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.
Great piece but this isn't entirely correct. In our system, the state must prove guilt, rather than the accused proving innocence. But this case is important to small business owners everywhere and I hope they prevail.
“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.”
And through the cost of living ruse you get paid more and more but it buys less and less.
Not when it comes to civil forfeiture. The defendant must prove innocence, more specifically, that is his assets were not gained through illegal behavior. No criminal charges (the kind where the State must prove guilt) even need to be filed. It’s a tidy system.
Ya wanna another laugh? If you consistenly deposit amounts just under 10K to avoid the reporting, the Feds will hit you with “structuring” charges.
In essence Oabmacare for anyone who purchases it is actually catastrophic insurance.
The High Deductibles will not help anyone who seeks preventive medicine, they will have to pay for it.
Only those who are given free insurance through Medicare will be insured for preventive medicine and have no deductibles.
Obamacare is insurance for the people in this country who have been depending on society to feed them , house them, and baby sit them for generations, with the rest of us paying for it.
Obamacare is for the poor and the useless, with the Middle Class paying the bill. It is insurance for the typical Obama voter. With those in the Middle Class who voted for it, being too stupid to understand that until they get hit broadside with that wad of dung being tossed at them.
Put down the crack pipe and step away from the keyboard. Bureaucracies by nature usurp power and everything does not relate back to drugs.
Some of us weren't cheering. We saw exactly where this was heading and spoke out about it.
Congratulations to all you drug warriors out there, you've sure done a bang up job of destroying the Constitution!
This one most certainly does.
That would be Debbie Stabenow or Carl Levin......take your pick.
I drive by that market all the time, it's a nice place in a nice location......
And that bank is right across the street which makes even more sense for the family.......
Good for you
Only a fool would sign up for 0bamacare
Not if it’s 0bama’s IRS, obvious
I am a 51 year old small business owner. My wife is 49. We are both in good health, but my wife does take meds for high blood pressure.
We had individual health insurance. They have been “cancelled” with the option of being replaced with policies that have much higher deductibles, fewer benefits (that actually benefit us, since we don’t need maternity), and a much higher cost, just over double what we are paying now.
Our insurance agent is telling us that our only option is to go on “Obamacare.” There are currently only two major health insurance providers in the state and both are offering policies WAY out of our reach, but on the state exchange we will, with subsidies, be able to get insured for about 20% more than we are paying now.
These new policies have much higher deductibles and fewer benefits than our current policies, but at least we will be covered if anything catastrophic happens.
Do you know of a better option? I’d love to hear it.
I’m speaking theoretically, of course.
I do not disagree with your conclusion. The actions engendered by the so-called "WOD" has manifested great harm to our 'free society.'
Thanks cripplecreek.
I’m sure that many a folks that are against this are supportive of the foundational policies that have led to these abuses. I’d like to send out a big thank you to those that supported the elimination of private property rights via smoking bans on private property and a special shout out to President Richard Nixon, R, that brought us the war on drugs!
Progressivism must destroy private property.
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