Posted on 11/18/2013 5:50:47 AM PST by Kaslin
Imagine that you run a grocery store with your daughter, a store you have owned for thirty years. Imagine that just last year the IRS found no violations in an audit of your store. Now imagine that, despite continuing your sound business practices, you awake one day to find the IRS has seized your entire bank account. The IRS has used a technique called civil forfeiture against you and you find your Constitutional guarantee of innocence until proven guilty has been completely reversed. That is the nightmare that Terry Dehko and his daughter Sandy Thomas found themselves in on January 22, 2013.
Since he bought it in 1978, Terry Dehko has owned Schott’s Supermarket in Fraser, Michigan. His daughter, Sandy, began working at the store when she was 12 and now helps her father run it. The IRS has not argued before a court of law that Terry and Sandy have committed a crime, but that has not stopped it from seizing their entire bank account, worth over $35,000.
The IRS claims that Terry and Sandy violated federal anti-money laundering laws by making regular deposits of cash in amounts less than $10,000. Since banks are required to report deposits larger than $10,000 to the IRS, a firm that consistently makes deposits less than this minimum may draw the attention of the IRS.
Dehko and Thomas state that they have nothing to hide and have offered a simple explanation. Their insurance policy, aimed at small businesses like their grocery store, protects them from theft, but only up to $10,000. Since any dollar over 10,000 left in the store is liable to uninsurable theft, Terry and Sandy make sure their revenues are deposited in their bank account before accumulating above $10,000.
The IRS seized Terry’s and Sandy’s assets using a process called civil forfeiture, which is a power government bodies may use to seize property that is suspected to have been used in a crime. While the IRS has not proved in a court of law that Terry and Sandy committed fraud, it has been able to seize their assets because it suspects that they may have done so.
Worsening the situation is a lack of due process for victims of civil forfeiture. While Terry and Sandy have explained their sounds business practices since their property was seized in January, they have not been able to argue their case before a court of law. Property owners who have their assets seized do not have a clear path to a speedy trial before a judge. Instead, they are required to file a lawsuit intervening in the forfeiture case. Civil forfeiture has made the idea of “innocent until proven guilty” a complete joke.
The Institute for Justice, a national civil liberties law firm, have come to the defense of Terry Dehko and Sandy Thomas. The Institute will assist them in two lawsuits related to the case. In the first, Dehko and Thomas will fight the forfeiture of their assets by demonstrating that their case deposits were for the purpose of sound business practices, rather than the evasion of money laundering laws. In the second, they are fighting the government’s ability to use civil forfeiture. A victory could mean protections for property rights of small-business owners all across the country.
Civil forfeiture is on the rise throughout the United States. According to the Institute for Justice, the Department of Justice’s Asset Forfeiture Fund held $93.7 million of seized assets in 1986. In 2008, that fund was greater than $1 billion.
In a recent profile of the case inthe Economist, Thomas stated that prosecutors offered her and Dehko 20% of their seized assets in a plea bargain, with the government to keep the remaining 80%. Thomas and Dehko declined, because “if [they] settle, it looks like [they’re] guilty of something, which [they’re] not.”
Michigan’s civil forfeiture laws are particularly heinous. In their 2010 report “Policing for Profit: The Abuse of Civil Asset Forfeiture,” the Institute for Justice gave Michigan a “D-” grade for their forfeiture laws. The Institute found the standard of evidence used in Michigan for forfeiture cases “is significantly lower than the beyond a reasonable doubt standard required to actually convict someone of criminal activity.” Furthermore, assets seized through civil forfeiture go towards “law enforcement efforts, creating an incentive to pursue forfeiture more vigorously than combating other criminal activity.” Between 2001 and 2008, more than $149 million were seized through this process in Michigan.
In their 2010 report, the Institute for Justice identifies a few avenues for reform. Property owners subject to civil forfeiture should have access to a prompt trial before a judge. They should also be presumed innocent until proven guilty. To prevent conflicts of interest, seized assets should be separated from the budgets of law enforcement.
These arbitrary seizures of private property must be stopped. Civil forfeiture as it exists today has no place in the American legal system, where citizens are innocent until proven guilty and granted due process to prove their innocence. People subject to civil forfeiture are powerless against law enforcement agencies who gain from these takings. Until civil forfeiture is abolished or radically reformed, more innocent Americans will face nightmares similar to that of Terry Dehko and Sandy Thomas.
Since there is no significant Republican opposition to it (indeed, they continue to cheerlead the War on Drugs that birthed it with unabated vigor) this is one of the key pieces of evidence that the Republicans are not a real opposition party at all, but a gang of actors hired to pacify potential enemies of the state until all the pieces of the planned dictatorship are firmly in place.
I knew it would lead to our present Police State.
People scoffed at me then. How do you like me NOW?
Hmmmm....if only deposits OVER $10K have to be reported, and all their deposits were LESS THAN $10K, how did the feds know??? Who reported these lower value deposits???
What is this 'U.S.A.' of which you speak? Are you referring to the U.S.S.A.?
Who reported these lower value deposits???
What really burns my biscuits about this whole thing is that there is not enough probable cause for law enforcement to do ANYTHING that impacts the people’s lives. The deposits can raise suspicion and cause an investigation to see if there is any “there” there. But to preemptively seize people’s assets is draconian.
It started with the 55 mph speed limit and has only gotten worse. The government is the enemy. Kinda sad, really.
Here’s the truth. The leftists hate private enterprise. In their minds, all the means of production should be in the hands of the government. (see communist manifesto)
They can’t seize all businesses, just yet, so they take a big piece at a time and call it something else: “asset forfeiture.”
That’s the American way. Deny what you’re doing. Give it a nice-sounding name. Keep doing what you were already doing.
It might be good for him, but it is legally illegitimate and does nothing to fix the process. This family is patriotic enough to take this fight to where it rightly belongs in order to get the system fixed.
G_d bless them.
It is a direct result of the drug war.
Which goes to another problem: How did the IRS know that they were making sub-$10K deposits? Where was the search warrant for acquiring that information?
I'd sue their asses off.
Citation please.
I don’t think the grocers cared if the Bank reported the >$10K transactions to the IRS. Their insurance policy required them to have <$10K at the store, so that was the reason for all the transactions that fell just short of $10K. The IRS just assumes such activity is to skirt their rules.
Civil Asset Forfeiture is primarily a product of the War on Drugs, although racketeering initiatives may also have been a motivation.
When you combine asset forfeiture with an increasingly greedy government at all levels and an increasingly militarized police force... well the picture is clearly not one of increasing liberty and freedom, is it?
“The time to complain about this was back in the 80’s when they started doing this to people suspected of being involved with illegal drugs. Instead, we cheered. And now here we are.”
You are totally right. I have been opposed to asset forfeiture since its inception. Its unconstitutional for one thing. If you get convicted of a crime you do the time and pay the fine. Its not supposed to mean the govt can take everything you have in the world and auction it off.
Reporting lower values?
If the bank sees you consistently less than the limit, they can (not sure if must), report that as suspicious.
“It’s to stop money laundering.”
If you like your money, you can keep your money, period.
You can’t get statists to understand that these forfeiture laws are a bad idea until their pockets get picked. They can’t get their hands around the idea that giving them the power to do it to someone else also gives these agencies the power to do it to them.
“The IRS claims that Terry and Sandy violated federal anti-money laundering laws by making regular deposits of cash in amounts less than $10,000.”
Everybody that gets a paycheck does that. And what the companies that pay them and require direct deposit?
Or we decide to take it from you.
The other dirty little secret about this law is that when it was passed, $10,000 was a LOT of money. It isn’t any more.
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