The first bank opened in the United States in 1791, offering citizens a safe place to store funds. Within years, criminals figured out how to capitalize on these strategically placed caches of money. In 1798, the Bank of Pennsylvania was the site of the first bank theft, when two men with forged keys entered the bank and emptied the vault and safety deposit boxes. Since then, law officials and bank personnel have been coming up with increasingly sophisticated methods of thwarting criminals intent on grabbing easy money.
As time progresses, technology becomes increasingly valuable in both preventing crime and catching criminals once a crime has taken place. However, this technology is also imbued with the capacity to become a significant threat to personal privacy.
In recent years, banks used exploding dye packs to discourage theft and help track thieves. Now, many financial institutions are switching to implanting global positioning system (GPS) devices in bags of money to find criminals on the run through geolocation.
The strategy appears to work. Using this technology, law enforcement officials catch bank robbers in record time. Wichita police were able to apprehend a suspect just 15 minutes after he committed the robbery by tracking a device hidden in the bags of money he had stolen. Similar situations in states such as Washington, Colorado, New York and others throughout the United States point to the effectiveness of GPS tracking systems in both deterring crime and leading to faster, safer criminal apprehension.
Recent years have seen GPS technology being perfected through smaller, more accurate trackers. In 2013, scientists at North Dakota State University made a breakthrough by developing Radio Frequency Identification (RFID) chips that are ultra-thin and virtually undetectable. The BBC reported that the chips could be used to track bank notes, legal documents, tickets, and more. Not only could this technology help foil bank robbers, but it can help follow “dark money,” the illicit funds exchanged by governments and organizations, criminal and otherwise, to support organized crime or political intrigue.
Dark money is any money of unknown origin. Commonly, politically active nonprofits and corporate entities such as limited liability companies (LLCs) are the primary generators of these types of funds. Nonprofits formed under sections 501(c)(4) and 501(c)(6) of the U.S. tax code are not required to disclose their donors. Moreover, LLCs formed in some states, including Delaware and Wyoming, can hide behind the only disclosure they are obliged to make: the company’s name. Forces can fund LLCs such as these to further a political agenda or donate to an independent political action committee (PAC) that’s able to raise unlimited sums of money for a candidate or chosen issue. These large PACs are called super PACs, and they can influence government policies for their small, but often financially dominant, donors.
According to the nonpartisan group Center for Responsive Politics, about $300 million in dark money was used to finance various political messages leading up to the 2012 election. In 2016, this figure increased tenfold, according to U.S. Senator Tammy Baldwin, and, as reported by the Huffington Post, one group, the National Rifle Association (NRA), spent more than $52 million dollars supporting Republican control of the government.
The Federal Election Commission sets up campaign finance laws, which put forward limits and prohibitions on contributions to maintain fair, balanced election and legislative processes. Dark money is a way around these procedures a trend that helps subvert our democratic process.
Another area of shady money is “black money.” Black money, as defined by Investopedia, is “Money earned through any illegal activity uncontrolled by country regulations. Black money proceeds are usually received in cash from underground economic activity and, as such, are not taxed. Recipients of black money must hide it, spend it only in the underground economy, or give it the appearance of legitimacy through money laundering.”
The phenomenon of black money is alive and well in India, where the World Bank estimates that the black money economy is one-fifth of the country’s gross domestic product (GDP). In action aimed at preventing individuals from continuing to hoard untaxed funds, the Indian government announced this November that it would ban two of the largest bills in its currency system. There is a three-fold reason for doing so: to target terrorists and other organizations that thrive on unaccounted-for money; to stem the tide of counterfeit money; and to more tightly regulate the Indian system of black money that relies on cash payments to avoid the payment of taxes.
Friends of mine from the Indian state of Kerala explained to me that many Indians sell houses or other valuables at less than half the market price, collecting the other part of the value in black money. This activity is confirmed by Geeta Anand in a column for The New York Times. She claims, “Real estate has been particularly hard hit by the ban on black money, since sale documents filed with the government typically reflect only the portion of the sale price paid by check. As a result, the sellers have no way of explaining to the tax authorities how they received the cash, which can account for as much as 60 percent of the deal.” The money, collected over the years, is hidden away in caches within the sellers’ homes or even buried.
When India’s Prime Minister Narendra Modi made the announcement regarding the abolition of the 500 and 1,000 rupee notes, he added that citizens could trade in the banned notes for newer currency until the end of the year, after which time the large bills would be obsolete. Also, citizens could only exchange up to 4,000 rupees per day, or around $60. People with substantial amounts of money to convert would be forced to explain the source of the funds and be at risk for tax investigations.
Shortly after the announcement, a video debuted on What’s App showing someone washing a recently issued Rs 2,000 bank note. The immersion of the bill in water caused a RFID tracking strip running down the side of the bill to emerge. The video went viral and subsequently caused panic as thousands of Indians believed the government was intent on using a “Nano GPS chip” in cash to track the currency and possibly to locate hidden stockpiles of money.
Even news sources such as rednewswire.com reported that the GPS tracking of cash would allow government entities to track money buried up to 120 meters below the ground using satellite technology. The media outlets further claimed that attempted removal of the chip would render the money useless.
The Reserve Bank of India (RBI) was quick to dismiss the claims, pointing out that it would be impossible to implant money with Nano GPS chips. According to news18.com, RBI spokesperson Alpana Killawala said, “Such a technology does not exist at the moment in the world, then how can we introduce such a feature?”
But the technology does exist.
The world’s smallest fully integrated GPS receiver in the world, the OriginGPS Nano Spider, which, at about 0.16 inches wide,.16 inches long and .08 inches deep, is smaller than a piece of pencil lead. It could most certainly carry out that sort of tracking for the Indian government. However, Trak.in, an online site reporting on business issues in India, dismissed the Indian government’s supposed chipping of cash as a rumor based on the fact that it would cost at least Rs50 per note to manufacture the tracking chips. Although it does seem an extreme and costly move for the government to make, Trak.in didn’t take RFID technology into consideration when declaring the rumor a hoax. As opposed to a GPS chip, a passive RFID tag for currency could cost as little as 12 cents per tag. While even this might seem like a lot to pay per note, it would more than pay for itself by tracking undeclared money in a country in which only 1 percent of the population has paid taxes. Since the ban on bills, the Indian government received about $80 billion in untaxed money between Nov.10 and Nov. 18.
While such tracking might be a boon for governments and anti-terrorism organizations tracking dark money or illicit funds, it may also be an invasion of privacy that goes far beyond the simple monitoring of transactions.
Implementing RFID tracking in currency implies the government knows the location of individuals carrying the currency. Government agencies using such technology would gain the ability to watch where and how their citizens spend their money and possibly pinpoint their locations at any given time. Even more worrisome is the fact that RFID technology is hackable. There are at least seven known ways to hack a RFID chip. It is easy to imagine criminals actively searching a city street for the victim with the most money, deactivating the locator, then moving in for the theft.
Geolocation technology also opens up privacy issues for children who are carrying money marked with GPS tracking technology. It could make them potential targets for crime and violate their rights under the continually changing U.S. Children’s Online Privacy and Protection Act (COPPA), which currently requires parental consent for geolocation data collection from children under the age of 13.
Even without RFID or GPS chip technology, our society is a trackable one. Browsers such as Google Chrome, Safari and Mozilla Firefox can note your physical location from computer input. Twitter can track you, even if you don’t use geotags. Facebook is another application that can follow your movements across town or across the world. Moreover, both iPhone and Android mobile phones keep a record of your location over time and download the information in a file stored on your device. At least one police department has run afoul of the American Civil Liberties Union (ACLU) by accessing this data using portable data extraction devices. Also, if you think you’ve escaped detection by your apps or devices, you may be still be tracked when you use Wi-Fi.
All things considered, the ability of law enforcement officials to track stolen, dark or black money might just outweigh privacy concerns. Money that is being used to subvert the election process or support terrorist groups, or is being hidden as a means of avoiding taxation that contributes to public coffers, offers insult to an egalitarian society. As a global society, we are constantly developing new rules and regulations to keep up with our rapidly changing and increasingly technical world. We’ve already put rules in place, including COPPA, the Electronic Digital Privacy Act (EDPA), the Cyber Intelligence Sharing and Protection Act (CISPA) Computer Fraud and Abuse Act (CFAA) and the Trans-Pacific Partnership Agreement (TPP), to stem the tide of privacy-disrupting digital technologies and practices. Similarly appropriate legislation can overcome, or at least mitigate, privacy issues associated with currency tracking.