ARNOLDS
PARK, Iowa — For almost 40 years, Carole Hinders has dished out Mexican
specialties at her modest cash-only restaurant. For just as long, she
deposited the earnings at a small bank branch a block away — until last
year, when two tax agents knocked on her door and informed her that they
had seized her checking account, almost $33,000.
The Internal Revenue Service
agents did not accuse Ms. Hinders of money laundering or cheating on
her taxes — in fact, she has not been charged with any crime. Instead,
the money was seized solely because she had deposited less than $10,000
at a time, which they viewed as an attempt to avoid triggering a
required government report.
“How
can this happen?” Ms. Hinders said in a recent interview. “Who takes
your money before they prove that you’ve done anything wrong with it?”
The federal government does.
Using
a law designed to catch drug traffickers, racketeers and terrorists by
tracking their cash, the government has gone after run-of-the-mill
business owners and wage earners without so much as an allegation that
they have committed serious crimes. The government can take the money
without ever filing a criminal complaint, and the owners are left to
prove they are innocent. Many give up.
“They’re going after people who are really not criminals,” said David
Smith, a former federal prosecutor who is now a forfeiture expert and
lawyer in Virginia. “They’re middle-class citizens who have never had
any trouble with the law.”