IJ Earns Two Civil Forfeiture Victories In Michigan

Good news from Michigan! Just two months after IJ jumped in to contest the seizure of more than $35,000 from a family-run grocery store near Detroit, the government hoisted the white flag and “voluntarily” dismissed its own case. But wait, there’s more good news: The government also dismissed its case against new IJ client Mark Zaniewski, the sole proprietor of a gas station just down the street.

As reported in the last issue of Liberty & Law, the IRS seized the entire operating account of Schott’s Supermarket in Fraser, Mich., back in January using civil forfeiture. The IRS claimed the owners of Schott’s Supermarket, Terry Dehko and his daughter, Sandy, violated federal money-laundering laws by making frequent cash deposits of less than $10,000 into the store’s bank account. But it is not illegal to engage in cash transactions of less than $10,000; it is only illegal to do so for the specific purpose of evading bank reporting requirements. As Terry and Sandy would have explained had anyone from the government bothered to ask, their deposits have nothing to do with bank reporting requirements and everything to do with the fact that their insurance policy only covers cash losses up to $10,000.

Soon after getting involved, we began hearing from other innocent property owners whose bank accounts were raided by the same IRS task force that hit the Dehkos. One of those people was Mark Zaniewski, the sole proprietor of Metro Marathon gas station near Schott’s Supermarket. Like Sandy and Terry, Mark makes frequent cash deposits, and, like Terry and Sandy, it has nothing to do with trying to avoid bank reporting requirements. Instead, Mark’s problem is that he is often the only person on duty at the gas station, which means he goes to the bank when he can—not whenever he wants. As a result, he often finds himself making substantial cash deposits on those days when he can get away long enough to run by the bank. But, like the Dehkos, the government never bothered to ask Mark why he deposits money the way he does. It simply took his money and dared him to try to get it back.

Well get it back he did, with the help of his friends at IJ. And after initially resisting IJ’s argument that due process requires a prompt post-seizure hearing in civil forfeiture cases, the government soon threw in the towel in both the Dehko and Zaniewski cases after we and our local counsel, Steve Dunn, showed that the government had missed a key filing deadline.

So that means Terry, Sandy and Mark will get their money back. It also clears the way for us to focus on the countersuit we brought seeking a ruling that simply making frequent cash deposits does not violate federal “structuring” law and an injunction forbidding similarly ham-fisted seizures going forward. We expect to have more good news soon from the front lines of the civil forfeiture fight in Michigan.

Clark Neily is an IJ senior attorney.