UPDATE: The government gave it back. Thanks to an eagle-eyed Facebook user for bringing this to our attention.
Lyndon McLellan runs a convenience store in rural North Carolina. He sells soda, cigarettes and catfish sandwiches for a living.
Thanks to a law established to crack down on drug dealers and terrorists, the I.R.S. seized his business bank account.
The I.R.S. and the Justice Department have recently announced that they would no longer be adhering to a law designed to target business owners suspected of criminal activity. But it’s too late for McLellan. He hasn’t been charged with any crimes but the I.R.S. has already taken $107,000 from the convenience store owner.
The rationale? McLellan does business in cash.
When you deposit more than $10,000 in cash, your bank is required to report the transaction. Structuring deposits — stacking them in small amounts so such reports aren’t triggered — is illegal. The law is designed to target drug dealers and terrorists, but business owners like McLellan, who only deal in small amounts of cash, can become collateral damage to its enforcement.
Since the decision by the I.R.S. and Justice Department to part ways with civil forfeiture wasn’t retroactive, the federal government isn’t following suit.
The United States attorney for the Eastern District of North Carolina is still pursuing the forfeiture of McLellan’s funds.