Author Topic: Paid cash for house - Must be a security risk!  (Read 9804 times)

jmusic

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Paid cash for house - Must be a security risk!
« on: September 30, 2014, 09:51:37 AM »
So I'm taking one of the many joyous computer-based trainings that we have to do in the military, "Cyber-awareness" challenge.  Lots of good info for those who don't know about phishing, social engineering, etc.  However, one of the sections talks about assessing risk of insider espionage.

One of the hypothetical case studies is someone who "mentions several times that he paid cash for his house."  Using my mustachian lens, I'm thinking, maybe he saved up for it, but no, it's a "risk factor" (meaning he must be selling government secrets)! 


The course does go on to mention though that there was a CIA employee who paid cash for a half-million dollar house (which was quite a lot of house in 1994) among other forms of conspicuous consumption that was indeed selling out.  They should definitely clarify though!

Cheddar Stacker

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Re: Paid cash for house - Must be a security risk!
« Reply #1 on: September 30, 2014, 09:53:18 AM »
Anything outside the norm sets off alarms. A lot of things people on this forum do could be considered a security risk by the gubmint.

jmusic

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Re: Paid cash for house - Must be a security risk!
« Reply #2 on: September 30, 2014, 10:07:25 AM »
Yeah, perhaps it's not the paying cash but the bragging about it? 

I've found that the more mustachian I get, the less I talk about it with others besides my fiancÚ.  They just wouldn't understand and I really don't feel like explaining it.  I make twice as much as many of my subordinates, and they often drive nicer cars & other expensive toys.

beltim

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Re: Paid cash for house - Must be a security risk!
« Reply #3 on: September 30, 2014, 10:20:57 AM »
I think the issue was a half-million dollar house in 1994 on a government salary.  In 1994 a GS12-1 employee (starting salary for those with a Ph.D.) made $40-50k depending on locality.  Buying a house in cash for 10-12 times your salary should raise eyebrows.

going2ER

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Re: Paid cash for house - Must be a security risk!
« Reply #4 on: September 30, 2014, 11:07:02 AM »
You are not following the rules when you buy a house with cash.

You are suppose to put the smallest deposit that you can and then stretch payments out for the longest period of time they will allow.

tat96

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Re: Paid cash for house - Must be a security risk!
« Reply #5 on: September 30, 2014, 11:10:09 AM »
I agree with the training needing a little better clarification.  I have to take the Cyber Security every year in the military and I think it aims to address sudden wealth more than overall wealth.  I would be worried if the guy in my office who can't manage his money all of sudden shows up with a paid off mortgage and a brand new sports car. 

sheepstache

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Re: Paid cash for house - Must be a security risk!
« Reply #6 on: September 30, 2014, 12:27:15 PM »
Ha ha, this reminds me of the Freakonomics thing where they published their findings that, by intensive analysing of bank records, they had determined some habits that indicated terrorist activity might be going on and also that those engaging in terrorism were markedly less likely to have a savings account, go to an ATM on Friday, or to have bought life insurance through the bank.

Everybody got quite annoyed with them, partly because the guidelines seemed poor and partly because publicizing them meant those who wanted to escape detection could easily do so.

Of course, it's actually very unusual for people to purchase life insurance through their bank. So the point was once this was published banks and the agencies closely monitored and investigated people who came in asking to buy life insurance.

former player

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Re: Paid cash for house - Must be a security risk!
« Reply #7 on: September 30, 2014, 12:33:37 PM »
It could be a proxy for "religious beliefs prevent the paying or receiving of interest" - in which case almost the only way to buy a house is to save up and pay cash.

jmusic

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Re: Paid cash for house - Must be a security risk!
« Reply #8 on: September 30, 2014, 12:54:18 PM »
I agree with the training needing a little better clarification.  I have to take the Cyber Security every year in the military and I think it aims to address sudden wealth more than overall wealth.  I would be worried if the guy in my office who can't manage his money all of sudden shows up with a paid off mortgage and a brand new sports car.

True, but those actions could easily be "explained" via inheritance, etc.  I'd be shocked if the guy who can't manage money actually pays off his house with said money though!

HawkeyeJD

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Re: Paid cash for house - Must be a security risk!
« Reply #9 on: September 30, 2014, 01:38:44 PM »
So I'm taking one of the many joyous computer-based trainings that we have to do in the military, "Cyber-awareness" challenge.  Lots of good info for those who don't know about phishing, social engineering, etc.  However, one of the sections talks about assessing risk of insider espionage.

One of the hypothetical case studies is someone who "mentions several times that he paid cash for his house."  Using my mustachian lens, I'm thinking, maybe he saved up for it, but no, it's a "risk factor" (meaning he must be selling government secrets)! 


The course does go on to mention though that there was a CIA employee who paid cash for a half-million dollar house (which was quite a lot of house in 1994) among other forms of conspicuous consumption that was indeed selling out.  They should definitely clarify though!

I took that training this past June, good stuff overall.  However, many of the "risk factors" could easily be explained in the right circumstances.  I suspect they are based around a "95%" type model where they look at what the vast majority do, then look for things that the vast majority do not do. 

I one of my soldiers came up to me and mentioned that Lt. Tim was walking around talking about how he just paid cash for his house, it would be at least something that I would follow-up on, even if just informally.  In reality, there are only so many ways one can acquire a couple hundred thousand dollars quickly (lottery, inheritance, years of savings) so that conversation ends in about 30 seconds.  However, if there is something fishy going on and I get some convoluted story etc., then I will dig further.  As an aside, it may not even be terrorism, but he could be running drugs, have robbed a few banks, or who knows what else, that could make him a security threat for one reason or another.


LennStar

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Re: Paid cash for house - Must be a security risk!
« Reply #10 on: September 30, 2014, 01:54:39 PM »
You know, that reminds me of hammer people.

If what you have is a threat analyser, everything looks like danger.

Spartana

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Re: Paid cash for house - Must be a security risk!
« Reply #11 on: September 30, 2014, 02:22:51 PM »
I think the issue was a half-million dollar house in 1994 on a government salary.  In 1994 a GS12-1 employee (starting salary for those with a Ph.D.) made $40-50k depending on locality.  Buying a house in cash for 10-12 times your salary should raise eyebrows.
My sister works security for a big defense contractor and has all kinds of top level clearances. When she bought a place with cash it raised eyebrows big time. She was able to justify it (and it was just a small condo not a McMansion) but for awhile there she was worried they (DoD) would pull her clearances - or worse. I had security clearances when I was in the service and remember that anytime a deposit or withdrawal of a certain amount of money was made on my bank accounts I had to fill out some forms to say "why" and "what for".  I think my sister has to do the same thing.
« Last Edit: September 30, 2014, 02:26:35 PM by Spartana »

Elderwood17

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Re: Paid cash for house - Must be a security risk!
« Reply #12 on: September 30, 2014, 02:28:45 PM »
I had security clearances when I was in the service and remember that anytime a deposit or withdrawal of a certain amount of money was made on my bank accounts I had to fill out some forms to say "why" and "what for".
Wow - had no idea.  I would be tempted to say "none of your business" but I am assuming this was explained up front?

Spartana

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Re: Paid cash for house - Must be a security risk!
« Reply #13 on: September 30, 2014, 02:33:55 PM »
I had security clearances when I was in the service and remember that anytime a deposit or withdrawal of a certain amount of money was made on my bank accounts I had to fill out some forms to say "why" and "what for".
Wow - had no idea.  I would be tempted to say "none of your business" but I am assuming this was explained up front?
I don't know if it for all levels of security clearances or just the higher level or unusual ones (I had both). Can't remember the amount of money you had to tell them about but probably in the $10K range. I think that's the level that the IRS looks at for anyone who makes a deposit into their bank accounts in a lump - probably for tax reasons but who knows? We also had to fill out forms when ever we went out of the country and be briefed and de-briefed before and after, tell them who we met and talked to overseas, etc... Invasive but part of the job.

EricL

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Re: Paid cash for house - Must be a security risk!
« Reply #14 on: September 30, 2014, 10:57:53 PM »
Meh.  The whole security clearance thing is a joke.  If you look closely at the most famous breaches you'll note they all should have rung alarms but when push came to shove the powers that be just couldn't imagine ol' Bob could do such a thing.  The U.S. never had the equivalent of Britain's Cambridge Five and if it did they're still undiscovered.  If your agency really hassled you about paying cash for a house they probably have some other beef against you. 

Brad_H

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Re: Paid cash for house - Must be a security risk!
« Reply #15 on: October 01, 2014, 07:31:40 AM »
Could you clarify what they mean by paying cash? It could be either someone who sold off an investment account and wrote a check or someone paid with a duffel bag full of $50s.

The first has an electronic paper trail that can be easily verified (the SEC is watching for any insider trading) while the second is probably drug money, etc.

Having 100k worth of cash setting around your house isn't very mustachian.

Travis

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Re: Paid cash for house - Must be a security risk!
« Reply #16 on: October 01, 2014, 08:16:08 AM »
The Cyber Awareness training is looking for outliers, changes in habits, or circumstances that don't line up with the person in question.  If a lowly government employee or junior soldier who either doesn't make much or is known to spend themselves into debt all the sudden has a ton of money to throw around is a single indicator.  If that person has also been doing a lot of foreign travel or correspondence outside of their norms, working late in secure areas, and displaying significant changes in behavior it should cause concern.

Brad, "paying cash" generally means not buying something on credit regardless of what source you use to pay it.

LalsConstant

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Re: Paid cash for house - Must be a security risk!
« Reply #17 on: October 01, 2014, 11:59:17 AM »
It could be a proxy for "religious beliefs prevent the paying or receiving of interest" - in which case almost the only way to buy a house is to save up and pay cash.

Not neccessarily so.  There are institutions that facilitate "interest free loans" where it's basically an arrangement where the bank agrees to buy the house and you agree to give the bank a series of payments.  I know that "Muslim financing " is a popular term for it in those circles.

Granted I can't help but realize that is simply imputed interest but if that is what flies that's what flies.

deborah

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Re: Paid cash for house - Must be a security risk!
« Reply #18 on: October 01, 2014, 03:15:48 PM »
Outliers of all types are looked for. If someone bought a (let's say) $5m house, they would also be an outlier. If they were deeply in debt, they would be an outlier (and very suspicious because they could be very open for bribery, and consequently blackmail). Keeping things quiet is deemed worse (for instance, if you are open about being gay, and everyone knows, it is OK, but if you are very secretive about it, you may again be easily blackmailed).

If you work in an area that requires a high security clearance, you should know you have no privacy, and that everything could be of concern - and just live with it. If you can't, you shouldn't work in that type of job.

Spartana

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Re: Paid cash for house - Must be a security risk!
« Reply #19 on: October 01, 2014, 07:02:20 PM »
Outliers of all types are looked for. If someone bought a (let's say) $5m house, they would also be an outlier. If they were deeply in debt, they would be an outlier (and very suspicious because they could be very open for bribery, and consequently blackmail). Keeping things quiet is deemed worse (for instance, if you are open about being gay, and everyone knows, it is OK, but if you are very secretive about it, you may again be easily blackmailed).

If you work in an area that requires a high security clearance, you should know you have no privacy, and that everything could be of concern - and just live with it. If you can't, you shouldn't work in that type of job.
Yep, financial issues such as high debt, prior bankruptcy, etc... make it almost impossible to get even a confidential or secret clearance - let alone high level ones. And then there are the polygraphs and their... interestingly... personal questions (er...a...have I ever engaged in bestiality? WHAT????) to see if you a potential security risk for the reasons you mentioned.

LennStar

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Re: Paid cash for house - Must be a security risk!
« Reply #20 on: October 02, 2014, 02:15:12 AM »
]Yep, financial issues such as high debt, prior bankruptcy, etc... make it almost impossible to get even a confidential or secret clearance - let alone high level ones. And then there are the polygraphs and their... interestingly... personal questions (er...a...have I ever engaged in bestiality? WHAT????) to see if you a potential security risk for the reasons you mentioned.
Even more interestingly if you dont forget that they simply just dont work. That is why in any halfway OK legal systems they are not allowed to be any kind of proof.

MrsPete

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Re: Paid cash for house - Must be a security risk!
« Reply #21 on: October 02, 2014, 04:07:40 PM »
I paid cash for my house.  In the relatively near future, we plan to sell it and build a custom house for our retirement years -- again, we're able to pay cash.

However, if anyone were to question it, we can show that for years and years we've deposited money into various accounts and investments.  We can show that for years and years we have consistently spent less than we've earned.  I don't think we'd ever be in any trouble. 

jordanread

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Re: Paid cash for house - Must be a security risk!
« Reply #22 on: October 02, 2014, 06:07:39 PM »
I'm on so many lists already...it almost doesn't seem worth it. :) Maybe I'll just get a mortgage.

kite

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Re: Paid cash for house - Must be a security risk!
« Reply #23 on: October 03, 2014, 05:40:06 AM »
It's pretty basic fraud detection.  There are far smaller amounts of cash movement that will trigger investigation.   

iris lily

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Re: Paid cash for house - Must be a security risk!
« Reply #24 on: October 06, 2014, 09:15:49 AM »
Anything outside the norm sets off alarms. A lot of things people on this forum do could be considered a security risk by the gubmint.

awww, I love that! yep.

Siobhan

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Re: Paid cash for house - Must be a security risk!
« Reply #25 on: October 09, 2014, 07:28:39 AM »
HA...hubs joined a more unique unit in the military.  His polygraph they asked him if he'd married another man in the past (the only thing we can think of was that it was his ex wifes first husband, she's on number 4 now...number three is why they divorced) and he had to verify where all our money came from.  They truly didn't believe that his wife worked, earned a dang good income, and that we didn't spend a dime of said income.  They spent over an hour just on the finance section.