Little Rock businessman Stephen Parks and his wife, Anna Harper Parks, have filed a federal lawsuit accusing IRS agents of using "unreasonable" tactics that violated their civil rights during simultaneous "SWAT-team style" 2012 raids of his Sixth Street businesses and their Heights-area home.
The suit mirrors a civil-rights lawsuit that employees of the Mountain Pure bottled water distributorship in Little Rock filed against federal agents in 2013 and that is scheduled to be tried on March 30 before U.S. District Judge Kristine Baker.
Attorney Patrick Benca of Little Rock, who filed the lawsuit on behalf of the Parkses, said Tuesday that he was encouraged by Baker's refusal last year to dismiss the Mountain Pure lawsuit, which also alleges that federal agents used unnecessary "SWAT-team style" procedures while searching for evidence of nonviolent crimes against Mountain Pure's owner, John Stacks.
Baker agreed with the plaintiffs in the Mountain Pure case that the agents "had no reason to believe that Mr. Stacks or any employee of Mountain Pure was a drug dealer, gang member, violent criminal, or otherwise armed and dangerous."
The search led to wire-fraud and money-laundering charges against Stacks, who went to trial in October on allegations that he tried to defraud the U.S. Small Business Administration by claiming false property damage from a 2008 tornado. Jurors convicted him on seven charges, but U.S. District Judge Leon Holmes later threw out two of the convictions, citing insufficient evidence, and granted a retrial on the remaining five convictions. The retrial has been delayed while prosecutors appeal Holmes' rulings.
In the Parkses' case, it has been more than two years since the searches, and 18 months since U.S. District Judge Susan Webber Wright imposed a stay on the government's efforts to seize the couple's homes, vehicles and millions of dollars in cash and investment accounts, until it completes its criminal investigation. Meanwhile, no charges have been filed. First Assistant U.S. Attorney Patrick Harris said Tuesday that's because the matter is "still under investigation."
In addition to filing the civil-rights lawsuit Monday, Benca and attorney John Kennedy, also of Little Rock, last week asked Wright to lift the stay she imposed Sept. 13, 2013.
They noted that at the time of the stay, the government said it anticipated seeking indictments in the next several months. Since then, they said, a federal grand jury has reviewed the matter for a year while Stephen Parks' businesses, unable to use money in the seized accounts, "have been forced to find additional assets" to stay in business and pay employees. The couple still lives in the home at 2020 N. Spruce St.
The government hasn't yet responded to the motion.
The couple's lawsuit alleges that "25 to 40 federal and state law enforcement officials from multiple states," armed with search warrants authorizing them to look for evidence of money laundering or wire fraud, used over-the-top measures in searching the corporate headquarters of King Coal LLC, at both 912 and 914 W. Sixth St., and the Spruce Street home.
"The agents approached King Coal, LLC's offices and Mr. and Mrs. Stephen Kirl Parks' personal residence in a long convoy," according to the lawsuit. "They surrounded both buildings and blocked all exits. They were armed and equipped with bullet proof vests, military grade weapons, a battering ram, and other SWAT team equipment."
The suit alleges that the agents, some with weapons drawn, forced everyone inside the two businesses into one area, then confiscated all cellphones and interrogated some people without reading them their rights or letting them call a lawyer. It alleges that at both locations, the agents refused to let anyone leave until about three hours after the buildings were secure, and during that time, refused to allow anyone to make a telephone call or otherwise communicate with anyone off the premises.
Stephen Parks, wearing shorts and a T-shirt, was detained for six or seven hours in a back room of one of the businesses, the lawsuit says. It alleges that agents took advantage of his scant attire by deliberately turning the air conditioner to its lowest setting while interrogating him.
Anna Harper Parks, the suit alleges, "was forced out into the front yard of her residence in only a night gown with neighbors looking on." It says that though she was eventually allowed back inside and allowed to make a couple of phone calls, she was denied access to her attorney for about four hours and "had to request permission to move anywhere in her home, including the bathroom."
In the lawsuit, Benca and Kennedy further alleged that many items belonging to the couple, the coal businesses or employees were seized despite having "nothing to do with any potential economic crimes" and being "beyond the scope of the warrant." It identified some of those items as magazines, T-shirt orders, maps, coal samples, personal credit card and mortgage statements, "and, most shocking, personal medical records."
The suit alleges that the searches were unnecessary, as agents could have issued subpoenas to obtain any necessary documents.
"The only discernible reason for a SWAT type raid was publicity, and that objective was achieved," it alleges, noting, "The raid was publicized both on television and in newspapers."
Meanwhile, it says, "Customers who learned of the raid quit doing business with Anna Harper Parks' business," Estate Sales by Anna, and, "Companies who were set to engage in contracts with King Coal LLC and Ecotec Coal, LLC, ... declined to do business with them because of the raid."
It notes that "after almost four years of being under government investigation," the Parkses "can no longer support their businesses or themselves."
The suit seeks punitive damages and was assigned to Chief U.S. District Judge Brian Miller.
Metro on 03/18/2015