IRS Drops Forfeiture Case, Returns $107,000 Taken In Bogus 'Structuring' Prosecution
from the teaching-old-thieves-new-tricks dept
Federal prosecutors have dropped an attempt to seize $107,000 from a North Carolina small business owner using asset forfeiture laws following several weeks of media scrutiny.
According to the Institute for Justice, a public interest law firm, the Internal Revenue Service and Justice Department moved Wednesday to voluntarily dismiss their case against Lyndon McLellan.
McLellan’s case was raised (as a “hypothetical”) by Rep. George Holding during IRS testimony in front of the House Ways and Means Committee. Holding asked IRS Commissioner John Koskinen why the agency was continuing to pursue a questionable “structuring” case against McLellan, considering both the IRS and the DOJ had issued policy revisions stating the government would not do this unless there was evidence the deposited money originated from criminal activity.
Koskinen agreed that McLellan’s case should be dropped and promised to look into it. Meanwhile, the prosecutor overseeing McLellan’s case contacted the Institute for Justice, claiming that its release of case details to House members would not only not help McLellan’s case but could actually make it worse for him — citing the vaguely-threatening “ratcheting” of “feelings” within the IRS by this public disclosure. He then offered McLellan a “final offer” of half his money back.
McLellan didn’t take the offer. Now, he’s getting all of his money back — which he’ll need, considering he’s already racked up plenty of expenses fighting the IRS and DOJ.
McLellan still had to pay for a lawyer, not to mention $19,000 to have his business audited. The government also refuses to pay for interest earned on money after it has been seized.
While the IRS may be curbing its dubious forfeitures, there are still problems that need to be addressed within the DOJ itself.
Last week, the Justice Department said it would investigate two other prosecutors after one business owner whose assets were seized said he had been punished more harshly after publicizing his case and another said he had been threatened with a felony charge if he did not agree to give up some of his money.
Kind of dispels the notion that asset forfeiture has anything to do with “justice.” As these programs continue to suffer from mainstream exposure, those heading up prosecutions seem unwilling to scale back their efforts accordingly. They can see the revenue stream drying up and they’re getting desperate. There will be more than a few forfeiture victims whose cases will stay off the radar. Unfortunately for them, these “zealous” prosecutors appear willing to do whatever they can to ensure funds seized with no evidence of criminal intent or origin remain inaccessible to those who actually earned them.