Asset Forfeiture

Feds Return $29,500 They Stole From a Maryland Dairy Farmer

The DOJ starts to retroactively apply new guidelines for structuring-related forfeitures.

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Institute for Justice

When the IRS cleaned out his bank account in 2012, Maryland dairy farmer Randy Sowers told a congressional subcommittee last year, "I was really taken aback by that. I couldn't believe…they would just come in and take my money with no prior notice." But such was standard practice in so-called structuring cases, where the government suspected people had deposited money in amounts less than $10,000 to avoid a federal reporting requirement. It did not matter if, as in Sowers' case, the money came from legitimate sources and there was no evidence of any other illegal activity, since structuring itself is a crime. That made no sense to Sowers. "I thought the government was supposed to protect me," he said. "I didn't think they were supposed to come out and try to put me out of business…I think the government ought to give my money back." Yesterday the government finally agreed to do just that, a development that opens the door to righting hundreds of similar wrongs.

In October 2014, responding to negative publicity surrounding forfeiture cases like this, the IRS said it would no longer seize money from people whose only crime consisted of making deposits or withdrawals that the government deemed suspiciously small. The Justice Department announced a similar policy five months later. But the policy change came too late for Sowers, who ran afoul of the IRS because of what he describes as an attempt to avoid extra paperwork related to the cash he and his wife, Karen, took in at farmers markets. "My wife went to the bank one day, and she had $12,000 in cash because we do a festival," Sowers testified. "So we had a little bit of extra cash that week. And when she went to deposit it, the teller told her, 'Well, next time, just keep it under $10,000, and I don't have to fill out a form.' So that is what she did." The honest, hardworking, and otherwise law-abiding couple did not realize that courtesy was a felony.

The government, which conceded the money was legally earned, seized $63,000 but eventually agreed to return about $33,000 of it. Sowers testified that the federal prosecutor handling the case initially seemed inclined to return more than that, but his attitude changed after Sowers told his story to the Baltimore City Paper. Something similar happened in the structuring-related forfeiture case involving North Carolina convenience store owner Lyndon McLellan, who nevetheless persevered and ultimately won. Like McLellan, Sowers had help from the Institute for Justice, which is asking the Justice Department to apply the new guidelines for structuring cases to forfeitures initiated prior to the change.

I.J. filed a petition on Randy and Karen Sowers' behalf last July, noting that "the government has never even alleged that Randy and Karen did anything unlawful," aside from making deposits of less than $10,000. The petition described the couple's agreement to let the government keep $29,500 of their money as accepting "an offer they could not afford to refuse" and cited congressional criticism of the case. The petition was supported by nine members of the House subcommittee that heard Sowers' testimony. At the same hearing, they noted, IRS Commissioner John Koskinen had testified that "anyone who…was not engaged in processing and laundering illegally gained funds who ended up stuck in the system…deserve[s] an apology." If so, I.J. argued, how can the government let such injustices stand? "If it would be wrong to take the money today," I.J. attorney Robert Everett Johnson said in a February 16 letter to Attorney General Loretta Lynch, "it is equally wrong to keep it." Apparently Lynch agreed, or at least worried that most people would draw that conclusion.

Johnson thinks the decision bodes well for other people whose money was taken in similar circumstances. "If the IRS and Justice Department are willing to do the right thing for Randy, there is no reason why they should not do the same for hundreds of other property owners in exactly the same situation," he said.

Randy Sowers also hopes the resolution of his case sets a precedent. "This is exactly what we wanted," he said. "I hope they give other people's money back. And beyond that, I just hope they quit taking people's money." 

Johnson and Nick Sibilla discuss the Sowers case and other structuring-related forfeitures in the August/September issue of Reason.

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32 responses to “Feds Return $29,500 They Stole From a Maryland Dairy Farmer

  1. And all it took was a measly 4 years. I am sure that dairy has thrived in the interim.

    1. Look, if your life savings is the only thing that kept you in business, maybe the dairy should have closed.

      1. Absolutely. And, did you see the way that dairy was dressed? It was totally asking for it.

        1. Totally.

          The IRS: “Stop hitting yourself, stop hitting yourself.”

          1. STOP RESISTING *wham wham wham* STOP RESISTING

      2. You didn’t build that daiiry. Somebody else built that.

      3. As a wise abeula once said “I can’t worry about every under capitalized business”…

    2. He got it back. It proves there’s checks on government and that a similar common sense system is needed for gun control.

  2. Oh shit. The comments have disappeared. Does that mean some prosecutor is mad at us commenters?

    1. I was going to comment on Reason-on-Reason crime, but the earlier article was the reposting of an earlier Reason magazine article. This is a follow-up to that. Still a bit odd.

    2. Our commenting volume was deemed suspiciously small, so we were probably trying to hide our opinions too much.

  3. They were probably selling raw milk, which is like a schedule 1 substance anyway.

    1. We need common sense milk reforms.

      1. Nobody need a milk bottle with that thing that goes up.

  4. The government, which conceded the money was legally earned, seized $63,000 but eventually agreed to return about $33,000 of it.

    How gracious and generous of the government to give back some of the Sowers money.

    1. And kept a soup?on for themselves because FYTW.

      What’s a reasonable rate of return for $63,000 over four years? Plus any attorney’s fees the Sowers shelled out before the IJ got involved, plus a bite at the apple for IJ, plus a steep penalty payable to the Sowers because unless these judgments hurt, the IRS is not going to stop with the bullshit. Just because they lose more cases than they win doesn’t mean they’re not still raking in a ton of cash.

      1. When you get your money automatically from involuntary sources regardless of performance and can’t go out of business, what constitutes a judgment that “hurts”?

        1. Double or nothing. Prove your case or pay back double what you seized.

      2. The base amount returned should be EXACTLY the same penalties and fees the IRS would levy against a taxpayer who withheld a like amount of owed taxes, PLUS legal fees and any considered punitive damages.

    2. This is where I get genuinely alarmed. If you’re the government employee handling this case, you admit that these people did nothing wrong, you admit that the money you seized should not have been seized, yet you only agree to return half of it? Like, literally, how could you sleep at night? Your job is to steal money, and unlike a burglar or other thief, you don’t even get to keep what you steal. It’s not like you’re going to get fired from your government job if you don’t steal their money. You’re actually just doing evil for the sake of doing evil. I don’t get it. At the end of the day these are human beings doing this stuff.

      1. Such positions attract malign assholes.

      2. Nobody with a conscience is working in that kind of position.

      3. The banality of evil, bruh. You would be hard pressed to pin down anyone in the IRS who broke the law or even actively did anything wrong. Mostly they just filed papers and sent emails and approved forms. They probably process dozens of items a day, some of which are legit criminal investigations. No one loses sleep at night because no one knows they did anything that ruined these peoples’ lives.

      4. Just like cops don’t have quotas. Sure, nothing’s written into policy, but you know, you know, that promotions and pay hikes are based in a large degree on the amount of money an agent brings in. An agent who settles for the full amount or refuses to sign off on a seizure is going to get the stink eye from colleagues who see that money as the source of their next bonus or raise.

      5. At the end of the day these are human beings doing this stuff.

        Are we sure about this part? I mean, just look at Hillary…

      6. Like, literally, how could you sleep at night?

        You make the mistake of assuming that apparatchiki have moral scruples. They don’t.

        -jcr

  5. “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

    The Internal Revenue Service is a state-sponsored criminal syndicate.

    1. come after the IRS goons with a RICO lawsuit… conspiracy and racketeering. Hey, if it had been the Mafia or the Brotherhood pulling this kind of insanity, that’s precisely what gummit would do.

  6. That made no sense to Sowers. “I thought the government was supposed to protect me,” he said. “I didn’t think they were supposed to come out and try to put me out of business…I think the government ought to give my money back.”

    Protect you? No, no, friend. That’s a serious mistake. The government protects itself. What’s yours is theirs and what’s theirs is theirs. They can do whatever the hell they want. They’re the mother-f*cking government, bitch!

  7. And when she went to deposit it, the teller told her, ‘Well, next time, just keep it under $10,000, and I don’t have to fill out a form.’

    Said teller needs some financial education.

  8. King George was so out of control the colonials found him utterly revolting… and did so, throwing off his yoke of evil. This sort of insanity is at least as bad, if not worse, then anything George and his Boys ever did.

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