Authorities Eye Whether Rush Limbaugh Laundered Money Used to Pay for Drugs

ABC News ^ | 11/19/03 | Brain Ross

[COURAGE]

Authorities Eye Whether Rush Limbaugh Laundered Money Used to Pay for Drugs By Brian Ross ABCNEWS.com Nov. 18— Radio talk show host Rush Limbaugh may have violated state money-laundering laws in the way he handled the money he used to buy the prescription drugs to which he was addicted, law enforcement officials in Florida and New York told ABCNEWS.

A conviction on such charges in Florida would be a first-degree felony, punishable by up to 30 years in prison. Limbaugh returned to the airwaves this week after five weeks of rehabilitation for his admitted addiction to prescription painkillers.

His lawyer denied today there was any foundation for a money-laundering prosecution.

"There's no basis for these charges. He has not committed any acts of money laundering and he absolutely denies it," lawyer Roy Black told ABCNEWS. "I can assure you — and Rush assures the listeners to his radio station — when we can, we will tell the story, and he will tell it himself. Everybody will see what has really gone on here."

Limbaugh makes an estimated $35 million a year and had no shortage of legally earned money to the buy the painkillers to which he became addicted.

Authorities say they became aware two years ago, during an investigation of New York bank US Trust, that Limbaugh had taken between 30 and 40 cash withdrawals from his account in amounts just under $10,000.

Banks must file a report to the government if someone withdraws more than $10,000 at once.

Limbaugh's lawyers confirm that as part of US Trust's service, a bank employee personally delivered cash to Limbaugh at his New York studio in amounts of $9,900 or so.

"That in itself is a suspicious activity: They are structuring their transaction to avoid reporting to the government, and the bank is required to file with the federal government something called a suspicious activity report," said Jack Blum, an expert on financial crimes.

Limbaugh's lawyers say it was US Trust that suggested the arrangement. In July 2001 the bank paid a $10 million fine because of the Limbaugh transactions and many others like it.

Limbaugh's name was not made public at the time but officials told ABCNEWS details were forwarded to state and federal investigators in Florida.

"Now the problem will be: Did he then assist his drug supplier in hiding the proceeds from the government?" said Blum.

Limbaugh's lawyers say he did not do that and that he is being falsely accused by those who want to force him off the air.

Officials say a decision on whether to prosecute on money-laundering charges will be made in the next few weeks

[Gunslingr3]

Limbaugh's lawyers confirm that as part of US Trust's service, a bank employee personally delivered cash to Limbaugh at his New York studio in amounts of $9,900 or so.

"That in itself is a suspicious activity: They are structuring their transaction to avoid reporting to the government, and the bank is required to file with the federal government something called a suspicious activity report," said Jack Blum, an expert on financial crimes.

"'Did you really think that we want those laws to be observed?' said Dr. Ferris. 'We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against- then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted- and you create a nation of law-breakers- and then you cash in on the guilt. Now that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with."

[HarleyD]

"If he had someone else buying prescription medication in her name for him I'm sure that's a breach of law. If he purchased and used more than he was supposed to I'm sure that falls under a drug abuse statute."

But isn't that true of any person who purchase drugs through a third party? I've never heard of anyone who bought drugs being charged with money laundering. First time offenders usually get probation not thirty years.

I'm suspicious especially with the "authorities" keep saying Rush was never a target. Funny, I haven't heard what charges they're going to bring against the housekeeper (the seller and supposely the intended target).

BTW-I rarely listen to Rush but I think he's getting hosed by some people in power.

[Edit35]

I presume the feds (or whomever) want to know exactly where and on what Rush spent that $300,000 or $400,000 cash. I just hope he had something worthwhile to spend it on.

Anyway, how does one prove where they spent cash, if they did not keep receipts? Or maybe he did.

Furthermore, seeing that Rush could hardly be considered a drug dealer, this whole investigation (persecution) should wake people up as to the evil power we as a society have given the government to snoop into our personal lives, any time they want.

And whoever leaked this to ABC news should be sought out and prosecuted, if there is any law that covers such prosecutorial subterfuge.

[Marianne]

In July 2001 the bank paid a $10 million fine because of the Limbaugh transactions and many others like it.
If you withdraw more than $10,000 of your own money, the bank has to report it to the federal government.
If you withdraw less than $10,000 of your own money, the bank has to report it to the federal government.

Catch 22?

[CMClay]

Golfballs are expensive.

...with his bad back, I'll bet a lot of his tee-shots went in the water.

[gridlock]

Well, it looks like US Trust had a procedure that was designed to get around reporting requirements. They arranged to dispense cash in just-less-that-$10,000 increments and then supplied couriers so the customer was not inconvenienced. The purpose of the $10,000 reporting requirement is to prevent money laundering. It is the banks responsibility to report if people are arranging their transactions in such a way as to avoid the reporting requirement.

In this case, the bank itself was circumventing the requirement. That's why the bank gets whalloped (appropriately, IMA) with a $10,000,000 fine. It's not like they failed in their responsiblity to monitor transactions. US Trust set up the mechanism that people used to thwart the law.

Now you might not like this particular law. I, myself, find it an unacceptable intrusion into the right to be left alone. But the law is pretty clear, and US Trust broke it.

Now as for Rush, he is not being prosecuted on that basis. He did not break the law with his pattern of withdrawls. What Blum is suggesting might be the basis for prosecution is the fact that Rush then turned this money over to his supplier, but did not ensure that the supplier was reporting the income and paying the tax. The position of the government, if the prosecution were to proceed on this basis, would be that Limbaughs large cash transactions were in fact designed to be untraceable, and thus assisted the supplier in breaking the law.

This is probably true, and probably against the law. But it seems that it would be an extremely agressive use of prosecutorial discretion to go after Limbaugh for that.

[Marianne]

Thank you for your reply.
. . .the fact that Rush then turned this money over to his supplier, but did not ensure that the supplier was reporting the income and paying the tax.
Why should Rush bear any responsibility for ensuring that his supplier reported the income and paid the tax?
Reminds me of the quote (can't remember the source), "You can judge the sanity of a society by the number of laws it has enacted."
Now you might not like this particular law. I, myself, find it an unacceptable intrusion into the right to be left alone. But the law is pretty clear, and US Trust broke it.
Clear, yes, but definitely an "unacceptable intrusion".
"I'm from the government and I'm here to help you."
"Government is not reason. Government is not eloquence. It is force. And, like fire, it is a dangerous servant and a fearful master."
George Washington

[LittleJoe]

If you withdraw more than $10,000 of your own money, the bank has to report it to the federal government.
If you withdraw less than $10,000 of your own money, the bank has to report it to the federal government.
Is that right?
Gotta love that War on Drugs.

Amazing, isn't it? The War On Drugs has given us laws hidden within laws. People have been complaining about this for years. There are hundreds of victims who have had their money confiscated even though they have been convicted of no crime. All of this in the name of the WOD.

By virtue of the money laundering provisions of the War On Drugs and the Patriot Act, your money does not belong to you. It is the personal property of the King. You just have temporary use of it. No one can deny this, especially after seeing the Patriot Act used against a strip club.

I find it ironic that Rush has been caught up in this fascist witch hunt! I think he will know very soon what those of us on the "lunatic fringe" have been warning about for years. Rush will have to move to Rio Linda by the time they are finished with him.

[OldPossum]

Correct. Anything by ABC News is suspect. Read for entertainment only.

[gridlock]

Actually, I should have phrased that differently. It was not so much that Rush did not ensure that the transaction was reported, as Rush deliberately did things to facilitate the illegal nature of the transaction.

Of course, when you're buying illegal drugs (or so I am lead to understand), you pay cash. This is illegal in as much as you are aiding you supplier in the criminal avoidance of the law. Of course, there is a much larger law being broken because it was illegal to purchase the drugs in the first place.

So it's not so much as Rush had a duty to ensure that money was reported, as he deliberately went out of his way to make sure that the money was not reported. This would be the basis of the prosecution, as stated by Blum.

That said, I still don't think it's right.

[SpinyNorman]

In this case, the bank itself was circumventing the requirement. That's why the bank gets whalloped (appropriately, IMA) with a $10,000,000 fine. It's not like they failed in their responsiblity to monitor transactions. US Trust set up the mechanism that people used to thwart the law.

Actually, the people did not thwart the law. Withdrawals under $10,000 are not illegal. Advising customers to systematically avoid making withdrawals over $10k might be, but the records of withdrawals will certainly be in the bank somewhere, so it isn't as though one is avoiding scrutiny. One is avoiding paperwork via Al Gore's paperwork reduction policies!! I knew it would be Clinton/Gore's fault!! LOL!!!

[ntnychik]

My local CREDIT UNION suggested we keep withdrawals under $10,000 so they didn't have to do the annoying paperwork.

[fight_truth_decay]

Rush also said he will respond later to who is behind these rumors of his wrong doing and explained further a NYC bank delivered money to his NY office 3-4 times for convenience while working. In Florida, his place of residence, Rush explained he did not do anything we all have not done; but just write checks. He never knew that one could not freely withdraw money from one's account, until his bank explained the paperwork involved.

Roy Black, Rush Limbaugh's attorney: "There's no basis for
these charges. He has not committed any acts of money laundering
and he absolutely denies it and I can assure you -- and Rush
assures the listeners to his radio station -- when we can, we will
tell the story, and he will tell it himself and everybody will see
what has really gone on here."

[fight_truth_decay]

This golf trips could easily account for larger withdrawals while traveling to courses within and out of this country in the past year. Some people carry cash...I am one of those.

[DoctorMichael]

Black: ".....everybody will see what has really gone on here....."

Hopefully its SLANDER and Rush's lawyers rip into these clowns.

[Hot Tabasco]

My local CREDIT UNION suggested we keep withdrawals under $10,000 so they didn't have to do the annoying paperwork

MY Credit Union actually advised me that I withdraw a minimum of $100 rather than stop by every other day to withdraw 10 bucks or so. Boy were they right, I am not only saving on withdrawal fees but time as well!

You Go Rush!

[BostonGuy]

Exactly right. I temped at the old BankBoston for a while, sorting the STRs (Suspicious Transaction Reports). The tellers are instructed to look for people who are likely intentionally skirting the $10,000 reporting requirement. Most often they involved people who changed their mind about 10k+ transactions, and instead did $9,900 or the like. They looked for repeated transactions just below the threshold, for both drug and tax fraud purposes. In every case, the customer had no idea they were being flagged.

[Dajjal]

BTTT

[Fledermaus]

How do you know he broke the law? Are you on the case?

And since when is depositing and withdrawing your own money against the law? The stupid $10,000 rule is ridiculous and another bad consequence of Reagan's war on drugs.

And how can it be illegal for a bank to advise their customers of this limit before it has to be "reported" illegal? Also, a good bank has paperwork any individual or business that deals in large cash transactions can fill out to get an IRS exemption from reporting.

I used to deposit hundreds of thousands a day when working for a real estate mangagement company and deposited lease payment checks on the malls we ran. Same for apartments.

And an individual, like a professional sports player, can be exempt. Besides, how much tax money is being wasted enforcing this ridiculous law?

[Fledermaus]

This $10K limit came from the 1980's war on drugs.