Offshore Asset Protection – A Sensible Option Safeguarding Against Civil Forfeiture

Offshore Asset Protection is almost a necessary measure in today’s world. All one has to do is open any newspaper or news website and it isn’t hard to find stories of civil forfeiture. For example this article from Sept. 25, 2013 on the USA Today Website:

Assault by civil forfeiture

The Feds seized more than lunch money from a Michigan grocer.

Terry Dehko owns Schott’s Supermarket, a small grocery store outside Detroit. An embodiment of the American Dream, Terry has successfully run his family business with his daughter Sandy for the past three decades. But earlier this year the IRS turned their dream into a nightmare. A lawsuit they are filing today in federal court seeks to change that.

In January 2013, the federal government obtained a secret warrant and took every dollar out of the Dehko’s grocery store bank account — more than $35,000 — without any warning or explanation. Only later would Terry and Sandy discover that, despite doing absolutely nothing wrong, the IRS and the U.S. Department of Justice teamed up to seize their money using an increasingly abusive tactic called civil forfeiture.

Civil forfeiture is now one of the most serious assaults on individual rights in America. It allows the government to take cash, cars, homes and other property from people without ever convicting or even charging them with a crime. Worse, civil forfeiture turns the American principle of innocent until proven guilty on its head. To get their money back, Terry and Sandy must go to court against the full might of the Department of Justice to prove their innocence. In fact, the vast majority of civil forfeiture cases nationwide are never heard by a judge or jury because victims can seldom afford to fight the seizures.

Terry came to America from Iraq in 1970 to create a better life. He bought his grocery store in 1978 and, after more than three decades of hard work, the store has prospered, providing good food and great service to his neighbors. The Dehkos now employ about 30 people.

Federal law requires banks to report cash transactions in excess of $10,000 to the IRS. And it is illegal for a person to “structure” one’s transactions — to break deposits up into lesser amounts — to avoid those reports. Structuring law, expanded by the Patriot Act in 2001, is now just one more way the government is collecting vast amounts of information about the private lives of everyday Americans. Officials claim that Terry and Sandy violated this law.

But it’s not illegal to deposit lesser amounts of cash when one has a legitimate business purpose for doing so — and the government never bothered to ask why the Dehkos made their deposits.

Like most grocery stores, Schott’s Supermarket gets cash every day from customers. Terry and Sandy make frequent cash deposits under $10,000 because it’s safer to put their money in the bank than keep it in their cash registers — and their store’s insurance policy only covers cash losses up to $10,000. But the government didn’t investigate — it just skulked into the bank and seized the Dehkos’ money. Nine months later, Terry and Sandy are still waiting for a hearing before a judge to contest the seizure.

The federal government seized over $4 billion through forfeiture just last year, some of it from people like Terry and Sandy who have done nothing wrong. Since most cases settle without being heard by a judge, it is not known just how many people like them are victimized each year. But they are hardly alone. The government recently seized $135,000 from the Cheung family, also from Michigan, for making similar cash deposits from their Chinese restaurant. Reza Ella, a used car dealer in Albuquerque, N.M., had $800,000 seized earlier this year — all of the working capital for his business. The government held his money for months, his business was left in desperate condition, and the stress took a toll on his health. Ultimately, the government returned his money because it had no case against him.

The government should not use civil forfeiture to take money from people who have done nothing wrong. That is why today Terry and Sandy are fighting back. They have joined with the Institute for Justice to demand a hearing to get their money back now.

A prompt hearing to contest a civil forfeiture seizure is the only way to ensure that the government does not take what rightfully belongs to innocent people. By standing up for their rights, the Dehkos will help set precedent protecting the property rights of all Americans.

Larry Salzman is an attorney with the Institute for Justice. He represents the Dehko family in their civil forfeiture lawsuit.

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