Small-town NC Case Shows Federal Overreach

My latest piece for the Civitas Institute discusses a small-town North Carolinian’s fight federal civil asset forfeiture:

…Mr. McLellan’s case demonstrates a fundamental problem. Intended to catch criminals, the law ensnares small-business owners who are not trying to avoid reporting requirements, but are either simply trying to avoid burdensome paperwork or have no idea the structuring rule exists. This is why the IRS and Justice Department recently announced that they would cease using “structuring” as a reason to go after small business owners who are not suspected of crimes. So why is McLellan still having to fight for his hard-earned money?

First, the new rules were announced after Mr. McLellan’s assets were seized, and no provision was made for their mandatory retroactive application. Therefore, the announcement did not require any action on his case by anyone at the federal level.

Second, the federal prosecutor involved, Steve West, has declined to dismiss Mr. McLellan’s case. To be clear, he does have the power to drop the charges. Just this past December, federal prosecutors in Iowa dropped the charges against small-business owner Carole Hinders in a similar case. However, West has told McLellan’s attorney he needs to either resolve or litigate his case, and that no amount of publicity will lead to its dismissal. This despite the fact that  Congress and the IRS commissioner have specifically said his case fails to follow new federal forfeiture policies.

West’s idea of “resolving” the case would be for McLellan to enter into a settlement with the IRS in which he loses only half of his money – almost $60,000! It took McLellan over 13 years to earn this sum, and he is not giving it up without a fight.

Read the entire piece here.

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