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If you’re like most Americans, you violate numerous laws each day, probably without even knowing it.

As I wrote in a blog entry nearly three years ago, 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. You can even be imprisoned for the crime of withdrawing lawfully earned currency from your own bank account.

Over the past three years, the trend toward what I call "criminalization" of everyday conduct has only intensified. (Criminalization is the conversion of conduct that was once considered a contractual dispute, or merely socially stigmatized, into a criminal offense.)

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Now, according to federal prosecutors in New Jersey, violating a Web site’s "terms of service" constitutes a crime. Under this interpretation, if you disregard  or simply fail to read (or understand) the lengthy and legalistic service agreement of any Web site, you risk imprisonment!

The defendants in this case purchased tickets in bulk from an online ticket reselling business, Wiseguy Tickets. They stand accused of reselling the tickets at a higher price, in violation of Wiseguy’s terms of service. Prosecutors also brought hacking charges against the defendants for bypassing technical measures to prevent bulk purchases. But it’s the criminalization of violating a Web site’s terms of service that concerns me the most.

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Most Web sites say they can change their terms of service anytime. To avoid prosecution under this theory, you’d need to read a multiple pages of legalese every time you log in to your favorite Web site. Even entering a fake name on a social networking Web site may be a crime! Federal prosecutors in Los Angeles indicted a woman because she violated a social network’s terms of service. Fortunately, the trial judge threw out the case.

And there’s no reason why this trend is limited to the online world. Imagine that you purchase a new car from your local dealer. You drive it for a few months, never bothering to read the terms of service in the back of the manual. One day you get pulled over for a traffic ticket. The cop asks you where you buy your gas. "From wherever it’s cheapest," you reply. "Wrong answer," says the cop, as he puts you in handcuffs. It turns out that the terms of service stipulate that you must purchase all your gas from a specific gas station recommended by the dealer. If you don’t, under the DOJ’s latest pet theory of criminalization, you’d be committing a crime.

Naturally, there’s no way that police can arrest you every time you knowingly or unknowingly violate the terms of service for an online  or offline  product or service. But the potential for arrest is always there, giving prosecutors wide discretion in pursuing the most visible  or more likely, the most politically viable  of such "crimes."

The trend won’t reverse itself until we convince lawmakers that criminal sanctions aren’t necessarily the best way to deal with moral, social, or political problems and disputes. Let’s hope that time comes soon  although I’m not holding my breath!

August 20, 2010

Mark Nestmann is a journalist with more than 20 years of investigative experience and is a charter member of The Sovereign Society's Council of Experts. He has authored over a dozen books and many additional reports on wealth preservation, privacy and offshore investing. Mark serves as president of his own international consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides international wealth preservation services for high-net worth individuals. Mark is an Associate Member of the American Bar Association (member of subcommittee on Foreign Activities of U.S. Taxpayers, Committee on Taxation) and member of the Society of Professional Journalists. In 2005, he was awarded a Masters of Laws (LL.M) degree in international tax law at the Vienna (Austria) University of Economics and Business Administration.

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