Civil Asset Forfeiture

How Uncle Sam Became a Bank Robber

Civil forfeiture and money laundering laws let the IRS seize the accounts of legitimate businesses.


During her confirmation hearings last week, Loretta Lynch, President Obama's choice to succeed Eric Holder as attorney general, called civil forfeiture, a form of legalized theft in which the government takes people's property without accusing them of a crime, "a wonderful tool." Lynch, currently the U.S. attorney for the Eastern District of New York, suggested that innocent owners need not worry about getting hammered by this tool, because forfeiture "is done pursuant to supervision by a court," and "the protections are there."

In light of a forfeiture case that Lynch's office had abruptly dropped the previous week, her assurances rang hollow. The case, involving $447,000 that the government stole from a Long Island business and sat on for nearly three years, illustrates the injustice inflicted by seizures in which a "crime" that harms no one becomes an excuse for bank heists that enrich the agencies perpetrating them.

Since 1970 the humorously named Bank Secrecy Act has required financial institutions to report deposits of $10,000 or more to the Treasury Department, because such large sums of cash are obviously suspicious. You know what else is suspicious? Deposits of less than $10,000, because they suggest an attempt to evade the government's reporting requirement, which has been a federal crime, known as "structuring," since 1986.

In 2012 a Nassau County, New York, detective decided the banking records of Bi-County Distributors, a family-owned business that sells cigarettes and candy to convenience stores, were "consistent with structuring." That judgment was enough to trigger an IRS seizure of all the money in the account, which caused an immediate financial crisis for Bi-County's owners, brothers Jeffrey, Richard, and Mitch Hirsch. 

For the next 32 months, the Hirsches struggled to keep their business afloat, relying on credit extended by longtime vendors. In all that time, the brothers never got a hearing before a judge. Instead they received a series of offers from Lynch's office, which refused to give the money back but said the Hirsches could have part of it if they surrendered the rest.

In the end, with her confirmation hearings looming and the case generating negative publicity, Lynch agreed to return all the money. "Nobody in America should have to live through the nightmare we've experienced," says Jeffrey Hirsch. "Civil forfeiture nearly destroyed our business, even though we did nothing wrong."

The Bi-County case is by no means unique. The Institute for Justice, which represented the Hirsches, has lent its pro bono assistance to several other owners of cash-intensive businesses who inadvertently aroused the government's suspicion by making insufficiently large deposits, including an Iowa restaurateur and a Michigan grocer.

In all of these cases, there was no evidence that the money came from illegal activity, that the business owners were deliberately trying to hide their deposits, or that they knew doing so was illegal. Yet under civil forfeiture rules, their frequent deposits below the $10,000 threshold supplied "probable cause" to seize their hard-earned money.

From 2005 to 2012, according to a new report from the Institute for Justice, the IRS seized $242 million based on suspected structuring in more than 2,500 cases. During that period, the number of cases rose fivefold and revenue increased by 166 percent, but the gap between the amount seized and the amount ultimately forfeited also grew, suggesting the IRS has becoming increasingly reckless with the rights of innocent owners.

After The New York Times started asking questions about these money grabs last October, the IRS said it "will no longer pursue the seizure and forfeiture of funds associated solely with 'legal source' structuring cases unless there are exceptional circumstances." Legislation introduced last week by Sen. Rand Paul (R-Ky.) offers a more reliable solution, requiring prompt probable-cause hearings for people whose money is seized and allowing forfeiture only when they "knowingly" sought to avoid bank reports of "funds not derived from a legitimate source."

Contrary to Lynch's assurances, the protections are not there. But they could be.

© Copyright 2015 by Creators Syndicate Inc.

NEXT: The Parasite Economy

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

Please to post comments

63 responses to “How Uncle Sam Became a Bank Robber

  1. I thought "Coal Miner's Daughter" was good. She'll make a good Attorney General.

    1. No, she's a pirate! Arrrrr, matey!

      They should've gone with Dolly Parton, who is more popular.

      1. Have you seen Dolly Parton's new shoes?

        1. No, Are they as nice as Stevie Wonders?

        2. "Have you seen Dolly Parton's new shoes?"

          No, but unlike Dolly Parton I don't have to look in a mirror to see them.

        3. Neither has she! Har har.

    2. She'll make a good Attorney General.

      Especially with some high-tech Lynching.

  2. Legislation introduced last week by Sen. Rand Paul (R-Ky.) offers a more reliable solution, requiring prompt probable-cause hearings for people whose money is seized and allowing forfeiture only when they "knowingly" sought to avoid bank reports of "funds not derived from a legitimate source."

    But he said something stupid about vaccines! Doesn't that totally invalidate everything else he says?

    1. I know! Plus I think he might be related to that racist Ron Paul guy.


      As others here before have commented, if only we had some document that spelled out what powers the government had. They could even put add-ons, amendments if you will, to further clarify that document.

      1. The Constitution is like a hundred years old, and the guys who wrote it talked like fags.

        1. And what's a "congrefs?"

    2. But he said something stupid about vaccines!

      Fake scandal. We live in the age of them.

      1. I know, right?

        What difference, at this point, does it make?

      2. Were you born a fat, slimy, scumbag puke piece o' shit, or did you have to work on it?

      3. It's just a big nothingburger.

    3. Yes, but let's not act like the rhetorical concept of ethos hasn't been around for about 2,300 years.

    4. He's not even a real doctor!

      1. Remember when he pulled that political stunt of performing free eye surgeries on poor Guatamalans for the last 15 years ?

        1. That was just propaganda for Big Ophthalmology, and you know it!

    5. No. He went and got a photo op while having his vaccination booster. Nullifying the nullification and re-validating all his positions.

      Plus he called force field. So no one can touch him on anything now!

  3. the IRS said it "will no longer pursue the seizure and forfeiture of funds associated solely with 'legal source' structuring cases"


    "unless there are exceptional circumstances."

    *Damn* it!

    1. I've noticed we are frequently living in "exceptional" times.

    2. They're all "exceptional" circumstances, aren't they?

  4. "being physically or especially mentally disabled to an extent that special schooling is required."

    1. Or more coffee is required.

    2. Isn't that part of the requirement for being a member of Congress or running for President?

  5. "... a wonderful tool."

    She said it.

    1. A tool for the ages: strong, firm, and lovely to behold. Why it stands for freedom! And can also be used for a good rogering.


    Wow. The insanity of the posters at Bratfart on the "Muslim problem".

    1. Don't lock eyes with 'em, don't do it. Puts 'em on edge. They might go into berzerker mode; come at you like a whirling dervish, all fists and elbows. You might be screaming "No, no, no" and all they hear is "Who wants cake?" Let me tell you something: They all do. They all want cake.

      1. I like to peruse the wingnut sites every now and then to see what great phobia is sitting on their heads.

        Right now the ISIS executions are getting them stirred up -- LETS ROUND UP THE MUZZIES AND SHIP THEM OFF! WE NEED TO GIT BACK TO THE CONSTITUTION!

        1. I bet you're the kind of guy who would fuck a person in the ass and not even have the goddamn common courtesy to give him a reach-around. I'll be watching you.

          1. He's the kind of guy that would crawl through a perfect good whorehouse to get at a fat boy's ass.

            1. Must ... not.... criticize .... conservatives.

              Got it!

              1. He has his head so far up the president's ass that Obama can smell the Brylcreem.

            2. He's the kind of guy who will get a good look at a T-bone by sticking his head up a bull's ass, rather than take the butcher's word for it.

              1. He's the kind of guy who trolls a website for years being a complete asshole and thinks people dislike him for his politics.

                1. Maybe it is post-concussion syndrome?

                  1. So you think Obama just straight up punched him in the head while he was slurping that Presidential cock? Makes more sense than someone hanging around a place where everyone hates him and thinks he's an idiot for years on end.

                2. He's the kind of guy who trolls a website for years being a complete asshole and thinks people dislike him for his politics

                  I don't think you understand how analogies work.

    2. Bratfart

      So I figured it out. You're not a "bot". You're not a troll. You're not just a dumb adult.

      You're 12 years old, aren't you?

      1. No, you're 12!

      2. You just now noticed that I like to make up names? Ridicule is an effective tool.

        Hil-Dog should stay out of 2016 by the way. She is a complete nothing of a candidate. Now the Big Dawg was good though.

        1. BUSHPIGS!!11!!!!!CHRISTFAGS!!11!!!!

            1. Are you quitting on me? Well, are you? Then quit, you slimy fucking walrus-looking piece of shit! Get the fuck off of my obstacle! Get the fuck down off of my obstacle! NOW! MOVE IT! Or I'm going to rip your balls off, so you cannot contaminate the rest of the world! I will motivate you, IF IT SHORT-DICKS EVERY CANNIBAL ON THE CONGO!

        2. She is a complete nothing of a candidate.


    3. Cantaloupe calved Mexican drug cartel mule migrants please step back, America's Right has a new boogeyman, Muslims.

      1. I know. The American Negro has new company.

        1. Here's the problem I have with you Butt Likkker. I'm okay with people making fun of conservatives, but you make fun of conservatives, and then praise progressives.

          You PB are a Turd.Burglar.

        2. The American what?

          Dude, that's so racist.

    4. Do you ever stop playing for a fucking team? God, it must be exhausting to be you, to always be looking for what the other team did bad and what your team did good.

      Go do something productive...

  7. My dad was a judge and waaaaaay back in the 1970's when I was a punk teenager we used to argue politics. My position hasn't changed in 40 years. Policing for profit creates bad incentives, and taking away people's property absent conviction of a crime cannot possibly be constitutional.

    His position: Anything to fight the drug war was OK...i.e. drugs are bad mmm'kay.

    1. What of drug less situations, such as are/were the subject of the article, and a number of other situations.

  8. Last October, the IRS said it "will no longer pursue the seizure and forfeiture of funds associated solely with 'legal source' structuring cases unless there are exceptional circumstances."

    So, you're NOT going to pursue money-grabs from legit businesses who aren't doing ANYTHING illegal???

    Wow, how benevolent Your Grace!
    Thank you, Your Grace.

    1. We're keepin' ya safe, providin' protection. Be a real shame if something were to happen to yer business.

    2. And who pray tell is willing to entrust what of value to the judgmental generosity and honesty of the good old IRS? Talk of Noblese Oblige.

  9. Tyranny: Banking Style

    What sort of political systems promote citizens, including those in businesses, spying on each other in behalf of their governments? Authoritarian despotisms. In the past, think of Mao in China, Hitler in Germany, and Stalin in Russia. In the present, think of The United States of America . . . even before 2008.

    In a democratic society fostering freedom, banks exist for one reason . . . to make a profit for their owners. They are not governmental entities. They do not exist to provide a "social good".

    In the current context of insatiable, governmental demands to confiscate the money of the productive to buy the votes of the unproductive, politicians and bureaucrats now have forced banks to become unpaid policemen of their customers. In typical government-speak, the Banking Secrecy Act really is the Banking Non-Secrecy Act.

    Admittedly, few people harbor sympathy for bankers. Yet, their plight represents a wider problem prevalent in many arenas outside finance. It's a reflection of The New American Tyranny.

    The consequences are inescapable. Prediction. They will be unpleasant ( In fact, they already are.

  10. Hey you guys I have found the perfect job as a full time student, it has changed my life around! If you are self motivated and social media savvy then this is ideal for you. The sky is the limit, you get exactly how much work you put into to it.
    click on this link to get started and see for yourself????.

  11. Apparently Barack Obama has never associated himself with an honest person.

  12. We can modify the 5th Amendment's "Takings Clause" to stop corrupt forfeiture laws, as well as reverse Kelo vs New London ('05)

    "No person shall be deprived property, without due process of law; nor shall private property be taken for public use, without just compensation, or on behalf of private use, nor shall it be subject to arrest"

  13. Reading the above article, there is no way that Ms. Lynch should be confirmed to anything, though she likely will be our next Attorney General, heaven help us all. In passing,I wonder as to how long it might take the nation to recover from 8 years of Obama et al, assuming that it does recover.

    That having been said, Civil Asset Forfeiture was, and continues to be nothing other than THEFT UNDER COLOR OF LAW. Shame on government.

  14. I'm going to show you how I make a living online! Here is a company that will pay you $100 if you don't make money in 24 hours. Take a look this company has an A+ Business Bureau Rating
    === ?w?w?w.M?o?n?e?y?k?i?n.c?o?m?

  15. What are the odds that these victims now accept bitcoin with their business?

    In 1933 THE DAY he was first inaugurated, FDR signed an order confiscating all the gold in the country (at the going rate per ounce) after a bank holiday of a few days HE REVALUED HIS NEW GOLD at about 50% MORE to finance his new socialist programs !
    NOW THAT WAS A BANK THEFT !! democrats are really good at that.

  17. How about just repealing 18 U.S. Code ? 1956 - Laundering of monetary instruments?

  18. My last pay check was $ 9500 working 10 hours a week online. My Friend's has been averaging 14k for months now and she works about 21 hours a week. I can't believe how easy it was once I tried it out
    ????? http://www.Workvalt.Com

Comments are closed.