Overzealous Prosecutors Cited for "Sloppy" Investigation That Put Small Business Out of Business

In a sad tale of yet another case of overzealous prosecutors, the USA Today reported on a story this week of a small business owner in Alabama that was driven to financial ruin by a former employee that embezzled funds from the company then allegedly told federal investigators that the business was selling military secrets to China in order to give herself a "get out of jail free card." Federal prosecutors indicted the business owner despite knowing that the information it had obtained came from an employee that had been arrested for fraud, and despite knowing that the business owner had done nothing illegal.

The judge presiding over the case called the investigation by prosecutors "sloppy" and dismissed all charges against the business owner. The judge also ordered that the government pay the owner's $364,000 legal bill. But all of that does not repair the reputation of the owner, restore his business, or put his employees back to work. Putting the business out of business was a "taking" in every sense of the word and the business owner should be fully compensated for both his economic and non-economic injuries.

Cases such as this are thankfully rare, but when rogue prosecutors unfairly victimize business owners, the business owners should be made whole. One can only imagine the agony suffered by a man who had worked for 5 or 6 years of his life to build a business, only to have his dreams shattered when armed federal law enforcement officials knocked on his door at 8:00 a.m. on a Tuesday in April, 2004. Prosecutors should be permitted the freedom to make good faith mistakes, but should be held to account in cases such as this, the Duke larosse team rape case, and the Aisenberg case, where prosecutors strayed far beyond what might otherwise be considered a good faith mistake.