Asset Protection BLOG - Mark Nestmann

Keys, Keys, Keys...Who Can Break Yours?

When Julius Caesar sent messages to his generals, he feared they might fall into the wrong hands.  To avoid having his war plans compromised, he coded his messages using a simple system that shifted each letter three positions to the right.  For instance, he replaced every M with P, every B with E, etc. 

Today, codes have become much more sophisticated, but the objectives are the same as in Caesar's time.  You want to send a message to someone that only that person can read.  Or, shifting back to our own time, you want to make messages (or other files) on your PC unreadable to anyone except for yourself.

A mathematical process called encryption makes this possible.  Encryption scrambles your messages or files using mathematical formulas that make the text unreadable to anyone except for someone possessing the key to "decrypt" it. 

Encryption programs are now available that even the super-computers used by national intelligence agencies cannot decipher messages created with them, at least not without an exhaustive effort.  They're easy to use, and cheap--sometimes even free.  I recommend them highly.

In keys, longer is better.  While the way a key is generated influences its strength, in general, the more "bits" a key has, the stronger it is. 

For instance, I use an encryption program called "Pretty Good Privacy" (PGP).  One of the types of keys PGP uses is called an "RSA key."  A 4096-bit RSA key is stronger than a 1024-bit RSA key.

And not just a little stronger.  Key strength increases exponentially with key length. 

Unfortunately, the early versions of PGP support a maximum key length of 1024 bits.  Recent research indicates that in near future, 1024-bit RSA keys will get "cracked" by increasingly powerful computers.  However, 4096-bit RSA keys remain very safe—for now.

If you're using 1024-bit keys to secure your e-mail or computer files, you should upgrade to a longer key.  The newest version of PGP, PGP Desktop, supports the stronger 4096-bit keys.  So does the free version of PGP you can download at http://www.pgpi.com. 

But act soon.  When asked whether 1024-bit RSA keys are dead, one cryptographic researcher involved the race to crack them said, "The answer to that question is an unqualified yes."

Act accordingly.

Copyright © 2007 by Mark Nestmann

Freeze Out Identity Thieves

Are you serious about protecting yourself from identity theft—the world's fastest growing crime? 

If you are, starting tomorrow, you'll have the ultimate tool to do it. It's called a "credit freeze."  Effective Oct. 31, 2007, all three major credit bureaus will offer credit freezes to any individual who requests one.

A credit freeze, in effect, places an electronic padlock on your credit report.  No one can review your credit report until you remove the padlock. 

If an identity thief tries to apply for credit in your name, he'll be in for a rude surprise. That's because if a company can't review your credit report, it's very unlikely to issue you (or an impostor) credit.  A credit freeze eliminates identity theft at its source—the ability of a criminal to obtain credit fraudulently.

Let's say that an identity thief steals enough information to apply for credit in your name.  That might include your name, address, birthday, and Social Security number—all easily retrievable over the Internet.

Next, the thief uses this information to obtain a driver's license or other official identity document containing your name, but the thief's photo. Then, he visits a car dealership or other seller of "big-ticket" items.  Finally, he test drives a luxury car and tells the salesman to "charge it"—to you.

With a credit freeze, the thief's application for credit in your name will be turned down cold! But without a credit freeze, he just might drive off the lot in a brand-new car, leaving you to pay the bill.

To freeze your credit file, send a letter via certified mail to the following addresses:

• Experian Security Freeze, P.O. Box 9554, Allen, TX 75013
• Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348
• Trans Union Consumer Protection Center, P.O Box 6790, Fullerton CA 92634

The letter must contain your full name, middle initial, and generation (Jr., Sr., etc.), your date of birth, your current address, and any previous addresses for the past two years.  You'll also need to include a copy of a government-issued photo ID card; a utility bill or bank statement with your name on it; and your Social Security Number. Finally, include a US$10 check or money order per credit bureau.

Each credit bureau will send you a letter confirming the credit freeze.  You'll also receive a PIN code that you can use to "unfreeze" your account if you want to buy a new car, apply for a mortgage, etc.  "Unfreezing" costs another US$10 per credit bureau.

Is there a downside?  Yes, but it's a small one.  If you lose your PIN, unfreezing your account may take as long as 10 days.  (With the PIN, the unfreezing is supposed to occur in a matter of hours or even minutes).  But, a 10-day delay isn't necessarily a bad thing if you're prone to making impulse buying decisions.

For hundreds more suggestions on how to protect your privacy and wealth, click here.

Copyright © 2007 by Mark Nestmann

Avoid the "Anti-Terrorism Clearance Certificate" Scam

In the last few months, I've received several e-mails from Sovereign Society members requesting assistance in obtaining an "anti-terrorist clearance certificate."  They supposedly need the certificate to claim a monetary award, generally for US$100,000 or more, purportedly from an offshore source.

One writer, who I'll call Debbie, received a text message informing her that she had won US$500,000 in a contest she didn't know she had entered.  The message instructed her to send a fax to a phone number in Latvia to claim her prize.

After she sent the fax, she received a message similar to the following:

"Dear Debbie,

This letter is to confirm that we have in our possession a CERTIFIED BANK DRAFT for US$500,000 to be sent to you upon receipt of the United Nations Office on Drugs & Crimes (UNODC) anti-terrorist clearance certificate.

Please contact me as soon as possible to obtain this certificate so that we may release these funds to you.

Yours truly,

Lord Michael Ellis, Barrister"

At this point, Debbie became suspicious.  But, since US$500,000 is, well, US$500,000, she decided to investigate further.

She sent an email message to "Lord Michael Ellis" requesting the instructions.  The next day, she received a message instructing her to send US$18,750 to cover the cost of the certificate.  The message stated that such a certificate had to accompany all international money transfers.

That's when Debbie contacted me.  And I told her what I'm about to tell you: you don't need an anti-terrorism clearance certificate to send money internationally.  indeed, no such certificate exists.  Those who tell you otherwise are perpetrating a variation of a very old fraud—the advance fee scam.

In an advance fee scam, a criminal offers you a large sum of money.  The catch is that you get it only after you pay a smaller amount to have the funds released.  Justification for the advance fee varies, but they're all fictions invented by criminals.  Once you pay the money, the criminal—and your money—disappear.

The bottom line: if someone tells you that you need to purchase an anti-terrorist clearance certificate to receive funds from abroad, it's a fraud.  Save your hard-earned money to invest in a legitimate opportunity—not an advance fee scam.

Copyright © 2007 by Mark Nestmann

Telecom Package Deals Sacrifice Privacy

You've surely received mailers or other reminders from telephone and cable companies offering "all-in-one" packages of telephone, television, and Internet services, with the package offered at a significant discount to the services priced individually.

But if read the privacy policies from the companies offering these packages, you'll may find that the providers may have the right to track what you watch on television and whom you call, in addition to monitoring which Web sites you visit, and what you buy online.  Some companies even reserve the right to read your e-mail.  This information belongs to the company, and may be used for any purpose provided for in the service contract, including selling your telecom profile to marketing companies or turning over the records to private investigators or the government. 

For instance, Time Warner Cable, which offers a combined telephone, television, and video service, says it may track "Internet addresses you contact and the duration of your visits to such addresses."  Time Warner says it "does not use or disclose any personally identifiable information that may be derived from these logs for marketing, advertising or similar purposes."  But, its "Affiliated Internet Service Providers" may monitor "information you publish on the ISP Service," which I interpret as giving the company permission to read your e-mail.  Further, it may retain "personally identifiable information" about your account for up to 15 years after you end your business relationship with the company.

Satellite television provider DirecTV says that it "may share customer information, including programming purchases, with selected media, entertainment, and other similar service providers."  However, you may "block the collection of Anonymous Viewing Information from your DIRECTV Receiver."

AT&T Yahoo! and Video Services goes farthest of all: it stipulates that, with respect to its Internet and video services, "while your Account Information may be personal to you, these records constitute business records that are owned by AT&T."  In other words, if you use AT&T's Internet or video services, the company owns, without reservation, your private data.

When you sign up for telecom services, you're stuck with whatever data collection and distribution policies the companies you choose have in effect.  However, some companies, like DirecTV, give you the option of blocking some types of information sharing.  I highly recommend doing so.

A better, albeit more expensive and time-consuming option, is to choose different companies to provide each telecom service you need.  For instance, you could use one company for local telephone service, but not use their cellular or long-distance services.  Purchase these separately, and if you value your privacy, choose pre-paid cellular and pre-paid long-distance services that you can purchase anonymously. 

Otherwise, your loss of privacy may be a package deal as well.

Copyright © 2007 by Mark Nestmann

Yes, You are a Criminal

If you live or do business in the United States, you're almost certainly a criminal, even if you don't know it.

In New Jersey, you can be arrested for driving by your own home.  In Florida, a man was sentenced to six years in prison for carrying cash.  In Pennsylvania, a woman faces prison for yelling obscenities at her clogged toilet. And under federal law, you can be imprisoned for withdrawing lawfully-earned currency from your own bank account. 

The common thread of these stories is criminalization: the conversion of conduct that was once merely socially stigmatized or subject to fines or other civil sanctions into a criminal offense.

Are you abusive, or does your spouse or partner say that you are?  Domestic violence laws in New Jersey and numerous other states mandate the arrest of a male based on recommendations from a social worker.  The social worker may recommend a man's detention for spousal abuse based on a woman's testimony alone.  Driving by your own home can be grounds for a criminal complaint. 

Who hasn't ever carried cash in their wallet?  In Florida, it's a criminal offense to do so: a court sentenced a man to six years in jail for the crime of possessing a cocaine-contaminated dollar bill.  An appellate court ordered the man released only after local newspapers revealed that the overwhelming majority of currency circulating in the state was tainted with narcotics residues.

Do you become frustrated because your appliances at home don't operate properly?  In Pennsylvania, a woman who allegedly shouted profanities at her overflowing toilet within earshot of a neighbor faces up to 90 days in jail. 

Have you ever withdrawn cash from a US bank account?  Better be careful, because if you withdraw more than US$10,000 in a series of "related" transactions, you may be guilty of a federal crime called structuring, and face a prison sentence of five years, a US$250,000 fine, and confiscation of the entire bank account under civil forfeiture laws.

Are you a terrorist?  You may not think that you are, but under the USA PATRIOT Act and other federal laws, practically all forms of domestic protest could be considered "terrorism."  Once the government classifies you as a terrorist, it can seize and ultimately forfeit everything you own, whether or not those assets are connected to terrorism.  Then, under the Military Commissions Act, it can detain you indefinitely, without ever charging you with a crime.

These examples merely scratch the surface of the overwhelming trend of criminalization.  The trend won't be reversed until we convince lawmakers that criminal sanctions aren't necessarily the best way to deal with moral, social, or political problems and disputes. 

In the meantime, the only way to protect yourself is to ask, before engaging in even the most seemingly innocent activity or transaction: "is there any way I might get arrested for this?"  The answer may not always be obvious, but a little research online or at a law library may at least shed light on the potential for criminal liability. 

Copyright © 2007 by Mark Nestmann

Since the NSA's Listening in Anyway, You Might as Well Get Free Phone Service

Here's a new wrinkle in telephone service: in exchange for permitting your conversations to be monitored by voice recognition software, you can call anyone, anywhere in the world, for no charge.

That's the offer that a start-up company called Pudding Media is offering its customers.  Here's how it might work, according to a company press release:

" It's Saturday night. You plan to go to a movie with Ashley. But which movie should you see...? Time to call her and decide. You surf to ThePudding.com and call Ashley for free. As soon as you start talking about movies, a list of local movies, complete with reviews and show times appear on the screen. Now, what about dinner? Just talking about where to get dinner, and offers for local restaurants are displayed. Now you and Ashley have everything you need for dinner and a movie! Oh and just a few clicks and you've reserved the tickets and a table. Sweet!"

I must admit that I have misgivings about allowing someone to monitor my telephone conversations.  However, I have no objection to services like Pudding Media, because the monitoring is truly voluntary, and you actually get something in return.

Now, if the National Security Agency would just be as helpful when they secretly monitor your calls as authorized by the grossly misnamed "Protect America Act."  But I suspect that the recommendations from ThePudding.com might be more helpful. 

To learn more about how you can protect your privacy on and off the phone, click here.

Copyright © 2007 by Mark Nestmann

How to Buy a Second Passport…and Why You Might Want to

In yesterday's blog, I described a program for "economic citizenship" from Lithuania, that, according to the Lithuanian embassy, has no legal basis.  For that reason, I recommend avoiding it. 

However, two countries—the Commonwealth of Dominica and the Federation of St. Kitts and Nevis—have "citizenship by investment" programs fully authorized in law. 

Dominica, sometimes called the "nature island of the Caribbean," is located approximately 300 miles southeast of Puerto Rico.  Not to be confused with the Dominican Republic, it's an amazing island with mountains rising nearly 5,000 feet out of the ocean, a boiling lake, and the last original settlement of native Americans in the Caribbean.  A former British colony, Dominica has been independent since 1978.

Dominica's gorgeous scenery, clean water, pure air, and a largely unspoiled environment have made it a popular eco-tourism destination.  But the country’s rugged coastline, lack of sand beaches, and the absence of a large international airport have hindered its growth.  Dominica also is periodically affected by hurricanes, although it's at the southern tip of the Caribbean hurricane belt.  Last summer, it suffered a severe blow from Hurricane Dean, although damage was limited to its agricultural sector and didn't seriously affect business or tourism. 

---

A World of Secret Possibilities, Financial Freedom and Excited Luxury Awaits You

The face of America is shifting as the economy weakens.

The days of prosperity and envy are long gone and it's time to make a choice live the life of your dreams or let your retirement and investment portfolio sink when things get worse.

You could be spending your days exploring uncrowded, unspoiled Caribbean hideaways before heading back to your beachfront home or enjoying the crisp morning air as you sip a cup of joe from the balcony of your cottage overlooking the Alps...

But you don't need to expatriate to save yourself and your family I have an easier and more affordable way...

Click here to learn more.

---

With a price starting at only US$75,000 for a single applicant (US$100,000 for a family), the cost of Dominican economic citizenship and passport is relatively low.  Legal and due diligence fees add approximately US$25,000 to these costs.  To qualify, you need to pass a background check, have a genuine interest in Dominica, and speak English fluently. 

With a Dominican passport, you can travel visa-free to about 50 countries and enter another 40 or so by obtaining a visa upon entry or with minimal formalities.  The passport provides a substantially expanded ability to live or work in any of Caribbean Community (CARICOM) countries, which in addition to Dominica are Antigua & Barbuda, The Bahamas, Barbados, Belize, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts & Nevis, Saint Lucia, Saint Vincent & the Grenadines, Suriname, and Trinidad & Tobago. 

Like Dominica, St. Kitts & Nevis are beautiful islands.  The mountains aren't quite as tall, but the scenery remains breathtaking.  Former colonies of Great Britain, these two sister islands form a federation that has been independent since 1983. A bit further north than Dominica, St. Kitts & Nevis is also subject to hurricanes.  In 1998, Hurricane Georges caused more than US$400 million in damages.

St. Kitts & Nevis is somewhat more prosperous and developed than Dominica, and the price of the economic citizenship program is higher.  There are two options: you can purchase qualifying real estate with a value of US$350,000 or more (plus a one-time 10% payment of property tax), or make a contribution of US$200,000.  Application, registration, due diligence, and legal fees add a minimum of US$15,000 to these figures; substantially more if you opt for the qualifying real estate option.

The St. Kitts & Nevis passport provides slightly improved travel options in comparison to Dominica.  Since St. Kitts & Nevis is also a CARICOM member, the benefits of improved access to CARICOM countries apply to both passports.

But perhaps I'm getting ahead of myself.  Why get a second passport at all?

There are many reasons.  A second passport can expand your travel possibilities.  It can also protect your identity, should you ever need to keep your nationality a secret for safety reasons.  It can give you the right to reside in other countries, and give you a way to cross international borders if your primary passport is lost or stolen. 

For U.S. citizens, a second passport has another benefit—it's a necessary prerequisite if you want to legally disconnect, once and for all, from the U.S. tax system.  The only way to eliminate all U.S. tax liability is to cease being a U.S. citizen.  But before you do so, you must obtain citizenship and passport from another country.

The Nestmann Group, Ltd. can provide assistance to qualified individuals seeking second citizenship and alternative residence.  Please contact us for more information at assetpro@nestmann.com. 

Copyright © 2007 by Mark Nestmann

Lithuanian Economic Citizenship--NOT

A passport from a European Union country is one of the most desirable travel documents you can possess.  Most EU members have extensive network of countries to which passport-holders can travel without a visa.  Equally important, a person holding a passport from one EU country can generally travel to, reside in, and work in another EU country, with few formalities necessary.

Unfortunately, few shortcuts are available to obtain a passport from a EU country.  Almost without exception, you must apply for residence in your selected EU country, and live there for an extended period--generally 5-10 years--before you're eligible to apply for passport and citizenship.

It certain cases, you may qualify for citizenship in a EU country by virtue of your ancestry, marital status, or residence in a dependency of that country.  For instance, if you can prove that you have at least one Irish-born grandparent, you can apply for Irish citizenship and passport.  There may also be a shortened period of residence to qualify for citizenship if you're married to a citizen of a EU country.  Finally, if you're a resident of a dependency of a EU country, it may be possible to make expedited application for citizenship in the parent country.

Since it's difficult to obtain citizenship from a EU country, it's not surprising that some shady promoters offer fraudulent shortcuts through this process.  Last May, I exposed one program that that was selling passports from unnamed EU countries for prices as low as US$9,900. 

Now, I've discovered a Web site offering economic citizenship from the EU country of Lithuania.  The Web site claims that:

"The Republic of Lithuania has a specific Citizenship- by-Investment Programme, its legislation provides for the possibility of granting citizenship be [sic] means of naturalisation to people who have achieved particularly good results for the country in their work in science, economics, arts, culture, and sport in the Republic of Lithuania, or who have invested a large sum of money in the Republic of Lithuania which benefited the economy and created jobs in the country. There is no set amount of money that needs to be invested, so success depends upon the economic result and the number of jobs created. The normal requirements, including the renunciation of the applicant's existing citizenship, are not applied."

According to this Web site, prices for Lithuanian citizenship and passport start from EUR 25,000.

This would be a great deal, but the company behind the Web site didn't answer my inquiries about the legal basis of this program.  So, I inquired about it to the Lithuanian embassy in Washington, D.C.  I received the following response from the embassy:

"There is no such law permitting an individual to purchase Lithuanian citizenship and passport for such items are not goods to be sold or bought.  We believe the service that company provides does not have legal basis.. On rare occasions, persons who by some act contributed to the well-being of Lithuania and its citizens can get Lithuanian citizenship by a special presidential decree."

How often does this occur?  Apparently, no such honorary passports have been issued since 2004.  Not exactly a reliable way to obtain a Lithuanian passport!

A company that sells you a passport from a country where there's no legal provision for such sale is likely offering stolen, counterfeited, or illegally issued documents.  In all cases, such illegally-obtained passports are subject to cancellation and confiscation.  Worse, anyone using them may face fines and even imprisonment for possession of illegal travel documents. Avoid such passports at all costs!

Fortunately, there are economic citizenship programs that do have a basis in law, and provide a legitimate means to obtain a second passport.  I'll be discussing these programs at the upcoming Sovereign Society Offshore Advantage Academy in the Bahamas Nov. 7-11, 2007.  For more information, click here. 

Tomorrow, I'll give you a "sneak peak" at my presentation...until then.

Copyright © 2007 by Mark Nestmann

Your Bluetooth Device May be a Bug

Bluetooth is a short-range communications standard intended to replace the cables that would otherwise connect portable communications devices; e.g., cell phones, laptops, etc.

Just about everyone seems to have a Bluetooth device, too.  The first few times I saw persons walking down the street, apparently talking to themselves, I thought I might be dealing with an outbreak of mental illness.  Then, I noticed the small blue device hooked to their ear.  This is a Bluetooth device—one of the hundreds on the market.

Because Bluetooth has been so successful, hackers have naturally tried to circumvent its security protocols.  There have been some spectacular security failures, the best known of which is a so-called "Bluesnarfing" attack that allows a hacker to remotely download the contacts list, diary, and stored pictures in Bluetooth-enabled cell phones.  While cell phone companies say they've closed this security flaw, older Bluetooth phones (certainly those manufactured before 2004) may remain vulnerable.

Now, researchers have discovered another vulnerability.  When your Bluetooth device is activated, an eavesdropper may be able to listen to your conversations—but only when you're NOT using the phone.  A modified radio scanner is all that's needed to listen in on conversations.  Someone can simply drive down the street with such a scanner, and when it detects a conversation broadcast by a Bluetooth device, listen to whatever's being said.  Essentially, the Bluetooth device acts as a microphone and transmitter, picking up whatever you say and broadcasting to anyone who with the equipment to monitor it. 

What's not yet clear is how far away the scanner can be from the Bluetooth device to monitor conversations on it.  It's at least 30 feet and I've seen one study that claims that broadcasts from more powerful Bluetooth devices can be monitored from 300 feet away, perhaps further.  But again, the attack works only when you're not using your phone.   

To protect yourself, don't use a Bluetooth device any more powerful than you really need.  Small over-the-ear wireless devices have very low power and are difficult to monitor.  But beware of larger units that connect to your vehicle's cigarette lighter or are dashboard-mounted.

If you're in the market for a Bluetooth device, look for one that requires you to press a button or otherwise manually synchronize the device before it's used.  Also, look for one that requires a PIN code and that allows you to change the PIN.

Finally, if you're not sure whether your Bluetooth device can be monitored, turn it off when you're not using it.

Copyright © 2007 by Mark Nestmann

U.S. on Verge of Enacting an "Exit Tax"

Since 1996, there have been at least a dozen efforts by congressional tax-and-spenders to impose an "exit tax" on wealthy Americans who exercise their constitutional right to disconnect from the U.S. tax system through a process called expatriation. I wrote about one of the most recent proposals here. However, President Bush vetoed the legislation containing this provision for other reasons.

In most countries, all that's necessary to expatriate is to become non-resident. But in the United States, you need to also give up U.S. citizenship, because the U.S. Tax Code imposes tax on U.S. citizens living abroad, even if they've never set foot in the United States. Since the United States taxes its citizens and not just its permanent residents, the only way for a U.S. citizen to eliminate U.S. tax liability is to acquire legal residence and citizenship in another country and subsequently give up U.S. citizenship.

Expatriation is politically unpopular. The vision of a pale ex-U.S. citizen-billionaire basking on a beach in a tax haven is too much for many less affluent citizens to bear. As a result, anti-expatriation rules penalizing U.S. citizens who are deemed to have given up their citizenship for tax avoidance reasons have been in effect for decades. First imposed in the 1960s, the rules were tightened in 1996 and again in 2004.

Now, Congress is again on the verge of passing an outrageous law that would impose the first-ever exit tax on former U.S. citizens or long-term residents (persons who have resided in the United States for eight years or more of the previous 15 years). On October 10, the House of Representatives passed the Tax Collection Responsibility Act of 2007 (H.R. 3056). If passed by the Senate, and signed by President Bush, this act will require persons who give up U.S. citizenship or long-term residence to pay a tax on all unrealized gains of their worldwide estate that exceed US$600,000. The gains will be assessed based on the fair market value of the assets and the tax due within 90 days of expatriation.

This bill also imposes a draconian 30% withholding tax on unrealized gains in an expatriate's IRA or other pension plan. And don't think about gifting assets to family members or friends still living in the United States: a separate 30% tax applies to such gifts or bequests.

The conference report on this legislation smugly states that U.S. citizens give up U.S. citizenship, but that the Tax Code shouldn't provide an incentive to do so. Rather, that decision should be, in the report's words, "tax neutral."

Give me a break. Taxing expatriates on a phantom gain that could quite possibly be taxed again by whatever country to which they relocate is hardly "tax neutral." Especially when the only alternative to this "alternative tax regime" is to make an to post a bond and pay an interest charge for the privilege of not paying tax on gains you never realized.

I'll be tracking the progress of this deplorable proposal as it makes its way through the Senate. There's a chance that President Bush would veto the bill, should it pass the Senate, but there's no assurance he would do so, since bashing wealthy expatriates is so popular.

I've also prepared a special report on expatriation and the implications an exit tax will have on Americans considering expatriation. To learn more about this report, click on http://www.nestmann.com/catalog/product_info.php?cPath=21&products_id=43.

Copyright © 2007 by Mark Nestmann