#183 – The Expat Files: RFID Passports, Legal Strategies, and Life in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:03] Hi everybody, I'm Johnny Mueller and you're listening to the expat files living in Latin America. The show that tells you what it's really like to live, work, play and or retire in Latin America. I tell it just like it is, not the version they give you in those glossy travel magazines or the picture they paint for you in those international traveler websites where they're only trying to sell you something. What's it really like for expats living in Latin America? Well if you stick around a while you'll find out. So, let's get started. Now if you remember in a previous show I talked about the fact that there's an RFID chip stuck in everyone's passport these days. Although it's the first generation RFID chip and doesn't have too much information on you at all. Only what's printed in your passport are ready, for now anyway.

[00:51] And I mentioned that in the next year or so all the newer passports are going to have really advanced RFID chips in them. Pretty much like that Steven Spielberg Tom Cruise movie, the Minority Report. Do you remember that? Anyway as word has been filtering out that there is an RFID chip in the passport, some US citizens quite naturally are pissed off about it. Now anyone with a hundred bucks worth of equipment from Radio Shack can pick off your personal data from two inches to two hundred feet away. And I'm talking about unauthorized people. In fact anyone can do it and it's been proven hundreds and hundreds of times in the field. Go ahead and check it out on the internet. Right now at this very minute there are passport RFID hackers out there. So no way is your data really safe.

[01:38] Check it out. But you see the loophole is, if you go on the US State Department website where they talk about passports, they say that your passport is good even if your chip is not functioning for some reason. And in that case it'll be treated just like a passport from the old days, one without the RFID chip. So far so good, right? And since the US State Department has already admitted it doesn't matter whether that chip is working or not, just because of that loophole, a lot of people have found ways to disable that chip. And like I mentioned in the past, one of the ways people commonly can do that is to slip their passport into a microwave oven and zap it for a few seconds. But the problem with that is, microwave ovens come in different sizes and strengths. So a 15 second blast in one microwave oven could be equal to a 2 or 3 second blast in

[02:24] another. Nobody knows, it depends on the size and brand of the microwave that you have. So the thing is, if you do that and your passport somehow flames out, how are you going to explain those burn marks next time you go through immigration? I mean there's only so many people a year who actually get struck by lightning, right? And even though those US immigration officers are thick headed government workers, I don't think they're going to buy that lightning strike excuse too often. But who knows, it's a matter of your dazzling BS story versus them. And we all know what kind of superstars gravitate into government jobs now, don't we? Now I'm not recommending for or against doing any of this stuff, I'm just giving you information because I do get a lot of emails from people talking about this very subject. Illustrating of course that people are just sick and tired of big brother and being watched,

[03:13] cataloged and filed 24-7. Anyway, if you're pissed off about those RFID chips in the passport that you have now, then you're really going to blow a fuse when the second generation RFIDs are inserted into your passport in the next year or two. That's why I recommend it in a past show that you go get a new passport right away. That way you'll have 10 years with that limp RFID chip that's in passports now, the one that only carries the existing information on your passport, not your entire life and medical history like the new ones will do. Not to mention they're saying that the new RFID chip passports are going to be interactive and will not only be read passively but they'll transmit data too. Again, that's why I advise you get a new passport soon before that second generation RFID chip

[04:01] comes out. Now like I also mentioned in a previous show, it's a crime to mess around with your passport and that means altering it in any way or writing in it and that means you're never supposed to bend, staple, mutilate or punch holes in it. You do that and you're subject to a big fine. And get this, a year or so ago when I was passing from Belize into Mexico on the land border I was standing in a line with a bunch of Mormons. They're everywhere down here believe me. And you know down here in the third world there are lots of lines and when you're standing in one everything is much more casual and relaxed than in the first world. You have to get used to the fact that when you're down here in a line you're wedged in all over the place especially when you're at the border and you're hot and you're sticky and you can close your eyes and take a breath and know immediately if you're downwind from

[04:48] the backpackers. Now concerning that rule about not bending, folding or mutilating your passport or writing girls phone numbers or recipes in it and stuff, well I guess that doesn't apply to everyone because you see when I was getting my passport checked at the Belize Mexican border with all those Mormons I noticed that the Mormon in front of me had a smiley face and a Jesus sticker on his U.S. passport. Now from what I hear that's good for a $5,000 fine. But then again since U.S. coinage says in God We Trust on it, maybe that's a precedent for U.S. immigration to cut Jesus some slack. Go figure. But as for Buddha or Mohammed stickers on your U.S. passport, I don't think so. I think then you're looking at that $5,000 fine and maybe a little jail time. But you know it is your passport and you paid for it right?

[05:36] At least you think it's your passport but guess what? It's really not. And you know I never could really understand that. You pay $125 for the thing or even more in some cases and yet it says on the back of your passport that this is property of the U.S. government. So what are we doing, renting the things? I don't get that. Will somebody explain that to me please? You know what? If they say it's their property then they should hand them out for free or pay for the damn things themselves, not us. Realistically that $125 or so that you pay is just simply another form of taxation. Just like driver's license fees and business operation fees and any kind of government permission or permit you pay for. Anyway getting back to sticking your passport in the microwave oven with the Jiffy Pop popcorn.

[06:24] Well you paid $125 for the thing didn't you? For that kind of money you should be able to take a dump on it if you like. And of course I'm not recommending you do that either because it is kind of unsanitary actually. But for those of you who want to see how people in the real world are disabling that RFID chip in their passports without the benefit of sticking it in the microwave. And of course this too is for informational purposes and a great laugh because it is really funny. Anyway you can go on YouTube and see a one minute live video of someone doing just that in an orderly step by step process. You really have to see this. And to check it out you normally would Google the words YouTube followed by the words silencing the RFID chip in your passport.

[07:10] And that's it. Go ahead and check it out for entertainment purposes only of course. And by the way if you're not doing it already I would skip using Google altogether. From now on don't even say Google it anymore. Get rid of that phrase from your personal vocabulary. Because all it is is a mini big brother. It files and tags and catalogs you and puts you on lists, checks your most frequently used words and searches, records your IP address, catalogs all the keywords that you're using and makes them available to people in businesses worldwide that you don't even know. Bottom line even though they say they have a privacy policy they don't. I mean how do you think those relevant ads always pop up on the right side of your screen? Magic? And why do you think Google is constantly getting sued and people complain about it all the time? The fact is they know more about you and your habits than you do yourself.

[07:59] That's why you should immediately switch over to a completely anonymous search engine. One that doesn't record your IP address or any of your searches or anything. A service that's free but collects zero data on you. Well the one I use is called StartPage.com which uses the Google search engine so you get all of Google's results but you're doing so anonymously. It just strips off your IP address when you're doing searches. Which means you'll never get another pop up ad again. So go ahead and try it. It's called StartPage.com and set it as your homepage so you don't forget to use it. And another very cool thing about StartPage.com is that its servers are not located in the US. They're located in the Netherlands. Now to prove the anonymity of this service go to StartPage.com and click on their privacy

[08:51] policy. You'll wonder why you ever used Google before in the first place. Although like I said when you get into StartPage and start doing your searches you won't see it but it is actually using Google as the main search engine. And by the way if you really want to maintain a low profile life which should be the goal of every expat and expat wannabe you really should get off of Facebook and LinkedIn and any other social website. Because if you're on those and you're checking in regularly any real privacy you thought you had is being ripped to shreds daily. You can be sure that your footprints are all over the web. So ask yourself are you TwinkleToes or Sasquatch? Now I'm not saying you should cut loose from these sites if you're running a business because it's important to have those connections. And that's a very different thing from having personal privacy and a low profile.

[09:39] That's why almost every gringo expat that I know eventually gets with a lawyer and starts an SA anonymous corporation. Which then becomes the very low profile legal entity from which expats run their businesses and financial affairs. Because I'll tell you very few gringos and expats use their own names or family members' names when they buy houses, cars, properties or run businesses. In fact by using an SA corporation for any of these things your name doesn't have to appear anywhere. Only the corporate name and or your legal representative. And that will usually be your personal lawyer, the one that set up the corporation for you. And you might give him power of attorney or limited power of attorney. It depends on the situation. And of course you'll have power of attorney because it's your corporation.

[10:27] Even if your name doesn't appear in the government corporate registry. Which is the point. And you should know that in every Latin American country except Cuba, all these little manipulations are completely legal. Without going into a lot of legal detail here, just know that that's what the vast majority of experienced expats use. And there's nothing at all illegal about it, but it does give you very nearly complete anonymity. Basically a nice, anonymous buffer from the whims of lunatic politicians and the tentacles of Big Brother. Not to mention great protection against lawyers or anyone else who are trying to get at you, your assets or your nest egg. And how does that work? Well let's suppose you're a long time expat living a happy semi-retired life in the Dominican

[11:13] Republic for the last 12 years. And you've accumulated assets. You've got a car and a house and some property and maybe a boat. And you have a nice little bar and restaurant business that employs a half dozen locals. Now suppose you've been in Dominican Republic a good long time and you haven't been back to the states for years. You know what kind of rat race it is up north. It's depressing and stressful. And you can see with your own eyes that the country is on a downward spiral. Three very good reasons why you got out in the first place. That's why you're in Latin America. So what about our expat friend? If he's like some expats I know, he's down here having the time of his life. And of course he doesn't want it to end. But back up there in the states, he left a few loose ends.

[12:01] And as a matter of fact I have to say about a fifth to a quarter of all the long term expats I know are in no rush to go back to the states for any reason. They love it in Latin America but don't want to step foot in the states in case their loose ends come back to haunt them. Like for example, a bankruptcy, a business deal or two gone sour, an unhappy or unsatisfied creditor or two, some unresolved judgment or civil court case, or more likely a disgruntled ex-wife or two and some unresolved alimony and child support payments. And almost all of that stuff gets left unsaid. But I can tell you for a fact that with expats there's a lot of that going on. And that's especially true of some of the male expats that come down in their 40s and 50s. You kind of wonder about their past but you don't want to pry too much.

[12:50] Now for example, one long term expat I know who happens to live in the Dominican Republic, once at one of those embassy parties, after way too many free drinks, he confided in me an expat Eddie and told us that he owed more than $160,000 in medical bills. And that happened because he co-signed for his now deceased father who was afflicted with Alzheimer's. Now it's not hard to imagine why this guy doesn't want to step foot back in the states. Since for $160,000 plus eight years of interest and penalties locked on, he's sure there's a dozen collection agencies would just love to get their hooks into him. After all, it's not like going after a guy who's got a $500 or $1,000 debt. Now that kind of debt really lights a fire under those collection agencies I'll tell

[13:37] you. So my friend in a DR does not want to go back to the states. And now being that he's a successful expat third world business guy, you might ask is he worried about someone trying to get to him in the DR, some collection agency or legal entity or even the US government trying to get to his assets or his business or his nest egg down there? Is he worried about that? Well in a word, no. He loses not a wink of sleep over that because he's got everything registered in an anonymous corporation set up by his attorney. And no one, not even the US government, can penetrate that. And the only way possible for anyone to even start digging, trying to get information, is first, there has to be a court order and a judgment against him in the United States.

[14:25] Then lawyers have to go down to the Dominican Republic. They can't petition a Latin court by snail mail or email. They have to present that court order and judgment and then file a new judgment in person and prepare a court case in the Dominican courts. Then they have to go through that third world court process which takes about six times as long as those well known retarded first world court proceedings. By then a year or two might have passed already and that's why first world civil cases almost never make it down to a Latin American court system. But suppose someone really wants to get you and his American lawyers are tenacious enough to go through that process. And in the end, the Dominican court rules in their favor against you. Now here's where you should pay attention.

[15:10] Since your name, or should I say my buddy's name, is not registered on any property deed or corporation, guess what, he's got no assets to attach. So in effect it was all for nothing and all the money they spent with those lawyers and court filings and delays was absolutely for naught. Oh and did I tell you that everything, and I mean everything, every scrap of paper, document from the first world and all the court proceedings have to be translated into Spanish? By a certified translator appointed by the court, probably the judge's niece or daughter, you know? After all this is the third world. So in effect if some entity or someone from the first world is trying to come down after your assets, they're gonna have to spend minimally tens of thousands of dollars just to get the

[15:56] case going. I mean just think of the hourly fees of first world lawyers and the plane flights and the expenses and the hotel rooms because they have to try to case down here too. Plus they have to hire Latin translators and Latin lawyers to try the case in court. So as you can see it's just about impossible unless you're a huge financial fish and someone thinks they have a real chance at getting your dough. Basically you'd have to be worth millions and someone up north would have to know about it and they'd have to have a pretty good idea where those assets were. And that almost never happens because lawyers in the first world know it's virtually impossible to attach assets in the third world. Now the logical question is, what if some of the information slips and somebody up north by hook or crook finds out that you do have a very successful bar and restaurant in the

[16:45] Dominican Republic. And the guy up north that's after your assets knows the name of your incorporated business and hands it off to his lawyer named Doberman and says he's in the Dominican Republic, go sic em. Well anyone who speaks Spanish of course can go down to the property and business registries and see what that corporation owns. That's all public information. However first you're going to have to study those corporation papers and see if you can find the name of the guy you want to sue listed as owner, part owner or on the board of directors. But you see the beauty of having an anonymous corporation is this. When you first incorporate you put down your three or four members of your board, your board of directors and almost always one of those people who will be your lawyer and the

[17:31] rest of them the legal assistants or another lawyer from the same law office. But in reality that's your corporation 100% because you hold the shares in your name and they're in your possession. And the beauty of that is none of that stuff shows up in the ministerial public. The records that are in the public ministry that are available for anyone to see, in Spanish of course, will show what assets that corporation holds like boats or land or buildings or businesses and it'll list the names of the people that took out the original articles of incorporation, the people on your board of directors. Your name doesn't appear there anywhere. But in your lawyer's office where your corporate file is, that's where the papers are that show you have full power of attorney and of course you're holding the actual shares of

[18:18] the corporation yourself, which will be in your name if you want them to be. Or in your wife's name or your kid's name or another corporate name too. But you see, that kind of information is not registered and never will be in the public ministry, the ministerial publico. As long as you control an anonymous corporation in Latin America and you set it up in the way I just mentioned, no one's ever going to be able to attach the assets because they're not in your name. Even if a lawyer with a lot of time and money has a court order from the first world with a civil order or judgment against you, well all I've got to say is it's all been for not because you don't own anything and you can prove it. A search of the ministerial publico and the property registry will reveal that you don't

[19:04] own anything, there's nothing in your name. And even if they have the name of the company that they think you own, you can look that US lawyer in the face and say, tough feces and he'll have to accept that. So in effect there's two big dead ends here after they get some kind of judgment against you in the states. First, they have to get that same judgment down here in the Latin court system in Spanish and secondly it's not enough that they have to find your assets, they have to find assets in your name which they're never going to find. And now you might ask, can they get a court order from the Latin court to go down to that Latin legal office that's on that corporate paperwork and pull all the files and records of the board of directors? In other words, go on a fishing expedition right in your own lawyer's office.

[19:52] Impossible again unless you're talking about millions and millions of dollars at stake. And if that's the case it's still going to take years and you're going to know way in advance that someone's fishing for your assets. And what one very wealthy expat once told me was, when you have really big money, you set up a couple of anonymous corporations, each in a different Latin country, and you let those companies be shareholders of each other. That way the owner's real name never even appears on the shares, kind of like an unbreakable daisy chain. That means if someone wants to take you or the company to court, they have to take you to court and go through the whole legal process in three or more different countries. And that my friends would be like a 10 year old kid trying to do brain surgery. But listen, I assure you in the 20 something years I've been down here, I've never heard

[20:39] any story personally or otherwise of any expat who had to go to those lengths to protect his assets. 99.9% of the time, one anonymous SA corporation holding your assets is enough. And by the way, if there's a tax judgment against you in the states, coming down with all the power and force of the US government, it doesn't matter. A case like that will never be heard in a Latin court for any reason, no matter how big and powerful the US government is, because a Latin government will only prosecute an individual for a law that's been broken in their country. So for example, if the IRS is after you, because for example you've got a business in Bermuda that's making all kind of money, and you purposely don't report that income to the IRS, willful

[21:26] failure to report outside income is a crime that can result in a huge fine in a jail sentence. Now suppose the IRS knew you were living in the Dominican Republic, and they came after you for that. Well guess what? It would never even get a two minute hearing in a Dominican court, because tax evasion like that, though illegal in the states, is not a crime in the Dominican Republic, nor in the rest of Latin America. And in fact, the only way a third world court will agree with a first world court and go after you is if you've committed a capital criminal offense like murder, kidnapping or rape, or money laundering. Which is the latest trick US Treasury and tax authorities use to nail high profile expats. But that never happens to low profile expats who stay under the radar.

[22:12] That only happens to really big fish that the IRS has it in for. Because you know the IRS is really a business too, though a very crooked and demented business at that. They're in the business of milking US taxpayers like cows every paycheck. And you can't do a thing about it because they have a thing called payroll tax withholding. Whereas down here in Latin America, there's no such thing, it just doesn't exist at all. But the IRS also has to figure how many agents it takes, how many man hours and all that to collect so much taxes from a delinquent taxpayer. So they have to make the books kind of balance. They can't spend $1000 of IRS manpower money just to collect $800 from a delinquent taxpayer. No way. They're only going to go after an expat living in a foreign country if he's a really big fish. And the only leverage they can really use, to get the local third world government boys

[23:01] to play ball, is to call it money laundering not tax evasion because they can't prosecute tax evasion. Like I said, if it's not a crime in their country, they don't prosecute. But money laundering is now considered an international crime. So should you worry about that? Well only if you idiotically have a high profile and like to flaunt the fact that you've got big money and big business interests that you don't pay US taxes on. But as for the 98% of regular long term expats who aren't big fish and stay relatively low profile, well the truth is, no one ever screws with them. So like I've said in so many past shows, the object is to keep a low profile on the street down here in Latin America. No fancy big ass cars and Rolex watches and designer clothes. No point in broadcasting that you have real money.

[23:47] Big money that is compared to the locals. And really it seems to me that people who like to put their wealth on display have more than a little bit of an ego problem to begin with. I mean come on, what's a person need a Rolex or any kind of $5,000 or $10,000 watch for? To me that smacks of an ego and self esteem problem, really. Think of it, you've already got a dozen clocks in your own house I'm sure. You've got your computer, your TV, your microwave, your stove, even your refrigerator's got a clock on it these days. And of course when you're in your car your dashboard and your radio's got a clock going. And every quarter mile there's a billboard with a clock on it and then there's a clock or two on your smartphone and even in those electronic traffic signs. The fact is if you live in a decent sized city, just by going about your business, going

[24:33] to work and driving, you pass a clock or see the time of day over 160 times a day and you don't even know it. So why in the world would you have a Rolex unless you had an ego problem or were just a real superficial guy? Or maybe you had a certain kind of physical deficiency often associated with men who drive corvettes. Oh and here's a good observation of expat eddies. He said for about every 100 guys wearing a Rolex there's maybe one woman wearing a Rolex, maybe none. So what's that say? And coincidentally he also said that for every 100 guys driving a Corvette there's maybe one woman driving one. Chances are it's her under endowed boyfriend's vet too. And by the way down here in Latin America you do see the odd Corvette.

[25:21] Which is probably one of the worst cars of all time to have in Latin America. In fact any real sports car, like a Corvette, a Boxster or a Porsche, cars like that and in fact any convertible too, are very very bad if not impossible cars to have in Latin America unless you just plan on keeping them in a garage and admiring them once in a while. For one thing the cops pull you over all the time because they know you have money and they should be able to squeeze a good bribe out of you. Secondly there are unmarked gigantic speed bumps down here everywhere called tumelos which can be so bulbous and tall that they scrape the bottom frame of the average car. And average cars have pretty good ground clearance and sports cars forget about it. And let's not forget those convertibles, absolutely one of the stupidest choices you could make.

[26:09] But of course they look cool. Now think about this for a minute. If you think your convertible is secure in a well guarded public parking lot or parking garage you're sorely mistaken and of course when you park your car you'll keep your convertible top up, that's a given. Even if it's your usual fenced in lot with armed guards there's simply no guarantees. Bottom line if you have a convertible you're simply begging to get robbed. In fact every person I've ever known who's had a convertible down here has been slashed and penetrated numerous times. Man that sounds pornographic. And by the way all the convertible owners I've known have been wealthy lanterns. The expats I know are just not that stupid. Oh and by the way here's one more thing I should mention about those speed bumps, those

[26:55] tumelos. That's why it's nice to have some kind of a four wheel drive vehicle because you almost never bottom out on those things. Their frames are usually a few inches higher off the ground than your normal car. However take note of this. If you're driving around content with the fact that your car is not bottoming out on these tumelos don't get overconfident because let me warn you as soon as you get a few passengers in the car it's a completely different situation. As your front wheels go over the tumelo get ready for that unnerving scrape that didn't happen before when you were the sole person in that car, the driver. And that happens to every expat so don't be surprised when it happens to you. You've been listening to The Expat Files, living in Latin America, coming to you each

[27:42] week from somewhere south of the border. And don't forget you can email me on anything at all about Latin America, The Expat Files at gmail.com. Once again, The Expat Files at gmail.com. See you next time, nos vemos!