How much trouble would you guess a small business owner could get in for depositing perfectly legal cash revenue in his bank account? If you said “none at all—that’s a ridiculous question,” you’re wrong. He might actually be a federal felon.
The Bank Secrecy Act requires banks to report cash deposits of over $10,000 to help law enforcement catch drug dealers, terrorists, and other particularly dangerous criminals. So when these criminals started distributing their cash in smaller sums across different accounts and banks to avoid triggering these reports, Congress labeled this behavior “structuring deposits,” and made it a felony. Multiple cash deposits in separate accounts adding up to more than $10,000 can now land a person in federal prison and constitute grounds for a government seizure of the money.
This was a bit of a shock to Randy Sowers, a highly successful independent Maryland farmer. Federal agents knocked on his door one day to inform him that about $70,000 of his money had been seized and he and his wife were facing prison sentences. His crime was structuring deposits. The couple had taken the earnings from their farm’s produce to the bank, where they were told that depositing the cash in chunks less than $10,000 would avoid some federal government paperwork. After Mr. and Mrs. Sowers made many of the suggested smaller deposits, the local U.S. Attorney’s Office decided the activity was suspicious. Eventually, he was forced to settle with the government by surrendering nearly $30,000. He had never heard of the Bank Secrecy Act in his life. Read the full story and others like it here.
It would be difficult to come up with a better example of how America’s conception of crime has gone astray. Crime used to turn on culpability. A criminal was someone who had done something morally reprehensible that resulted in harm to another, or was at least calculated to have such a result. Today, however, the federal government can enforce over 10,000 regulatory violations with criminal sanctions. And a total lack of criminal intent, victims, or damage to society is often irrelevant when prosecuting crimes found in the ever-expanding federal criminal code. We have gotten to the point where the Sowers almost became felons by running errands.
For years, Justice Fellowship has advocated to stop this erosion of our criminal justice system by proposing several reforms in this area you can read about here. The fact is that overcriminalization like this wastes tax dollars, undermines public confidence in the criminal justice system, and in cases like the Sowers’, can even punish entirely innocent people.