Drug Manufacturing in Iowa

Drug manufacturing involves the making of drugs with the intent of distributing them. This means that a person who is doing drug manufacturing is making huge quantities of drugs with the express intent to sell them. According to the laws in Iowa, one does not necessarily have to be actually making drugs to be manufacturing drugs. Instead, even having the substances and items that are used to manufacture drugs is considered drug manufacturing.

The increase in synthetic drugs is the main reason why drug manufacturing has increased so much in Iowa. There are people who manufacture illegally to sell to other people without the necessary authorization to do so, including prescription drugs. In the case one is arrested for drug manufacturing, it is important to get a professional drug crime lawyer in Iowa. Such a lawyer will be able to argue the case using the necessary laws that are put into place.  

The main reason why drug manufacturing is strictly guided by the laws in Iowa is that there are people who manufacture illegal drugs that are much more dangerous than even the drugs they are supposed to be. Such people manufacture drugs such as methamphetamines that are known to cause negative effects on their users.

Such drugs are not checked by the regulating authorities and could even be more dangerous if the person making them doesn’t use the “standard” materials. Because of these reasons, the laws for people who do the manufacturing illegally are very strict. A person caught manufacturing drugs in Iowa can be jailed for up to ten years. These laws are meant to protect the residents from the negative effects of the illegal and substandard drugs they produce.  

Besides the people who perform drug manufacturing illegally in Iowa, there are others who are accused but are not guilty. Such people are caught because some of the things used to manufacture the illegal drugs are legal and are used in day to day activities. If a person is caught with some of these things on the street or at home, one can be charged with drug manufacturing. In such a situation, it is paramount to hire a professional drug crime lawyer in Iowa for the lawyer will be able to argue the case and prove the innocence of the arrested person.  

There are also stores that sell some of the components used to manufacture drugs. But such stores usually sell such components for other uses. This means that such stores do not have any idea that the people who buy the items intend to use them to manufacture drugs. But if the court establishes that there is a store that sells these items knowingly, such a store can be charged in a court. This makes it the responsibility of the stores in Iowa to make sure that the people who buy certain items do not use the items to make drugs – which is why there are certain things that seem strange to be carded for at your local big box store, but it happens to prevent such manufacturing. 

The main reason why it is important to deal with drug manufacturing in Iowa is that people who use the drugs experience different types of negative side effects. This is because the users of these drugs hope to get high and they and up being addicted, potentially ruining their lives. After being addicted, it becomes very hard to stop the addiction. The crime rate also rises because most users steal to get money to buy drugs. Competition in selling of these drugs also causes safety concerns. Consequently, the state government keeps on dealing with the sellers and manufacturers of the drugs to the fullest extent of the law. 

When convicted with drug manufacturing in Iowa, one is usually arrested together with the evidence. After being arrested, one is kept in the custody of the police and then taken to a court of law within the shortest time possible. In the court one gets an opportunity of explaining why he or she has been arrested. The evidence or a portion of the evidence is brought before the court and the arresting officers are also requested to testify for the judge so that he or she knows all of the details. It is highly recommended for the accused person to get a professional drug crime lawyer in Iowa. This is because the lawyer has a better understanding of the various drug laws. Depending on the evidence produced, the accused person will be jailed, fined or set free.  

It is evident that the drug manufacturing laws are very helpful in Iowa. They reduce the quantity of illegal drugs which are sold and used in this area and it also prohibits people who do not have the necessary skills and equipment from making the drugs. The law also protects people who might be caught by mistake, especially those who are caught with legal items which are used to manufacture the illegal drugs. Therefore, understanding the drug laws in Iowa is helpful and one should get a professional lawyer in case one is caught with a drug manufacturing offense.  



Protection of Witnesses in a Drug Case

It may well not come as a revelation to many that supposed drugs traffickers, who are facing a lengthy incarceration, will go to great lengths to stop their own drug cases and do so by spreading fear and alarm through the use of intimidating means. The witnesses will need some assurance of their safety. They should be protected both in their areas of residence and when appearing in the court of law. Also, their families and friends should equally be protected as drug case is more sensitive and drug traffickers will use every mean to intimidate them.  

There various types of intimidations a witness may experience in the course of their work. They include: 

-Implicit threats 

-Property damage 

-Courtroom intimidation 

-Physical violence 



Drug dealers may try all means to ensure that witness is intimidated. They may assault, brutalize, isolate from public or even kill one of the witnesses’ family members. To avoid these situations, certain measures should be taken by the government. The law is very clear on Protection of Witnesses in a Drug case. What witness protection allows, in any situation in which the evidence that somebody is to give is crucial at a drug case matter, is peace of mind through the elimination of their fears and anxieties, allowing for an enhanced capacity for recalling the essential facts accurately.

Something a large number of witnesses often find this hard to do with the risk of violence or harassment hanging over them. A private security company that supplies a witness protection service will provide protection officers who will facilitate 24-hour security and put into action risk-reducing standard operating procedures that will benefit all those acting on behalf of the prosecution, inclusive of Drug Crime Attorney and key witnesses; those that are exposed or have endured threats from those who seek to interfere with their drug case.  


A properly planned and managed witness protection service will lessen the risk to those key people involved on the prosecution side. It will not only protect a client, but produce a sense of security and assurance within those involved, which allows the witnesses to recall their evidence more precisely.  

If you have a court appearance pending and believe you need a witness protection service, then make sure that any security company you approach can and will fulfil the following basic criteria: 

  • The provision of 24-hour protection that includes the leading up to, during and posts court appearance.  
  • A facility to provide safe houses and secure locations.  
  • That you will be safely transported to and from the court.  
  • That they coordinate with the court security staff to ensure understanding and maximum support.  
  • Supply personnel with police backgrounds, who are familiar with court procedure and an understanding of the requirements of the witnesses and their families.  

On that last point, specialists should have plenty of prior experience and be required to have provided close protection in drug case and courts to both Drug Crime Attorney and witnesses and they should place their importance on ensuring that clients are put at ease through feeling that they are safe and protected; so that they are ready to give good quality evidence on that particular drug case. There is no denying that it is a sensitive matter that requires the very best a close protection officer has to offer.  

Should they fall short in any or all of these, then move on and keep looking because you cannot put a price on the protection and safety of yourself or your family.  

One other matter that needs consideration is that the larger security companies may not share the same emphasis on client focus as the smaller firms and may not have the same quality of officer.  

The question has to be asked; can a corporation that provides work for thousands of employees really offer a quality of service that is comparable with a perceived lesser company whose staff are all handpicked and chosen for the knowledge and experience?  

It is an incorrect supposition held by many people that because a corporation has a large workforce that they offer a better-quality service, it is our experience that the precise opposite applies. Smaller security companies focus on hiring and working with only those they trust implicitly and not all and sundry.  


EEOC Issues “Best Practices” Guidance for Employers

The Equal Employment Opportunity Commission (“EEOC”) is the federal agency charged with enforcement of federal discrimination laws such as Title VII and the ADA. Today a Task Force commissioned by the EEOC released an extensive document entitled “Best Practices of Private Sector Employers” outlining its findings and providing significant recommendations for all employers.

The 183 page document reflects the results of many individuals and companies and months of research into the inner workings of American companies both large and small.  The Task Force divided its study into six major groupings:  (1) recruitment and hiring practices; (2) promotion and career advancement; (3) terms and conditions; (4) termination and downsizing; (5) alternative dispute resolution and (6) other. 

The Task Force noted that, in order to qualify as a “best practice”, the practice should promote equal employment opportunity and address one or more barriers that adversely impact equal employment opportunity.  The practice must also involve a serious commitment from management to the EEO objectives and must involve management accountability for equal employment opportunity.  The practice must essentially embrace fairness to all employees and must be implemented conscientiously and should show noteworthy results.

In attempting to obtain data from a statistically significant slice of the American workplace, the Task Force sent letters to any employer with 25,000 or more employees.  In addition to numerous surveys sent to associations representing employers, employees and civil rights groups, the Task Force sent letters to each member of the Senate Labor and Human Resources Committee and the House Committee on Education and the Workforce asking for input on all matters under Task force consideration.

All employers are well advised to review this detailed analysis of the types of practices this governmental agency would consider to be acceptable in the area of EEO compliance.  It provides many suggestions and recommendations applicable to many businesses. 

Should You Hire a Dallas Immigration Lawyer

Immigration to the United States is great, but the question of staying in the country comes up and that can be a bear to figure out.  Immigration laws, are complex and are not easily understood.  Most times, only a trained immigration lawyer will be able to help.  Many people misrepresent themselves, so make sure your search for a Dallas immigration lawyer is thorough.

Make sure that you have the right lawyer, a lawyer that can actually solve your problem.  You are a unique person, not just a number.  What is very important is your concerns and fears, and you need a lawyer that can empathize with you and give it to  you straight, without alot of lawyer talk that can confuse you.

That being said, it is not always easy to pick a good immigration lawyer.  There are many who act like they have knowledge, but are really inexperienced.  Just because someone has a law degree, doesn’t mean that they are a skilled practitioner. Someone who doesn’t know what they are doing, can get you in a lot of trouble, and cause alot of havoc.

When checking out your potential Dallas immigration lawyer, here are some things you need to look for.  Make sure your lawyer is liscenced and able to practice in the US, and is in good standing with the Dallas City, and Texas State Bar. It sounds like common sense, but there are many who have unwittingly ended up working with those not registered or have good standing with the State Bar.

Make sure your lawyer is ethical and practices with a good track record. If you can’t get him to give you references, you should leave. Make sure your lawyer practices immigration law. If they focus on another area of law, you should really think about whether or not you really need this.

They should also give you a clear-cut answer on what it’s going to cost you to deal with them. And last, but not least, they should not give you a guarantee of success but simply indicate they will work for you and with you to do the best they can given the system.

There is no specific requirement for having an lawyer prepare those docuements for you, but not doing so can set you back months or years.

This can be a very exciting time for you if you are working to become a legal citizen of the United States. If you are in Dallas and you need to make this happen, make sure you pick a really good Dallas immigration Lawyer that will help to get you the things you need, and will represent you in the best light.


This document sets out the basis on which Millar Wyslobicky Kreklewetz LLP (“MWK” or “we”) will agree to provide services to our clients. Accordingly, if you decide to retain MWK as your legal counsel, our agreement will be as set out below (“our Agreement”).

MWK’s Fees for Services Rendered

Under our Agreement, we will charge you a fee for our services that will be determined in a manner that is consistent with the Law Society of Upper Canada rules, and that will represent a fair and reasonable fee, based on a number of factors, including but not limited to the time and effort involved, the complexity of the matter, the amounts in issue, the overall results obtained, and the degree to which special skills and expertise are involved in dealing with the matter.

In addition to our fees, we will charge you for any disbursements which we incur on your behalf, as well as all applicable GST – which may apply to both fees and disbursements.

Where we choose to base our fee entirely on the time spent, please be advised that our hourly rates currently range from $175 per hour for our most junior associates, to $650 for our most senior partners.
Where appropriate, we attempt to have junior lawyers involved, on a supervised basis, so that the most cost effective service can be provided. If you have particular requirements in this regard, you will raise these with us at the outset of our Agreement.

Retainer Policy

MWK’s usual policy to request a retainer in advance from all new clients, and in respect of any matters where it is likely that substantial services will be required to be provided. MWK will base the amount of any retainer requested on our estimate of the time and effort that will be initially required to deal with the preliminary aspects of any particular matter. Where appropriate, we may notify you and request that the retainer amount be further replenished, which may be required before additional steps are taken by us, and we reserve the right under our Agreement to cease all work on your file until such a replenishment has been made.

Where MWK requests a retainer from you, the provision of that retainer by you to us shall constitute your acceptance of our Agreement. Where we choose not to require a retainer in advance for our services to you, the provision by you of any information or documentation to us shall constitute your acceptance of our Agreement.

Statements of Account & Unpaid Balances

Statements of Account will be issued to you periodically throughout the term of our engagement, and are payable upon receipt. To the extent retainer funds are held by us in trust at the time the Statements of Account are issued, those funds will be applied directly to the Statements of Account. Any balance remaining unpaid more than thirty days after the Statement date will bear interest from the Statement date to the date of payment, currently at the rate of 1% per month.

If your account with us remains outstanding for a period of 15 days from date of issuance, we reserve the right under our Agreement to cease all work on your file.

Legal Services Provided to You

As client of MWK, you can expect that our legal services will be performed on a professional and competent basis, and in a timely manner. If you have particular requirements in this regard, you will raise these with us at the outset of our Agreement, so that the appropriate resources can be directed to your particular needs.

We reserve the right to determine how the legal services provided to you are performed, and by whom they are performed.

If you are a non-resident of Canada, and should it become necessary for us to visit you or your facilities outside of Canada, you agree that the purpose of our visits shall be to obtain information only, and that as Canadian counsel, all of our legal services will be performed in Canada.


Our Agreement constitutes the entire agreement between us and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral.

No amendment or waiver of any provision of our Agreement shall be binding on either of us unless consented to in writing by both of us.

Our Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

In the event you feel the need to bring suit against us, you agree to bring such suit in the Ontario Courts.


Recent Customs & Trade Developments


Some of the most significant current developments in customs law have centered on Canada’s customs valuation rules, and range from the newly enacted “purchaser in Canada” regulation, which imposes an additional pre-requisite to using the transaction value method, to the recently decided royalties cases.


Certain royalties and license fees are potentially dutiable under the transaction value method as an addition to the price paid for the imported goods.  Royalties have been the subject of intense audit and assessment activities by the CCRA.  Not surprisingly, there have been several high profile cases involving the scope of the royalties addition, with the Supreme Court of Canada  recently considering the issue in the Mattel Canada case.  Based on the Supreme Court’s decision, royalties that are paid to an unrelated licensor are not subject to duty unless failure to pay the royalty enables the manufacturer to effectively repudiate the contract by refusing to sell the goods to the Canadian purchaser.


Administrative Monetary Penalties

Customs has recently announced plans to implement an Administrative Monetary Penalty System (AMPS).  AMPS is to supplement the new penalty structure under section 109.11 and the new “informed compliance” provisions under the Customs Act which requires importers to correct declarations where they have “reason to believe” that their declarations are incorrect.  Under AMPS, civil penalties will be expanded and will be used as the principal means of sanctioning customs contraventions.  Seizures and criminal sanctions will only be used for the most serious offenses.  AMPS is slated to come into force in late October, 2001.

SIMA Changes

Several amendments have recently been made to SIMA, paralleling the Canadian system more closely with that of the United States.  Other major changes include the further bifurcation of the CCRA and CITT tasks.  Now, once an investigation has been initiated by the CCRA, the CITT now assumes responsibility for the preliminary investigation of injury.  For interim and expiry reviews, the CCRA will now be formally involved in addressing the anti-dumping and subsidization aspects (e.g., whether dumping/subsidization has continued, whether there is a likelihood of resumption etc.).  Other changes include the expansion of the public interest provisions in SIMA, and the requirement for the CITT to cumulate the effects of dumping from more than one country and consider an exporter’s pricing practices in third countries, when determining whether the domestic industry has suffered, or is likely to suffer, material injury.  

Never Too Young To Sue: New Jersey Affirms Age Discrimination Lawsuits For The Young

Age discrimination lawsuits are no longer the exclusive preserve of the maturing workforce in New Jersey. This was confirmed by the State’s Supreme Court in the matter of Bergen Commercial v. Bank Sisler, 1999 N.J. LEXIS 58 (Feb. 24, 1999), which held that New Jersey’s Law Against Discrimination (“LAD”) is broad enough to permit reverse age discrimination cases to be brought by young employees.

The plaintiff in that case was 25 years old when he was hired in 1994 by the defendant Bank for the position of vice president. Shortly after his hire, the plaintiff alleged that the Bank’s Chairman was “shocked” to learn of the plaintiff’s youth during a discussion over lunch. Approximately five months later, the plaintiff was terminated from his position. He then sued the Bank and claimed that his termination was improperly based upon his young age.

The trial court initially dismissed the action, based upon its interpretation of the LAD as intended only to apply to workers age 40 and older. This interpretation is consistent with the federal Age Discrimination in Employment Act, which prohibits age-based discrimination only to those workers at least 40 years of age. However, New Jersey’s Appellate Division disagreed and reversed the lower court’s decision in 1998.

The Supreme Court affirmed the reversal of the lower court’s decision based upon its expansive interpretation of the LAD. The Court found it “entirely consistent with the underlying purposes of the Law Against Discrimination” to presume that New Jersey’s Legislature intended the LAD to protect all employees of the State, regardless of age, because the LAD lacks a minimum qualifying age to trigger the law’s protection. Specifically, the Supreme Court held that “the LAD’s prohibition against age discrimination is broad enough to accommodate [a] claim of age discrimination” based on youth because the statute “contains no such express limitation” on age as those contained within the LAD’s federal equivalent.

While the obvious repercussions for New Jersey employers will be profound, the Supreme Court rejected the notion that its holding “will undermine protections for older workers and force employers to fill vacancies for high-level executive positions with unworldly 18-year-old applicants.” The Court was also careful not to alter or modify New Jersey’s heightened standard for “reverse discrimination” cases so that a young plaintiff — as a member of the historically unprotected majority — must prove “background circumstances supporting the suspicion that the defendant is the unusual employer who discriminates against the majority.” Nonetheless, the decision will only further burden employers in the State and opens the door for wholesale claims of age discrimination, regardless of the employee’s actual age.


 Over 100 million Americans could participate in first ever lawyer-lovefest, critics sure to be angered
BOCA RATON, FLORIDA, – “Mark your calendars for the first Friday of every November from now on. “National I Love My Lawyer Day” will be one of the most anticipated and talked about days of the year,” said Nader Anise, National President of American Lawyers Public Image Association (ALPIA).  

This year, “National I Love My Lawyer Day” falls on Friday, November 2. On this day, not only is lawyer bashing a big no-no and considered in poor taste, but the public is also asked to take a few minutes out of their day to let their lawyers know how much they love and appreciate them. “Call your lawyer and say happy lawyer’s day or thanks for a great job, or even send him or her a gift or flowers,” Anise said. “Lawyers are always painted as the bad guy, even when they do their job well. We’re hoping this day will spark public interest in commending lawyers rather than condemning them.” “This is a personal crusade,” Anise added. 

As a show of appreciation by lawyers, ALPIA is asking every US lawyer to give back on November 2: either perform at least one hour of pro-bono work or donate the income from one billable hour to Childreach, a non-profit organization that does extraordinary work for underprivileged children around the world. 

“National I Love My Lawyer Day” was declared when the ALPIA Board passed a national resolution earlier this year. Annually, it will be a national day of lawyer appreciation in which the public, lawyers, American Bar Association, 50 State Bar Associations and other legal organizations may participate. 

ALPIA is a national organization committed to promoting a positive public image of lawyers. Its most recent battle was against NBC television in which ALPIA played a leading role in running the show First Years off the air. NBC featured ALPIA repeatedly in promos during primetime and also during Access Hollywood. ALPIA’s founder and National President, Nader Anise, has gained national media attention due to the controversial nature of his crusade.

Crime-Fraud Exception to Attorney-Client Privilege


In In re Campbell, 13 Fla. Law W. Fed. B183 (Bankr. M.D. Fla. 2000), debtor filed an objection to creditor’s motion to compel production of documents filed against debtor’s counsel. Debtor asserted the attorney-client privilege, attorney work product. The Creditor alleged that non-exempt assets were converted to exempt assets with the intent to hinder, delay or defraud creditor and the privilege fails under the crime-fraud exception to the privilege. Id.

The crime-fraud exception is associated with a client who consults a lawyer for advice for a fraudulent undertaking. Id. at 10, See In re Warner, 87 B.R. 199 (Bankr. M.D. Fla. 1988). If advice is obtained with respect to past crimes or misconduct then it is privileged. However, advice sought in contemplation of commission, prior to commission, or during commission of a fraudulent undertaking prior to the commission of a fraudulent event then it is not privileged. Id. at 10.

To invoke the crime-fraud exception to the attorney-client privilege a two part test must be met. First, a party must provide, “prima facie evidence showing that the client was engaged in criminal or fraudulent conduct when he sought the advice of counsel, that he was planning such conduct when he sought the advice of counsel, or that he committed a crime or fraud subsequent to receiving the benefit of counsel’s advice” Campbell, 13 Law. Law W. Fed. B183, 9-10 citing In re Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226 (11th Cir. 1987). Second, the party must show that the attorney’s advice was obtained in furtherance of the criminal or fraudulent activity or closely related to it. id.

The Court in Campbell, found that the crime-fraud exception to the attorney-client privilege applied. The Creditor did raise sufficient inferences that the transfer may have been fraudulent. The Bankruptcy Court concluded that the Creditor was entitled to certain documents that might be part of a fraudulent plan

Pension Funds and IRAs

1. General Rule – Anti-alienation Provision

Section 206(d)(1) of Title I of ERISA (the “anti-alienation provision”) provides that: “[e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated.”  The corresponding tax provision is Code §401(a)(13) which provides that  “[a] trust shall not constitute a qualified trust under this Section unless the plan of which such trust is a part provides that benefits provided under the plan may not be assigned or alienated.”  ERISA provides a means of enforcing its anti-alienation provision.

2. Non- Bankruptcy Cases

Outside the bankruptcy arena, Section 206(d)(1) of ERISA generally protects pension funds in an ERISA pension plan from the claims of creditors.  See Guidry v. Sheet Metal Workers Pension Fund, 493 U.S. 365 (1990), holding that a labor union may not impose a constructive trust on pension benefits of a union official who breached fiduciary duties and embezzled funds.

3. Bankruptcy Cases

In the bankruptcy arena, the Supreme Court of the United States, in Patterson v. Shumate, 112 S.Ct. 2242 (1992), held that assets in an “ERISA-qualified” plan are excluded from the bankruptcy estate. The basis for the holding is Bankruptcy Code §541(c)(2), which excludes from the bankruptcy estate a beneficial interest of the debtor in a trust where the trust contains a restriction on the transfer of the beneficial interest which is “enforceable under applicable nonbankruptcy law.”


While it appears clear from a careful reading of Patterson that the enforceable anti-alienation provision upon which the decision is premised is ERISA Section 206(d)(1), the plan involved in Patterson was also tax-qualified. The issue which has arisen since Patterson is the meaning of the undefined term “ERISA-qualified”.  One line of cases follows the rule set forth in In re Hall, 151 Bankr. 412 (Bankr. W.D. Mich. 1993), which requires a plan to be subject to Section 206(d)(1) of ERISA and to also be in compliance with all IRS requirements (“tax-qualified”) in order to obtain the protection provided by Patterson.  The other line of cases follows In re Hanes, 162 Bankr. 733 (Bankr. E.D. Va. 1994), and holds that a plan which is subject to the ERISA anti-alienation provision is protected under Patterson regardless of whether the plan is tax qualified.  A Florida bankruptcy case which considers the issue, In re Harris, 188 Bankr. 444 (Bankr. M.D.Fla.1995), follows Hall.


Plans which are not subject to Title I of ERISA, and therefore are not subject to the above-cited anti-alienation provision, receive no benefit from the Patterson decision. Plans in this category include plans in which the only participants are the shareholders, partners, or sole proprietor and his or her spouse. See e.g., In re Witwer, 148 Bankr. 930 (Bankr. C.D. Cal. 1992).  Witner was followed in In Re Fernandez, 236 B.R. 483 (Bankr. M.D. Fla. 1999), which held that if a plan is not operated within ERISA requirements, it is not exempt.


Other types of plans which are not subject to Title I of ERISA include excess benefit plans, governmental plans, most church plans, most IRAs and some SEP/IRAs.

4. Purpose


Section 522(d)(10((E) of the Bankruptcy Code provides an exemption for certain retirement funds to the extent the funds are “reasonably necessary for the support of the debtor and any dependent of the debtor.”  The courts are split as to whether §522(d)(E)(10) is applicable to IRA accounts.  (E.g., Carmichael v. Osherow (In re Carmichael), 100 F.3d 375 (5th Cir. 1996); In re Link, 172 Bankr. 707 (Bankr. D. Mass. 1992), holding that §522(d)(E)(10) applies to IRA accounts; In re Moss, 143 Bankr. 465 (Bankr. W.D.Mich. 1992), holding that IRAs are not within the scope of §522(d)(E)(10)) Additionally, since a factual determination must be made as to what portion of a debtor’s retirement fund or IRA account falls within this exemption, §522(d)(E)(10) cannot be relied upon to provide full protection for non-ERISA plans.

5. State Protection


Retirement benefits which are not protected by the Patterson rule may be protected by state statutes, such as Fla. Stat. §222.21, which provide creditor protection for tax qualified retirement plans, IRAs and SEPs. While there has been much litigation as to whether ERISA preempts such state statutes, the issue has been resolved in favor of Fla. Stat. §222.21, by the Eleventh Circuit Court of Appeal in Schlein v. Mills (In re Schlein), 8 F.3d 745 (11th Cir. 1993).

An example of the protection afforded by Fla. Stat. §222.21 is illustrated in the recent case of In re Groff, 234 B.R. 153 (Bankr. M.D. Fla. 1999). The debtor, as president, sole director and 85% shareholder of “RMGA”, an Indiana corporation, sponsored a Salary Reduction Simplified Employee Agreement (“SARSEP”) governed by Code §408(k). The debtor’s participation in the plan terminated in 1995, at which time he rolled over his entire SARSEP account into an individual retirement account. At the time he filed his bankruptcy petition the account balance was more than $400,000.

The court, citing In re Francisco, 204 B.R. 799 (Bankr. M.D. Fla.1996) and In re Schlein, supra, made short shrift of the Trustee’s spurious argument that Fla. Stat. §222.21 does not include IRAs or, alternatively, that §222.21 is preempted by ERISA. The more interesting argument of the Trustee was that the IRA was not qualified under Code §408, which is a prerequisite to §222.21 protection, because the funds were transferred from a non-qualified plan. See In re Banderas, 236 B.R. 837 (Bankr. M.D. Fla.1998). The Trustee contended that the form of the plan was defective because it was not amended to comply with subsequent changes in the law, and that the plan was operationally defective because it was not administered in accordance with its terms. The court overruled the Trustee’s objections for failing to meet her burden of proof.

6. Still a Debate


As indicated above, the Patterson case is not the last word on the protection of retirement plans from the claims of creditors.  The Courts’ debate over the meaning of “ERISA-qualified” is discussed by Houle in “Courts, Confusion and ERISA,” New Jersey Law Journal (June 6, 1994).  The vulnerability of retirement funds of sole proprietors, partners and sole shareholders, and potentially majority shareholders, is discussed by Woodruff in “ERISA’s Hidden Traps for Owner-Employees,” LXVI, No. 11 Florida Bar Journal30 (December 1992) and “Are Interests in Florida Retirement Plans Really Safe From Creditors?,” Supra. See also DeBenedictis’ “Protecting Pensions,” ABA Journal (Sept. 1993).  More recently, the authors of “Qualified Plans May Not Be Protected in Bankruptcy”, 23 ACTEC Notes 75 (Summer, 1997), illustrate the growing conflict among the Bankruptcy Courts in their interpretation of Patterson, and conclude that self-employed individuals who reside in states like Florida, which provide statutory protection for IRA accounts, have one method of gaining absolute protection for their current retirement funds, which is to terminate the currently tax qualified retirement plan and roll over the assets into an individual retirement account.

7. No Shield to Federal Tax Liens
a. ERISA’s anti-alienation provision does not shield against federal tax liens and judgment.  SeeUnited States v. Sawaf, 74 F.3d 119 (6th Cir. 1996).

A debtor is not entitled to avoid a federal tax lien on an IRA. In Deming v. IRS (In re Deming), 1994 Bankr. LEXIS 1129 (Bankr. E.D. Pa. 1994), a debtor opened an individual retirement account with a bank. The IRA was in the form of a certificate of deposit that provided that the certificate was not transferable except on the books of the bank.  In 1987, the IRS recorded a notice of federal tax lien arising from the debtor’s tax obligations for 1983.  The debtor filed a voluntary Chapter 7 in bankruptcy in 1992 and in 1993 the debtor commenced adversary proceedings against the IRS to avoid the federal tax lien on his IRA. Debtor conceded that Code § 6334 did not list IRAs among the items exempt from IRS levy, but invoked Pennsylvania law which exempts tax deferred IRAs from execution by a judgment creditor.  The Bankruptcy Court, however, granted the government’s motion for summary judgment holding that the debtor was not entitled to avoid the IRS’ lien on the IRA. The court noted that under Section 522(c)(2)(B) of the Bankruptcy Code, a properly noticed pre-petition lien entitles a taxing authority to proceed against even exempt property once the bankruptcy stay has been terminated either under Bankruptcy Code Section 362(b)(c) or a judicial order. Therefore, the court reasoned, that the debtor could not use Bankruptcy Code Section 522(h) to avoid the IRS lien on the IRA under Bankruptcy Code Section 522(b), since the IRS could still seize the IRA once the Bankruptcy Court’s jurisdiction over the property ended.  Citing, Leuschner v. First Western Bank and Trust Company, 261 F. 2d 705 (9th Cir. 1958), the court in Deming determined that Pennsylvania’s state law exemption was ineffective against the IRS lien. 

The court cited Michigan v. United States, 317 U.S. 338 (1943), for the principle that in enacting Code § 6321, Congress exercised its constitutional prerogative to lay and collect taxes.  Pursuant to the Supremacy Laws of the United States Constitution, the court continued, the right of the Federal government to collect taxes overrides Pennsylvania’s Statute providing for the exemption of property.  Therefore, a debtor cannot use bankruptcy to avoid an IRS lien on an IRA account even though state law exempted the IRAs for execution by creditors, because the federal taxing powers override state law. See also Shanbaum, discussed in the Section, above, entitled Exempt Property.


Lawler v .Suntrust Secs., Inc., 740 So. 2d 592 (Fla. Dist. Ct. App. 5th Dist. Ct. 1999) Lawler was a beneficiary of an IRA at Suntrust Bank, which was the Trustee. The IRS issued a Notice of Levy and the Bank complied. The Court held in favor of the Bank and held that an IRA is not exempt from IRS levy.  The Court stated that state law restraints cannot affect the IRS’ ability to levy based on Federal law.  The Court noted the “IRS has a well grounded reputation for being the King Kong of creditors in terms of collecting tax delinquencies.”

8. Florida Legislation Results in Additional State Bankruptcy Exemptions


Since January 1, 1999, Florida residents have had the benefit of several additional state bankruptcy exemptions. Fla. Stat. §222.21(2)(a) was amended to exempt Roth IRA’s from creditors’ claims, and Fla. Stat. §222.22 was amended to exempt medical savings accounts from the claims of creditors. The amendments were passed into law on May 22, 1998 without the governor’s signature. Additionally, effective July 1, 1998, the Florida Probate Code was amended to incorporate the Florida Prepaid College Program exemption. Florida Prepaid College Program contracts purchased pursuant to Fla. Stat. §240.551 are now exempted from the claims of probate creditors