Feds Sue to Keep South Mountain Creamery’s “Structured” Cash Deposits
The owners of South Mountain Creamery (SMC), the Frederick County dairy farm and mainstay of Baltimore’s farmers markets, are facing a new phase of legal trouble with the Maryland U.S. Attorney’s Office (MD-USAO).
As City Paper first reported on Wednesday, the bank account where SMC deposits its farmers-market proceeds was emptied in late February, pursuant to a federal warrant for apparent violations of an anti-money-laundering statute known as “structuring,” in which cash deposits are illegally made in increments of $10,000 or less in order to evade bank-reporting requirements. Yesterday, MD-USAO filed a civil-forfeiture action in U.S. District Court, seeking to keep nearly $63,000 of the nearly $70,000 seized. The latest development was first reported today by the Frederick News-Post.
The forfeiture complaint, signed by assistant U.S. attorney Stefan Cassella–who literally wrote the book on federal forfeiture law–includes an account of what SMC co-owner Randy Sowers told law enforcers in an interview on Feb. 29. He said, the complaint recounts, that “during the farmers’ market ‘season,’ his weekly cash receipts were on the order of $12,000 to $14,000,” yet “he kept his cash deposits under $10,000 intentionally so as not to ‘throw up red flags.’” He also told the agents that “he was advised by a teller at the bank that the deposit of more than $10,000 in cash would lead to the filing of a form, and that he decided from that point forward not to make deposits in excess of $10,000,” according to the complaint.
As a result of Sowers’ admissions, along with bank and SMC records showing a pattern of cash transactions under $10,000 despite greater amounts being earned at each weeks’ farmers markets, Cassella’s complaint states that the facts support “a reasonable belief” that there was “an intentional scheme or plan to hold back cash receipts” in order to evade the federal bank-reporting requirements.
Sowers’ attorney, David Watt, has advised his client not to talk with City Paper about the situation, and Watt did not immediately return calls for comment. As a matter of policy, MD-USAO does not comment on pending court matters.