Thanks to civil forfeiture laws, the ever-expanding IRS can seize the accounts of innocent people without their ever having committed a crime. The victims aren’t given notice and are subjected to expensive court proceedings to get the money or property back, if they get it back at all. Victims have to prove their innocence without ever having been found guilty.
Civil asset forfeiture is a proceeding by government that can find property guilty of a crime.
You will find cases filed under these laws with names such as public use v. solid gold object in the shape of a goose.
The law derives from the superstitious people of medieval times when properties were deemed guilty. It was excised from the law except in the case of ships.
It made sense in to keep it for ships because there were cases of ships being used for crimes like smuggling but the owner would be miles away. The law was used to seize the ships.
The law was picked up again in the 1980s as a tool in the war on drugs. It’s being misused.
There are fewer procedural protections under this law. There is no right to notice, no right to a hearing until after the property has been held for a long time. The person who owns the property must prove their own innocence.
The law allows law enforcement agents to take property or money they suspect of being tied to crime without criminal charges ever being filed. Law enforcement agencies get to keep a share of whatever is forfeited.
Critics say this incentive has led to the creation of a law enforcement dragnet, with more than 100 multiagency task forces combing through bank reports, looking for accounts to seize.
We are not talking KGB or Russia, we’re talking the United States of America.
More and more innocent people are being swept up by the abusive practice.
Carol Hinders of Arnolds Park, Iowa, pictured below, has a cash-only business. Thousands of dollars were seized from her account by the IRS solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.
She had no idea a report needed to be filed.
Jeff Hirsch who owned a cash business – a convenience store – had his entire bank account containing $447,000 seized and after more than two years and thousands of dollars in expenses, he can’t get his money back. His lawyer believes the government just wants to keep his money.
The Bank Secrecy Act requires banks to help U.S. government agencies detect money laundering. Under that act, if you deposit more than $10,000 cash in the bank, the money can be seized. If less than $10,000, it’s a crime and it can be seized.
Mr. Hirsch (photo above) handled a lot of cash in his business and was forced to continually close his accounts and open new ones because the banks didn’t want to deal with him. His accountant told him to open accounts for under $10,000 so he wouldn’t be forced to constantly open new accounts. It was then that the government seized his money.
Army Sgt. Jeff Cortazzo of Arlington, VA, began saving for his daughters’ college costs during the financial crisis, when many banks were failing. He stored cash first in his basement and then in a safe-deposit box. All of the money came from paychecks, he said, but he worried that when he deposited it in a bank, he would be forced to pay taxes on the money again. So he asked the bank teller what to do.
“She said: ‘Oh, that’s easy. You just have to deposit less than $10,000.’”
The government seized $66,000; settling cost Sergeant Cortazzo $21,000. As a result, the eldest of his three daughters had to delay college by a year.
“Why didn’t the teller tell me that was illegal?” he said. “I would have just plopped the whole thing in the account and been done with it.”
Many people give up when they can’t get their money back.
Chris and Mark Sourbouelis of Philadelphia (photo above) had their home seized by the government after their son sold $40 worth of drugs from their home. The Institute for Justice is representing the family.
The money from forfeitures goes into a special forfeiture fund to be used to seize more money and property. It’s a self-fulfilling fund. It seizes to replenish itself so it can seize some more.
In some cases federal funds are involved, creating a financially lucrative relationship between the feds and local governments.
Russ Caswell owned the Russ Caswell Motel, a family business and a perfectly fine motel. Some people who frequented the motel did things that weren’t legal. He did what he could to assist police. He even gave rooms to the police for free so they could investigate the criminals in ajoining rooms.
That wasn’t good enough for the police. The police took the entire motel because some guests were criminals. The police were assisted by the feds and they all shared in the loot.
It’s called equitable sharing. Forfeiture is initiated under federal law and the feds then share the proceeds with local authorities.
The Institute for Justice, a Washington-based public interest law firm that is seeking to reform civil forfeiture practices, has taken on many of these cases pro bono. They’ve also analyzed IRS structuring data and found the I.R.S., which made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case.
On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice.
And you can take that to the bank but it might be seized!