The Neasham case: What are some of the broader implications?Article added by Ken Davis, CPA, CFP, CLU, ChFC on June 8, 2012
Ken Davis

Ken Davis, CPA, CFP, CLU, ChFC

Fountain Hills, AZ

Joined: November 23, 2009

What has happened to our great nation? Are we returning to a feudal system where the regulators become our new lords and masters? And what are we going to do about it?

Here are the key points the Glenn Neasham case suggests to me. How about you?
  • Our laws, regulations and prosecutors are stretching what used to be called professional mistakes — or at worst negligence — into criminal behavior.

  • The rules have become so complex and change so frequently that it is impossible to be informed on everything that impacts us legally.

  • The government bureaucrats are extending the laws well beyond the intention of the lawmakers and by doing this, turning otherwise law-abiding citizens into criminals.

  • The outcome of this lawsuit has implications to all other businesses that contract with seniors. Car sales people, dentists and roofing contractors, among many others, could wake up some day and find out that selling their products and services for profit is considered larceny under the law.
I am all for incarcerating thieves, embezzlers and con artists that set out to harm people. I think agents that have been grossly negligent should pay fines and restitution, where appropriate. Depending on the offense, it is also appropriate in some cases for people to lose their licenses. I think Steve Savant put it all into perspective with his recent article on this topic. The picture of Mr. Neasham standing in jail with a bunch of con artists and violent criminals looks like a scene out of an absurdist play.

I went to a seminar conducted by a major law firm in Phoenix. The topic was privacy laws at the state and federal level. They have a whole department dedicated to this area of law that attempts to keep up with all of the changes in the area. They put major resources into this project and they admit that it is a daunting task.

As I listened to them, I wondered how any of us could comprehend all of these laws and how reasonable it is for the government to expect us to both know and follow them. And if we cannot understand them all, how can we remain law abiding citizens, even if we want to be in compliance?

I looked up the number of pages that were published in the Federal Register in 2011. This publication publishes all of the new laws, as well as related matters daily. It is a great indicator of how fast our laws are growing in this country at the federal level. Last year, it totaled 82,419 pages! In 1970, the year I graduated from high school, it was 20,036 pages. In 1952, the year I was born, we had 11,896 pages. We seemed to function just fine during the 50s, 60s and 70s without all the laws that came later.
So, what is the rationale for this massive build up of laws since the early 50s? Do we really need all of these laws and regulations? Do we really need to enact so much new law each year? And can our citizens be reasonably expected to know all these laws and abide by them?

We all understand the basic truth that ignorance of the law does not exempt a person from being responsible to the state for their actions. However, what happens to us all if it is impossible to keep up with all the laws because of their complexity? Does that old truth still hold true? Or has the state burdened us with so much new law that we all throw up our hands in disgust and quit or just hope we do not make a mistake?

I had lunch with an assistant DA from Los Angeles back in the late 90s who was out visiting his father who had been disagnosed with Alzheimer’s. We got to talking about the law as it existed then. Even back then, he told me that you do not want to mess with the government because the laws were so complex that he could charge virtually anybody in LA with some violation of the law. It gives me chills even to this day. What incredible power the government has over all of us.

In the case of Mr. Neasham, his supposed offense almost appears to come out of thin air. A year ago, if you had asked me if taking a commission on an annuity that made money for a client was larceny, I would have told you that you were stark raving mad.

I wonder if all the other businesses out there are aware of their future plight in dealing with seniors. Do our seniors know that the nanny state is going to protect them to the point that no sane business person will contract for goods and services for fear of going to jail? Will a guardian have to step in for them to do routine daily tasks like signing contracts to have their furnace fixed? Tell me you haven’t already set an age in your mind as a limit for those whom you will sell annuities to in the future. Or any other financial product for that matter. Does this really serve our seniors or does it effectively take away their civil rights to conduct their affairs as they see fit?

One of our esteemed colleagues on this website tried to convince us that we would have anarchy without all these wonderful regulations. Do you agree with him or do you feel, as I do, that government has become oppressive and too far reaching?

What has happened to our great nation? Are we returning to a feudal system where the regulators become our new lords and masters? And what are we going to do about it?
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