Shell game in New York City. If you hang around certain areas of New York City, or ride its subways long enough, you’ll be pushed to play a shell game. It looks easy enough–just find the pea under one of three thimbles that are quickly moved around. Of course, it’s all a con, and if you’re crazy enough to bet, you can lose significant amounts of money.

I mention the shell game because we can expect the L.A. County District Attorney, and its alphabet soup of supporting agencies, to employ the shell game strategy in beating up on Rawesome Food Club in advance of a trial, by dribbling out various accusations.

The latest government accusations suggest that the Rawesome Three are guilty of various tax infractions on top of the raw-milk-sales accusations. In addition, James Stewart, the Rawesome manager, is being accused of money “laundering” and Sharon Palmer of fraudulently re-selling food at farmers markets that she purchased elsewhere.  

The new charges have come to light because of motions made by the state against James Stewart, Sharon Palmer, and Victoria Bloch to apply a state law that prohibits defendants from using for bail any money obtained via criminal activity.

The state thus had to present to the judge its evidence.
The motions accuse each of the three defendants of failing to file state income tax returns for 2009. That’s not automatically a serious matter for someone who had little income, or simply isn’t well organized.

But for Stewart and Palmer, the alleged financial problems go beyond not filing a state income tax return. According to the motion for Stewart, “evidence gathered suggests that the defendants have not reported or underreported the income they derive from these illegal enterprises and that money laundering statutes may have been violated as well.”

In the case of Stewart, “A review of documents seized in search warrants executed on June 30, 2010, that were analyzed by the (CA) Franchise Tax Bureau, reveals that Stewart and his Rawesome business could have generated an estimated $526,464 annually. Neither Stewart, nor his Rawesome enterprise filed 2009 California Resident Income Tax Returns, which, if done with intent to evade paying tax, is a felony.”  

Specifically, the motion describes Stewart’s possible “‘laundering’ the financial proceeds of his business by using customers’ blank checks or money orders to pay his suppliers and thus not reporting or recording the income generated by the sale of food, dairy products, supplements, meats, and non-food items. He also has failed to report the income generated by the $25 annual fee charged to members in order to shop at Rawesome and a computer generated list indicates there may be as many as 2,917 members.”

As for Palmer, the state alleges she didn’t file her California income tax return for 2009, though she had at least $70,000 of bank deposits for the last four months of 2009.

And then there’s the matter previously alleged by Aajonus Vonderplanitz that Palmer sold food from outside sources as if it came from her farm. The state alleges that invoices and records “revealed that she was buying thousands of dollars worth of meat, poultry, and eggs from other vendors and reselling it at farmer’s markets and at Rawesome, despite claims and advertising that it was raised on her farm and not fed commercial feed.”

So how does the shell game analogy fit into any of this? First off, the new government charges are unrelated to the attack on and closing of Rawesome. If the government has a problem with the taxes paid or not paid by any of the defendants, it should be acting separately against the individuals on those matters. Same with the alleged outsourcing by Sharon Palmer of foods she sold at farmers markets and at Rawesome. The government should file charges of fraud against her.

No, the real issue is contained in this statement from Kelly Sakir, the L.A. County District Attorney lawyer filing the case against Stewart: “Stewart has none of the permits necessary to construct any type of structure on the property…Despite being ordered to close on June 30, 2010 until proper permits and licenses were obtained, James Stewart and/or his employees removed the posted closure notice and re-opened for business. Stewart and his attorney, Anthony Blain, appeared at the July 1, 2010 LACDPH hearing and said that they rejected its authority and jurisdiction and would reopen as usual and defy their orders.”

Rawesome operated as a private member-only organization because its members wanted access to foods unavailable via the permitted system. I have been told by Rawesome suppliers that Stewart used customers’ blank checks and money orders to pay the suppliers to be consistent with the leasing arrangements whereby members’ food came from farms that Rawesome had leasing agreements with. The members’ checks thus were used to pay the farmers.

The heart of the matter for a judge and jury is whether consumers can enter into such private leasing or herdshare arrangements that are similar to arrangements commonly used on a daily basis by all kinds of businesses in the U.S., to obtain their food.

Similarly, it’s up to members to decide if they want to deal with a farmer like Sharon Palmer amid allegations she has outsourced food. If she’s charged by the state with fraudulently outsourcing food at farmers markets, then that’s a matter between her and the state.

Rawesome volunteers overseeing the club are asking members to stay focused on the real issues. “We are a test case for the new powers given the FDA by the Food Safety Modernization Act which we believe are unconstitutional and whose jurisdiction does not apply to us as a private members food club.”

The Rawesome club is encouraging its members to not be distracted by the government’s shell game. “Our situation is one in which we members have to be highly organized, direct serious efforts toward fundraising, continue protesting and staying in the media, and stay positive. In-fighting is inappropriate. We need to close ranks.”

It’s tempting for all who support the principles Rawesome stands for to moan and groan that founders James Stewart and Aajonus Vonderplanitz screwed up on this or that matter, and isn’t it too bad we don’t have a better case on which to pin our food rights argument. The reality is that the opponents of food rights are choosing their targets, putting proponents on the defensive via cases like this or Traditional Foods Minnesota or Daniel Allgyer in Pennsylvania. We need to avoid the temptation to play the government’s shell game, and keep our attention on the fundamental matters of food rights.