by Jon Guze
Senior Fellow, Legal Studies, John Locke Foundation
In a newsletter that appeared last May I wrote about Lyndon McLellan, the owner of a convenience store in Fairmont, North Carolina who had been victimzed under federal tax and civil asset forfeiture laws. On the basis of several large cash deposits, federal agents seized $107,000 from McLellan’s bank account. He was not accused of any crime, and the deposits were legitimate. Nevertheless, at the time I wrote he had spent more than a year trying, without success, to get his money back.
Fortunately for Mr. McLellan, a public interest law firm called the Institute for Justice agreed to represent him without charge, and in a subsequent newsletter I was able to pass on some good news from the IJ:
The IRS and Department of Justice moved to voluntarily dismiss the case and give Lyndon back 100% of his hard-earned money.
As I noted, however, this did not mean justice had been done:
Even after he recovers his bank account, Lyndon is still out tens of thousands of dollars, thanks to the government’s actions. Lyndon paid a $3,000 retainer to a private attorney before IJ took the case on pro bono, and he also paid approximately $19,000 for an accountant to audit his business and to provide other services to help convince the government he did nothing wrong. The government is refusing to pay those expenses. And the government also is refusing to pay interest on the money.
Today, I’m happy to report still more good news in the case. Yesterday the IJ announced:
This week a federal court handed down a long-awaited decision vindicating Lyndon McLellan in his fight against the IRS. …
The district court’s decision rejected the government’s maneuver, stating:
Certainly, the damage inflicted upon an innocent person or business is immense when, although it has done nothing wrong, its money and property are seized. Congress, acknowledging the harsh realities of civil forfeiture practice, sought to lessen the blow to innocent citizens who have had their property stripped from them by the Government. . . . This court will not discard lightly the right of a citizen to seek the relief Congress has afforded.
“Today’s decision recognizes that Lyndon should not have to pay for the government’s outrageous use of civil forfeiture laws against a totally innocent property owner,” said IJ Attorney Robert Everett Johnson. “The government took Lyndon’s property even though he did nothing wrong, forcing him into a prolonged and expensive legal nightmare. Now the government will have to comply with its obligation to make Lyndon at least partly whole.”