Phase 3: Expansion of laws to criminalise any vauge behaviour the govt decides is unacceptable.
When everyone is guilty, you can extort the funded class to look the other way and exploit the unfunded class by imprisonment and forced Labor. The legal system will be saturated by arrests for 'disorderly conduct', 'resistimg arrest' and 'anti-governmemt activities' faster than the courts can keep up with tossing out bogus charges. If you have money,you post bail and try really hard to behave yourself and not rock the boat. If you don't have money, it's off to the work farms for you.