04:41.920 | should serve as a warning to anyone who is considering emulating Mr. Littlejohn's
00:04:45.520 | actions," said Acting Inspector General Heather Hill of the Treasury, Inspector
00:04:50.280 | General for Tax Administration, TIGTA. TIGTA relentlessly investigates
00:04:56.120 | individuals who illicitly access and disclose taxpayer information regardless
00:05:01.120 | of their personal motivation. TIGTA appreciates the commitment of the
00:05:05.920 | Criminal Division's Public Integrity Section and the U.S. Attorney's Office in
00:05:09.400 | ensuring those who abuse their positions of public trust are held accountable for
00:05:14.080 | their actions. In July and August 2020, Littlejohn separately stole tax return
00:05:19.600 | information for thousands of the nation's wealthiest individuals. Littlejohn was
00:05:24.160 | again able to evade detection by uploading the tax return information to
00:05:28.040 | a private website. In November 2020, Littlejohn disclosed this tax return
00:05:32.560 | information to News Organization Two, which published nearly 50 articles using
00:05:37.200 | the stolen data. I guess it wasn't six. Littlejohn then obstructed the
00:05:41.240 | forthcoming investigation into his conduct by deleting and destroying
00:05:44.640 | evidence of his disclosures. Littlejohn pleaded guilty in October 2023 to
00:05:50.440 | unauthorized disclosure of tax returns and return information. Now if we go to
00:05:56.920 | some of the news articles from the time, from CBS News, one of the things that's
00:06:01.840 | interesting is his statement in court. Before sentencing Littlejohn on Monday
00:06:07.240 | to the maximum penalty, Federal District Judge Anna Reyes called his attack
00:06:11.360 | "an attack on our constitutional democracy. He targeted the sitting
00:06:15.840 | President of the United States of America and that is exceptional by any
00:06:18.720 | measure," Judge Reyes said. "It cannot be open season on our elected officials."
00:06:23.840 | Littlejohn made a brief statement before the court acknowledging that "I
00:06:27.920 | alone am responsible for this crime." He said he was driven by a desire for
00:06:32.480 | transparency, but was also aware of the potential consequences of his actions.
00:06:36.680 | "I made my decision with full knowledge that I would likely end up in a
00:06:41.320 | courtroom to answer for my serious crime," he said. "I used my skills to
00:06:45.960 | systematically violate the privacy of thousands of people." Littlejohn's
00:06:50.720 | explanations did not appear to sway the court's sentencing decision. Reyes said
00:06:55.240 | courts must be an "unbreakable bulwark for American democracy in the face of
00:07:00.000 | increased threats." The court's job, the judge said, was to make sure that others
00:07:04.720 | never viewed "this type of conduct as acceptable or justifiable or worth
00:07:09.720 | the trade-off. We are a nation of laws." I don't know about you, it doesn't sound to me
00:07:18.960 | like he's particularly repentant of his crime. Sounds to me like he went into it
00:07:24.880 | believing that this action that he took was necessary in order to advance his
00:07:31.560 | cause, his agenda, and that he accepts the five years in prison as a
00:07:38.200 | reasonable sentence. In a day and age in which people are self-immolating in
00:07:44.680 | public places for their political beliefs and political concern in the
00:07:48.760 | United States, it seems to me that five years is not a particularly long
00:07:52.360 | sentence, but I've never been to prison, maybe five years in the federal prison
00:07:56.840 | feels like forever, I don't know. But it certainly at least is worth
00:08:02.120 | acknowledging that the IRS did follow through and did catch this guy, did
00:08:07.520 | convict him in a court of law, and he is now in prison. And so we should
00:08:12.760 | acknowledge that and appreciate that. It's worth being
00:08:16.480 | appreciative of. The challenge is that though we can acknowledge and appreciate them
00:08:21.920 | for following through, the deed is done, the events are in the past, they have
00:08:28.400 | happened, and that probably is something that will happen in the future. Now, we
00:08:35.280 | should talk for a moment about privacy. For example, do government individuals or
00:08:39.920 | do wealthy individuals have a right to privacy? I think they do, but not all
00:08:45.880 | countries acknowledge that. And for example, with all of the hullabaloo
00:08:50.200 | around President Trump's tax returns, if we want our political candidates to be
00:08:55.440 | required to disclose their tax returns, then we should pass a law. Congress
00:09:01.120 | should do its job, pass a law, and require that political candidates make public
00:09:04.920 | their tax returns. We should not go about it with this unofficial but pressure
00:09:09.840 | thing, and then people going around and stealing the tax returns in order to
00:09:13.840 | publicize them. That's not healthy and helpful. If we believe that
00:09:18.680 | wealthy individuals should be required to publicly disclose their tax returns,
00:09:22.280 | then we should pass a law. And Congress should pass a law requiring the
00:09:26.080 | disclosure of tax returns, and the data can become public. There are some
00:09:31.080 | countries around the world, at least one I know, where that is the law, and
00:09:35.840 | that could be the law in the United States or whatever country that you are
00:09:39.960 | in. But as always, individuals acting outside of the law is not a healthy and
00:09:46.200 | a helpful thing. But it is something that happens, and I was
00:09:51.320 | interested to see if there was a history of this. So I went and I tried to find, is
00:09:55.280 | there a history of other kinds of instances in which leaked or stolen tax
00:10:00.680 | return data has become public? There is a precedent for this with regard to
00:10:09.120 | US President Richard Nixon. And in 1970-1971, somebody stole his tax
00:10:17.640 | return information, and that information was leaked. It's my understanding that
00:10:23.080 | whoever was involved was never publicly charged or prosecuted for that crime,
00:10:28.960 | because the political sentiment was very much focused on, "Hey, these
00:10:35.240 | tax returns are so scandalous," and so the person was never brought to justice.
00:10:39.160 | There have been a few other times. There was one guy who tried to extort
00:10:43.420 | presidential candidate Mitt Romney, that he tried to extort and sell those
00:10:51.920 | documents. As it turned out, it was a hoax, and the individual involved, a man named
00:10:57.480 | Michael Mansell Brown, didn't actually have any documents, and he was convicted
00:11:01.520 | for his extortion attempt and for his fraud attempt. But whistleblowers or
00:11:06.760 | leaking information is a time-honored tradition of individuals taking private
00:11:13.320 | information and going public with it. And in general, what I have found is that my
00:11:17.920 | friendliness towards whistleblowers depends much more on whether or not I
00:11:22.920 | happen to agree with the whistleblower's politics or position than it does about
00:11:27.880 | any kind of strong moral statement about whistleblowing in general. And I think
00:11:32.880 | that your experience is probably similar to mine, that when a whistleblower is on
00:11:37.120 | our side, we're glad to have the person come out and make private information
00:11:41.520 | public, and we think, "Yay, go for it, go for you, good job," and when the
00:11:46.040 | whistleblower doesn't agree with us, then we're upset about the travesty of
00:11:49.680 | justice of an individual making private information public. It's just human
00:11:54.280 | nature, right? What can you do and what can I do? Well, first of all, we can
00:11:58.200 | acknowledge and appreciate that the IRS has done its job, or that the
00:12:03.980 | Justice Department did its job, tracked somebody down, they
00:12:07.680 | prosecuted the individual, and gave him the maximum sentence permitted under
00:12:13.000 | federal sentencing guidelines. But if that rings hollow for you, as it does for
00:12:18.560 | me, as pretty insubstantial penalty for pretty challenging, you know, I don't know,
00:12:26.640 | how would you even value it? It's hard to say. So maybe I'm being too energized by
00:12:32.520 | saying it's an insubstantial penalty. It is what it is. But if it rings true that,
00:12:36.520 | "Hey, you know what, this ought not to happen," then the question is, "What can you do
00:12:40.440 | about it?" Because it's up to you what you do about it. And once things have
00:12:47.280 | happened, once the information is out there, if the information is harmful to
00:12:51.760 | you, you can't get it back. Once it's been printed on the internet and released, you
00:12:55.120 | can't get it back. So first of all, I think you should be aware of the
00:13:01.240 | risk. And many of us are living in a world in which we're simply not aware of
00:13:05.840 | the risk. I had a funny thing that happened to me at a recent group event.
00:13:13.680 | I went and I was buying some tickets for a little fair, and the person at the desk
00:13:18.240 | wanted my name. I'm paying cash for these little tickets for rides and food for my
00:13:23.960 | children, and the person wanted my name, and I just gave the person an alias name.
00:13:27.640 | And someone standing there, who knows me by another name, turned and looked at me
00:13:31.560 | and said, "Huh? Like, what's going on?" And they said, "You know, what?" And I just
00:13:36.960 | explained that anytime you put your name or information into a database, you need
00:13:40.800 | to expect that that database is going to be published online and is
00:13:45.000 | fully available for someone else to be there. And so it's silly, because
00:13:49.920 | what's the actual risk to me of, you know, me going and buying tickets
00:13:55.600 | for a fair for my children and my name being disclosed? Not a big deal. Any more
00:13:59.880 | than it's a big deal for you to use your legal name when you go and order your
00:14:03.560 | Starbucks latte. It's not a big deal. But it is a big deal, because you
00:14:09.160 | need to be aware that any information that you publish is ultimately going to
00:14:12.680 | wind up on the Internet. And once the information is out there, then there's
00:14:16.960 | nothing you can do about it. And so at all times, you should be aware of the
00:14:21.000 | fact that any list or registry that you enrolled in, any information that you
00:14:26.440 | give to another person, that is all going to be publicly available on the Internet
00:14:31.480 | in a data dump probably within a few years. Now, most information is not that
00:14:38.440 | big of a deal. Is it a big deal if you know that your name is and your address
00:14:42.400 | and something is published online? Well, for some people, it is a big deal. For
00:14:47.000 | most of us, though, we can go through our lifetime and it's not really a big
00:14:51.000 | deal. But I recently had an experience in which I was thinking about how big of a
00:14:56.280 | deal this actually can be. Many years ago, I had an unfortunate experience with one
00:15:05.480 | of my dogs. One of my children had left the door of our house open. One of my
00:15:10.320 | dogs had gone out in the neighborhood for a run and, you know, "Hey, I'm free. I'm
00:15:14.560 | gonna escape and run around," had chased and attacked a stray cat in our
00:15:20.240 | neighborhood, and the cat ended up dying after being found in the jaws of my dog.
00:15:26.440 | My dog is not a vicious dog. I don't think that he intended to kill the cat,
00:15:31.480 | but how do you know between dogs and cats? As it turns out, it was a stray cat,
00:15:35.680 | which I was very grateful for because it was my dog. My dog went out and killed
00:15:41.120 | another creature. Thus, I'm responsible for it. And it was something that really
00:15:45.160 | affected me at the time. There was a lot of lessons and a long story to it that
00:15:48.560 | I'm gonna skip here, but it was something that really affected me at the time and
00:15:51.760 | has continued in my memory for a very significant, for a long time. Primarily
00:15:59.480 | because of the moral issue. I was so grateful when I was able to
00:16:05.240 | ascertain that the cat was a stray cat, and while I was unfortunate for the loss--
00:16:10.360 | I was very sad, of course, for the loss of life of the cat--I was grateful that I
00:16:14.440 | didn't have to go to somebody and share that, "Hey, my dog killed your cat," because
00:16:21.040 | I've thought a lot about the morality of that. Like, what can you possibly do
00:16:24.960 | about--how could you make that situation right? If my dog were to get
00:16:30.720 | out of my house and attack your dog, your family pet, or your cat, your family cat
00:16:36.800 | who you all love, or your rabbit, or your hamster, or anything else that you do
00:16:40.440 | that you really love, and my dog kills your loved animal, how could you
00:16:46.400 | possibly make that right? How could you morally solve it? And it's one of those
00:16:50.640 | things where there's--all of the answers are very unsatisfying, because--and it's
00:16:57.720 | one of those things where, at the end of the day, the potential results are so
00:17:03.800 | significant that the only proper course of action is to make sure it never
00:17:07.160 | happens by preventing it, because it probably can't be morally solved. There's
00:17:12.840 | not an amount of money that we could figure out that could compensate you for
00:17:17.040 | loss of life of your beloved family pet, something like that. So I was sharing
00:17:21.320 | this experience with a friend of mine and sharing my moral question and my
00:17:28.120 | musing on it, trying to figure out how would you make it right. And this friend
00:17:31.680 | is a very serious cat lover, and the friend had recently lost a beloved cat.
00:17:38.680 | And in the interaction, the friend showed me basically the way that he would have
00:17:47.240 | responded if it had been his beloved cat whom my dog killed, which was flat-out
00:17:53.000 | scary, because there was violence involved and there was harm being
00:17:57.600 | threatened towards me and towards my family. And it was a rather shocking
00:18:04.280 | event, because my friend was role-playing, but genuinely was pointing out how
00:18:09.280 | serious and emotionally charged his reaction would have been. When I was
00:18:15.080 | considering that event, I realized that this is just how fast life can change.
00:18:21.040 | Life can change in an instant. And once it's changed, you can't go back and
00:18:26.960 | change it. A number of years ago, somebody that I used to work with was murdered. She
00:18:31.120 | and her husband were having a cookout in their garage in a Tony neighborhood in
00:18:35.000 | South Florida, and a guy walks up to them and murders them just flat-out in cold
00:18:41.040 | blood. And that event really shook me. It was just a random young guy in his 20s
00:18:47.960 | who had evidently a psychotic breakdown, had done some drugs, and for unknown
00:18:55.480 | reasons murdered the people that I know. And it was an example of how quickly
00:19:03.200 | things can change, how quickly people can snap, how quickly they can go crazy. He was
00:19:07.000 | ultimately found to be criminally insane by the court and sent to a
00:19:13.840 | mental institution instead of to prison for his crimes. My point simply is
00:19:20.320 | to say that a lot of times privacy doesn't matter until it does. And then
00:19:25.440 | when it matters, it really matters really quickly. And I thought if my dog had
00:19:30.960 | gotten out, run out of the house, which is a totally understandable event, and
00:19:35.200 | chased down a neighbor's cat, which again is a totally reasonable and
00:19:40.160 | understandable event, and killed a cat, and it just so happens to be that this
00:19:44.320 | particular neighbor is emotionally charged, to put it mildly or flat-out
00:19:49.440 | crazy, to say something that is possible, I would have to disappear immediately, to
00:19:57.080 | protect my family, to protect my wife. I would have to disappear instantly. And
00:20:00.920 | it's an example of something that I didn't do anything really wrong.
00:20:06.560 | I certainly would bear responsibility for allowing the dog to run out of the
00:20:10.920 | front door, but you know what it's like going in and out of the front door with
00:20:14.720 | children and strollers and all the rest of the stuff. It's an understandable
00:20:17.680 | event, and yet if it just so happens to be that you're up against a crazy person
00:20:22.120 | that day, then things matter. So all data and all information should be viewed not
00:20:27.800 | with extreme paranoia perhaps, but just suspicion. And what's crazy is that
00:20:33.920 | we're living in a world in which our data is consistently published
00:20:39.600 | everywhere, rarely without our even knowing it. In my state, where I'm from, in
00:20:45.480 | Florida, not only do they publicly disclose your data online, for
00:20:50.680 | example when you sign up to vote, when you get a driver's license,
00:20:56.240 | they publish your voting data, all of it available online, but more
00:21:01.720 | importantly they actually sell your data. So here's how the law works. The
00:21:05.960 | government requires you to have a driver's license if you are going to
00:21:13.040 | enjoy the privilege of driving. So you have to go and get a driver's license.
00:21:16.600 | That driver's license, by law, has to reflect your physical address as well as
00:21:21.880 | all of your characteristics, and has to record a current photo of you. Then what
00:21:27.640 | the Florida State Government does is they turn around and they sell that data in
00:21:31.560 | order to profit off of the data that they have legally compelled you to
00:21:35.440 | disclose to the government. Here's a paragraph or two from Action News
00:21:39.760 | Jacksonville. "Action News Jacksonvestigates learned the state of
00:21:43.080 | Florida is making hundreds of millions of dollars by selling your DMV
00:21:46.920 | information. This includes your name, address, and date of birth. Action News
00:21:50.760 | Jackson investigator Ben Becker looked into why it's allowed and how it
00:21:53.720 | potentially could compromise your financial safety. Becker discovered the
00:21:57.120 | state of Florida sells your personal DMV information to dozens of private
00:22:00.840 | companies, mainly data brokers, who can request it or pay for unlimited
00:22:05.920 | electronic access. Your name, address, date of birth, and even your driver's
00:22:10.280 | license number are available for as little as a penny per file to send you
00:22:13.600 | junk mail." And it adds up. "From 2021 to 2023 the state made 263 million dollars
00:22:21.080 | and you can't opt out. The biggest bulk buyers of your information are data
00:22:28.520 | brokers like LexisNexis at more than 90 million dollars, followed by 53 million
00:22:32.880 | dollars from Tessera data, and 40 million dollars from safety holdings." It goes on
00:22:37.680 | and talks about it. So actually we'll continue down. "In 2023 a Russian linked
00:22:44.240 | cyber attack targeting the Louisiana and Oregon DMVs leaked the sensitive data of
00:22:48.320 | nearly 10 million drivers." Goes on and talks about other attacks and the 263
00:22:52.960 | million dollars that the state of Florida made during those couple of
00:22:55.640 | years. So this is, I think to me it's pretty shocking, but it's standard
00:23:01.280 | operating business, no one seems to care, doesn't seem to be a big deal for a lot
00:23:04.640 | of people. But something as simple as your driver's license data is basically
00:23:08.680 | public access, because anybody with really any connections whatsoever, do any
00:23:13.640 | serious investigative capabilities, can access the information needed or find it
00:23:19.360 | and buy it. So this, I think, should be concerning. It's an example of how you're
00:23:24.720 | compelled to create data and then that data, by the government, and then the data
00:23:28.360 | is often sold out from under you. So while you may or may not be able to opt
00:23:32.360 | out of your driver's license data being sold, you can take steps to to adjust the
00:23:40.280 | data that you personally create and put online. And that's something that you
00:23:46.240 | should be thoughtful about, as thoughtful as possible. So the first step is limit
00:23:50.620 | the data that you create and share to only what's necessary. Now another thing
00:23:55.320 | though, that you can get involved in, is some form of political advocacy. I don't
00:24:00.080 | see any particularly fruitful political advocacy opportunity, but you might in
00:24:05.520 | the future. For example, if the residents of the state of Florida would rise up,
00:24:09.160 | then possibly they could end this abusive practice of the government
00:24:12.680 | selling data, and that may be something that you could be involved in in your
00:24:16.400 | state. But I would say that another expression of this is something like the
00:24:21.280 | tax system in the United States. The way that the tax system works, is you are
00:24:26.600 | legally obligated to disclose to the US government on your tax returns, all of
00:24:32.360 | your personal and confidential information. And the penalties for
00:24:35.720 | non-disclosure are so significant and severe, that most of us are gonna follow
00:24:41.640 | the law and go ahead and disclose. I don't want to get into a situation where
00:24:45.560 | I got a judge saying, you know, you lied on this and so I'm tossing you in prison.
00:24:49.000 | The pain of prison is too high, I'm gonna go ahead and disclose. But the
00:24:52.840 | disclosures are enormous, enormous. And now as they've expanded to disclosures
00:24:58.680 | of cryptocurrency holdings, things like that, it's become so much more
00:25:04.880 | significant. And then what you see is that all it takes is one person, one
00:25:10.880 | person with motivation and opportunity, and now the data of thousands of people
00:25:17.280 | is compromised. And some of those people are very high-level people. This creates
00:25:22.920 | not only moral hazard, this creates not only political risk, not only real risk,
00:25:28.960 | but what I mean is that not only a real risk to, say, your reputation or your
00:25:34.400 | business or your something like that in the community, but this creates a real
00:25:38.760 | physical risk. One of the things that has not generally been present in the United
00:25:43.360 | States is extortion. Crimes of extortion based upon people's personal information
00:25:50.160 | and personal data. But this is a feature that has happened in many places around
00:25:56.000 | the world, and it's something that I think is likely to happen more in the
00:26:01.520 | United States. And so even something like tax return information is a vector of
00:26:05.800 | risk that can be quite significant. I'll tell you just one simple example. A number
00:26:11.360 | of years ago I had a friend of mine who was a taxi driver from Tampico, Mexico,
00:26:16.400 | and we were chatting about this. And we were discussing, basically, the safety and
00:26:22.720 | security of Mexico. Going back and forth, and I'm pretty, you know, pretty relaxed
00:26:28.880 | about dangerous places, but I really want to know what's real and what's true. And
00:26:33.720 | so he was explaining to me what's real and what's true on the ground. And he
00:26:37.080 | said one of the things that you can never do in, where he was from, he says
00:26:40.440 | you can't keep your money in the bank. And the reason you can't keep your money
00:26:43.680 | in the bank is that all of the criminal elements that are there in their society
00:26:49.200 | have paid informants in the bank who will let them know if somebody has a
00:26:54.360 | certain amount of money in his bank account. And so let's say that you have
00:26:58.920 | $15,000 in your bank account. Well, the agent at the bank who has access to the
00:27:04.120 | personal information of how much money you have in your bank account can go and
00:27:08.240 | share that information with a local criminal who can then go and kidnap your
00:27:14.720 | daughter from her school, or from off the street, or off the playground. And that
00:27:19.680 | person knows exactly how much ransom to require from you this weekend based upon
00:27:25.960 | the inside information. So he requests a ransom of $15,000, and you basically have
00:27:30.880 | no choice but to pay it. Who among us would say no? If we know we have the
00:27:36.480 | money and by paying the money we might be able to save the life of a loved
00:27:41.920 | child. So you create a problem when you have data access, access to data. And you
00:27:49.640 | say, well that's only in Mexico. No, it's not. Just imagine for a moment that this
00:27:54.240 | guy with the IRS whistleblower, imagine that he had not gone after public
00:27:59.360 | figures. Imagine that he instead of going after, you know, President Trump at the
00:28:04.680 | time, and Peter Thiel, and whoever all the other billionaires were that were
00:28:08.280 | talked about. Imagine that instead of doing that, he had just taken the
00:28:12.920 | information related to high-income earners who have access to things, not
00:28:18.800 | mega billionaires who are likely to have security, just guys like you and people
00:28:23.920 | that you know. You know, normal people with good amounts of income. He goes
00:28:27.760 | through your private tax return data, figures out who's got hundreds of
00:28:31.680 | thousands or millions of dollars, and he doesn't go and publish the information
00:28:34.920 | to the Internet, doesn't go and take it to a journalist, but instead just simply
00:28:38.520 | passes the private information along to a criminal element in your place, in your
00:28:45.200 | state, in your city. And now that same model that works so reliably in
00:28:49.880 | Mexico has now been imported to Kansas City, Kansas or wherever you happen to
00:28:55.000 | be from. Imagine how chilling that would be. And that's with tax return data.
00:29:01.040 | Which is probably much more highly guarded. Now take that information into
00:29:05.760 | your local financial institutions, take that information into your local bank,
00:29:09.640 | your local insurance office, just imagine all the information that is there. It's a
00:29:18.800 | lot. And there's basically no protection against it. Except you being careful with
00:29:24.920 | the information. So be careful with the information, that's step one. If you can
00:29:29.240 | advocate for a lighter system, fewer government rules and requirements in
00:29:36.280 | some way, then that would be great. To be clear, I don't see any opportunity for
00:29:41.280 | this. It's not there. I could create, meaning it's not politically
00:29:45.800 | feasible, I could create a system in which it would be possible. For
00:29:51.720 | example, I don't think taxes should be based upon income. Why not just figure
00:29:57.480 | out how much tax each person needs to pay in order for us to run the
00:30:00.480 | government and give people a bill and you keep everything above it. There are,
00:30:03.720 | around the world, there are governments and countries that offer these kinds of
00:30:08.320 | tax programs. They're called lump-sum tax programs. And the most famous of them is
00:30:13.560 | from Switzerland, where you individually go to the government and you negotiate
00:30:17.440 | your tax rate privately based upon the amount of consumption that you pay. And
00:30:22.000 | so you can be a mega gazillionaire and if you negotiate with the Swiss
00:30:25.120 | government that, "Hey, I'll pay you guys 300,000 Swiss francs every year," that's
00:30:28.760 | your tax bill. It doesn't matter how many mega gazillions you make on top of that,
00:30:32.640 | you just negotiate it with the government. This is widely available
00:30:36.320 | right now in a couple countries in Europe. Famously, Italy has a 100,000
00:30:39.920 | euro tax program. Go to Italy, you pay 100,000 euros, you're done.
00:30:43.720 | Everything above it is beyond that. Why shouldn't we have more of that? Why
00:30:47.800 | not negotiate with the US government and say, "All right, my number is $300,000 a
00:30:52.920 | year and if I pay $300,000 a year, that's it." And we all know why not. It's not
00:30:56.640 | politically feasible, but it could be done. And it could all be done without
00:31:01.240 | even required disclosure of individuals' amounts. I'm
00:31:06.760 | not here to solve it because it's silly to even spend time thinking about
00:31:10.400 | it. It's not something that is in any way politically feasible at the moment. But
00:31:14.520 | you need to be aware that these risks are real. And just because you have been
00:31:19.160 | protected from them for much of your life doesn't make them any less real.
00:31:22.560 | A lot of Americans see the violence happening around them. They see that
00:31:28.960 | that violence could increase. You understand that in most of our cases the
00:31:34.160 | local police departments are overtaxed. And while certainly they are likely to
00:31:38.200 | give more priority to somebody who has potentially kidnapped your child or
00:31:45.240 | is extorting you, perhaps, but it's pretty severe, the world that is
00:31:51.600 | available. And we make it easy based upon the proliferation of data all around the
00:31:58.000 | world. Consider it. A couple of practical things. Remember that if this is
00:32:04.520 | something that you're interested in, if this is something that you have not
00:32:07.400 | researched before and you don't even know what to do, remember that I teach a
00:32:11.320 | course on basically this, how to protect yourself. It's called a hack proof course.
00:32:16.120 | Go to hackproofcourse.com. That will allow you to have an
00:32:22.720 | up-to-date, cutting-edge, but basic, but comprehensive. What I mean is that
00:32:29.360 | it's a very simple program, but it's not unsophisticated. It's simple but
00:32:33.240 | straightforward and really good of how to protect yourself against identity
00:32:37.600 | theft for situations like this. And it's the kind of thing that, as with any good
00:32:42.520 | insurance policy, you got to do in advance. So if this is of interest to you,
00:32:45.960 | go to hackproofcourse.com. Link in the show notes for today's show.
00:32:49.140 | Hackproofcourse.com. Sign up. Buy my course. I think it'd be a great fit for you, be
00:32:54.080 | enormously helpful to you to take good actions to protect yourself and to
00:32:57.880 | protect your data. And we can appreciate that the Justice Department did get the
00:33:01.680 | guy. I don't think, however, that it's likely to be the last. I think that we'll
00:33:08.040 | see more and more of these kinds of crimes because they fit the new world.
00:33:13.000 | What I mean is that since there's now much more data collected and available
00:33:19.880 | in data breaches, data leaks, we can expect to see more sophisticated
00:33:26.000 | extortion attempts imposed on people based upon the data. And these
00:33:32.280 | extortion attempts are not exclusively going to be for public figures. It can be
00:33:36.800 | for many other people who are going to be extorted and blackmailed. So good for
00:33:42.680 | the Justice Department for doing it. But you need to do everything you can to
00:33:47.040 | protect yourself going forward as best you can. Hackproofcourse.com can be of
00:33:52.320 | service to you and I'll be back with you very soon.
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