Felon Farmers? Law Criminalizes Legitimate Businesses

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MIDDLETON, Md. -- With at least 4,500 federal laws existing today, some of the most unlikely people are finding themselves charged with crimes and breaking laws they didn't know existed.

Such is the case of two Maryland farm families who ran afoul of the "Bank Secrecy Act," which farmer Randy Sowers told CBN News he'd never heard of.

Sowers has been farming in the mid-region of Maryland for decades.

"I've been doing this for 31 years and I've put in most days 18 hours or more," he said.

Sowers decided to buck the trend of most farms these days and not work for a major agribusiness, but sell products from his South Mountain Creamery independently.

As products became more popular, the Sowers pulled in thousands of dollars in cash most weekends.

Then in February, the busy farm family discovered federal officials were targeting them with the Bank Secrecy Act, which originally ordered banks to report any cash deposits over $10,000.

The law was meant to nab some of the world's most nefarious characters.

"This law was designed to go after drug dealers, go after terrorists and gun-runners who would take proceeds from illegal sales and launder them through the banks," explained Paul Kamenar, a legal policy consultant who helped the Sowers with their case.

Watch the Entire Nation of Criminals Series:

Depositing a Crime

To dodge the law, criminals started salting their ill-gotten cash around in various banks in amounts of less than $10,000. In turn, the feds made that a crime, too, called "structuring" deposits.

Unfortunately, many innocent people also deposit large amounts of completely legal cash in more than one account, like checking, savings, a college fund, or retirement account.

"It's quite natural for members of the public to say, 'Well, look, if I've got a lot of cash, I'll spread it around,'" Kamenar insisted. "But in fact, if those cash deposits add up to more than $10,000, you are inadvertently violating the Bank Secrecy Act."

That's what the Sowers had been doing. David Watt, Sowers' attorney, explained why his client began doing that.

"One day [Randy] goes to his bank and the teller says, 'Hey, listen, if you don't have more than $10,000 to deposit, we the bank don't have to file this report,'" Sowers' attorney David Watt said.

After Sowers made dozens of deposits under $10,000, federal agents suddenly showed up at the farm with chilling news.

"They told me, 'We seized your account' -- $70,000 they pretty much took out of there," Sowers recalled.

Watt used this comparison to describe what happened to his client. He said imagine if the government wanted information from a farmer.

"They wanted to know how many cattle were being milked in a barn. And anytime you got over a hundred cows, you needed to file a report with the government," Watt explained.

To avoid paperwork, the farmer begins to make sure he never milks more than 100 cows in that barn.

"Then here comes the government and they seize all your cattle. And they say 'You are guilty of structuring your milking operation in order to avoid filing this report. And not only that, but as a civil forfeiture, we're going to keep half of your cattle,'" Watt continued.

Thousands of Dollars Lost

In Sowers' case, he ended up forfeiting much of his cash so he could settle with the government.

"Almost $30,000 they're keeping," he said. "I just couldn't believe that it was true, that they could do that, that it could be a felony, and they could throw me in prison for it."

"It was there on the paper: they could do it," Sowers said of the threat against him and his wife. "I mean, me going to jail is one thing, but throwing her in jail, for depositing money in the bank? I mean, it's unbelievable."

The Taylors, another farming family in Maryland, found themselves in a similar situation.

The federal government seized about $90,000 of their hard earned money. The Taylors didn't fight back and in the end, lost some $45,000.

Who Wants More Paperwork?

Kamenar said the Taylors' case was another instance of bank tellers unintentionally leading farmers astray.

"It was the bank teller telling both of them, 'Look, I have to fill out some paperwork if it's over $10,000.' And of course they would say, 'Well, we'll oblige you. Who wants more paperwork?'"

No one doubts the money the Sowers and Taylors deposited was earned in a legitimate, legal way.

Yet, federal officials decided to seize and keep tens of thousands of those dollars, for no other reason than the way the funds were deposited.

Sowers was originally going to get off with a slap on the wrist. But he talked to a Baltimore City Paper reporter about his case.

"After that, the U.S. attorney wasn't so accommodating to me anymore," Watt recalled. "He said, 'Well now that your client has talked to the press, I am going to have to move forward on this.'"

"So here we have a clear example not only of the government using its heavy hand going after honest, hard-working Americans. If you exercise your First Amendment right and complain about that, they're going to hammer you even more," Kamenar said.

Nation Under Arrest

Paul Rosenzweig, co-editor of a book about overcriminalization, One Nation Under Arrest, said he sees this sort of thing happen all the time to people who stand up to the government.

"They simply fail to bow and scrape in front of the government authorities in ways that make the government authorities say, 'Well, I'm going to take you down a peg,'" Rosenzweig said.

Kamenar added, "When there is a small businessman who dares assert his constitutional rights, there is this reaction by the bureaucrat to say 'I'll show you who's boss.'"

The Taylors decided it wouldn't be wise to speak to the press, including CBN News. But Sowers insists he won't be silenced.

"Because it's wrong what they did and people have to know it's wrong," Sowers said.

"We found out since that there's a lot of other people this has happened to, but they all just kind of crawled into a hole and don't say anything," Sowers added.

"And then the government can go ahead and get away with it because nobody says anything," he said.

The U.S. Attorney's office in Baltimore wouldn't grant CBN News an interview for this story, but sent a lengthy statement.

It said in part, "A seizure order may be approved by a federal judge only if there is probable cause to believe the law was violated."

"In most cases, the motive for structuring is to conceal money earned through criminal conduct, or to evade taxes on money earned lawfully," the statement continued.

"The U.S. Attorney is always willing to consider evidence that a defendant had no improper motive, but the defendant must present the evidence before the case is settled."

Read the entire U.S. Attorney's Office statement about Bank Secrecy Act here.

Small farm advocate Liz Reitzig, with the Farm Food Freedom Coalition, told CBN News it's a tragedy small farmers like the Sowers and Taylors are harassed because farming is one of the most productive sectors of the economy.

"They're providing economic prosperity to their rural community," she said. "They're creating jobs. They are producing something for the American economy. And they're the ones who are targeted."

Criminalizing the Innocent

Reitzig, who's also a home-schooling mother of five, said government regulation is now so overbearing and massive, any American can become a target.

"It's so broad now that they can criminalize anyone," she stated.

"Given how broad the scope of criminal law is today, in effect, everybody commits a crime at one point or another in the course of a month," Rosenzweig added.

He said there are about 300,000 regulations that implement the 4,500 federal laws -- and those regulations undermine citizens' trust and belief in law enforcement.

"The fundamental morality of criminal law is that evil exists, bad exists, and it should be punished," Rosenzweig told CBN News. "And now we are punishing as evil, as bad, that which in nobody's mind is objectively evil, wrong, bad."

"Agriculture is the heartbeat of America, and when they do this to farmers, they'll do it to anybody," Sowers warned.

*Originally aired July 17, 2012.

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Paul  Strand

Paul Strand

CBN News Washington Sr. Correspondent

As senior correspondent in CBN's Washington, D.C., bureau, Paul Strand has covered a variety of political and social issues, with an emphasis on defense, justice, and Congress.  Follow Paul on Twitter @PaulStrandCBN and "like" him at Facebook.com/PaulStrandCBN.