After fighting the federal government for over four years, a Maryland dairy farmer will finally be made whole. In a letter made public on Wednesday, the U.S. Department of Justice announced it will return $29,500 taken from Randy Sowers, after he and the Institute for Justice filed a petition to recover his seized cash. (To help other victims of IRS seizures, the Institute for Justice has resources and sample petitions available online.)
“This is exactly what we wanted,” Randy said in a statement. “I hope they give other people’s money back. And beyond that I just hope they quit taking people’s money.”
Randy, along with his wife Karen, has owned and operated South Mountain Creamery, a dairy farm in Middletown, Maryland, since 1981. For years, the two have sold their all-natural eggs, glass-bottled milk and buttery ice cream at farmer’s markets. But since their customers frequently paid in cash, Randy and Karen found themselves caught in the crosshairs of the Internal Revenue Service.
In February 2012, the IRS raided and emptied the couple’s bank account, seizing $62,936.04. Under “structuring” laws, which date back to the late 1980s, it is illegal to make a series of cash transactions under $10,000 to evade federal banking laws. Although Randy and Karen were never charged with structuring (or any other crime), a legal tool known as “civil forfeiture” allows law enforcement to take assets, even without alleging criminal wrongdoing.
Facing an uphill battle to retrieve their property, the couple decided to settle in May 2012, agreeing to forfeit $29,500 of their hard-earned money. But their fight in the court of public opinion was just beginning. Since the settlement, Randy has become a cause célèbre for forfeiture reform, appearing in media outlets nationwide. He even testified before Congress.
“They could throw my wife in jail for depositing cash in a bank? It was just unbelievable,” Randy said at a hearing before the House Ways and Means Oversight Subcommittee in May.
The Justice Department’s decision to return their seized cash could have major ramifications beyond Randy and Karen’s case. Earlier this month, the IRS began notifying more than 700 property owners who had their money seized under structuring laws that they too could file “petitions for remission or mitigation” to partially or fully recover what was forfeited. A 2015 report by the Institute for Justice revealed that the IRS had seized more than $43 million from over 600 owners, where the only suspected criminal activity was depositing or withdrawing cash in sub-$10,000 amounts.
“Today’s decision opens a way for other victims of the structuring laws to get back what’s rightfully theirs,” noted Robert Everett Johnson, an IJ attorney who represented Randy in his petition effort and has testified before Congress on structuring.
“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 added.
Already, the IRS has decided to return cash in 17 other structuring-seizure cases. One of those cases involved Ken Quran, a convenience store owner who lost more than $150,000 from an IRS raid in June 2014. But after the Institute for Justice learned of his case, Ken filed a petition with the IRS and was paid in full in February.
“It’s never too late to do the right thing,” Congressman Peter Roskam, chair of the House Ways and Means Oversight Subcommittee, told The Daily Signal. “I’m glad the IRS stepped up and finally gave Randy Sowers his money back. His case was an affront to justice and the government can never truly compensate him for the ordeal it put him through.”
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