The IRS effectively shut down the bank account of a small business in Fraser, Michigan in January. Using a controversial process called “civil forfeiture,” IRS seized more than $35,000 from Schott’s Market.
Civil forfeiture permits the U.S. Government to take your entire bank account if the government “doesn’t like the way you deposit or withdraw your money,” said attorney Clark Neily.
Larry Salzman, an attorney with the Institute for Justice, said the government hasn’t charged the business owners—Terry Dehko and his daughter—with any crime. “And they’ve broken no law,” Salzman said.
Federal laws require banks to report cash transactions that are more than $10,000. “It’s illegal to try to avoid that requirement,” said Neily who is also an IJ attorney. In the Dehkos’ case, the government claims they broke the law by frequently depositing less than $10,000 into their store’s bank account.
Dehko showed the IJ his business insurance policy—it only covers amounts up to $10,000 in cash. Thus, it makes no sense for the store to keep more than that amount on the premises.
Salzman said last year the government “took in more than $4 billion in forfeiture money.”
Before the feds took the Dehkos’ money, they gave no warning or notice.
Salzman penned an editorial about the Schott’s case for USA Today. IJ is trying to help the business owners get their money back.
Schott’s is famous for its deli. They employ about 30 people.
‘“Terry came to America from Iraq in 1970 to create a better life. He bought his grocery store in 1978 and, after more than three decades of hard work, the store has prospered, providing good food and great service to his neighbors.”
The seizure of the Dehkos’ money is a striking example of government overreach all too common these days. (Commentary by Kay B. Day/Oct. 4, 2013)