Tag: taxes

A Tiny Alabama Town Ran an Outrageous Speed Trap. Now It Will Pay $1.5 Million To Settle a Lawsuit.

The hamlet of Brookside, Alabama, has agreed to pay $1.5 million to settle a civil rights lawsuit three years after local news investigations revealed that it was running a predatory speed trap.

The Institute for Justice, a public interest law firm that sued Brookside in 2022 on behalf of motorists who said they were framed and swindled by the town, announced on Monday that it had reached a settlement agreement that would require substantial transparency and policing reforms, in addition to payments to the class members.

Brookside became a national news story in 2022 after the Birmingham News reported that the small town’s unusually large police force was bankrolling the city budget by fining people traveling through and towing their cars under what motorists claimed were fabricated charges.

It was one of the worst cases of profit-motivated policing in recent memory: The news investigation found that Brookside, a place with no traffic lights and one commercial property, a Dollar General store, “collected $487 in fines and forfeitures for every man, woman and child.” By 2020, two years after Brookside expanded its police force from one officer to nine and began aggressively pursuing traffic enforcement, income from fines and forfeitures comprised 49 percent of the town’s budget. Motorists alleged that they were getting pulled over for fake traffic violations, slapped with bogus charges, then forced to pay thousands in fines and towing fees after being convicted in Brookside’s municipal court.

The investigations led to the resignation of the Brookside police chief, a Pulitzer Prize for the reporters, and a class action lawsuit filed by the Institute for Justice.

“Police are supposed to protect and serve, not ticket and collect,” Chekeithia Grant, one of the named plaintiffs in the case, said in an Institute for Justice press release Monday. “When that gets flipped around, people suffer. We brought this case to remind Brookside of that, and to get the town on the right track. This settlement should do that. And it should be a warning to other towns.”

According to the lawsuit, Grant and her daughter were both arrested by Brookside police following a traffic stop and falsely charged with possession of marijuana, possession of drug paraphernalia, obstruction of government operations, and resisting arrest. Both were convicted in the Brookside Municipal Court, but town prosecutors agreed to dismiss all the charges after the two women appealed to a county court. But by then, they had already paid roughly $2,000 in fines and fees to Brookside.

Brookside’s racket was so outrageous that the Justice Department filed a “statement of interest” in support of the Institute for Justice’s lawsuit, noting the perverse profit incentives that such schemes create:

Judges should not profit from their decisions in cases. Nor should funding for prosecutors or police officers depend substantially on unnecessarily aggressive law enforcement aimed at generating income through fines and fees. Criminal justice systems tainted by these unreasonable incentives stand to punish the poor for their poverty and put law enforcement at odds with the communities they are meant to serve.

However, Brookside was just a particularly odious example of the classic American speed-trap town, a municipality that survives by latching onto a nearby highway and gorging itself, like a bloated tick, on traffic enforcement revenue.

States have often responded to negative publicity from speed-trap towns with legislative reforms, and Alabama was no different. A few months after Brookside’s practices were exposed, the Alabama state legislature passed a bill capping the revenue municipalities can keep from fines to just 10 percent of their general operating budgets.

In addition to the $1.5 million payout to the lawsuit class, the proposed settlement will require Brookside to end many of the financial incentives tied to its traffic enforcement, such as repealing its fee to retrieve towed cars. The Brookside Police Department would also stay off the nearby interstate for the next 10 years, except for emergency response, and there would be 30 years of strict caps on how much revenue the town could keep from policing and code enforcement.

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The Heavy Pot Taxes Favored by The New York Times Would Undermine Legalization

The New York Times embraced legalization of recreational marijuana in 2014, two years after Colorado and Washington became the first states to take that step. By that point, most Americans opposed pot prohibition, and that majority has grown since then.

Although the Times does not regret endorsing legalization, its editorial board now says stricter regulation and heavier taxation are necessary to curtail the costs associated with marijuana abuse. Those recommendations elide two inconvenient facts: Cannabis is still federally prohibited, and states are still struggling to replace unauthorized pot peddlers with government-licensed marijuana merchants.

The Times emphasizes that “occasional marijuana use is no more a problem than drinking a glass of wine with dinner or smoking a celebratory cigar.” But while marijuana “is safer than alcohol and tobacco in some ways,” the Times says, “it is not harmless.”

Frequent cannabis consumption has increased substantially in recent years, the Times notes, and roughly one in 10 marijuana users “develops an addiction.” Even nonaddicted cannabis consumers “can still use it too much,” it says, since “people who are frequently stoned can struggle to hold a job or take care of their families.”

The Times also mentions cannabinoid hyperemesis syndrome, “marijuana-linked paranoia,” and the danger posed by stoned drivers. “Any product that brings both pleasures and problems requires a balancing act,” the Times says, which means “personal freedom” must be curtailed to protect “public health.”

That formulation is inherently paternalistic, since the “public health” burden to which the Times refers is borne mainly by cannabis consumers themselves. And the moral logic of the hefty marijuana taxes that the Times favors is questionable.

Those taxes would add to the difficulties that some heavy consumers face while punishing the occasional use that the paper says is no big deal. Although “adults should have the freedom to use” marijuana, the Times says, they must pay the government for that privilege.

A tax-based “balancing act” also raises practical difficulties. “The first step in a strategy to reduce marijuana abuse should be a federal tax on pot,” the Times says, gliding over the point that Congress cannot impose an excise tax on marijuana products unless it is prepared to legalize them.

The editorial does not explicitly acknowledge the need for that step. To the contrary, it implicitly criticizes President Donald Trump’s decision to reclassify marijuana under federal law, which falls far short of legalization.

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Pritzker’s “Blind” Trust and $20B in Taxpayer Contracts Raise Waste, Fraud and Abuse Questions

Illinois taxpayers are being asked to believe a fairy tale.

They are told that Gov. JB Pritzker’s massive personal fortune sits inside a “blind trust,” safely sealed off from the decisions of the state government. But the numbers tell a different story – one that is becoming impossible to ignore.

Since Pritzker took office in 2019, companies tied to his blind trust have received more than $20 billion in Illinois state contracts, all paid for with taxpayer money.

That is not blindness. That is precision.

A blind trust is supposed to prevent conflicts of interest, not repeatedly intersect with state spending on a scale that dwarfs most state budgets. Yet under Pritzker, taxpayer-funded contracts continue to flow to companies within his financial orbit – healthcare giants, Medicaid contractors, and corporate entities deeply embedded in Springfield’s lobbying culture.

This is not a one-off coincidence. It is a pattern – and patterns are what expose systems.

Illinois has lived under one-party Democratic rule for years. When competition disappears and oversight weakens, corruption doesn’t need to hide. It operates in plain sight, wrapped in legal language and dismissed as “normal.”

That same pattern extends beyond healthcare and into the Pritzker family’s hospitality empire.

Recent disclosures uncovered show that more than $180 million in taxpayer-funded renovations and upgrades have flowed to the Hyatt Regency McCormick Place since 2011.

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Minnesota Fraud Whistleblower Claims She Was Subjected to ‘Smear Campaign’ After Reporting Concerns to State

The fallout continues in Minnesota over the explosive allegations of fraud from last month.

One whistleblower is now going on record, saying that she was subjected to a smear campaign after reporting her concerns to the state, saying she was even accused of being a racist.

The most troubling part of these reports for leaders in Minnesota is that they support the idea that they knew this fraud was happening and did nothing to stop it. People need to be prosecuted for this.

FOX News reports:

Minnesota DHS whistleblower details ‘smear campaign’ after reporting fraud concerns to state

A Minnesota Department of Human Services (DHS) whistleblower said she has been raising red flags about fraud in the state since 2019, but has faced only unyielding retaliation in response, calling Gov. Tim Walz’s assertion that he was unaware of the problem “absolutely false.”

Faye Bernstein, who has worked for Minnesota’s DHS for two decades in contract management and compliance, said she was subjected to a “smear campaign” for trying to make leadership aware of illegal contracting practices. She said she was called “racist” and that her work responsibilities were diminished.

“There is just a continuous effort to stifle you, to shut you up. And it is impossible to overcome,” Bernstein said on “Saturday in America.”

Federal prosecutors estimate that up to $9 billion was stolen through a network of fraudulent fronts posing as daycare centers, food programs and health clinics. The majority of those charged, so far, in the ongoing investigation are part of Minnesota’s Somali population.

Rather than receiving thanks for speaking out about irregularities within the contracting process, Bernstein wrote in a letter obtained exclusively by “Saturday in America” that the “nearly unbearable retaliation” she faced also included being “trespassed from all DHS-owned or leased property” and investigated “at a great cost to the state.”

To make matters worse, the fraud allegations just keep coming.

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Two men charged in $120M adult day care fraud scheme in Queens 

The Justice Department accused two men of stealing $120 million from federal health care programs over the course of a decade by bribing patients to enroll in social adult day cares and submit unneeded prescriptions to a pharmacy.

Inwoo Kim, 42, and Daniel Lee, 56, were charged with conspiracy to commit health care fraud. They each face up to 10 years in prison. 

“Today’s complaint targets those who prey upon the vulnerable so they can steal from American taxpayers and defraud government programs meant to help the public,” A. Tysen Duva, who leads the Justice Department’s criminal division, said in a Monday statement. 

Kim owns Happy Life and Royal, two social adult day cares in the Flushing neighborhood of Queens in New York City. Lee worked as the centers’ program director. 

Charging documents allege the duo began working to submit fraudulent Medicaid and Medicare claims as far back as March 2016. They also purportedly induced patients to submit unneeded prescriptions to a pharmacy Kim used to own.

Patients allegedly received financial incentives, including grocery gift certificates and cash. 

“Please give $10,000 to the Korean members first,” Kim wrote in a 2023 text message, according to the complaint.

Over the course of a decade, Medicaid purportedly paid Kim’s businesses $62 million for their social day care services while Medicare paid the pharmacy $58 million for prescription drugs. 

Kim’s attorney declined to comment. The Hill has reached out to Lee’s attorney for comment.

Kim has faced scrutiny for years. The Department of Health and Human Services has been investigating him since 2021, and the charging documents also indicate an unnamed health plan had received complaints about the kickbacks. 

And in February 2024, New York’s Office of State Comptroller (OSC) identified concerns during a site visit. Day care staff had provided “suspicious” sign-in sheets that appeared to include pre-filled dates and the same handwriting for numerous names, according to the charging documents. 

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Here’s Where Prosecutors Should Look For More Evidence Of Somali Daycare Fraud

Alot has been made of the Nick Shirley videos claiming to “prove” that dozens of companies owned and allegedly operated by Somalis as daycare centers were involved in defrauding the federal government out of hundreds of millions of U.S. taxpayer dollars. And although these videos show numerous daycare facilities with boarded-up windows, broken doors, untreated snow-covered sidewalks and parking lots, no operating phone numbers, no playground equipment, and most importantly zero children at them during regular working hours, this circumstantial evidence only lays the groundwork for identifying hundreds of potential fraudsters. 

The corporate media, Minnesota Gov. Tim Walz, and other leaders on the American left have dismissed Shirley’s videos as unsubstantiated propaganda and/or “racist,” but in fact prosecuting those involved with these sham daycare centers should be relatively easy, using an assortment of readily available financial records.

Bank Records

It is undisputed that Somali daycare centers received millions of federal dollars either directly or through various state-sponsored programs funded by federal grants. And since either Minnesota or the federal government made ACH or other electronic payments directly to these businesses, they already know which business bank accounts to pursue. 

By now, the Department of Justice should have issued federal criminal subpoenas for records related to all these accounts. And since banks are typically required to respond to criminal subpoenas within 1 to 2 weeks, the feds already should have lists of which business entities were paid, their business type (C-Corp, S-Corp, LLC, general partnership, etc.), their employer identification number, and lists of authorized account signers. With this data and the accompanying monthly bank statements, tracing disbursements from these business accounts will be the next phase of any investigation.

Of course, if large transfers were made to other bank accounts, the DOJ should repeat the subpoena process until all disbursements are found. If these efforts uncover large cash withdrawals from these accounts, this would indicate large-scale fraud, since legitimate businesses operating in present-day America pay almost all operating expenses electronically or by bank ACH — never by cash. If these centers used paper checks, information regarding who was paid and how much would be readily discernable from copies of cancelled checks.

Employer Tax Filings: Forms W-2, 941, and 1099

In order to have billed the government millions for childcare, all these daycare facilities had to have employees or contractors, because Minnesota mandates strict adult supervisor/child ratios. 

Under these rules, the maximum ratio for infants per adult is 4:1, for toddlers it’s 7:1, and for preschoolers it’s 10:1. Consequently, a center would need 77 full-time attendees, active for 12 consecutive months, to achieve a $1 million annual bill rate, based on the average daycare cost ($1,094 per month) per a 2024 study by Child Care Aware of America. And under Minnesota staffing regulations, the center would need eight to eleven full-time adult employees to achieve $1 million of annual revenue. 

We can do similar calculations for if the center caters exclusively to infants, which are billed at a higher rate.   

We can also pull employer tax filings for the duration these businesses were receiving funds from the government. Under federal employment law, any business with a W-2 employee must file Form 941 quarterly. This tax form lists all employee names, their Social Security numbers, the total Social Security and Medicare wages paid to each employee, the total number of employees paid, and the amount(s) of federal income and FICA taxes withheld during each reporting period. And if these centers failed to file Form 941, hefty IRS fines would be due. 

But, if these centers willfully failed to file these employer forms, the failure to file becomes a criminal misdemeanor, punishable by a fine of up to $25,000 ($100,000 for a corporation) and up to one year in jail per violation. And if the business entity failed to file these forms to conceal a larger fraud, noncompliance becomes a felony tax evasion case. In such cases, penalties escalate to a $100,000 fine ($500,000 for a corporation) and five years in prison per count.

In addition to the employer filings, each employee must receive a W-2 form annually. Moreover, the willful failure to provide said form to an employee could result in an additional fine of up to $630 per occurrence, without a cap. And if these daycare centers used contract labor, they would be required to file Form 1099 annually for each contractor who received more than $600. Again, if these centers operated using contract labor and willfully failed to issue W-9s, they would also be fined up to $630 per missing form, without limit. All of this data should be subpoenaed as well.

If these daycare centers were legitimate, they must have employees. And we would now have two data sources to prove if employees existed. First, payroll data showing payments either directly to employees or through a payroll processing agency, both easily identifiable from disbursements on the monthly bank statements. Second, the federal tax filings showing who was paid what and what FICA taxes were withheld. 

If there were no employees, fraud occurred. If there were employees, did the proper federal tax filings occur? If not, even a mediocre federal prosecutor fresh out of law school should have little problem achieving a tax fraud conviction.

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Another Blue-State Disaster: Maine Lets Fraudsters Feast on Autism Funds

Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz has expanded a federal fraud crackdown to Maine, citing significant concerns identified by Health and Human Services investigators in the state’s autism services program.

Oz disclosed the findings in a video posted to X, outlining the results of a recent review conducted by the U.S. Department of Health and Human Services.

The announcement follows similar investigations into fraud patterns identified in Minnesota, California, and Nevada involving Medicaid-funded programs, including hospice care and autism treatment services.

In the video, Oz said Maine’s program showed warning signs similar to those previously identified elsewhere.

“We might have another ‘Minnesota’ on our hands,” Oz said.

Oz referenced the earlier Minnesota case involving autism services.

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Waste of the Day: Postal Service’s Record Payroll Leads to Losses

Nearly 20,000 people made $100,000 or more.

The Post Office brought in $80.5 billion in operating revenue, $916 million more than 2024. The boost was attributed to “strategic price increases” in postage costs, especially first-class mail.

Combined with $89.8 billion in expenses, the Postal Service had a $9 billion net loss. That was better than the $9.5 billion the Postal Service lost in 2024, which makes it appear as if its business model is improving. However, those figures include expenses and revenues that Postal Service management has no control over. Salaries, pensions, workers’ compensation, rent and more are mandated by Congress. Interest rates affect investment income.

When looking at only the spending that’s planned directly by Postal Service management, the Post Office had a “controllable loss” of $2.7 billion in 2025. That was the worst since 2020. Controllable loss was only $1.8 billion in 2024.

Over the next 10 years, the Postal Service plans to spend $20 billion on deferred investment and maintenance to upgrade and repair buildings and technology.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com. 

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Republican bill aims to give Americans in Israeli military same benefits as US soldiers

Two Republican congressmen have introduced legislation that would provide the same employment and economic protections to Americans serving in the Israeli military as US citizens who get deployed to serve in the US military.

The protections sought by the two lawmakers, Guy Reschenthaler and Max Miller, come in stark contrast to how other countries have been called upon to treat their citizens who have gone to serve in Israel’s military.

“Over 20,000 American citizens are currently defending Israel from Hamas terrorists, risking their lives for the betterment of our ally,” Reschenthaler said in a statement.

“This legislation will ensure we do everything possible to support these heroes who are standing with Israel, fighting for freedom, and combating terrorism in the Middle East.”

By introducing this legislation last Friday, the lawmakers want Americans serving in a foreign military to be treated in the “same manner as service in the uniformed services”.

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Tren de Aragua Brutally Tortures and Kills Innocent People While Benefiting From Federal Funds

When reports of the brutal Venezuelan gang Tren de Aragua first appeared, Democrats denied its existence, claiming it was an anti-immigrant myth perpetrated by Republicans. That denial began to unravel after the Aurora, Colorado incident in August and September 2024, when video surfaced showing armed men inside an apartment complex.

Governor Jared Polis’s office initially dismissed claims of an “invasion,” with a spokesperson saying the narrative was a “feature of local officials’ imagination” and suggesting the allegations were being used for political theater.

Several mainstream media echoed that dismissal, describing Tren de Aragua as a new “bogeyman” or even a hallucination. While acknowledging the gang’s existence, they argued that reports of organized violence amounted to a fabricated “invading army” narrative designed to fuel anti-immigrant sentiment and justify mass deportations.

In reality, the gang is very real and has been brutally torturing and killing people while also taking advantage of federal and state benefits programs. ICE has been arresting its members and leaders, but those cases receive little attention from the mainstream media because they do not fit the narrative.

Last January, a 58-year-old woman in Burien, Washington, just south of Seattle, was kidnapped from her apartment complex by two illegal aliens, Alexander Arnaez-Gutierrez and Kevin Sanabria-Ojeda, who have confirmed ties to the Tren de Aragua gang. The attackers tortured the victim by using a power drill on her hand to force her to reveal her ATM PIN and the location of her jewelry. They also beat her and eventually shot her before leaving her for dead. The woman survived by playing dead until help arrived.

On January 8, 2026, ICE arrested an illegal alien, Venezuelan national, and confirmed Tren de Aragua gang member, Yorvis Michel Carrascal Campo, in Colorado Springs on charges including murder, racketeering, and drug trafficking tied to crimes in New Mexico. According to a federal indictment, Carrascal Campo participated in the June 2024 kidnapping and killing of a man and helped conceal evidence of the crime. The victim’s body was later hidden in a remote area of New Mexico.

Under President Trump, federal investigations into Tren de Aragua have focused on how the gang exploits migrant infrastructure by embedding itself within legitimate support systems run by nonprofits and funded by the federal government. While these programs are intended to provide humanitarian aid, investigators say Tren de Aragua has used them as hubs for recruitment, logistics, and criminal activity.

Federal agencies and congressional committees have focused on multiple locations where Tren de Aragua established footholds, most prominently New York City’s Roosevelt Hotel. FEMA and DHS opened investigations into claims that Tren de Aragua–linked groups, including Diablos de la 42, were operating out of city-run shelters.

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