Maryland dairy farmer Randy Sowers has won back $29,500 the IRS seized four years ago in a money-laundering investigation, and his case could pay dividends for hundreds of other small businesses, his lawyer says.
"It's a victory not just for Randy, but also for others, so he's really a trail-blazer here," says Paul Kamenar, one of two lawyers that pressed Sowers' case with the Justice Department and got Sowers two congressional hearings.
The nonprofit Institute for Justice worked the case for years. It announced the victory on Thursday.
City Paper broke the story in 2012, several months after federal and local law enforcers seized the bank account of South Mountain Creamery, Sowers' Frederick County dairy farm that sells its wares at farmer's markets across the state. Sowers' crime was "structuring" cash deposits in amounts just under $10,000 to avoid triggering notification to the feds. He later said a bank teller suggested doing it to minimize paperwork.
Maryland's federal courts then led the nation in structuring cases, which had historically been used to grab money from tax cheats, drug dealers, and suspected terrorists. The charge was increasingly being made against regular business owners not suspected of other crimes, and Maryland U.S. Attorney Rod Rosenstein told City Paper then that, "There's a possibility that somebody did it innocently, and we are always open to that."
After Sowers spoke to City Paper, however, prosecutors dug-in, inserting a clause in his settlement agreement saying that the feds had good cause to take his money.
"Since that time we've had two congressional hearings," Kamenar says. "One in February 2015 . . . then again last month for round two because they were concerned, 'Why haven't you given Randy's money back?"
The Justice Department changed its policy in 2014 so that henceforth it will not seize money under the structuring statute unless it suspects the underlying transaction involved a criminal act, he says. The IRS has also sent letters to previous defendants inviting them to file a "Petition for Remission" to get their money returned. They have 60 days to do it, Kamenar says.
The attorney who at the time led Rosenstein's asset forfeiture and money laundering section, Stefan Cassella, has left the federal government and hung out a shingle (with seven other lawyers) as a legal adviser to law enforcement and expert witness on asset forfeiture law. He is one of the nation's preeminent experts in the law. He appeared last week at a debate sponsored by the Federalist Society, a conservative legal group. Kamenar says he asked whether Cassella thought Sowers should get his money hack, and Cassella replied "No."
Cassella did not immediately reply to a phone message.