by Mitch Kokai
Senior Political Analyst, John Locke Foundation
George Leef’s latest Forbes column focuses on a business owner in North Carolina fighting against civil asset forfeiture.
Although some states have moved to stop the abominable practice of civil asset forfeiture (bravo to New Mexico), the vicious monster is still alive, still seizing money and property from innocent people, still making them battle through the legal system if they want it back.
Here’s a case that ought to send shivers up your spine if you run a business that deals in a lot of cash.
Lyndon McLellan owns a gas station and convenience store in the little town of Fairmont, North Carolina. Last spring, IRS agents came to his store and informed him that they had just seized his bank account, which had more than $107,000 in it. McLellan was not accused of any crime, but the IRS was suspicious of his bank transactions. Thanks to our “war on drugs,” the government insists that we notify it whenever we deposit $10,000 or more in cash – but if someone regularly deposits significant amounts but less than $10,000, the IRS calls it “structuring” and thus suspicious.
Without any evidence of illegal activity, the government can seize bank accounts when it observes cash deposits that might be “structuring” and that is just what it did to Mr. McLellan. After grabbing his money last spring, in December the Department of Justice filed a forfeiture complaint in federal court. McLellan will lose all his money unless he is able to defeat the feds in court. (Or he can merely lose half of it if he’ll settle – more on that below.)
No American should have to fight a legal battle against the IRS and Department of Justice to get his property back when he has not even been accused of any crime, much less convicted. But for the free legal help Mr. McLellan is getting from the Institute for Justice, he’d probably lose his savings simply because a small business owner alone has about as much chance of prevailing against the feds as high school football team has against the Green Bay Packers.