Corporations have spent years building increasingly sophisticated systems for tracking Americans’ movements, purchases, communications, and other digital activity, while government agencies have increasingly found ways to access and use that information. Now, new reporting shows that financial data is being used by law enforcement to identify people for traffic stops.
A new investigation by 404 Media has uncovered previously unreported Border Patrol units called Predictive Intelligence Targeting Teams, or PITT. The teams analyze information about Americans and pass their findings to local law enforcement, which can then stop people the federal government considers potentially suspicious even when they are not suspected of a specific crime.
The report includes an example involving Kyle William Olson, who was driving across Montana in May. According to 404 Media’s investigation, Border Patrol analyst Matthew Phelps reviewed “law enforcement-sensitive databases” and identified what he described as “financial activity patterns commonly associated with illicit narcotics activity.” Phelps also reviewed Olson’s previous arrest and criminal history.
Phelps then sent that information to Montana Highway Patrol Sgt. James Beck as part of what the Border Patrol analyst described as “general interdiction efforts.” Beck subsequently stopped Olson, officially citing an obstructed license plate.
However, the traffic stop did not end there. Officers made Olson get out of his vehicle, tested his blood, and charged him with driving under the influence. Authorities later charged him with possession with intent to distribute marijuana found in his vehicle.
Exactly what financial information Border Patrol was examining remains unclear. Customs and Border Protection declined to tell 404 Media what financial activity it monitors or whether it obtains warrants for that information. The agency said it does not discuss its “specific analytical methods, data sources, targeting criteria, investigative techniques, system capabilities, or deployment details.”
The agency’s refusal to explain the underlying data is particularly significant because the government apparently does not need to tell the officer conducting the traffic stop why someone was originally flagged. In Olson’s case, the officer could point to an obstructed license plate as the stated reason for the stop, while the financial analysis that prompted the investigation remained hidden.
The PITT program is not limited to Montana. 404 Media identified teams in Border Patrol’s Spokane Sector, which covers the border with Canada, and its Laredo Sector, which covers the border with Mexico. CBP operates 20 sectors nationwide but declined to say whether additional PITT teams exist.
Rob Frommer, a senior attorney at the Institute for Justice, told 404 Media that combining mass surveillance with predictive policing “is a recipe for tyranny.” He argued that programs like PITT treat Americans as potential suspects rather than citizens.
Parallel Construction
The alleged mechanics of the Olson stop have a name: parallel construction.
The term refers to a law enforcement technique in which investigators receive information from a sensitive or secret source, then create a separate investigative trail that conceals how the investigation actually began. The resulting evidence can make it appear that police discovered a suspect through ordinary investigative work rather than through intelligence they are unwilling to disclose.
The practice previously received attention in 2013, when Reuters published an investigation into the Drug Enforcement Administration’s Special Operations Division. According to the report, the DEA unit was passing intelligence from sources including the NSA to ordinary law enforcement agencies. Agents were instructed to conceal the origin of the information and instead “recreate” an investigative trail that would make the case appear to have begun through conventional police work.
That bears some resemblance to what appears to have happened in the more recent case uncovered by 404 Media.
Jake Laperruque, deputy director of the Security and Surveillance Project at the Center for Democracy & Technology, told 404 Media that “genuine probable cause cannot be synthetically generated,” arguing that Border Patrol appeared to be using parallel construction to conceal the reason behind the traffic stops.
Signs of a Larger, Troubling Trend
PITT is also part of a much larger expansion of data-driven policing.
Last November, an Associated Press investigation found that Border Patrol has been using automatic license plate readers to monitor the travel patterns of millions of American drivers. The system can identify supposedly suspicious patterns of movement, including trips that occur hundreds of miles from the border, and pass information to local law enforcement.
Flock Safety, one of the largest providers of automatic license plate readers, has also faced scrutiny over how its network can be used to monitor political activity. According to another recent 404 Media report, the company walked police through how to use its surveillance system to monitor a “No Kings” protest in a webinar, combining license plate readers with live video, traffic data, and other law enforcement databases.
This sort of automated surveillance technology can also cause serious issues when law enforcement becomes overly reliant on it. There were recently two cases in Florida in which people were wrongly arrested after police relied on incorrect facial-recognition matches. One man spent 83 days in jail, lost his job and car, and his family became homeless; another was jailed after police identified him as a suspect despite evidence that he was hundreds of miles away when the crime occurred.
Financial Privacy Is Already on Shaky Legal Ground
The government’s ability to obtain and analyze information held by financial institutions and other data custodians is not simply a technological problem. It is also rooted in decades-old American law.
The third-party doctrine generally holds that people have a diminished expectation of privacy in information they voluntarily provide to another party. The Supreme Court established the principle in cases including United States v. Miller, a 1976 case involving bank records, and Smith v. Maryland, a case regarding telephone records.
In practice, much of the financial activity generated by modern life is stored by banks, credit-card companies, payment processors, retailers, and other intermediaries, and that creates a problematic situation. A person’s financial history can reveal where they go, what they buy, what organizations they support, where they travel, and who they do business with.
Crypto Promised to Change This, But It Hasn’t
Bitcoin was designed as a peer-to-peer electronic cash system that could operate without a trusted financial intermediary. In theory, cryptographic systems can allow people to control money directly rather than relying on banks and payment companies to maintain the definitive record of every transaction.
However, the irony is that much of the crypto industry now appears to be moving in the opposite direction. Instead of eliminating trusted intermediaries, a large portion of the industry has become overly dependent on centralized stablecoin issuers, and blockchain networks themselves are increasingly being designed around the needs of the issuers of those dollar-pegged tokens and other large financial institutions.
At the same time, public blockchains effectively operate as financial panopticons with transparent accounting records. Blockchain analysis companies can trace transactions across permanent ledgers and connect addresses to identities using information obtained from exchanges and other businesses.
Bitcoin itself remains a permissionless network in which no single company can simply freeze a transaction or seize assets, and there are also methods of gaining better privacy on secondary Bitcoin layers or via privacy-focused altcoins like Monero and Zcash. But those features of crypto only matter if people actually use them.
Zcash has seen a surge in interest and price over the past year or so, although it remains unclear whether the price rally reflects widespread interest in real-world use of its privacy technology or whether privacy has simply become another narrative that traders use to speculate on crypto assets. Additionally, bugs have previously been found in the privacy-related cryptography used in Zcash and Bitcoin’s Liquid Network that could allow attackers to generate coins out of thin air. In the case of Bitcoin’s Liquid Network from this past weekend, the bug led to the sidechain being drained of $320 million worth of bitcoin by a self-proclaimed white-hat hacker.
Indeed, the crypto industry has seemingly devoted more attention to gambling on speculative tokens, such as Hunter Biden’s upcoming memecoin project, than anything else over the years. Simply put, crypto has moved a long way from the original cypherpunk vision of cryptography as a tool for reducing dependence on governments, banks, and other centralized institutions.
