So let us suppose that some conservative politician has a black great-grandmother that he wants to keep hidden because his campaign is based on barely-concealed themes of racial animus. A descendant of the brother of the great-grandmother threatens to disclose the birth certificate of the pol's great grandmother that has the letter "N" under "race"... and some unaltered photographs of what he presents as some "Cherokee princess"* that he waxes rhapsodical about. The blackmailer asks for $20K every year, and the pol sends amounts of $9.8K twice a year as cashier's checks from the bank and another $400 as a money order paid for in cash.
The blackmailer gets greedier, demanding $25K, and the pol then sends cashier checks for $12K and a money order for $1000... not recognizing that the amount for which the Feds look is not adjusted for inflation. The pol gets caught.
The Feds see the blackmail as a worse crime than the payoff, and give the pol a deal -- testify against the blackmailer in a federal court for tax fraud or money laundering even if such implies having to admit to failing the one-drop rule. Having to admit that he is one-eighth black is far better than ending up with some tough black guys who dealt drugs or robbed banks who now reside in a federal penitentiary.
*The Cherokee had no nobility, so the story of his grandmother's origin is a sham.
This is the most dangerous view I've seen on Atlas and just recently, many expressed support for killing a baby because of who its parents were. Charging victims with crimes just to get them to testify is the absolute greatest wrong happening in the developed world at the moment even in cases where it is done to get justice.
Lying to the Feds is probably necessary too. The less people who known undesirable facts the better. He obviously deemed the money less important than the public's lack of knowledge regarding such events. Using a new crime where an individual is a victim (or perhaps not even necessarily a victim but just broadly defined "crimes" in general) to prosecute a crime where the statute of limitations has passed is also a very dangerous precedent (though this is obviously not the first time it's happened, so perhaps simply a dangerous practice).
The first paragraph is also unbelievably absurd. Start living in the 21st century please.