Readers will remember from this series of posts in April and May how the U.S. Attorney’s Office for Maryland brought and then settled charges against Randy and Karen Sowers of Middletown, Md., over “structuring” of bank deposits, that is, the conscious holding of transactions under $10,000 to avoid triggering paperwork and federal scrutiny. Now Van Jones of the Baltimore City Paper, who has led the coverage of the story, has some unsettling new allegations:
Randy Sowers is not the only Maryland farmer recently targeted by federal money-laundering investigators for illegally depositing cash his business earns in increments of $10,000 or less, in order to avoid triggering bank-reporting requirements. But Sowers, whose South Mountain Creamery (SMC) dairy farm in Middletown, near Frederick, is a popular fixture at Baltimore-area farmers markets, is the only one to exercise his First Amendment rights and talk to the press about it.
For that, Sowers’ lawyers say, the Maryland U.S. Attorney’s Office (USAO-MD) has made him pay—an assertion that U.S. Attorney Rod Rosenstein denies, despite an e-mail sent to Sowers’ attorney by the chief of Rosenstein’s asset forfeiture and money laundering section, Stefan Cassella, that appears to state exactly that.
David Watt and Paul Kamenar, attorneys for Sowers, say during negotiations over a deal to settle the charges, Watt asked Cassella why the government was insisting on particular concessionary language it had not obtained in the settlement of similar charges against a farmer named Taylor on the Eastern Shore. Cassella sent back a one-line email that read: “Mr. Taylor did not give an interview to the press.” In an e-mail to U.S. Attorney Rod Rosenstein, Cassella has stated that the Sowers settlement was “not a punishment for exercising his First Amendment rights.”
21 Comments
I know you don’t but accept this premise for a second: someone committed a crime and mouthed off to the press like they did nothing wrong.
Are we supposed to be surprised when someone flouts the law, denies they did anything wrong and then comes to the government to settle the case and the government makes them pay a little – and it is just a little – extra?
If you set aside that you reject the premise that these people did anything wrong, is it so awful for the government to be like “you are going to admit responsibility” because you were walking around acting like you did nothing wrong?
(I did not read everything on this and I could be dead wrong. I just think it might be a little less than black and white here.)
yes. it is awful. it shows how petty those prosecutors really are.
Ron,
Yes, they broke a law, but the law in the case is an ass.
In order to catch money launderers, large transactions must be registered. But since registering large sums is easy to avoid. So the Law wants to still be able to find money launderers. The blunt instrument arrived at is to make illegal otherwise legal transactions, if those transactions have the appearance of money laundering.
Unfortunately such law still does not get to the problem of money laundering, but merely burdens legal businesses in ways which could trap them in the ordinary conduct of legal and tax generating operations.
If the investigation cannot lead to evidence of money laundering crime, the original stated aim, then no punishment should ensue for technical violations unrelated to the overarching aim of the law.
The Law in this case is an ass. The prosecutor is an ass.
As a tax advisor my concern is, how do we keep the original seizure from happening again?
At the very least the law ought to have a safe harbor (a way that a business like Randy Sowers’ farm can satisfy the requirements of the law without having to stop making its frequent bank deposits). If I were he, I would simply tell my bank “I’m going to be making lots of deposits and the total will probably be over $10K, so go ahead and report them all to the Treasury.”
If the Treasury’s real goal is what it purports to be (stopping the flow of large amounts of cash to potential terrorists, drug producers, and tax evaders) they will allow an arrangement like this, and come down hard on local police who don’t respect it.
If the Treasury does no such thing it will tell us they are really at war with us.
A wonderfully statist view, Ron- “Shut up, and take your medicine. Do not exercise your right to a trial, do not exercise your right to free speech, and above all do not protest your innocence. If you do any of the above, you WILL be punished further.” You know what Ron? Screw that. We shouldn’t be just surprised, we should be angry as hell about it.
I don’t give a damn just how little it is, Ron. It’s the fact that the power of the state was brought on a small, successful business. Instead of making a few discreet inquiries and a quick investigation which would have made plain there was no criminal intent- you do remember that a usual element of criminality is intent, yes?- a criminal investigation was opened. A business’ viability was severely jeopardized simply because of an overweening ego and a dubious law to back it up. Then, the government has the gall to demand more, simply because someone protested their treatment? What the f***?
Tell you what, Ron. Go read the remaining posts and articles. Retain your skepticism throughout. But please, don’t bother saying anything more until you do.
Oh- and, for the sake of disclosure, I’m just a simple car electrician with only a couple of years of college.
Ron, when people like Eliot Spitzer are prosecuted, then you can yap all you want. And I am not sure that the law was broken.
First, Bill H, I want to say thanks for the shoutout. You used my name four times. Bill H, you must have taken one of the Dale Carnegie courses or something Well done, Bill H.
Again, you could not do what I asked. For. The. Sake. Of. Argument. Pretend for a second that you believe that a crime was committed and prosecution was warranted. You completely ignored that part because it took some steam off of your narrative.
(As an aside, I don’t think people should intentionally make deposits of less than 10k to avoid scrutiny. People with lots of cash are watched more closely by the IRS. Is this a bad thing, really? And why were these people doing this in the first place? The amounts get reported. Big deal. If you have nothing to hide, who cares? )
So no law was broken? Great. Go to trial. This is an agreement among parties. These people certainly had their right to their day in court.
(Of course, later you say there was a dubious law that was the problem. So is it that no law was broken or is it that the law is bad? Or are you just going to use whichever one you want.)
And, certainly, Bill H, you rant is at times displays some lack of common understanding that would seem to be required for such a condescending post. It is hardly uncommon in a plea bargain type situation for the defendant to be required to admit fault. If they don’t, they can have a trial. So demanding an admission of responsibility for a plea is hardly the Gestapo at work.
SPO, I think Spitzer (sp) should have been prosecuted if he did what was alleged. But I’m not real sure. I think it is reasonable to argue otherwise just as it was reasonable to argue that John Edwards should not have been prosecuted.
The IRS does this routinely. If people take a public stand against the IRS, or even if a case just gets more publicity, the IRS considers it more important to make sure that those people get a very unpleasant result.
This is strategically reasonable. The IRS may be willing to let many things slide or waive penalties but they don’t want people knowing this or the best deal they’ve ever given anyone becomes the baseline everyone expects. However, I think it’s extremely unseemly and probably unconstitutional for the government to make a policy of doing this.
Ron,
I am having problems with your blaming someone else for a sentence that was able to be interpreted several ways. When I read your “premise,” I, like Bill thought you were talking about the Sowers. After all, who would expect a totally different argument being interjected into a thread on a specific case?
First, let’s get to the idea of “if you have nothing to hide….” That is one of the most ridiculous and shallow arguments in the world. Perhaps you have forgotten that people should be able to live in peace without having to prove anything – you know, the ol’ “innocent until proven guilty” thing?
Secondly, try going to court with the IRS sometime. The IRS has unlimited resources and fighting the IRS in this case would cost more than the actual fine. Yet it is clear you don’t have a problem with that. After all, you seem to think people should go to court to prove they are innocent.
Thirdly, why would anyone say that that one must make a choice between “there was no law broken” and “this is a bad law?” Are all laws “good” in your mind? Are all laws “fair” and “just” in your mind? Whether a law is “good” and whether a law was violated are mutually exclusive.
Lastly, stick to the facts of this case for a moment. Instead of a long protracted fight, the Sowers seemed to realize that fighting would cost more than the fines, so they settled. Are you really advocating them being penalized for maintaining their innocence? Are you really trying to say that people should be punished for publicizing the actions of the IRS and the government? That would seem to go against the idea of “if the government has nothing to hide….” as the government wouldn’t care if people looked at the case or what was said about it.
Instead, you seem to agree with the idea that people should be punished for for exercising their rights.
That is not a world in which I want to live. You may want to, but I do not.
The government acting like a bully is never acceptable to most people. If you want to be one of the few, that is fine. You certainly have that right.
Giiacarver, you pretty much have to have one or the other. You can’t scream, “No law was broken” while at the same time saying “It is a bad law that was broken.” If you can’t see why I struggle to believe these are mutually exclusive, I’m not sure what more I can say.
What I’m telling you is that for a plea bargain, most courts in most situations require that the defendant admit guilt. I’m not a criminal lawyer but I’ve known enough prosecutors (and watched enough tv) to understand that this is a fundamental precept in most plea bargains.
The problem is you reject as just outlandish things that are bedrocks of law. Which is fine but you don’t seem to know that you are doing just that.
Ron,
Once again, you have changed the argument when facts go against you.
Here is what you said originally: “So is it that no law was broken or is it that the law is bad?”
Now you are saying: “No law was broken” while at the same time saying “It is a bad law that was broken.”
You have changed the parameters. No wonder you struggle to defend and understand what you have said because you keep changing it.
What I’m telling you is that for a plea bargain, most courts in most situations require that the defendant admit guilt.
This is another instance where you are putting forth something that doesn’t fit the case. From the cited article:
Ultimately, the e-mails show,[chief of asset forfeiture and money laundering section, Stefan] Cassella had no objection to including a clause in which Sowers “admits no wrongdoing.”
So in this case, your “bedrock” is shifting sand, as are most of your arguments.
Ron, I used your name four times because I was speaking to you directly, not out into the ether that comprises posting out into the internet. You seem somewhat touchy about that. I’ll try to do it less, just to prove that I’ve never had anything to do with Dale Carnegie.
You didn’t ask. You asserted. I responded, noting that your little thought experiment was rather vile. We don’t need to pretend what and why happened. Walter was kind enough to point us toward the relevant
articles, which you admitted you hadn’t read. Did you bother to read the articles (yes, I am going to do it again!) Ron? I’m going to guess that you did, since you are back and in full cry.
Getting to your aside: (I don’t think deposits of 10K or better should be reported, since the vast majority of people who make these deposits are not criminal. I see you didn’t address MY assertion that this could have been handled differently. You honestly don’t see the problem with making everyday activity a felony? Really? I’ll get to your statement about having nothing to hide in a bit. )
I didn’t say no law was broken. As it was put by another poster (I’m really trying to be kinder and gentler, here) the law is an ass. I did say it was a dubious law. So no, no double standard here. From my rant- yes, I will stipulate it was a rant, I even considered placing a /rant tag, as a sort of cherry on top- it should be fairly plain that I have little regard for laws that make whole classes of people criminals simply because they engage in everyday activities, such as running a successful business. Note that no other allegation was made against the creamery. No health violations, no work code infractions, nada.
Which leads me to your view that if they had nothing to hide, they had nothing to worry about. Did you note that the creamery wasn’t trying to hide anything? Once again, that really is a statist attitude.
See there? I cut the use of your name by 50%. A small improvement, but one none the less. As we continue to shout at each other, I shall try to continue to improve.
And, please, don’t Godwin yourself by invoking the Geheime Staats Polizei. That does quite a bit of damage to your argument.
Gitacarver, I don’t even understand half of what you have written. You point is always so confusing I just quit. You consistently mix apples and oranges in a way I repeatedly find exhausting. I think people that agree with you often roll their eyes on your comments.
Bill, I disagree with you but I take you seriously. I have to tell you, an article telling me someone had nothing to hide does not mean that they had nothing to hide. The underground economy of cash that evades taxes means that you and I pay a ton more in taxes than we should (or said better, our deficit/debt is much higher). People in cash businesses just have to live with the fact that we have laws that make them suspects because the data is overwhelming that people with cash under report income. (High on this list? Criminal lawyers.)
My though experiment is hardly vile. First, vile is a crazy strong word, right? Second, I’m saying put yourself in the prosecutor’s shoes for a second. To do that, we have to assume that the law is right and this couple has done something wrong to see analyze their action through their own lens.
I think any time you are doing something in an effort to trick the government or monitoring of your activities, that is a bad thing.
OK, Ron (that’s 1!). I have to ask just what is it you do for a living. I’ve told you what I do, and it isn’t anywhere near as complicated as criminal defense. However, I don’t use shows like American Chopper as part of my curriculum vitae. That doesn’t help me when I’m trying to convince someone their 5-8,000 in custom work is safe with me. Along those same lines, using shows like Law & Order SVU or Hawaii Five-O for your legal training doesn’t help your credibility, either. I honestly cannot ever recall anything the flavor-of-the-week deputy DA said being used as a fundamental precept in anything said anywhere in any court in the US. Of course, your mileage may vary.
No, no. Gitarcarver has it exactly right. The Magna Carta is a bedrock of law. The Constitution and the Bill Of Rights is a bedrock of law. The 10 Commandments is a bedrock of law.
What Stefan Casella says because he’s butthurt someone dared protest their innocence to a free press is not a bedrock of law. Fearing at every turn you could be an unwitting felon is not a bedrock of law. Fearing the state because you don’t wish to expose yourself to the mercy of their inspection at any time is not a bedrock of law. Matter of fact, it’s called totalitarianism. Let that soak in for a few seconds. Realize that it isn’t my position, or Gitarcarver’s, or anyone else who has crossed swords with you on this. It’s yours.
Ron,
Gitacarver, I don’t even understand half of what you have written. You point is always so confusing I just quit.
It is confusing that you changed your own statements to try and make a point? It is confusing that in this case the Sorrows did not have to plead guilty to anything? It is confusing that people don’t have to prove their innocence and the idea that “if you have nothing to hide” is exactly backwards?
Those thoughts confuse you?
Wow. Just wow.
The TV line was just a joke, Bill. It is a flip line. People who are writing do this sometimes, Bill. Try and stay with me.
Now, let’s take a second and expose that you don’t know what you are talking about. Do you question the premise that even for hundreds of years – since before this country was formed – a plea bargain by its very nature is considered to be an admission of guilt in exchange for a punishment that is less than the maximum? That if fundamentally requires that the elements constituting guilt be admitted? That the rule for plea bargains has almost invariably been that although a person who admits guilt as part of a plea bargain does so voluntarily, the admission is necessary to receive the reduced sentence. If you question any of this, set forth a single fact that supports your contention.
This is bedrock of American jurisprudence. No one seriously questions this. I appreciate that your definition is that is has to be a least 200 years old and come from the famous legal documents. But you can’t just make up definitions for words. Judges and courts have been using this legal term of art for terms far less deeply embedded.
Listen, when you conspire to end run federal government reporting requirements, you are going to have issues. But if you go back to my original post, you will find out that was not even the purpose of my comment.
Bill, respectfully, you are little out of your depth in this conversation, you really are.
Ron,
With all due respect and despite your protestations to the contrary, it is you are wrong in this case on the “bedrock of jurisprudence” issue.
You state:
That the rule for plea bargains has almost invariably been that although a person who admits guilt as part of a plea bargain does so voluntarily, the admission is necessary to receive the reduced sentence.
However, the linked article says something different:
Ultimately, the e-mails show,[chief of asset forfeiture and money laundering section, Stefan] Cassella had no objection to including a clause in which Sowers “admits no wrongdoing.”
Now I realize you have couched your response with terms like “almost always,” but that would belie the meaning of the term “bedrock,” which invariably is unshifting and unchanging.
Even so, looking at this case, is it your position that there was no admission of guilt required (contrary to the article) , or is it your position that the government violated the “bedrock of jurisprudence by not requiring an admission of guilt?
Because in this case a particular prosecutor had no objection, does not mean it is not a bedrock tenant. This is a relatively unique crime in that it does not require intent so, technically, an admission of wrongdoing is not an element of the crime. But splitting up large bank deposits to avoid the feds noticing is clearly a criminal offense under the Bank Secrecy Act. To go back to the actual point, requiring a defendant to admit wrongdoing is an element of almost every crime so it is hardly a shocking development that a prosecutor would require it. (Again, Git, there was one other case where they didn’t with this statute, we all get that.)
Good grief Ron, that is one of the most contradictory statements I have ever read.
You railed on Bill H. telling him he didn’t understand one of the “bedrocks of jurisprudence,” and “fundamentally requires that the elements constituting guilt be admitted.”
Yet Bill H was right on the money and it was you who misunderstood the very nature of this case and how there was no requirement of an admission of guilt. The hyperbole you laid down was shown to be false and yet you kept pushing it.
Now you bring forth the idea that this is a unique crime that does not require intent, and then say that the mere splitting up of the funds was a crime – intent or no intent.
So lets look at what happened here. The Sowers had a settlement in which there was no admission of guilt and no forfeiture of their money. They talk to the press about the case and suddenly the government wants the money. The government admits their going after the money is because the Sowers talked to the press and yet you seem to have no problem with that.
God forbid that a citizen should be able to speak out against a ridiculous law. How dare the Sowers speak out! They must be punished!
The Sowers negotiated a settlement in which they paid a fine, made no admission of guilt, and no forfeiture of their money. Then, because the government didn’t like what they said, they are harassed and sued for more money.
Why you think that is acceptable is beyond me.
this entire back and forth misses the real issue…
the ‘structuring’ reg is used to catch money launderers…that’s the basis for a Court not finding the law to be an infringement of individual liberty (don’t get me started on all the criminal laws that trade liberty for perceived safety)
legislators and naive citizens think that the ‘structuring’ law won’t be used to persecute otherwise innocent people…but it was sold to them to create a probable cause argument to investigate people/businesses that were not on law enforcement’s radar…the premise being if that if there was no money laundering there would be no prosecution.
and in this case there was NO finding of money laundering – for those of you without a clue, money laundering DOES NOT involve making deposits less than 10k so the that feral government keeps it’s collective nose out of one’s business, it involves money obtained from illegal means (drugs, prostitution, etc…) being ‘washed’ through a legitimate business.
that was NOT going on in this case
but a prosecutor who wanted a pound of flesh decided to charge ‘structuring’ because he could…not because the underlying crime of money laundering had been occurring.
this is all about control of people and criminalization of otherwise lawful conduct that individuals wish to keep private
just my $.02…coming from over sixteen years of state law enforcement as a police officer and a prosecutor.
look beneath the superficial if you want to educate yourselves
Unfortunately the facts are what the facts are. Did the defendant break the law? Yes.
Structuring is a common tactic used to launder money, specifically to place funds into the financial systems. Structuring is a federal offense even if the funds are legally obtained.
FinCEN produces an Educational Pamphlet on the Currency Transaction Reporting Requirement :Notice to Customers: A CTR Reference Guide
The full brochure can be accessed through the following link http://www.fincen.gov/whatsnew/pdf/CTRPamphletBW.pdf
Below is an excerpted frequently asked question from that brochure.
Can I break up my currency transactions into multiple, smaller amounts to avoid being reported to the government?
No. This is called “structuring.” Federal law makes it a crime to break up transactions into smaller amounts for the purpose of evading the CTR reporting requirement and this may lead to a required disclosure from the financial institution to the government. Structuring transactions to prevent a CTR from being reported can result in imprisonment for not more than five years and/or a fine of up to $250,000. If structuring involves more than $100,000 in a twelve month period or is performed while violating another law of the United States, the penalty is doubled.