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The IRS Intentionally Targeted Innocent Small Business Owners in Order to Steal Millions Via Forfeiture Laws

Earlier this month, a report from the Treasury Department’s Inspector General detailed how the Internal Revenue Service used a restriction on deposits to bilk otherwise law abiding individuals and businesses of millions of dollars using asset forfeiture laws. Those restrictions require that any deposits made to a bank above $10,000 be reported to the IRS. The stated intention of that restriction is to draw attention to profits generated by illegal acts, such as terrorism and the violation of drug prohibitions.

In order to escape that scrutiny, many of those involved in such activities employ what is called “structuring,” which consists of splitting large deposits into multiple smaller deposits that are below that $10,000 threshold. However, many others involved in completely legal activities also do the same thing for various innocent reasons. Those reasons include a lack of awareness of those restrictions, insurance policies that limit coverage of deposits to less than that amount, and simply an effort to avoid extra paperwork (often on the advice of bank employees).

While structuring is illegal under the federal Bank Secrecy Act, according to the Inspector General it is really just a technicality that is intended to allow the initiation of an investigation into whether the deposits in question were derived from illegal activities. Instead, the IRS often used the practice of structuring alone as a justification to seize those deposits, via civil asset forfeiture. They also intentionally targeted small businesses and individuals engaged in legal activities due to the fact that they were less likely to be able to fight the forfeitures and in order to avoid “time consuming” investigations of actual criminals.

Via the Washington Post:

They “were not put in place just so that the Government could enforce the reporting requirements,” as the IG’s report puts it.

But according to the report, that’s exactly what happened at the IRS in recent years. The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indications of connections to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents’ suspicions, leading to the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity.

The IG took a random sample of 278 IRS forfeiture actions in cases where structuring was the primary basis for seizure. The report found that in 91 percent of those cases, the individuals and business had obtained their money legally.

“Most people impacted by the program did not appear to be criminal enterprises engaged in other alleged illegal activity,” according to a news release from the IG. “Rather, they were legal businesses such as jewelry stores, restaurant owners, gas station owners, scrap metal dealers, and others.”

More troubling, the report found that the pattern of seizures — targeting businesses that had obtained their money legally — was deliberate.

“One of the reasons why legal source cases were pursued was that the Department of Justice had encouraged task forces to engage in ‘quick hits,’ where property was more quickly seized and more quickly resolved through negotiation, rather than pursuing cases with other criminal activity (such as drug trafficking and money laundering), which are more time-consuming,” according to the news release.

In most cases, the report found, agents followed a protocol of “seize first, ask questions later.” Agents only questioned individuals and business owners after they had already seized their money.

In many cases, the property owners provided plausible explanations for their pattern of deposits. But these explanations appeared to have been disregarded or ignored.

“In most instances, we found no evidence that attempted to verify the property owners’ explanations,” according to the report.

It probably shouldn’t be that surprising that the Feds’ official revenue generators at the IRS jumped on an opportunity to go the extra mile and generate even more cash to fund our disfunctional, violent uncle’s war machine. Nor should it be particulary shocking that they avoided the tedious work of investigating actual criminals in favor of preying on innocent people that lack the ability to fight back.

Incidentally, it’s unknown exactly how much money the IRS stole from innocent businessmen, because they don’t voluntarily disclose those figures and refused to honor Freedom Of Information Act (FOIA) requests for that information even after those requesting it said pretty please.

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Update: RCMP Officer Convicted of Abuse and Sexual Torture of Son Sentenced to 15 Years in Prison

In December of last year, I posted about a Royal Canadian Mounted Police Officer who had been convicted of numerous abuse-related offenses after his son escaped from a makeshift dungeon he had created in the basement of his house. On Wednesday, that officer was sentenced to 15 years in prison for the torture he had infilcted against his son. Critics, including a group known as “Bikers Against Child Abuse,” complained that the sentence, which likely will amount to eight years at the most, was insufficient in light of the severity and nature of the crimes involved.

At the time of his arrest in 2013, that son was described as looking like “someone from a concentration camp movie.” Despite being eleven years old at the time, he weighed just 50 pounds and had scars on his body, including those consistent with someone who had been shackled at the wrists and ankles for an extended period of time. In addition to being starved, chained up, and physically abused, the child was also sexually tortured by having his genitals burned with a lighter. Ironically, the officer worked for the RCMP’s counter-terrorism unit.

After escaping from the basement where he had been confined, the officer’s son was spotted in nearby houses attempting to get water from the faucets within the yards. When one neighbor attempted to take him home, he collapsed from the effects of malnourishment. Ottawa Police Det. Johanne Marelic and other investigators described his condition when they first saw him as “unfathomable” and “difficult to comprehend.”

During court, the officer apologized for “being a monster” to his son and attributed his actions to PTSD resulting from having been abused himself. Although Justice Robert Maranger described the charges as “horrific” and the “worst kind of abuse” while stating that he didn’t believed the officer had shown any true remorse, he nonetheless indicated that he avoided giving him a much harsher sentence (prosecutors were seeking 23 years) due to the testimony from expert witnesses about his mental state and the contention that the abuse was caused by PTSD.

The officer was convicted of two counts of aggravated assault, one each of sexual assault causing bodily harm, unlawful confinement, assault and failing to provide the necessaries of life, plus several firearms offenses. In addition, the officer’s wife (and the prototypical evil stepmother of the child) was also convicted of assault with a weapon and failing to provide the necessaries of life, but received a sentence of just three years. The names of the officer and his wife have not been released publicly per a court order to avoid identifying the child who was victimized by them.

Local News Coverage

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RCMP Officer Lies About Needing Permission to Film Police; Admits Police Parking Illegally is Wrong

The following video was shared with the CopBlock Network by Donald Smith, who frequently films the police as he travels within Canada, via the CopBlock.org Submissions Page.

In the video, which was taken in  Victoria, British Columbia and uploaded to Youtube, Smith can be seen questioning an (unidentified) officer with the Royal Canadian Mounted Police about why he is parking his motorcycle on the sidewalk even though he would ticket citizens for doing the same thing.

Initially, the officer responds by explaining that he’s not breaking the law because police are exempt from that law. However, those exemptions are generally based on the idea that police can disregard such laws while responding to emergencies or, at the very least, while performing official police functions. Although the exact circumstances leading up to the conversation on the video weren’t given, the officer makes it pretty clear in his response that neither of those things are the case.

After some discussion of whether the officer should be giving tickets to people for parking infractions while he himself is illegally parked, the officer soon attempts to shift the subject by lying about the legality of filming in public. According to this officer, recording in public requires the permission of the person being filmed.

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Although it’s not terribly uncommon for cops not to know the laws they are supposed to enforce or for them to try and enforce laws even though they don’t actually understand them, the fact that this officer claims that it became illegal to film him in public without permission on January 1st (implying that a new law was passed) is pretty indicative that he is intentionally lying. Shortly after, the officer uses that horrible threat that police for some reason think bothers people filming them that he will also film Smith (without having asked his permission first).

(For the record, no such law was passed and it is completely legal to film anyone, including the police, in public view – even in Canada.)

Then the discussion returns to whether he should be parking his motorcycle on a sidewalk. While continuing to maintain he is exempt from such rules and clarifying that police officers can even park cars on the sidewalk if they feel like it, the officer then readily admits that such a double standard is wrong. Quite surprisingly, he then actually promises not to park on the sidewalk next time.

If you have a video, personal story involving police misconduct and/or abuse, or commentary about a law enforcement related news story, we would be happy to have you submit it. You can find some advice on how to get your submission published on the CopBlock Network within this post.

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