Randy and Karen Sowers are not your typical terrorists or mob financiers. They run the popular South Mountain Creamery and sell their produces at farmer’s markets and local events. The Somers however were confronted recently by FBI agents who informed them that the Justice Department was moving to seize their accounts under a law designed to thwart mob and terrorist financiers. They had made repeated deposits under $10,000. The Justice Department has seized their account of $62,936 under the law as illegal “structuring.” The criminal provision is written in a way to avoid the need for actual intent or knowledge of the illegality.
The FBI documented nearly three-dozen deposits into their company’s bank account just under $10,000. The Justice Department takes the position that the transactions alone are sufficient to seize private assets.
Yet few people are aware that such a pattern can be deemed illegal structuring. Perhaps our tax lawyers can fill in the details, but I assume that this money is still reported as income by the business regardless of the deposit amount. Thus, there is no evidence of a benefit to the company in structuring.
What is remarkable is that this is a trap intentionally set by Congress at the demand of the Justice Department. In 1994 in Ratslaf v. U.S, Justice Ruth Ginsburg “interpreted the “willfully” element under 31 U.S.C. Sec. 5324 to require proof that the defendant knew the structuring was illegal. That would seem to create a fair and workable solution to structuring — confining it to the truly criminal element. However, Congress responded to the opinion by removing wilfulness from the statute.
The provision states in part:
(a) Domestic Coin and Currency Transactions Involving Financial
Institutions. – No person shall, for the purpose of evading the reporting requirements of section 5313(a) or 5325 or any regulation prescribed under any such section, the reporting or recordkeeping requirements imposed by any order issued under section 5326, or the recordkeeping requirements imposed by any regulation prescribed
under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508 –
(1) cause or attempt to cause a domestic financial institution to fail to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by an order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-508;
(2) cause or attempt to cause a domestic financial institution to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by any order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91-
508, that contains a material omission or misstatement of fact; or
(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
According to reports, Randy Sowers told agents that “during the farmers’ market ‘season,’ his weekly cash receipts were on the order of $12,000 to $14,000.” He admitted that “he kept his cash deposits under $10,000 intentionally so as not to ‘throw up red flags.’” He says that he was advised to keep the checks below $10,000 by a teller to avoid forms being filed. Yet, there is no charge of tax evasion. Thus, while the Justice Department insists that there is “a reasonable belief” that there was “an intentional scheme or plan to hold back cash receipts,” it is not clear what benefit the family derived from the practice beyond simply not being reported for such checks. I could understand if this was done for the purpose of some criminal benefit, but there is no indication of a collateral crime.
What do you think?
Source: Frederick News
If indeed they had to give up half the amount seized then the crime was on the part of the FBI, no matter how “legal” which gives new meaning to the term, organized crime.
Hope they changed banks.
Man oh man… And I thought milk money was used to buy hookers…..
The Sowers now have “legal standing” under Article Three of the U.S. Constitution to overturn this federal statute as blatantly unconstitutional. The Sowers should contact the Maryland ACLU today!
Looks like the Feds have a case of lactose intolerance
The “Word Press” censors are senslessly at work today.
I must have written something they are sensitive about.
This is just outrageous. And it’s what happens when we build a giant beast of a govt, exacerbated by the “war on terror” that just gives them more power to abuse at the good citizens’ expense.
It’s also another example of how it’s becoming increasingly hard to avoid violating some damned fed law or another, even with no ill intent at all.
They just converted one more family to those who view the fed govt as their enemy. I really hope this can be reversed, though I’m sure they’ll pay a mighty price in the process, no matter what.
Seizure of this kind is one of the “little”outrages that seem to go on daily in this country. It takes time and money to resolve and the stress of being locked in the system for months with individuals who have no limits on their behavior because they are “heroes protectectiin us from terrorism” must be terrifying and stressful.
Darwins Finch, I hope this is old news for your neighbors but it is an outrage that they had to “give” up half of the money that was seized. I still don’t get what the crime here was. Perhaps someone could fill us in. Is it money laundry laundering? Is it evidence of drug dealing. Or is depositing $10,000 or close to $10,000 in cash on a regular basis in and of itself illegal? That’s interesting because apparently stealing billions is OK.
Do we now write laws to be traps for the unwary rather than stop crime? How nice.
“The FBI documented nearly three-dozen deposits into their company’s bank account just under $10,000. The Justice Department takes the position that the transactions alone are sufficient to seize private assets.”
Non-biological diseases that affect the thinking of people in power are more of a threat than biological mental problems are.
Everyone knows that a cash business is a threat to the American way of life unless you’re a bank and get your cut in the form of credit card interest and superfluous bank fees.
It’s a stupid law to begin with.
Wall Street banksters who loot billions from taxpayers, support money laundering and drug cartels are harassed less than these hard working folk. Two-tiered justice rears its ugly head again.
Randy & Karen’s business is “just up the hill” from us and I swear this all happened last year. They settled the charges by giving up half of the seized amount. Or is this a new issue for them?
The Justice department seizes the Sowers bank account but lets banksters go free. It’s too bad the Sowers weren’t richer. They might have gotten invited to a State dinner…like Lloyd Blankfein and Jamie Dimon.
And its one, two three, What are we fighting for?
Don’t ask me I don’t give a damn,
Next stop is Vietnam….
If cows could, they’d give Milnot.
Put your cash in the safe. Be safe. Not a Safe Deposit Box at some bank. Your own safe. Be square or be there. Or is it vice versa?
dont steal from the corporation formerly known as the government they hate competition.. but this smacks more of eminent domain. smh what will it take for the people to wake up
slowcobra
let us know how that works out for ya
i’m guessing you’ll be changing your name to slowcolander
Speaking as a former bank regulator who used to review those reports — yes, this really is “structuring”.
Sadly, these two are among perhaps tens of thousands who have been so advised by idiot bank tellers.
The reality is that by regulation banks are exempt from filing Currency Transaction Reports (“CTR’s”) on businesses that regularly deposit more than $10,000 in cash if those businesses are of the type that commonly transact business in cash. All the bank has to do is file a form requesting an exemption. 31 C.F.R. § 1020.315. This is done regularly for businesses, including seasonal mom-and-pop sole proprietorships. Moreover, even if the reports had been filed, no one in the government would have given them a second thought. There are a lot of businesses that engage in large cash transactions. Someone at FinCEN would have looked at a couple of reports, determined that it was such a business, and moved on.
What most likely happened was that someone in the compliance department of the bank noticed the pattern of deposits and filed a Suspicious Activity Report (“SAR”), which made it more likely that the transactions would be looked at as possible structuring. Trying (on bad advice) to avoid one type of report caused the filing of an even worse report,which led to the seizure.
That being said, it’s an unfair result under an unfair law, probably motivated by the ease of the seizure and the bump in the FBI’s (and the individual agents’) seizure statistics. Special Agent Jones will get an attaboy in his annual performance evaluation for another successful asset seizure.
If they didnt do their do diligence and they are wrong we the people need to start a trend and shoot all such people wherever they come from. The gov(mob-natzi) tactics are a few and they can not control all of us and they ARE evil and should be put down
If they are reporting all of the cash income, how can there be a crime?
This is why I work with cash as much as possible and nothing else. The government loves to look at your bank accounts and everything else, and stick their nose in it… And then seize it because they feel like it.
Oh, but then again, if I’m carrying large sums of cash, aren’t I subject to being a suspect in drug dealing?
wow, scalia mad at Gays and
said blacks are treated too well.
No its after the ice cream man.
Whats next.
Any mom and pop store is a criminal gang.