The service station along the National Pike in Maryland was an immigrant’s prized small business. He was the one in overalls, his wife ran the office.
Just a few years after he opened it, zealous government investigators fishing for criminals seized all of the station’s money on a hunch — and wiped the family out.
No, they weren’t money launderers or terrorists or mobsters or tax evaders. The government found no evidence of criminal activity.
But after the investigation ended, after the gas station went under, and Kwon’s wife died amid the stress of it all, after he moved from his neighborhood in shame and the Internal Revenue Service changed its policy so no other small business would get steamrolled this way — the agency won’t give Kwon his money back.
That’s $59,117.47 the IRS is holding on to.
As recently as August — the last time Kwon, now 73, asked for his money back — the IRS said no.
He’s heartbroken that the country he loves is treating him this way.
Kwon was 32 when he came to the United States with his wife, son and daughter. He immediately enlisted in the Army. “When I came to the United States, I had to do something for the country,” said Kwon, who became a U.S. citizen.
After four years and an honorable discharge, he built his life as a solid American. “My whole life was work, work, work,” he said.
His nightmare began in 2011, when he found federal agents on his doorstep. They accused him of “structuring” — depositing money in increments of less than $10,000.
A 1970 law called the Bank Secrecy Act requires banks to report any transactions bigger than $10,000. This is why terrorist groups, organized crime, money launderers, tax cheats and other bad hombres deposit their cash in chunks less than $10,000. And it’s why banks are supposed to report people who make lots of cash deposits in smaller amounts, because it looks like they’re structuring their deposits to evade scrutiny.
These deposits are a crime only if they are done with the intention of staying beneath the radar. So the government has to know what’s in your heart to charge you. In lots of cases, the bank deposits are a trail of bread crumbs leading to bigger crimes.
That simply wasn’t the case with Kwon. He paid all his taxes, reported what had to be reported.
“Of all the cases I have worked on, this one stands out for me,” said attorney Edward Griffin, who is now fighting to help Kwon get his money back. “ I firmly believe that the government did wrong in choosing to prosecute Mr. Kwon and seize his assets. There was no good policy purpose for the prosecution. They did it for money, and they destroyed a good and honest man. It is shameful. Which is why I am still fighting for him.”
The IRS wouldn’t comment on Kwon’s specific case, but a spokesman noted that he pleaded guilty to the structuring charge.
When Kwon opened the gas station for business a decade ago, the teller at his local bank told him that deposits larger than $10,000 require a lot of paperwork, so she suggested he deposit less cash, but more frequently, he told me.
So he did that. This is all he was guilty of. Lots of other small-business owners operate the same way.
But around 2011, fervent investigations targeted scores of small businesses in Maryland. The best known of these was South Mountain Creamery, the Maryland farm that delivers eggs, dairy and produce to doorsteps throughout the D.C. area.
When the creamery was accused of structuring — farmer Randy Sowers also said his bank teller told him to keep the deposits under $10,000 to cut paperwork — the farm’s entire operating budget was seized.
The government eventually found out that the cows weren’t drug mules and the chickens weren’t gangsters and allowed Sowers to sign a settlement agreement to get back half of about $60,000 that the IRS took. Sowers did it because he needed that money to keep the farm going.
Another Maryland farmer, Calvin Taylor, had about $90,000 seized in 2011 after the government snagged him in a similar investigation. He couldn’t take the time to fight the charge, either, and agreed to a settlement where the government returned about $41,000.
Kwon went one step further, pleading guilty to the technicality of a structuring charge. Yes, he repeatedly deposited less than $10,000 cash, he reasoned. And yes, he did it to avoid paperwork. But the courts didn’t see what was missing in his heart — criminal intent.
The guilty plea killed his business, and he watched helplessly as his wife battled cancer and died. He still thinks her death was hastened by their legal troubles.
The farmers didn’t walk away from the fight. Backed by the libertarian Institute for Justice, Sowers, Taylor and others testified before Congress, petitioned and fought for three years to get their cash back. The IRS changed its guidelines in 2014, saying it would seize assets that came only from criminal activity. And less than a year later, the Justice Department announced it would follow suit.
That should mean that Kwon gets his money back too, right?
Griffin petitioned the IRS and Department of Justice again this summer, citing the 2014 change and Kwon’s clean record.
But Kwon “has not provided any additional information” in his case, wrote Claiborne Porter, the Justice Department’s acting principal deputy chief of money laundering and asset recovery, in the latest response to his remission request.
Even if the IRS finally returned his $59,117.47, Kwon said the damage can never be undone.
It wouldn’t get him his gas station back, it wouldn’t bring his wife back and it wouldn’t get him his honor back.
He was shamed, he said, when his neighbors were interviewed during the investigation.
“They saw me as Korean. As a veteran,” he said. “They were surprised to see me as a criminal. I will never forget that.”
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