Why Does The Government Hate Pizza?
May 27, 2016 (Mimesis Law) – A business sells a product people love. Some might call the product addictive. People line up for this product. They pay cash to buy it. They take it back to the privacy of their home and indulge in, what for many people, is a vice. The same family has run this business for many years and works primarily in cash.
When the federal government seizes all of the money from this business and sends an armed team of agents to interrogate these people, it looks like justice is served. Except for one small problem. This is not organized crime distributing drugs to Americans.
It’s a pizza bakery. They deal in carbs and sauce. Pies and sandwiches. America’s favorite Friday night fare. It seems the agents of the Internal Revenue Service and prosecutors from the Department of Justice have little respect for this venerable edible institution.
Vocatura Bakery is a restaurant in Norwich, Connecticut. The same family has run it for three generations. According to food critics, it serves the best pizza and grinders around. According to the federal government, it is a hotbed of federal financial crime and a target for civil forfeiture and criminal prosecution. With the help of the Institute for Justice, the Vocaturas are fighting back. Unfortunately, they are also starting to learn just how much power the federal government has.
The case started three years ago, when the IRS seized around $68,000 from the bakery’s bank accounts. The bakery was accused of “structuring,” a federal law that prevents people from depositing under $10,000 in cash if they are doing it to avoid federal financial reporting requirements.
If you deposit over $10,000 in cash, for any reason, your bank is supposed to rat you out to the feds. Armed with this knowledge, the feds can then…do something to you. You may be curious about what happens if you deposit less than $10,000 for innocent reasons. Well, let’s ask the Vocaturas.
In 2013, all of the money in the bakery’s bank account was seized. Then armed agents showed up to interrogate the Vocaturas. In case anyone thinks there was a valid reason for the jackbooted thugs to show up at a local bakery:
From the start, the government conducted the case as a fishing expedition, searching for evidence of some form of illegal activity at the bakery. The agents asked Larry, David and Frankie [the Vocatura brothers] questions about all manner of illegal activity, including whether they were selling drugs out of the delivery trucks, running a prostitution ring in the back of the bakery, or keeping guns on the premises. The agents, however, found no evidence of criminal activity during the raid…
Drugs, prostitution, guns. Gotta be something in there, right? No. As you may have suspected, the Vocaturas were dealing in nothing more dangerous than high-cal, carb-filled delicacies. But the federal government really doesn’t understand why people still use cash and it especially hates businesses that deal in cash.
While the structuring laws make it a crime to limit the size of a deposit with a specific purpose to conceal information from the government, businesses can have all manner of innocent reasons for depositing cash in amounts under $10,000. In this case, a bank employee called the bakery in 2007 to complain that an over-$10,000 cash deposit had required the bank to complete additional paperwork. On the understanding that bank employees did not like having to deal with this paperwork, the bakery limited the size of its weekly deposits to help the bank reduce red tape.
Because the business’s weekly cash revenue fluctuated above and below the $10,000 mark—and generally was below $10,000—it was a simple matter for the bakery to hold back cash to avoid going over that $10,000 threshold. No one at the bakery had any idea that these weekly bank deposits would lead the IRS to accuse Vocatura’s Bakery of a federal crime.
The bakery was depositing under $10,000 for two reasons. It wanted to help its friendly local bank avoid some paperwork. And sometimes it didn’t earn over $10,000 before its deposit. That seems pretty legitimate. A simple explanation and the feds can apologize and go back to their regularly scheduled business.
Not so much. A motion filed earlier this week by the bakery seeks the return of the money. It also reveals exactly what the Vocaturas have dealt with over the last few years. First, the feds did nothing. They already have the bakery’s money, so time is on their side. That’s how the forfeiture game is played. The government takes the money and then takes its sweet time grinding you through the court system.
After more than a year of no action, the feds doubled down on the Vocatura brothers. Instead of admitting there was a better use of taxpayer dollars than chasing the local bakers, they decided to offer a deal. That deal involved the brothers pleading guilty to structuring, a crime that had not yet been charged. They would give up the $68,000 along with an additional $160,000. They would waive any constitutional challenges to the forfeitures. Oh, and they would get 3 to 4 years in federal prison.
Aha! Finally busted doing something wrong. What did the feds find? Was it drugs? Guns? Hookers? We knew all along these bakers were up to something. Just kidding. Still no crimes. Again, none of law enforcement’s actions have been based on crimes committed by the Vocaturas. After this much time, there is little doubt the federal prosecutors and all of their resources would have uncovered criminal activity if there was any to be found. Instead, they have decided a routine business activity should allow them to destroy the Vocaturas’ lives to the tune of a quarter million dollars and years in a federal prison.
The Vocaturas turned down the plea offer to a crime they weren’t charged with. In response, the federal government issued a sweeping grand jury subpoena seeking years of detailed financial records from the bakery. Not only are prosecutors fishing for evidence of anything to support their actions, they are seeking to retroactively justify the seizure.
Ironically, the government claims it has adopted numerous polices against this exact activity. In October of 2014 the IRS decided to lay off of people suspected of structuring but not involved in some real other criminal activity. The following year, the Department of Justice issued a similar policy directive. As a more general matter, civil asset forfeiture looked like it was beginning to fall out of favor at the beginning of this year.
But no. That applies to new cases. The government can still screw people involved in the old cases. Like the Vocaturas. All of those government policies are lip service, not real change.
Is this how the citizens want their money spent? Running innocent people into the ground? For what purpose? Think about what the Vocaturas are accused of doing. There is not a single reason to prosecute them or take their money. There is no hint this witch hunt is anything more than an arrogant flexing of the government’s muscle.
Assistant United States Attorney Peter Jongbloed, who is leading this campaign of harassment, should be ashamed of himself. More importantly, the citizens of our country should be ashamed of him. Look at his title. He is an attorney for the United States of America. It’s time for us to demand he, and anyone else involved in civil forfeiture, start acting like it.