Thanks to a law established to crack down on drug dealers and terrorists, the I.R.S. seized his business bank account.
The I.R.S. and the Justice Department have recently announced that they would no longer be adhering to a law designed to target business owners suspected of criminal activity. But it’s too late for McLellan. He hasn’t been charged with any crimes but the I.R.S. has already taken $107,000 from the convenience store owner.
The rationale? McLellan does business in cash.
When you deposit more than $10,000 in cash, your bank is required to report the transaction. Structuring deposits — stacking them in small amounts so such reports aren’t triggered — is illegal. The law is designed to target drug dealers and terrorists, but business owners like McLellan, who only deal in small amounts of cash, can become collateral damage to its enforcement.
Since the decision by the I.R.S. and Justice Department to part ways with civil forfeiture wasn’t retroactive, the federal government isn’t following suit.
The United States attorney for the Eastern District of North Carolina is still pursuing the forfeiture of McLellan’s funds.
“It took 13 years to build up my business account and less than 13 seconds to take it away,” McLellan says in a video produced by the Institute for Justice. “I chose to try to keep going and move forward. It’s hard to overcome this kind of loss in today’s business world.”
The notion that you don’t have to be charged with a crime before your goods are taken away sounds ridiculous. Almost as ridiculous as the (very real) names of past civil forfeiture cases that John Oliver read on his show, Last Weekend Tonight.
After all, as John Oliver explains, it’s not you that’s on trial. It’s your stuff.