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.
As Mark says later in the article, only when the citizens stand up and bring the government back in check will justice be restored and liberty preserved. Fortunately, the Founders gave us a way to do just that. A Convention of States can limit the size and jurisdiction of the federal government, ensuring things like this never happen again. But it's up to us to make it happen.