Update: Baltimore City Paper on South Mountain Creamery case

by Walter Olson on April 21, 2012

Van Smith with the City Paper in Baltimore (where South Mountain Creamery is a farmer’s-market fixture) reported on Wednesday and again on Friday on the “structuring” charges and forfeiture action against dairy farmers Randy and Karen Sowers (see yesterday’s post). A few highlights:

  • On Wednesday, Smith reported that Sowers said in an interview that “he deposited the cash he’d made in the increments in which it had been earned. If the deposited amounts often ended up being a little under $10,001, he explained, that’s just the way it worked out and he [had] no intention of breaking the law.”

    On the other hand, according to Smith’s summary of the federal complaint yesterday, Sowers is said to have told federal investigators during a February 29 interview “that ‘during the farmers’ market “season,” his weekly cash receipts were on the order of $12,000 to $14,000,’ yet ‘he kept his cash deposits under $10,000 intentionally so as not to “throw up red flags.”‘ He also told the agents that ‘he was advised by a teller at the bank that the deposit of more than $10,000 in cash would lead to the filing of a form, and that he decided from that point forward not to make deposits in excess of $10,000,’ according to the complaint.”

  • “Historically, the anti-structuring statute has been used by prosecutors as an ancillary charge with other accusations of nefarious behavior, such as drug dealing or terrorism. And it still is. But over the last few years, prosecutors have started to use it more regularly as a standalone charge — an observation noted by defense attorneys that Maryland U.S. Attorney Rod Rosenstein confirms. Syracuse University’s Transactional Records Access Clearinghouse, a data center about federal court cases, reports that in fiscal year 2011 Maryland brought 14 of the nation’s 99 structuring cases, making it the top state for such prosecutions. Nationally, the numbers have been rising; the 2011 figures are up 8.8 percent from the year before and up 57.1 percent from five years ago.”
  • Targets in Bank Secrecy Act forfeiture cases — which, to repeat, need not be premised on any suspicion of tax evasion or other criminality unrelated to the Act — have included Maryland “gas stations, liquor stores, and used-car dealerships.” “South Mountain is not the first seasonal-produce market to find itself targeted for structuring recently. Taylor’s Produce Stand, on the Eastern Shore, was stung last year after the feds seized about $90,000 from its bank accounts. In December, pursuant to a civil-forfeiture settlement agreement after no criminal charges were filed, the stand’s owners got back about half of the seized money.”
  • And this clue as to why the U.S. Attorney’s office in Maryland might be outperforming its colleagues nationwide in pushing BSA forfeitures: the forfeiture complaint against the Sowerses was “signed by assistant U.S. attorney Stefan Cassella – who literally wrote the book on federal forfeiture law.”

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“Structuring”: who can get away with it, and who can’t
04.21.12 at 10:19 am

{ 7 comments }

1 doug 04.21.12 at 11:14 am

so he basically did not want to file the forms. other than that, he doesnt seem to be evading his tax obligations or breaking any other laws. once again, this is like drug forteiture laws in which the cops get to keep the money or cars seized. this is wrong and should be abolished.

2 Mannie 04.21.12 at 1:28 pm

It’s now safer to keep the cash in mason jars buried under the chicken house.

3 spo 04.21.12 at 6:51 pm

But there’s no obligation in the first place to deposit more than $10K. All the guy is doing is depositing money. He’s not structuring a transaction.

Sometimes, I really hope these government bureaucrats with a license to mess with your life have someone mess with theirs.

4 William Nuesslein 04.22.12 at 8:53 am

How about adjusting the $10,000 for inflation to $25,000 or so?

5 Flemur 04.23.12 at 9:27 am

Is breathing still legal?

6 a_random_guy 04.24.12 at 10:09 am

“Sowers is said to have told federal investigators…”

Of course, one should never talk to the police, and certainly not to a federal investigator. They will twist your words and find something to nail you with. If he gets out of this charge, they will nail him for lying to a federal investigator – for which the only record will be the notes and recollections of the very same investigator. Just ask Martha Stewart.

7 Rob 05.01.12 at 4:13 pm

More over-reach by the feds. A statute that was clearly aimed at money laundering is now used to steal funds from a business simply because the owner did not want to have red flags on his account. Could it be as simple as he did not understand what a red flag is? Perhaps if it was explained to him he would not have ‘held back’ payments if that is indeed the case. Here we have a struggling farmer trying to make a living and the feds come along and steal his cash. I don’t see where they are claiming he was laundering the money or even hiding cash, simply keeping his deposits below a certain amount. This is a clear violation of his liberties. Are the feds this desperate for cash. They should return ALL the funds with interest. Not just to this business but to the others from which they have stolen money. This is just not right, period.

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