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<p>[QUOTE="janetdoe, post: 502949, member: 1545"]</p><p><a href="https://www.fbi.gov/seattle/press-releases/2012/brothers-who-defrauded-nordstrom-with-online-reward-scheme-plead-guilty-to-wire-fraud">https://www.fbi.gov/seattle/press-releases/2012/brothers-who-defrauded-nordstrom-with-online-reward-scheme-plead-guilty-to-wire-fraud</a></p><p></p><p>When you are doing ridiculously large amounts of manufactured transactions for the purpose of earning rewards/rebates, and when you know or should have reason to know that such transactions should not earn rewards, you can probably end up in jail. There are fraud laws as well as tax laws.</p><p></p><p>It really depends on the language in his CC T&C, whether they purposely exclude cash equivalents (e.g. VGCs) from earning rewards. If that is the case, the fact that the bank is erroneously awarding him cashback on these purchases (i.e. they let him do it) is probably not an adequate defense should the feds decide to prosecute. I'm not sure if it would be a valid defense in a civil lawsuit.</p><p></p><p>In either case, putting out a blog post with your name on it, admitting that you do millions of dollars worth of transactions for the sole purpose of generating tax-free rebates, is one of the more indiscreet and flat-out stupid things I have seen in this hobby. <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite11" alt=":rolleyes:" title="Roll Eyes :rolleyes:" data-shortname=":rolleyes:" /></p><p>My first answer is no, because he claims they filled out the paperwork.</p><p></p><p>But that does raise the question... he mentions that he does $20k on a normal day, and he was buying $5.5k and his friend was buying $15k. So the real questions are:</p><p>1. Did he only do $5.5k on MOs that day, and all his transactions at the one store? If he broke up the transactions into amounts smaller than $10k at different stores, that could be problematic.</p><p>2. Was the friend buying $15k on his behalf, and if so, did they fill out the paperwork truthfully? The paperwork definitely asks if you are buying the MOs on behalf of another person.</p><p></p><p>So yes, it is quite possible that, even filling out the paperwork, he did something that would run afoul of the structuring or BSA laws.</p><p>[/QUOTE]</p>
[QUOTE="janetdoe, post: 502949, member: 1545"] [URL]https://www.fbi.gov/seattle/press-releases/2012/brothers-who-defrauded-nordstrom-with-online-reward-scheme-plead-guilty-to-wire-fraud[/URL] When you are doing ridiculously large amounts of manufactured transactions for the purpose of earning rewards/rebates, and when you know or should have reason to know that such transactions should not earn rewards, you can probably end up in jail. There are fraud laws as well as tax laws. It really depends on the language in his CC T&C, whether they purposely exclude cash equivalents (e.g. VGCs) from earning rewards. If that is the case, the fact that the bank is erroneously awarding him cashback on these purchases (i.e. they let him do it) is probably not an adequate defense should the feds decide to prosecute. I'm not sure if it would be a valid defense in a civil lawsuit. In either case, putting out a blog post with your name on it, admitting that you do millions of dollars worth of transactions for the sole purpose of generating tax-free rebates, is one of the more indiscreet and flat-out stupid things I have seen in this hobby. :rolleyes: My first answer is no, because he claims they filled out the paperwork. But that does raise the question... he mentions that he does $20k on a normal day, and he was buying $5.5k and his friend was buying $15k. So the real questions are: 1. Did he only do $5.5k on MOs that day, and all his transactions at the one store? If he broke up the transactions into amounts smaller than $10k at different stores, that could be problematic. 2. Was the friend buying $15k on his behalf, and if so, did they fill out the paperwork truthfully? The paperwork definitely asks if you are buying the MOs on behalf of another person. So yes, it is quite possible that, even filling out the paperwork, he did something that would run afoul of the structuring or BSA laws. [/QUOTE]
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