"Bull____." That's how 61-year-old Stewart Dennis Sachs "repeatedly described" federal regulatory requirements for money-lenders during depositions in a 1990s lawsuit he brought against Regal Savings Bank, where he'd previously served as president, according to court documents. The Maryland Court of Appeals, in reviewing the case, said that Sachs described Regal's "environment as laissez-faire so long as money was being made," and concluded that Sachs was "openly contemptuous" of the federal regulations. Now the federal banking laws are biting Sachs back, hard. On March 18, the IRS Criminal Investigations Division filed a criminal complaint against Sachs in Maryland U.S. District Court, charging him with breaking an anti-money laundering statute in connection with cash repayments he received on a $151,000 loan his company – Owings Mills-based Worthington Alternative Capital – made to Robert T. Taylor, a 37-year-old from Aberdeen who has pleaded guilty in Pennsylvania federal court to supplying crack cocaine to a dealer in Harrisburg, Pa. Sachs has been very successful in the lending business, judging from his three-acre waterfront estate on the Eastern Shore's Tilghman Island, which is assessed at $1.5 million, according to real-estate records. He also holds a highly esteemed position in Baltimore's Jewish community, serving since 2011 as president of the 170-year-old Har Sinai Congregation, the longest-running Reform congregation in the U.S. – a position he publicizes on Worthington Alternative Capital's website (the picture above is from the "
" on the Har Sinai website). Last week, Sachs was quoted in the press about the recent agreement to make Har Sinai the future home of the Pumpkin Theatre, a longstanding children's theater. Messages left for Sachs and Har Sinai's rabbi, Benjamin Sharff, were not immediately returned. The U.S. Attorney's offices in Maryland and Pennsylvania also did not immediately respond to requests for comment. Sachs is accused of "structuring," the practice of evading IRS reporting requirements that kick in on cash transactions involving more than $10,000. When the amounts cross that threshold, banks are required to report them to federal authorities in "currency transaction reports," or CTRs. By depositing or withdrawing less than $10,000 at a time, even though more cash is actually involved in the transactions, account holders cause banks
to report them, which is a federal crime. In addition, when a person "engaged in a trade or business who receives cash of more than $10,000 in the course of that trade or business," the IRS website explains, then the person needs to report it, too, by submitting an IRS Form 8300. Not doing so is also a federal crime. If convicted, Sachs faces a maximum five-year prison sentence and up to a $250,000 fine. According to the criminal complaint filed March 18 by IRS criminal investigator Jeffrey Hostelly, Sachs was asked about the transactions with Taylor in March 2012, when he was visited by U.S. Drug Enforcement Administration agents, and the complaint indicates that he was cooperative and forthcoming, describing the "bricks" of cash Taylor brought to him and saying he understood that Taylor's cash was derived from buying and selling cars. Sachs explained that the cash had been deposited into his business account with Sun Trust Bank, and that "any CTRs filed on Taylor's payments would be in the name of Sachs or one of his employees," the complaint states. "Sachs added that it was not unusual in his everyday dealings to receive cash for payment." Though Sachs told the agents that he'd deposited the cash from Taylor into his bank account, and though the agents learned from a confidential informant that six of Taylor's seven repayments were made in increments of more than $10,000 – one of them was more than $42,000 - the agents could find no evidence that Sachs had filed any IRS Form 8300s to report the transactions. "In fact," the complaint states, "comprehensive queries conducted under the numerous individuals, entities, and address used or associated with Stewart Sachs were negative for
IRS Form 8300s being filed" by Sachs or Worthington Alternative Capital. (Emphasis in original.) The court docket in Sachs' case, which has been assigned to U.S. magistrate judge Timothy Sullivan, indicates he has not yet had his first appearance in court, and that he does not yet have a lawyer representing him. UPDATE: Here is a PDF of the specific complaint against Stewart Sachs:
. This post originally reported the wrong city where Robert T. Taylor was supplying drugs, and has been corrected.
regrets the error. UPDATE 2: Stewart Sachs' first name was misstated in the second-to-last paragraph. It has been corrected.