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Depositing Cash Can Make You A Criminal

If you make several cash deposits of less than $10,000 you are presumed guilty and your assets can be seized.

Lyndon McClellan owns and operates L & M Convenience Mart in Fairmont, NC. One day last July more than a dozen federal, state and local law enforcement agents swarmed his business, showing him paperwork indicating that he had made two cash deposits totaling $11,400 within a 24-hour period in his bank account. They said that he had a history of "consistent cash deposits" of less than $10,000, which was a violation of the federal law against "structuring." They also informed him that the IRS had seized all of the $107,702.66 in L & M's bank account.

What Mr. McClellan did not know was that it is against the law to make several cash deposits of less than $10,000. Banks are legally obligated to report any deposit of more than $10,000 to the Treasury Department. If you make several cash deposits of less than $10,000 over an unspecified period of time that total more than $10,000, you are presumed to be a money launderer or drug trafficker.

If you are simply suspected –not convicted– of structuring, your bank account can be seized by the IRS under "civil asset forfeiture" laws. They have an incentive to invoke such laws because they can keep the assets and expand their activities without an appropriation from Congress. The IRS even "deputizes" state and local law enforcement agencies to go through bank "suspicious activities reports" in exchange for a cut of the loot subsequently seized by the IRS.

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Depositing Cash Can Make You A Criminal

If you make several cash deposits of less than $10,000 you can be presumed guilty of money laundering or drug trafficking and your assets can be seized — without a trial.

Lyndon McClellan owns and operates L & M Convenience Mart in Fairmont, NC. One day last July more than a dozen federal, state and local law enforcement agents swarmed his business, showing him paperwork indicating that he had made two cash deposits totaling $11,400 within a 24-hour period in his bank account. They said that he had a history of “consistent cash deposits” of less than $10,000, which was a violation of the federal law against “structuring.” They also informed him that the IRS had seized all of the $107,702.66 in L & M’s bank account.

What Mr. McClellan did not know was that it is against the law to make several cash deposits of less than $10,000. Banks are legally obligated to report any deposit of more than $10,000 to the Treasury Department. If you make several cash deposits of less than $10,000 over an unspecified period of time that total more than $10,000, you are presumed to be a money launderer or drug trafficker.

If you are simply suspected –not convicted– of structuring, your bank account can be seized by the IRS under “civil asset forfeiture” laws. They have an incentive to invoke such laws because they can keep the assets and expand their activities without an appropriation from Congress. The IRS even “deputizes” state and local law enforcement agencies to go through bank “suspicious activities reports” in exchange for a cut of the loot subsequently seized by the IRS.

Months after the seizure of his bank account, the federal government offered Mr. McClellan 50 percent of his money back if he agreed to a settlement. He refused and intends to pursue the matter in court. Unfortunately, under civil asset forfeiture laws, he bears the burden of proving his innocence.

As he puts it, “It’s not fair to the American people who work for a living that one day they can knock on the door, walk in their businesses, and say, ‘We just took your money’ … I always thought your money was safe in the bank, but I wouldn’t say that now.”

Randy Sowers built his dairy farm over three decades into a thriving business. But the Maryland farmer’s operation suffered a big setback when the IRS swooped in to seize tens of thousands of dollars from his account, claiming he violated the structuring law. Despite the IRS all but admitting the law they used to seize the cash is flawed, Sowers is still fighting to get his money back.

“We work hard for what we get, and the government can just come in and take it,” Sowers says. “We get a lot of cash from sales at farmer’s markets,” Sowers explained. He said the bank teller told them they’d be “better off” if they kept cash deposits under $10,000, since, said the teller, “there is a lot of paperwork we have to fill out if you have to deposit more than $10,000.”

Doing what the teller suggested is the crime of structuring. So Treasury agents showed up at the creamery with guns. Sowers told them everything he could about his cash transactions, hoping to prove he wasn’t hiding anything. But as soon as they heard he sometimes had more than $10,000 and didn’t deposit all of it to stay under the reporting limits, they seized his $60,000 bank account. Out of fear of a jail sentence and a nearly half-million dollar fine, Sowers settled — letting the IRS keep about $30,000 of his hard-earned money.

These are just two of many cases that have come to light where the feds seized an otherwise law abiding business owner’s cash for supposed “structuring.” Beware.
mises.org

Urban Institute: Private Investors In NPNs Help Borrowers More Than Govt.

A new report from the Urban Institute says that selling non-performing notes to private investors is a good thing — that they “can do more for borrowers” than the government by helping borrowers avoid foreclosure.

Many if not most investors buy NPNs to restructure the note for high yields, not to foreclose.  The Paper Source Note Symposium will feature several highly-regarded experts in NPNs teaching and offering complimentary private consultations.

Read the story:  http://bit.ly/1SmuJnz 

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— Bill Mencarow, The Paper Source, Inc.

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“Sell Everything But Notes” Says Royal Bank

“Sell everything except high quality bonds (notes) — 2016 will be cataclysmic for all other investments.”  That’s the advice in an unprecidented warning to its clients from the Royal Bank of Scotland.

“Major stock markets could fall by a fifth and oil may reach US$16 a barrel.”

“This is about return of capital, not return on capital. In a crowded hall, exit doors are small.”

For more, see http://snipurl.com/2aoe7nta

I would amend the RBS’ advice to include investments in gold bullion coins http://the-moneychanger.com/answers/ten_commandments_for_buying_gold_and_silver and perhaps a few select single family homes. http://www.johnschaub.com

Remember my New Year’s gift to you: a coupon code that will save you $50.00 on the Paper Source Note Symposium April 28-30 in Las Vegas.  Go to www.PaperSourceSeminars.com — click on the Register Now button and enter newyeardiscount in the coupon code box.  Hurry — it expires soon!
— Bill Mencarow, The Paper Source, Inc.

7 Keys To Land Notes

Remember my New Year's gift to you: a coupon code that will save you $50.00 on the Paper Source Note Symposium April 28-30 in Las Vegas.  Go to www.PaperSourceSeminars.com — click on the Register Now button and enter newyeardiscount in the coupon code box.  Hurry — it expires soon!
— Bill Mencarow, The Paper Source, Inc.
 
7 Keys To Land Notes
by Richard Koehler
 
Note investors and brokers who get rich do so by developing niche markets. They develop an expertise in an area where there is little or no competition. If you are only going to buy or broker first position notes on owner-occupied, single family residential homes, you will face stiff competition in finding them and then in getting the best price.
 

One niche market that has not been fully exploited is land notes. There are profits to be earned. Historically, however, it has been difficult to find buyers for land notes. The secret in buying and brokering land notes is to locate safe ones that are profitable for you and attractive to an investor.

 

First, buy notes only on developed land, not dirt. Developed land means the roads, telephone, water and electricity are in, but there is no building.

 

Second, buy land notes with recourse back to the note seller. This means the seller of the note is personally liable if the payor defaults on his or her payments.

 

Third, you want to have a realistic appraisal on the land value; realistic” because developers can distort the value by selling a parcel to a colleague at an inflated price. New buyers and some appraisers will use this phony sale price to give an inflated appraisal.

 

Fourth, run a credit check on the payor. You should try to broker land notes with good payors who have “A” or “B” credit.

Fifth, verify that the payor made a MINIMUM cash down payment of 20% on the property — many investors won’t consider a note with less than 30% or even 50% down.

Sixth, call the payor to verify that he is happy with his purchase and that he is not unrealistic about making profits on his new property. Many land developers will oversell” a developed lot, leaving the buyer with dreams of riches in a few years. When the buyer’s dream bursts you do not want to be stuck with a disgruntled payor.

 

Finally, keep your investment-to-value (ITV) at or below 50% if you want to broker the note to an investor. You do this by agreeing to buy only part of the payment stream. For example, if you and your investor are comfortable with a $30,000 value for a lot in a residential area, you would multiply .50 times $30,000 to get the maximum investment for your note buyer. In this case, an investor would put maximum $15,000 in this note. If there was a $22,500 note tobe sold, you would offer to buy only part of the payment stream.

 

Your goal is to find a good supply of lots and a hungry developer. Advertising that you buy land notes is one effective way to locate them. Other brokers have been successful working with real estate brokers, others contact developers by phone, offering to finance some of their sales. Your marketing creativity can be rewarded with several of these deals a month.

 

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