Stewart D. Sachs' impressive resume, built over 40 years in banking and finance, includes being president and CEO of Regal Savings Bank, founder of Maryland Permanent Bank and Trust Company, and board member of Lexington National Insurance Company (the company that underwrites bonds for Big Boyz Bail Bonds, see feature). Since 2011 he's been serving a two-year term, set to expire next month, as president of the 170-year-old Har Sinai Congregation, the longest-running Reform congregation in the U.S.
But the 61-year-old's long-running string of successes was recently met with a setback, when, on March 18, he was charged in Maryland's U.S. District Court with breaking a money-laundering statute in connection with cash repayments he received on a $151,000 loan his company-Owings Mills-based Worthington Alternative Capital-made to Robert T. Taylor, a 37-year-old from Aberdeen who has pleaded guilty in Pennsylvania federal court to supplying crack cocaine to a dealer in Harrisburg, Pa.
"This is not a new issue to Mr. Sachs," says criminal-defense attorney Andrew Alperstein, who on March 21 entered his appearance as Sachs' retained counsel. "He's known about the subject matter of this for some time, more than a year, and he thought the issue was resolved favorably," Alperstein says, and now "he's working with the government to resolve the issues, and we're confident that it will work out fine," adding that Sachs had not yet been served with the complaint as of March 22.
Bonnie Heneson, public-relations consultant for Har Sinai, says "we have no idea why you brought Har Sinai into the article" about Sachs' criminal trouble, since the synagogue has nothing to do with the allegations. She called Sachs "very respected, very esteemed," and says he has "moved the congregation along very, very well" as its president, a position he's held since 2011, noting that his two-year term "will be over next month."
Sachs is accused of failing to comply with IRS reporting requirements that kick in on cash transactions involving more than $10,000. When the amounts cross that threshold, banks are required to report them to federal authorities in "currency transaction reports," or CTRs, and when a person "engaged in a trade or business who receives cash of more than $10,000 in the course of that trade or business," the IRS website explains, then the person needs to report it too, by submitting an IRS Form 8300.
According to the criminal complaint filed against Sachs by IRS criminal investigator Jeffrey Hostelly, Sachs failed to file Form 8300s on Taylor's loan repayments during a five-month period starting in June 2011. Sachs was asked about the transactions in March 2012, when he was visited by U.S. Drug Enforcement Administration agents, and the complaint indicates that he was cooperative and forthcoming, describing the "bricks" of cash Taylor brought to him and saying he understood that Taylor's cash was derived from buying and selling cars.
Sachs explained that the cash had been deposited into his business account with Sun Trust Bank and that "any CTRs filed on Taylor's payments would be in the name of Sachs or one of his employees," the complaint states. "Sachs added that it was not unusual in his everyday dealings to receive cash for payment."
Though Sachs told the agents that he'd deposited the cash from Taylor into his bank account, and though the agents learned from a confidential informant that six of Taylor's seven repayments were made in increments of more than $10,000-one of them was more than $42,000-the agents could find no evidence that Sachs had filed any IRS Form 8300s to report the transactions.
"In fact," the complaint states, "comprehensive queries conducted under the numerous individuals, entities, and addresses used or associated with Stewart Sachs were negative for any IRS Form 8300s being filed" by Sachs or Worthington Alternative Capital (italics in original).
Alperstein takes issue with the idea that failing to file Form 8300s is a money-laundering violation. When pointed to the section of the IRS Internal Revenue Manual that labels the offense as "money laundering," Alperstein responds by saying, "if that's what they're calling it, that's what they're calling it," but stresses that a Form 8300 violation is "all [Sachs is charged with] right now" and "obviously that's much less substantial than a 1956 charge," referring the 18 USC 1956, the statute which outlaws "laundering of monetary instruments" and which carries a maximum 20-year prison sentence upon conviction, plus fines of $500,000 or more. In contrast, Sachs' alleged offense-violating 31 USC 5331-carries a maximum penalty of five years in prison and a $250,000 fine.
Recent high-profile cases coming out of the Maryland U.S. District Court involving Form 8300 violations include those against prominent criminal-defense attorney Stanley Needleman ("Attorney Stanley Needleman Sentenced to Prison," Mobtown Beat, Dec. 21, 2011), Fuentes Brothers Auto Sales in Jessup, and Metro Jewelry Brokers Ltd. owner Eugene Petasky ("Jewelry Dealer Boasted of Drug-Dealer Ties," The News Hole, April 12, 2010). Similar to the accusations against Sachs, each of these cases involved the defendants receiving cash from customers who were either drug dealers or posed as such.