The criminals in federal and local government will steal your money, even if you’re a law-abiding citizen. Don’t believe it? Just ask Carole Hinders (and 62,000 others), who has run a “modest” cash-only Mexican restaurant for many years. Last year, two IRS agents came to her home to inform her they had stolen $33,000 from her because she deposited less than $10,000 at a time, which the IRS viewed as an attempt to not trigger government reporting by her bank. She thought she was just doing everybody a favor.
“How can this happen?” Hinders asked in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”
If you’ve been reading Dollar Vigilante’s blog, you already know the answer to that question. It’s the U.S. government, and it is what the government does. And it is increasing at a frightening pace.
The law permitting this was designed to catch drug traffickers, racketeers and terrorists by tracking their cash. Of course, honest, hard-working people get caught up in the mix as the government targets business owners and wage earners without any criminal cases against them.
“They’re going after people who are really not criminals,” said former federal prosecutor David Smith, now a forfeiture expert and lawyer in Virginia. “They’re middle-class citizens who have never had any trouble with the law.”
The New York Times reported:
The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.
On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by “exceptional circumstances.”
In a statement chief of Criminal Investigation at the IRS, Rich Weber, wrote:
This policy update will ensure that C.I. continues to focus our limited investigative resources on identifying and investigating violations within our jurisdiction that closely align with C.I.’s mission and key priorities.
The IRS isn’t the only government agency practicing theft of people’s money. Other agencies and local police forces have come under fire for the same practice.
The money is seized under a law known as civil asset forfeiture, which enables law enforcement agents to steal your things if you are a U.S. subject. No charges need to be filed. Law enforcement agencies get to keep a share of their booty, further incentivizing them to steal.
Weber also noted that Hinder’s practice of making deposits under $10,000 at a time to evade reporting is called structuring, and is illegal regardless of where the funds originated. Depositing $10,000 is not illegal, unless it is done for the specific purpose of avoiding reporting requirements. Apparently, the government doesn’t need to prove you were doing this, though.
All authorities need to steal your money is a bank statement. In a Long Island example of civil asset forfeiture, the police submitted a year’s worth of deposits, ranging from $5,500 to $9.910. The officer wrote in his warrant affidavit that this pattern “is consistent with structuring.” The government stole $447,000 from the cash-intensive candy and cigarette distributor that had been run by one family for 27 years.
“My mom had told me if you keep your deposits under $10,000, the bank avoids paperwork,” one business owner said. “I didn’t actually think it had anything to do with the IRS.”
The candy and cigarette distributor remains a business only thanks to longtime vendors’ extending credit; one has extended $300,000. The government has brought settlement offers to the family requiring the family to give up an “excessive” portion of their money.
“We’re just hanging on as a family here,” Mr. Hirsch said. “We weren’t going to take a settlement, because I was not guilty.”
Another victim of civil asset forfeiture, Army Sgt. Jeff Cortazzo of Arlington, Va., wanted to save money for his daughters’ college costs amid financial crisis. He stored cash in his basement and then in a safe deposit box.
The government seized $66,000. The settlement cost Cortazzo $21,000.
Investigations concerning the use of federal civil forfeiture law by local law enforcement agencies across the United States to raise cash has exposed problems with a routine but rarely discussed police tactic.
Washington Post journalists gathered 43,000 reports from agencies across the United States and wrote that the budgets of police departments and drug task forces are funded by stolen assets, including property and money never involved in a crime.
“Police agencies have used hundreds of millions of dollars taken from Americans under federal civil forfeiture law in recent years to buy guns, armored cars and electronic surveillance gear,” Robert O’Harrow and Steven Rich wrote for The Post. “They have also spent money on luxury vehicles, travel and a clown named Sparkles.”
The WP journalists wrote that Freedom of Information Act requests filed by the paper provided them with a tome of documents that demonstrate police departments spend the stolen money liberally.
“The Department of Justice Asset Forfeiture Program (the Program) is a nationwide law enforcement initiative that removes the tools of crime from criminal organizations, deprives wrongdoers of the proceeds of their crimes, recovers property that may be used to compensate victims and deters crime,” reads the official DOJ guidelines. “Federal law authorizes the attorney general to share federally forfeited property with participating state and local law enforcement agencies.”
Local and state police receive up to 80 percent of their stolen loot.
“Any state or local law enforcement agency that directly participates in an investigation or prosecution that results in a federal forfeiture may request an equitable share of the net proceeds of the forfeiture,” state the guidelines. “Department of Justice policy requires shared monies and property to be used for law enforcement purposes.”
The tome of documents makes the case clear: “Public servants” steal wantonly.
“The documents offer a sweeping look at how police departments and drug task forces across the country are benefiting from laws that allow them to take cash and property without proving a crime has occurred,” the journalists stated. “The law was meant to decimate drug organizations, but The Post found that it has been used as a routine source of funding for law enforcement at every level.”
But the money was never used for wrongdoing in the first place.
“Of the nearly $2.5 billion in spending reported in the forms, 81 percent came from cash and property seizures in which no indictment was filed, according to an analysis by The Post,” the paper reported. “Owners must prove that their money or property was acquired legally in order to get it back.”
The Washington Post investigation found that 61,998 cash seizures worth more than $2.5 billion have been made on U.S. highways and elsewhere since Sept. 11, 2001. The departments of Homeland Security and Justice received $880 million of that total, while state and local authorities got the rest. According to the Post investigation, approximately one-sixth of the seizures are challenged in a court of law. And in 41 percent of the challenged cases (more than 4,000 of them), the government agreed to return all or part of the money. The appeals process often took more than a year and required owners of the cash to sign agreements not to sue local police.
Note: In the TDV Newsletter learn ways around civil asset forfeiture. Put your money where local police thugs can’t find it.