Imagine opening up your door one morning to two agents of the IRS. They tell you that they have seized your checking account and the $33,000 in it, just because you made a “suspicious” cash deposit under $10,000. Not a good start to a day.
That’s just what happened last year to Carole Hinders, who runs a cash-only Mexican restaurant in Iowa. She wasn’t charged with any crime or even accused of anything. Hinders lost her money because of the size of her deposits.
Drug traffickers, money launderers, and even terrorists often keep deposits under $10,000 to avoid a regulation designed to sniff out illegal transactions. It just so happens that many legitimate businesses also deposit cash in large amounts less than $10,000.
As the New York Times reports, the “increasingly controversial area of law known as civil asset forfeiture…allows law enforcement agents to take property they suspect of being tied to crime even if no criminal charges are filed.” But instead of tracking down real criminals, the law is now being used to go after “run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent.”
“Who takes your money before they prove that you’ve done anything wrong with it?” an incredulous Hinders asked.
Here’s a key statement in the whole debacle: “Law enforcement agencies get to keep a share of whatever is forfeited.”
Have a “suspicion,” rake in some money, and answer questions later — if at all. Not a bad deal, unless you care about things like justice.
Responding to questions from the New York Times, the IRS said it will “curtail” the practice and focus on cases that involve clearly criminal activity. With its oft-lamented limited resources, it makes sense to limit investigative efforts to cases where the money is clearly obtained illegally or when deposits are being made with the intent to avoid reporting — i.e., what the law was intended for in the first place.
But the updated policy comes too late for Ms. Hinders and any other people whose funds have already been seized.
When the IRS or another agency seizes funds, it passes on the case to the Department of Justice. However, “the Justice Department does not track the total number of cases pursued, the amount of money seized or how many of the cases were related to other crimes.” Agencies can seize money and report “suspects,” but after that, accountability vanishes. So does the people’s hope of ever getting their money back.
The Institute for Justice looked into IRS records and found that the agency made 639 of these seizures in 2012, compared to 114 in 2005. And only one in five was prosecuted as a criminal case. Was the money from the other 80 percent of cases returned to its rightful owners? Somehow, I doubt it.
Fighting an unjust bureaucracy is never easy — especially when one’s money has just been seized, and one has attorney’s fees to reckon with. Just getting by becomes difficult. Hinders “has borrowed money, strained her credit cards and taken out a second mortgage to keep her restaurant going.”
In another case, three brothers from Long Island had nearly $450,000 seized from their family business. They’ve been fighting the seizure for over two years. Their store survives on credit from longtime vendors. They’ve had several opportunities to settle and get a portion of their money back, but that’s not justice. As one brother explained: “We weren’t going to take a settlement, because I was not guilty.”
When will the government stop trampling its citizens’ rights? Is “innocent until proven guilty” becoming an outdated principle or naïve assumption?
Bravo to Carole Hinders, the Hirsch brothers, and others who are speaking up and fighting back against this injustice. Only when the citizens stand up and bring the government back in check will justice be restored and liberty preserved.
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