for years kids have set up stands like this, but today, the police may busted you. >> i was really scared because i didn't know it was going to happen. we were selling lemonade out in our front yard and the third day they decided to shut us down. >> their mom heard the police yelling. >> i heard them yelling, girls you have to shut down the lemonade stand. >> it made me want to open my stand. will the police bust me? >> there are so many laws, everybody could be caught up in it. >> the avalanche of new laws, it makes criminals just about all of us. >> every citizen arguably could be shown to have violated some regulation in these stacks, that is the danger. >> police never told knees girls why they were shut down. >> we tried to find out but the city official, they said really they shut down our lemonade stand. >> we're not aware of who made the lemonade or what the lemonade with. you are still breaking the law and we can't let you do it. >> appleton, wisconsin shut down this stand and these kids were shut down, too. >> they said you need a permit. >> and hazelwood, illinois they settled on girl scout cookies from the front yard but the city said to stop. >> i said, what? cookies, come on. >> all has to people ran afoul of laws they didn't know existed and still don't understand. >> they are ununderstandable, not only to you but people like me, i am a lawyer and they are incomprehensible to me. >> even the police don't understand. she says the kids' lemonade stands violated the law. >> two officers, previous day bought lemonade from them and tipped them. >> in scottsdale arizona, one a person is accused of breaking the property maintenance crime, the crime -- the tree is the wrong kind in the backyard. >> you will be fined $2,000 a day. >> you bought the house partly because of this tree? >> yes. >> but it turned out this tree wasn't on the planning and development list of approved trees. there is a budget of them in the area. >> you point this out to the authorities. they say what? >> let us know who they are and we will fight them, as well. >> stephanie and chuck were fine had for holding bible studies. >> you need a conditional use permit. >> that is tricky, it goes down this road of studies. this could be tension of thousands of dollars. >> and how many people? >> code enforcer and the boss said more than three. >> you have more than three kids? >> i have five. >> famous people accused of breaking law can afford the lawyers or get them acquittal. >> but what you are an ordinary businessman, you import these guys, watch out you go could to jail for years. >> we didn't see the lobster. >> he used to import seafood then authorities is said you are in trouble. >> i did the same thing for 13 years. clear customs, bring the lobster tails in and sell them. nobody had a problem with that until date walked up on the dock don't off load. >> customs showed up and said put them back. >> we were wondering what happened. they didn't know the answer. >> you shouldn't murder and steal. that is old-fashioned. but the laws are much more technical. >> the government eventually said he broke four obscure regulations that or the books in honduras. >> said they had to be packaged in 40 pound boxes. >> everybody was using plastic bags. >> i started in 1986 and i have been doing it the same way. >> even honduras said it didn't matter. >> 7:30 in the morning. f.b.i., irs, six vans, customers about 13 of them on my deck, all with guns. >> that was just the beginning of his nightmare. >> you were sentenced to? >> eight years, would month. >> eight years and a month, maybe he was a repeat offender. >> any trouble before this? >> worst thing was a speeding ticket. >> he served six years in jail. >> what happened to your business? >> i went broke. >> what happened to the family? >> broke up. my kids are back home with their mother. that is the story. >> how do attorney generals they are not evil people. they want to make a name for themselves. they don't want to hurt people that didn't do nasty things wnruq are a lot of fanatics. >> prosecutors have noticed, other prosecutors like eliot spitzer, richard blumenthal, want impressive conviction records. >> all these regulations, they will comb the books and find something. >> this could happen to you. they can take any law they think you broke and take you to trial. whether you win or lose you are going to lose because by the time you are done fighting you are broke. >> the government never goes broke. >> they must spent million dollars. >> i heard they spent five million. >> how much money does it take? >> i've had clients that spent $10 million. >> i cannot even imagine how much money they spent prosecuting my husband. >> the feds tried jill's husband jack and lost. but instead apologizing for getting it wrong, they threaten to fine him $37,000 a day. a terrible crime did they commit. trying to build a house on their own property. >> the county gave you permission to build. >> and they inspected the foundation and approved it. >> so you started to build. >> but a government owned drainage ditch was clogged. they asked the government to the fix. >> it they say we are backed up six months. if you can go ahead and clean it go ahead and do it. >> we removed a huge logs out of this ditch. the water poured off the land and we were cited felony for cleaning the ditch. >> felony charge, it gave the property appearance of being a wet land. state government flood your property and federal government charges you with a felony for building on wet land. >> it's clearly not a wet land. she digging a well here. he wasn't finding water. >> he was down about eight feet but could not find the water table. >> a jury cleared jack of all charges. >> we won, but after we were home for a month, the army corps of engineers and epa sent us another letter saying how nicely you won in the criminal court. we still feel its wet land and the decision made by the jury did not matter to them. if you don't get off the property we're going to fine you. >> what does that mean? >> $37,500 a day. >> they've had to sell their home. now, they live in a trailer. >> this has almost taken everything you have? >> yeah, but i wouldn't live like that. >> and life savings? >> we'll be bankrupt. you have no idea what you are up against. you don't know the power. >> they ever all the time and resources in the had. it's foe with unlimited budget and they wear you down. >> they just come in and ruin lives. >> so our government is supposed to be by the people, for the people, sometimes is against the people. >> up next, why i had to do this. >> wait, stop. i can't give it to you, don't drink it i find the omega choices overwhelming. then i found new pronutrients omega-3. it's from centrum. it's a smaller minigel. with two of the best omegas to support my heart, brain and eyes. new pronutrients from centrum. lord of the carry-on. sovereign of the security line. you never take an upgrade for granted. and you rent from national. because only national lets you choose any car in the aisle. and go. you can en take a full-size or above. and still pay th mid-size price. i deserve this. [ male announcer ] you do, business pro. you do. go national. go like a pro. [ male announcer ] you do, business pro. you do. fore! no matter what small business you are in, managing expenses seems to... get in the way. not anymore. ink, the small business card from chase introduces jot an on-the-go expense app made exclusively for ink customers. custom categorize your expenses anywhere. save time and get back to what you love. the latest innovation. only for ink customers. learn more at chase.com/ink ... and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i came to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does thean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country. ♪ >> john: the fact that american police tell little kids they don't have the proper permits to do this, made me wonder, what does it take to open a lemonade stand legally in america. >> they directed me to this website. >> this is supposed to make life simple. >> they make it easy, except, what? >> there was unintelligible questions. >> what is an assistant. >> an employee identification number. >> the government said i needed to take a 15 hour protection class to sell lemonade. >> i don't have a bicycle. >> and then an exam and wait weeks to find out if i passed. then i would buy a government approved fire extinguisher. it could take months, forget it. so i did it without a permit. max's lawyer gave me the okay. i didn't sell anything. i had to give every refunds. first, the customers thought it was crazy. many once had their own lemonade stands. >> did you have to get a license? >> i'm in canada and i can't let you drink this. >> there are so many rules, i'm not allowed to sell this to you. >> i didn't have time to get all the permits. >> you didn't need any permit. >> that is how was once in the united states. >> back in the 1920s and you take a poor italian and he going out and buys a used car and paints the word taxi and he is in business. >> john: this old documentary he got his start driving a cab. >> i made about $125 a week. >> today he couldn't buy a cab unless he was millionaire. >> most cities to buy one of these medallions. no medallions, you are not legal. but they now cost million dollars. >> very expensive. >> so expensive that only big companies can afford them. so these drivers are not entrepreneurs, they are employees. >> it's because of the medallion. >> the purpose of these licenses is to keep outsiders out the purpose of a license so they can charge higher prices. >> john: one of the few remaining places you can start a taxi business is washington, d.c. >> it's the last bastion of free entrepreneurs in america. >> john: this lobbyist wants to end that freedom. >> you have to regulate. >> john: he wants to bring the medallion rules to the washington, d.c. he wants to cut the taxi cars in half. >> there is too many taxicabs. >> they don't think so. >> they like be allowed to work but the lobbyists convinced the d.c. councilman to sponsor his bill. >> we want to professionalize our taxicab system? >> we wanted want to make sure the customer has a good riding experience. >> john: that sounds good but regulations are in the books subject to every driver to petty harassment. still at least in washington, d.c., open entry rules allow them to enter the business. >> washington, d.c. is the only major city in america that allows open entry. isn't that good for poor people? >> no, it's not. a medal yon system is what is needed. >> john: that squeezes newcomers out? >> and they should be squeezed out. >> john: why? >> because this is a regulated industry. >> john: how much do you get paid lobby for this. >> my right is $775 an hour. >> i can't blame him, but don't husband 80 me. >> john: so you are paid by the taxi king, jerry schaffer. >> i'm being paid not him. >> john: keep the little guys out. >> kings, queens and jacks. >> poor folks pay lobbyists. if he gets his regulation, poor people won't be taxi entrepreneurs. >> only a few will be able to afford it. >> john: washington has been an open place for taxi to become a taxi driver so why monkey with it. >> folks have different legislation, our charge is to implement it. >> john: how many laws have you gotten past? >> very active. >> john: ever repeal any. >> no, we haven't appealed any. >> john: it makes it much harder to be an entrepreneur. ♪ 6. >> john: put aside what you eat. it turns out, no. some towns ban meals. one banned all fast food restaurants. they want to limit the salt i eat. if you sell certain things at the food police disapprove of, you better watch out. >> there was lookout banging on the back gate. >> john: not long ago, federal and state officials raided a food co-opt in los angeles. >> were you drawing guns. >> they searched me. they thought we had cocaine in the fruit. >> their crime was selling milk that hadn't been pasture turized >> they also raided sharon's farm which supplies rawsome with the natural food. >> these people come and rip my house apart. they took me down to the county jail, booked me. like i was a criminal. >> they were charged with six felonies. they could go to jail all because health officials say raw milk can be down right dangerous. >> john: it can. unpasture used means it's not heated and could have salmonella but raw food buyers say this. >> it's pure and healthy and makes me feel good. >> john: that is ridiculous. but don't people have a right to be ridiculous. >> this is america. how are you going to tell me what i should and shouldn't eat. i eat lots of dove bars and i also eat chicken. they say it causes lots of illness and many deaths. we don't ban chicken. >> when the government gets between my lips and throat, that is an invasion. >> why do you want to drink raw milk? >> i think it's good for me. >> john: most states ban the sairls sale of raw milk just like unlicensed lemonade stands. my lawyer told me if no one drinks it and i don't make any money, that is probably legal. >> it indicates the prejudice against terrible business people. anyone who is this s is in business is a cheater. >> john: cdc says hundreds have gotten sick from raw milk? >> more have drowned in backyard swimming pools. ultimately you and i should be able to choose our risk. i think eating mountain dew is risky but i'm not asking for a government telling you can't do it. >> they have koult elevated 500 acres and more and more rules. >> every day, i look over my shoulder, what are they going to find illegal. >> john:. >> you can go into the woods and put a deer prominently and take it around in the afternoon sun and take it home and string and feed to it your children. that is being a great american. >> but if i take one lamb or one pig and get all the neighbors together and we have a community kill them and one neighbor pays me a criminal i'm a criminal. >> john: we need government to protect us? >> if that is what you think, go ask for government protection but allow my customers and me who don't have faith in the government, let us opt out. it's freedom of choice should be important as the freedom to worship and speak and own a gun. >> john: what about the freedom public officials doing public work? coming up, in america these days you never know what is legal. can police legally arrest you just for filming the authorities? that that is next. what makes the sleep number store different? you walk into a conventional mattress store, it's really not about you. they say, "well, if you want a firm bed you can lie onne of those." we provide the exact individualization that your body needs. wow! that feels really good. it's about support where you find it most comfortable. hurry to the final days of the ultimate sleep number event, where queen mattresses now start at just $599. and save 50% on the final closeout of our innovative limited edition bed. only at the sleep number store. "wall street journal" reporting that pentagon is beefing up sea and land based defends in the persian gulf to counter attempts by iran to close the strait of hormuz. nearly 20% of the world's traded oil passes through the strait. >> opening arguments beginning in the trial of a former rutgers university student accused of using a web cam to spy on his gay roommate. 19-year-old's attorney says his client may be young and stupid but he is not a criminal. he committed suicide in 2010 days after he was recorded being intimate with another man. he faces 15 charges. now back to john stossel's illegal everything. our government adds thousands of new laws ever year. the feds added 80,000 pages of laws. and state and local laws we're drowning in rules. >> this could lead to the police locking me up. given the police have the power to lock me up, or shoot me, it's important that we be able to keep an eye on them. >> fortunately that is easier today even our phones have cameras and camera is a powerful tool, watching the watcher. >> you are going away. >> the problem is that often the watchmen don't want to be watched. >> a highway patrol told pete stop your rv. pete is an activist to that likes to videotape encounters with authorities. >> turn that camera off, please. >> how come? >> turn it off for me. >> he had broken no traffic laws but he was suspicion of his big trailer with new hampshire plates. he filmed the encounter. i would like to keep everybody accountable and the police officer didn't like that. another arrived and said -- >> i'm not turning it off. >> you are going to jail. >> the cops grabbed his camera and arrested him and his friend. >> they held us in jail. >> after 12 hours the police let them go. >> they charged me with possession of a beer because there was one opened beer. they nothing else to stick on me. >> they couldn't charge him with filming the police because that is legal. just outside my office a cop claimed a bicyclist rolled in to him on purpose and the video showed up and showed the officer was the aggressor. that cop was eventually fired. maybe video like this is why some don't want to be filmed. >> i'm recording what you are doing. >> this is my yard. >> in rochester new york, when he heard a driver stopping outside of the house. she went out to film the encounter. one officer didn't like that. >> i'm allowed to stand in my yard. >> i was in cotton pajamas. i don't think there is any faith. >> all i have camera and i'm wearing nothing. >> it does not matter. >> you are going to jail. >> i don't. >> understand the officers took her to jail and charged her obstructing governmentalings. >> did i nothing. >> i think the young police officer is high on his power. >> high on his power is a little harsh. he is doing his job. >> no, it's not his job to take people from their own property and put them in jail. >> john: a month later, emily put the video online. it was viewed thousands of times some viewers criticized the police. >> john: you post it on youtube and they come back. >> in uniform, four officers. >> police showed up outside a meeting and started writing tickets for parking violations, like parking 12 inches away from the curb. >> her friend taped that. >> it's 12 inches from the curb. >> the media picked up on the story, police chief said officers' actions were inappropriate. charges were dropped but no officer was ever punished. they never are. even when they arrest news men. just ask. tried to film a police pursuit. >> because it's an act of seeing and you are leaving. go away. >> john: he went away. he moved across the street. then the officer drove up to him there. >> put it down. put it down. >> john: they charged phil with obstructing government. >> did you obstruct the government. >> absolutely not. i was probably 1,000 feet away from the officers. >> charges were dropped, the officer was never punished. none of the officers would talk to us. head of one police union, sent us a comment. >> some is a serious safety issue. i am afraid terrible something will happen. >> opposite is true,. >> john: this hijacker rammed a cop car. the officers shot limb and exonerated from murder because he acted in self-defense. some officers understand it's just part of a job to be filmed. >> so let's g