Asset Forfeiture

After Returning the Money They Stole, Feds Will Pay Interest and Legal Expenses Too

A convenience store owner accused of "structuring" will get some compensation for his forfeiture ordeal.

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Institute for Justice

First the feds stole $107,000 from Lyndon McLellan, saying his bank deposits of money from his North Carolina convenience store were suspiciously small, as if he were trying to avoid the reporting requirement for transactions involving $10,000 or more. Then the feds refused to return the money, even after the IRS and the Justice Department announced that they would no longer pursue such "structuring" cases unless they involved proceeds of illegal activity. Offering to return half the money last March, a federal prosecutor warned McLellan's lawyer that calling public attention to the case would only make the government less inclined to reach a settlement. Two months later, the feds finally agreed to give McLellan his money back but without interest and without compensating him for the $22,000 he had paid his lawyer and a forensic accountant before the Institute for Justice took the case pro bono. This week a federal judge completed McLellan's vindication by dismissing the forfeiture case with prejudice, making him eligible to recover his costs and the interest on his purloined savings under the Civil Asset Forfeiture Reform Act (CAFRA).

"The damage inflicted upon an innocent person or business is immense when, although it has done nothing wrong, its money and property are seized," wrote U.S. District Judge James Fox. "Congress, acknowledging the harsh realities of civil forfeiture practice, sought to lessen the blow to innocent citizens who have had their property stripped from them by the Government. Through CAFRA , Congress provided for relief in such cases. This court will not discard lightly the right of a citizen to seek the relief Congress has afforded."

Under CAFRA, the owner of a seized asset is entitled to attorney fees, litigation costs, and interest if he "substantially prevails" in challenging a forfeiture. Dismissal with prejudice, which means the government is barred from bringing the case again, makes it much easier to satisfy that standard. The Justice Department argued that Fox should ignore that issue in deciding how to dismiss the case. Fox disagreed.

Fox's ruling, which was issued on Tuesday, "recognizes that Lyndon should not have to pay for the government's outrageous use of civil forfeiture laws against a totally innocent property owner," says Institute for Justice attorney Robert Everett Johnson. "The government took Lyndon's property even though he did nothing wrong, forcing him into a prolonged and expensive legal nightmare. Now the government will have to comply with its obligation to make Lyndon at least partly whole."

The Institute Justice is seeking CAFRA compensation in a similar structuring case involving Carole Hinders, an Iowa restaurant owner who got her money back after I.J. took up her cause. The U.S. Court of Appeals for the 8th Circuit will hear oral argument in that case next Tuesday. "The government cannot turn a citizen's life upside down and then walk away as if nothing happened," says Wesley Hottot, an I.J. attorney who is representing Hinders. "Now that Lyndon has been vindicated, we look forward to holding the government to account in Carole's case as well."

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  1. …a federal prosecutor warned McLellan’s lawyer that calling public attention to the case would only make the government less inclined to reach a settlement.

    I suppose punitive damages are out of the question.

    1. What kind of “damages” are you implying?

      /preet

    2. They owe him double what they took. That would be justice.

      1. Why should the taxpayer be forced to subsidize this injustice.
        The highest level government official that authorized the seizure should have to pay the extra, from his/her own pocket.

        1. At the bare minimum, some Government Almighty bastard SOMEWHERE should lose his or her Government Almighty fat-cat job, AND be forever barred from EVER again sucking at the teats of us sorely abused tax-slaves. Sad to say, I think that’s probably WAY-way tooooo terribly much to ask, in today’s Government-Almighty-worshiping mood…

          1. Scienfoology Song? GAWD = Government Almighty’s Wrath Delivers

            Government loves me, This I know,
            For the Government tells me so,
            Little ones to GAWD belong,
            We are weak, but GAWD is strong!
            Yes, Guv-Mint loves me!
            Yes, Guv-Mint loves me!
            Yes, Guv-Mint loves me!
            My Nannies tell me so!

            GAWD does love me, yes indeed,
            Keeps me safe, and gives me feed,
            Shelters me from bad drugs and weed,
            And gives me all that I might need!
            Yes, Guv-Mint loves me!
            Yes, Guv-Mint loves me!
            Yes, Guv-Mint loves me!
            My Nannies tell me so!

            DEA, CIA, KGB,
            Our protectors, they will be,
            FBI, TSA, and FDA,
            With us, astride us, in every way!
            Yes, Guv-Mint loves me!
            Yes, Guv-Mint loves me!
            Yes, Guv-Mint loves me!
            My Nannies tell me so!

  2. Your client needs to resolve this or litigate it. But publicity about it doesn’t help. It just
    ratchets up feelings in the agency.

    Yep, we’re at the mercy of the feelz of our betters, totally unrelated but does anyone have a woodchipper for sale.

    1. You mean peasants shouldn’t be punished for making their betters look bad? Lese Majeste, you know.

    2. What a surprise, that was from an AUSA, possibly the lowest form of life in the federal justice system.

  3. Now all we need to do is pass a law eliminating immunity for the government fucksticks who pull this crap.

    1. Dreamer, you know you are a dreamer.
      Well can you put your hands in your head, oh no!
      I said dreamer, you’re nothing but a dreamer.

      1. Of course it has zero chance of happening, and even if it did, I’m sure the courts would declare it ‘unconstitutional’ because FYTW and restore immunity for themselves and their fellow officers of the court. Since judges just made up immunity out of nowhere in the first place.

        1. If there were consequences for their actions, they might have to stop doing them. Power coupled with responsibility is no fun at all.

      2. Yer bloody well right. πŸ˜›

  4. Perusing another thread, I saw a reference to “the late, great [REDACTED] Episiarch”

    What happened? I’ve been intermittent lately.

    1. Probably a joke, he was around yesterday.

      1. It was AIDS Rabies

          1. Turtle Zika AIDS Rabies!

            1. He’s got the gonhosyphylchlamiAIDS. He tried to get mono, but that wasn’t a challenge.

              1. As long as it isn’t EbolAIDs he’ll be fine.

    2. It turns out he’s neither.

      1. But is he redacted?

        1. He didn’t actually fall into the redactor.

  5. “a federal prosecutor warned McLellan’s lawyer that calling public attention to the case would only make the government less inclined to reach a settlement. ”

    They truly are thugs.

    Anyone involved in any way to asset confiscation in this manner does a community wrong.

    They’re essentially evil in my view.

    1. No ‘essentially’ about it, they are flat out evil.

    2. And I thought it was just local law enforcement using Mafia tactics.

    3. if the business owner wronged in this case had even suggested a mere HINT of any consequences for the gummint goons to fail to return his cash forthwith, HE would be in jail for making threats against a public official.

      The goon making these threats needs to be dealt with… like being forced to stand in the local soup line when his pogie runs out after being fired for malfeasance and abuse of the public trust vested upon him.

  6. “The government cannot turn a citizen’s life upside down and then walk away as if nothing happened,”

    Uh, I’m confused because that statement seems to defy the unwritten FYTW clause of the Constitution?

    1. The government cannot turn a citizen’s life upside down and then walk away as if nothing happened

      I know right? Since when? They do it all the damn time!

  7. It would be nice if Ms. Hinders’ case made it to SCOTUS and we’d get a (somewhat) definitive ruling on it. They’ve given royal treatment to the 14th Amendment, they could show the 5th some love too.

  8. Justice would truly be served if the fines and fees came directly out of the funds allocated to the annual budget for the prosecutors office.

    1. Actually, justice would be served if the fines and fees came out of the pockets of the actual perpetrators of this horse shit.

      1. Never going to happen,though for the moment, dreaming is still free and unregulated.

  9. The IRS will then claim he owes income tax for 2016 on all the returned money, interest and compensation payments so the government will still get to steal a lot from him.

    1. No, he already paid the tax on the revenue generated from the money while it was in the possession of the Federal government since asset seizure does not eliminate you tax liability. He will have to pay taxes on the interest and if he deducted the attorney expenses on a prior year’s return the tax on that.

  10. The essential problem is that there seems no punishment at all for wrong doers, wearing that “government suit”, sad to note.

  11. Returning the money, paying interest – it’s a start.

    Now jail the thugs who stole the money in the first place.

  12. just before I saw the receipt that said $7527 , I accept that my mom in-law woz like actualey making money in there spare time from there pretty old laptop. . there aunt had bean doing this for less than twentey months and at present cleared the depts on there appartment and bourt a great new Citro?n 2CV . look here…….
    Clik This Link inYour Browser.
    ???????? http://www.Wage90.com

  13. How about holding the individual accountable, instead of the tax payers?

  14. Instead of CAFRA, Congress *could* have simply changed the law such that the government required a criminal conviction to seize property, which is the way it should actually be. Instead they are continuing to allow the government to violate the 5th Amendment with civil forfeiture, and placing the onus on the victim to get their property back and reach a very high standard of victory to get it back.

  15. My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can’t believe how easy it was once I tried it out. This is what I do..

    Clik This Link inYour Browser….

    ? ? ? ? http://www.Workpost30.Com

  16. so, in true socialist form, the gummint after persecuting an individual and making a hash of his life, will now take the money to “fix” their tyrannical overreach from the rest of us. Well, better this one man be reasonably well restored than to get hosed….. but it makes me furious that WE the rest of the people pay the price ultimately.

    What Congress need to do is to change the Civil Asset Forfeiture laws to bring some sort of direct consequences against the gummint nitwits who perpetrate such fraudulent thefts upon innocents. Until there are consequences of suffient pain levied upon the miscreants slopping at the public trough, nothing will change. And SOMETHING needs to change.

    1. Who would want to work for the government if it meant that they would be treated the same as everyone else – having to pay for their absolutely malicious acts? Heck, under those conditions they might as well go to work for the Mafia.

  17. ??My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can’t believe how easy it was once I tried it out. This is what I do..

    Clik This Link inYour Browser??….

    ? http://www.Workpost30.com ?

  18. My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can’t believe how easy it was once I tried it out. This is what I do..

    Clik This Link inYour Browser….

    ? ? ? ? http://www.Workpost30.Com

  19. IJ is one of my favorite charities. I’m glad that the money I donated went to help defend this guy pro bono.

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