June 13, 2016

Amid Controversy, Public Safety Officials Put Temporary Hold on Prepaid Card Readers

Print More

Amid international controversy, the Oklahoma Department of Public Safety has put a temporary hold on using prepaid card readers to seize or freeze suspected drug-trade funds loaded on to prepaid cards.

DPS Capt. Paul Timmons said late Monday that use of the vehicle-mounted devices was being put on temporary hold until DPS Commissioner Michael Thompson can attend training on the card reader to get a better understanding of the device. Timmons said he does not know when the training will occur.

Earlier Monday at a news conference, Thompson said he wanted to re-evaluate use of the device but that there were no plans to stop using it.

“It’s too good a tool” to cease using, he said. “I personally want to sit through this to get a clear understanding of how this works and get a good comfortable feel before we move forward.”

Held nearly a week after the department’s purchase of the card readers was first reported by Oklahoma Watch, the news conference was aimed at clarifying misperceptions and erroneous information about the devices – brand-named ERAD Prepaid Card Readers.

The state paid $5,000 for the devices and $1,500 for training, and the company that makes the devices, ERAD Group, gets a 7.7 percent cut of any funds seized and forfeited through use of the device.

The story has become national and international news.

As the story spread, incorrect information about the card readers’ capabilities began to appear on social media and other websites, such as reports that the devices could seize funds from personal bank accounts rather than funds loaded on to prepaid cards, which are held in pooled accounts in financial institutions.

However, the device is capable of reading any card with a magnetic stipe on the back and retrieving limited information. This is important when investigating possible credit card fraud or determining whether a cardholder’s information has been placed on another card’s magnetic stipe, Col. Ricky Adams, Oklahoma Highway Patrol chief, said at the conference, which was live-streamed by News9.

“We can do nothing with someone’s bank account. We can do nothing with someone’s debit card,” Adams said. “What we can tell is if it is yours, if the information on the back of a gift card is your personal credit card information.”

According to ERAD’s bid for the state contract, the devices allow DPS officers to determine the amount of money loaded on to a prepaid card and to either freeze the funds or seize them by having the money deposited directly into a Department of Public Safety Account. This can be done during a traffic stop. The funds would then be subject to forfeiture actions in court.


Document: State’s Bid Solicitation for 20 Card Readers
(Description of Device’s’ Roadside Capabilities Highlighted in Yellow)

Thompson said the department will not use the card reader in ordinary traffic stops, rather in cases where the trooper believes that criminal activity is occurring.

“In order for us to use those card readers … we have to have reasonable suspicion a crime has occurred to stop someone, then we have to have probable cause before we can move forward to swiping that card and seeing what’s on the card,” Thompson said.

Asked about determining probable cause, Thompson declined to discuss details, saying he didn’t want to provide information that criminals could use to evade enforcement. In cases of roadside seizures of cash, officers have often relied on drivers’ or passengers’ behavior, such as nervousness and inconsistencies in their answers, as well as alerts from drug-sniffing dogs, including to bundles of cash. With prepaid cards present instead of cash, it’s unclear whether dogs would detect drugs as often.

Thompson said law enforcement agencies in at least 25 states have ERAD devices. The inventor of the device, T. Jack Williams, told Oklahoma Watch last week that hundreds of law enforcement agencies around the country have the device.

So far, no prepaid card funds have been seized by the Highway Patrol using the devices, Thompson said. The department’s use of the devices is to combat criminal organizations that have taken to using prepaid cards as a way to fraudulently obtain money or disguise illicit operations, such as drug or human trafficking.

“If we didn’t have this technology … we would lose out on the ability to help people that live and work here, or the people passing through here,” Thompson said.

Thompson said the device also does not violate the Constitution, citing recent Sixth and Eighth Circuit U.S. Court of Appeals rulings.

“For the folks who have said this is an unconstitutional practice, that’s simply not the case,” Thompson said. “This card reader technology has been challenged all the way to the Sixth and Eighth Circuit, and it’s been ruled constitutional.”

In a May 2016 presentation to the West Coast Anti-Money Laundering Forum, ERAD inventor Williams cited two relevant Sixth Circuit appeals court cases – one from 2013 and the other from 2015 – to show the constitutionality of the devices. A third relevant case was decided by the Eighth Circuit appeals court last week.

Those three cases dealt with Fourth Amendment questions on whether law enforcement can obtain information from cards’ magnetic stripes without a search warrant. However, the rulings do not touch on whether funds from cards can be seized or frozen by law enforcement prior to a court order.

Adams said he was irritated by the spread of incorrect information about the devices, and that attacks on the use of the devices benefit criminals.

“The misinformation that’s being put out and the Internet assassinations that are going on on this process – this is a system that’s been used around the country. We’re not the first to have it,” Adams said. “This is a good practice and really the only people being benefited by the attacks on it are criminal organizations.”

Thompson said he was concerned that the recent publicity and incorrect information about the device’s capabilities could erode the public’s trust in the Department of Public Safety.

“I don’t want anyone to use what we’re trying to do with this technology to help people in Oklahoma to be used as a tool against us,” Thompson said. “Trust and confidence may sound like a cliché, but it’s the only way we can do our job in this state.”

  • Bleu

    I don’t care how this guy tries to defend their use, it is just wrong to freeze or take some ones money without due process of law.

    • so

      Due process of law as determined by the wealthy(our bettors).

  • tsw

    Col. Adams will have his employees steal your money simply to allow himself a slush fund to spend without oversight. If you travel with cash or a prepaid debit card and one of Adams’ revenue generators pulls you over, you WILL lose your money and ADAMS will get it.

    Adams, the highwayman, claims that his employees only target criminals, but as we’ve seen time and time again, they target anyone they think might have money for them to steal.

  • tsw

    Here’s how it goes. You’re driving into Oklahoma to buy a used car. No one is going to take a personal or bank check which are notorious for being possible fakes. Cash is your only option. If you get pulled over by Colonel Adams employees, the only thing they are better at when writing tickets is ascertaining whether you have any cash in the vehicle.

    There’s a dilemma. If you tell Colonel Adams’ employees that you do have cash in the vehicle, you’ll now have to convince that employee that you have a legitimate reason to have your own money. That employee knows that seized money is one of the things he is ranked on for promotion and that the money will be spent on new cars, hot dog machine in the breakroom, or best of all trips to Miami for “training”. That employee will have every reason to take your money. Now if you’d rather not let Colonel Adams’ employees know about your money, either because you think that they’ll take it from you, which they probably will, or because you think it’s absurd that you don’t have any right to privacy in Colonel Adams’ Oklahoma, be warned. Simply not telling the people who are trying to steal your money about your money is a 100% guaranteed way to get your money stolen if they find it.

    By the way, if an encounter with people who are trained to steal your money makes you nervous, well you heard it from Adam’s own mouth: nervousness is a justification to take your money. There is no winning. If Colonel Adams could seize your house while you were driving your car down the highway, he would. One has to be a supremely dishonorable person to make a living stealing money from people on the highway.

    • Survivor3306

      Used car sales are going to tank in Oklahoma.

  • GTElmore

    Adams was “irritated?”

    Really?

    Does he remember who he works for?

  • Ryan C

    From this article: “So far, no prepaid card funds have been seized by the Highway Patrol using the devices, Thompson said.”

    But last week 1LT Vincent of the Oklahoma Highway Patrol said “If you can prove that you have a legitimate reason to have that money it will be given back to you. AND WE’VE DONE THAT IN THE PAST,”

    So…either they’ve done it or they’ve never done it. Somebody’s lying about this program which makes everything they say about this program suspect.

    • so

      Proving requires legal representation. I’m sure everyone can afford that. Our corrupt government in action. How do law enforcement officers go home and face their families and friends. Talk about being a middleman.

    • White Hat from TX

      A snake with two heads and forked tongues they are… Criminals with a badge.

  • EarlyMedievalSerf

    sounds like a program made for corruption.

  • Smiling Jack

    i bought used cars in OKC. Never again. One loss would wipe me out. I can’t take that risk.

  • Oh-boy

    How is it that America has become so corrupt that open thievery by public officials is tolerated with a mealy-mouthed article like this?

    America used to be great . . . now it’s just a den of elected thieves and thieves in uniform.

    • ChiefSteve Grant

      frightening

  • J Dubya

    So, this DPS ladder-climber Thompson says, “I personally want to sit through this [training] to get a clear understanding of how this works and get a good comfortable feel before we move forward.” So he wants to get a clear understanding of how they work but wants to assure us that “it’s too good a tool” to NOT (ab)use it? Cart before the horse much?!

    Typical bureaucrat. Telling everyone how great (or bad) something is when they know jack squat about it.

    Pair this up with systemic corruption and you can bet your bottom dollar this “tool” will be abused.

    And you want to talk about PROFIT MOTIVE? How about THIS little gem: “ERAD Group, gets a 7.7 percent cut of any funds seized and forfeited through use of the device.”? Wow.

    You want to know why these stories turn into full-blown internet sh#t storms? Because public trust in government, its institutions and its enforcement agencies is near ZERO. Until THAT is repaired, none of the rest of this crap matters.

    • GenEarly

      Repair after years of abuse may be optimistic. I had almost “moved on’ from this Clintonista carnage, but not quite. Be ready for vthe unthinkable Again from these putzes.
      It is difficult to confront Evil, but We must do so now or perish as mortals as well as spiritually.
      http://fplm.org/waco—what-really-happened.html

  • billstclair

    Asset forfeiture is one of the “gifts”of the war on some drug users. Law enforcement around the country has been taking cash from people they “suspect” of crimes for over 20 years. Many sheriff’s departments rely on that “income”. No pesky criminal trial required. I call it armed robbery under color of law.