Congress must act to curb federal forfeiture laws

No charges have been filed against Terry and Sandy Dehko, the owners of a Fraser mom-and-pop grocery, yet the federal government has seized their bank account and crippled their small business. This David vs. Goliath tale is the latest outrage in federal takings that have confiscated billions of dollars from Americans without due process.

These abuses come despite multiple court rulings and federal legislation in 2000 that tried to put a leash on federal forfeiture law, signaling that it’s time Congress passed tougher legislation to curb threats to constitutional property rights.

Since the U.S. Department of Justice’s Asset Forfeiture Fund was established in 1986, the feds have used property forfeiture to deter criminal activity and to incentivize local governments to cooperate with federal anti-drug and anti-terrorism efforts. Under the 2001 Patriot Act, Congress expanded civil forfeiture to include cash transactions, requiring banks to report deposits of more than $10,000 to detect terror-related money-laundering schemes.

But this blunt instrument has instead been used to harass Americans like the Dehkos, owners of Schott’s Supermarket on 14 Mile, who routinely deposit grocery cash proceeds of $7,000 to $9,000 in their bank because their store’s insurance policy covers only $10,000 if their business is robbed.

Incredibly, the federal government suspects their activity is designed to circumvent the $10,000 cash reporting requirement. Under a secret warrant, the IRS in January cleaned out the store’s entire bank account of about $35,000, or 40 percent of its net income, without any charges being filed.

“We weren’t trying to hide anything,” says Sandy Thomas, the Dehkos’ daughter. “If we’re guilty of money laundering, why haven’t we been charged? And why has it taken eight months for us to prove to a judge that we’re not criminals?”

The Dehkos are finally getting their day in court on Oct. 23.

“Last year alone, the government took in more than $4 billion in forfeiture money,” said Institute for Justice Attorney Larry Salzman, who is representing the Fraser couple. “Thankfully, the Dehkos are prepared to go all the way to the Supreme Court if that’s what it takes to vindicate the right to private property for Americans everywhere.”

The feds’ abuse of forfeiture law has been reviewed by the Supreme Court before, in 1993, when the justices marginally limited government powers.

Yet the lure of billions in seized assets to pad federal and local law enforcement budgets has proved an irresistible incentive for police to continue to push the forfeiture envelope.

In 2012, Russ Caswell had his family-owned hotel in Tewksbury, Mass., seized by the feds because its rooms had allegedly been used for drug transactions 30 times over two decades. The Caswells’ livelihood was endangered despite their cooperation with the drug probe. The Justice Department intended to sell the hotel for $1.5 million and distribute 80 percent of the proceeds to the local police before a federal judge intervened last January, ruling that the government had exaggerated evidence and overstepped its authority.

“What country are we in?” asked a bewildered 68-year-old Caswell during the ordeal.

This abuse of due process must stop. In 2000, Congress, including the Dehkos’ representative, Sander Levin, D-Royal Oak, passed the Civil Asset Forfeiture Reform Act, which requires a pre-seizure hearing if the government attempts to take a person’s home or real estate. But no such hearing is required if the government takes cash, including an entire bank account, as happened to the Dehkos.

Congress should demand seizure hearings be extended to cash takings and review the entire forfeiture statute to make sure more innocent Americans aren’t caught up in the federal net.