Feds Steal $35K From Small Grocer's Bank Account Despite Finding "No Violations" To Justify the Grab

No robberyArenamontanus / Foter / CC BYSchott's Market, in Fraser, Michigan, was robbed in January of this year. Unfortunately for Terry Dehko and his daughter, Sandy, who own the place, the thieves are government agents in the employ of the Internal Revenue Service. The IRS doesn't even allege that the Dehkos committed a crime to justify cleaning out their bank account using civil asset forfeiture—they even sent the Dehknos a letter clarifying that “no violations [of banking laws] were identified.” So, why the mugging? The feds just don't like the way the grocers have been depositing money in their bank account. Really.

According to the Institute for Justice, which represents the Dehkos, the problem is that the Dehkos run a cash-heavy business, and don't like to keep lots of lucre on hand. So they make frequent deposits.

Like most grocery store owners, Terry and Sandy receive cash every day from their customers.  Their commonsense practice has always been to avoid letting too much cash accumulate in their store. Moreover, their insurance policy specifically limits coverage for theft or other loss of cash to $10,000—a common provision for small-business policies.

Over the past several years, however, the government has been collecting vast amounts of private information about Americans, including entrepreneurs like Terry and Sandy that deal in cash.  In 2001, the Patriot Act amended federal law to make it easier for the government to seize money and other private property through civil forfeiture.  Federal law requires banks to report cash transactions above $10,000, and it is illegal to “structure” cash deposits for the purpose of avoiding this requirement.

So you have to report deposits of over $10,000, but keeping deposits under $10,000 is considered suspicious, even if your insurance company insists on the practice. Get it?

Under the circumstances, IRS agents dropped by for a friendly chat in 2010, and then again in 2012. After the second visit, the feds sent the Dehkos a letter saying that “no violations [of banking laws] were identified.”

And then, nine months later, the IRS emptied the Dehkos' bank acount of $35,000 without warning.

In the Dehkos' case, the IRS used civil asset forfeiture, which requires no criminal action or proof of guilt on the part of a property owner to seize that property—technically, it's a legal action against the property itself. Not surprisingly, it's a hugely lucrative practice for government agencies and a hugely controversial one for everybody else. Last year, Pennsylvania Judge Dan Pellegrini called the practice “state-sanctioned theft.” Shelby County, Texas, was forced to return money and property that its officers essentially stole from motorists just passing through. Amidst much screaming from mugged constituents, Washington, D.C.'s city council is considering reforming (thought not abandoning) the practice. Some Tennessee lawmakers want to dump it altogether.

But the use of asset forfeiture, both civil and criminal, soared at the federal level under the current administration, growing from $500 million in 2003, to $1.8 billion in 2011.

The Dehkos have been charged with no crime, and still await a chance to ask a judge to force the IRS to return the money.

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  • Anonymous Coward||

    You peasants wouldn't have made that $35,000 if the government, in its wisdom and benevolence, hadn't created MARKETS for you to exploit.

    /Tony w/o spaces

  • tarran||

    Stop obsequiously pandering to the elites, anonymous!

  • lovewedleton||

    my best friend's aunt makes $67 an hour on the laptop. She has been fired from work for 5 months but last month her pay check was $13328 just working on the laptop for a few hours. try here

    ------------
    http://www.works23.com

  • fish||

    I'm sure that someone less well off needed this money in the form of a transfer payment to buy a nice cover for their Obamaphone.

  • MJGreen||

    Americans have charged the IRS with the duty to calculate and collect taxes. If they took $35,000 from the owners' bank account, that must be what these people owe to the community. Not paying it is called freeloading, aka theft.

  • ||

    Last I checked, the government was not allowed to punish people with even so much as a fine withut a trial.

    And nobody pays a 100% tax rate.

  • ||

    What's the problem?

    Tony.

  • fish||

    Insufficiently smug Rufus.

  • ||

    What's the problem? Corporations steal from people all the time. Er, when the stock price goes down that's stealing - and a form of abuse since they take the money and pay themselves big bonuses. Do you really want kids who have no health insurance die? You libertarians offer no alternative to these questions so I say the IRS stealing from people is payback since they probably don't pay their fair share anyway.

    Better, fish?

  • ||

    That's the extent of my being able to mimic incoherence.

  • fish||

    That's the extent of my being able to mimic incoherence.

    Better...not great. I guess the great ones really are born that way.

  • ||

    I'm very competitive. My objective is to be as incoherent as Tony next time.

  • CatoTheElder||

    I'm sure happy that the same bureaucracy are going to be in charge of the entire fucking medical insurance industry next year!

  • John C. Randolph||

    The most appalling thing about this theft is that the perps face absolutely no legal jeopardy. Even if the victims get their money back, the perps will not spend a day in jail, or pay a penny in fines.

    -jcr

  • Bill Dalasio||

    You know, the same thing occurred to me. The bottom line with government overreach is that there's an asymmetric incentive structure. Bureaucrat or politician oversteps and gets away with it, then awesome. Lots of promotions and advancement in store for them. Bureaucrat or politician oversteps and gets caught? Oh well, there heart was in the right place.

  • Bill Dalasio||

    Maybe an acceptable defense for homicide of government officials should be "not guilty by reason of government overreach".

  • sarcasmic||

    Not only is there no defense for homicide of government agents, doing so carries much harsher criminal penalties than homicide of mere peasants. That's assuming that the government agents who apprehend you let you live.

  • Bill Dalasio||

    Well, that is why I used the phrase should be.

  • croaker||

    We need to implement the system H Beam Piper had on his fictional planet of New Texas. Any mahem on a politician was legal if a special court determined after the fact that he had it coming to him.

  • croaker||

    mayhem

  • ||

    Everything about government is the absolute inverse incentive from what it should be. It's why government is utterly fucked and cannot be made to "work" properly. Because it doesn't "work" in the first place. It's only purpose is its own growth. People try and make its purpose be "national defense" or "protecting property" but you can't make government truly do anything but grow.

  • sarcasmic||

    Which is why there needs to be means and an incentive to repeal shitty legislation. Though I'm sure even that would be corrupted.

  • Bill Dalasio||

    And that's why I advocated the "not guilty by reason of government overreach" defense. Government officials may be a little more inclined to demur from overreaching if they know doing so might sign their own (legal) death warrant. Incentives aligned.

  • CatoTheElder||

    Government is the only institution for which lying is perfectly normal and acceptable by the majority of its participants.

    Government is the only institution for which theft (aka taxation, eminent domain, forfeiture) is perfectly normal and acceptable by the majority of its participants.

    Government is the only institution for which slavery (aka regulatory compliance, conscription and national service) is perfectly normal and acceptable by the majority of its participants.

    Government is the only institution for which mass murder (aka war) is perfectly normal and acceptable by the majority of its participants.

    etc, etc. Of course it fails to accomplish good.

  • ||

    Perfectly acceptable, at leadt, so long as it's not the government that is the victim of any of that.

    When government IS the victim, we hear words like traitor and terrorist.

  • ||

    "Knowledge and Decisions," Thomas Sowell.

    Engineers will recognize this as a system where there's no negative feedback in the control loop.

  • Finrod||

    Eventually there's going to be some negative feedback in the form of torches and pitchforks. They'll have it coming and they'll never see it coming.

  • ||

    Can you imagine what it must be like when an IRS agent goes home at night?

    Agent: Honey, I'm home!
    Wife: (wipes ass, cum off mouth): Oh, you're home early. How was your day?
    Agent (sticks chest out): Yeah, it was a rough day. We had to put some businesses in their place.
    Wife: Sonabitches, huh?
    Agent: Yeah. The hilarious thing, get this, we can fuck with anyone we want without much consequences!
    Wife (waves man out): Heh. Fuck. Well, I'm sure you're hungry, what, with you busy saving America and such.
    Agent: Yeah. Sure am. People hate us but those assholes don't see the big picture. By the way, I think I'm gonna be able to afford that vacation after all.

    Camera pans to hell.

  • Falkland Comments||

    It is considered suspicious to act in such a way as to make it more difficult for criminals in government to spy upon you.

  • Invisible Finger||

    They didn't seem to have any difficulty though.

  • ||

    It's worse than that.

    It is now considered suspicious to try to obey the law -- and suspicion alone allows the government to steal everything you own.

    Depositing less than $10,000 isn't circumventing anything if you never have more than $9,999 to deposit.

  • Mr Whipple||

    So, I guess he belongs to one of those Tea Party groups?

  • db||

    Gawddemmit, J.D., you know no one's recovered from Feeney's nutpunch below, and you do this?

  • ||

    Just realize that there are government employees who are spending their time, right now, trying to find ways to fuck people over and steal from them using asset forfeiture. That you (and I) are paying their salaries. We're paying them to figure out how to "legally" steal more than they already do. It's madness.

  • db||

    "Always Think Forfeiture"

  • fish||

    "....coffee is for Forfeiturereres".

    Shit...doesn't roll off the tongue like "closers".

  • Calidissident||

    The Royal Tax Collectors are entitled to take as much of the peasants' harvest as they desire. The God-King wills it

  • Aresen||

    The Dehkos have been charged with no crime, and still await a chance to ask a judge to force the IRS to return the money.

    So, how much will it cost the Dehkos to get their own money back?

  • UnCivilServant||

    $51,000

  • sarcasmic||

    Your property is guilty until proven innocent.

  • Jordan||

    If I was the Dehkos, I would have a very difficult time not resorting to violence.

  • Scruffy Nerfherder||

    My thoughts as well.

  • Finrod||

    Eventually the manufacturers of torches and pitchforks are suddenly and unexpectedly going to make a good deal of money.

  • croaker||

    Not to mention the makers of tar, feather bedding, fence rails, and hemp rope.

    Oh, and there might be a few bucks in there for lumber yards and blacksmiths (anyone have builder's plans for a guillotine?)

  • Jordan||

    This must be a lie. Tony assured me that their is no despotism in the U.S. Government.

  • Longtorso, Johnny||

    Romans 13:1-2, New International Version 1 Every person is to be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God. 2 Therefore whoever resists authority has opposed the ordinance of God; and they who have opposed will receive condemnation upon themselves.

    Titus 3:1
    Remind the people to be subject to rulers and authorities, to be obedient, to be ready to do whatever is good,

    1 Peter 2:13
    Submit yourselves for the Lord's sake to every human authority: whether to the emperor, as the supreme authority,

    Matthew 22:20
    …19 "Show Me the coin used for the poll-tax." And they brought Him a denarius. 20 And He said to them, "Whose likeness and inscription is this?" 21 They said to Him, "Caesar's."

  • ||

    What part of "submit yourselves to every human authority" did such a 'Christian' nation as the USA not understand when attacking Hitler??? Hitler was "established by God" after all!!!

  • ||

    The key difference in the US versus the Roman Republic is that we have a constitution that sits above the men and women who lead us.

    To follow your logic, government overreach occurs when leaders rebel against God. It's not going against God to expect leaders to submit to higher authority, after all

  • ||

    @Gindjurra: Your statements here directly conflict with the quotes above from the (completely fictional, written by primitive men) Bible.

  • Mustakrakish||

    Also, we would still be part of the British Empire. God Save the Queen!

  • Matrix||

    Yeah, Obum-bum sure loves him some small business.

  • CatoTheElder||

    Obama understands that Mr. Denko didn't build that business.

    Somebody else built that business, and deserves the $35,000.

  • ||

    Obama is the enemy of the middle-class and small business he trumps. He - indeed any government - needs to rape and pillage them to keep the government's parasitical behavior going.

  • ||

    By the way, considering NSA and all that, can the above be seen as 'extremist' rhetoric?

    It's rhetorical of course.

  • Scruffy Nerfherder||

    OBEY

  • Aresen||

    It's rhetorical of course.

    And you are Canadian, so Obama can give you 'due process' any time he likes.

  • ||

    The privilege of being Canadian I suppose.

    /kneels before Doug Henning poster.

  • CatoTheElder||

    Maybe we can get a semi-official opinion of some NSA shithead on that question by posting a few NSA trigger words

    Mavricks Meta-hackers ^? Steve Case Tools Telex Military Intelligence Scully Flame Infowar Bubba Freeh Archives Sundevil jack Investigation ISACA NCSA Rand Paul

    And, yes, Rand and Paul are NSA trigger words according to this list.

  • ||

    Fuck, you reason boys are going heavy on the nutpunches today, aren't you? Dicks.

  • Invisible Finger||

    technically, it's a legal action against the property itself.

    Whenever I tell people the government brings forth thousands of crimes annually with things like a 1972 Chevrolet Nova as the defendant, people seriously think I've lost my mind and think I need psychiatric attention.

    Bringing up cases on a smartphone so that can easily see for themselves just makes them wonder how (and why) I found those fake websites.

  • ||

    What if you show them the ACLU page on it?

  • Invisible Finger||

    "The ACLU is exaggerating."

  • ||

    By that standard you could sue the local police station for a 42USC1983 violation instead of the individual police or the police as a group, on the theory that the station facilitated the violation of rights, and if the judge finds that a violation occurred, you could seize the building and the land it sits on

    What is good for the goose IS good for the gander, after all.

  • JW||

    How does this not qualify the US as a police state?

    You don't have to wait until their dumping the bodies in open graves.

  • canuck53||

    God Bless America. Land of the Free. So happy I escaped the USA and now live in a free country. It just gets worse and worse in the US, I feel uncomfortable crosssing the border but may have to cross for cheaper shopping ans booze.

  • Aresen||

    Don't sneer.

    We have our own share of issues. Like waiting in line for surgery (I may need cataract surgery. I'll be surprised if I get in before 2015.)

    Then there is the Human Rights Commission in each province.

    And the $200 Billion unfunded pension liability for the Federal Civil Service.

  • Death Rock and Skull||

    IRS agent, I'd like you to meet my friend, ball peen hammer.

  • Robert||

    Reported here months ago. What's new in this story?

  • Griffin3||

    Could the business just declare $35,000 "paid to federal government" on their tax return at years' end? I know that they don't have a 941 to back it up, but it sounds like the government ... someone ... there's got to be a paper trail where the money was seized from the bank account?

  • Duelles||

    I admit to nothing, past present or future.

  • J.B.||

    This had nothing to do with banking practices or savings. This had to do with intra-family trust stock-transfers they did not want to pay taxes on. http:// cofo.giftlegacy.com/ ?pageID=134&docID=97 Remove spaces and see Patricia Schott, et vir. vs. IRS.

  • J.B.||

    Here's another one: http:// www.plannedgiving.uci.edu/ ?pageID=134&docID=63 These people have been trying to cheat the IRS by giving "gifts" to each other in person and in trusts. Basically trying to move their money around (ie. laundering it) so it can't be taxed at all.

  • J.B.||

    Oh, wait, so this is third infraction of IRS law: They would make over $10,000.00 in a day, but instead of reporting it to the IRS, they would make multiple deposits of less than $10,000.00 and hope that no one noticed. They got two warnings they ignored, and are now whining about having to pay the taxes they owed. Yeah, somehow my sympathy for them is nil.

  • ||

    What part of 'no violations found' was unclear?

  • Plopper||

    You're that bitch who got all of her comments totally rebutted on youtube aren't you?

  • ||

    And how is a 1994 case involving Stephen and Patricia Schott (real estate developers/builders) related to the current non-case theft from Terry and Sandy Schott (grocers)? And who said there was unreported income? You're a putz.

  • lovewedleton||

    my best friend's aunt makes $67 an hour on the laptop. She has been fired from work for 5 months but last month her pay check was $13328 just working on the laptop for a few hours. try here

    ------------
    http://www.works23.com

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