Tag Archives: Department of Treasury

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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Michigan State Police Illegally Search; Use Falsified License to Entrap Legal Medical Marijuana Facility

The following post was shared with the CopBlock Network by Derek Antol, via the CopBlock.org Submissions Page.

Date of Interaction: July 09, 2014
Officers Involved: Det. Sgt. Karl Schmitz, Trooper Vogt, Det. Phillip Marshall, Det. Casey Bringedahl, Det. Kate Straus
Department Involved: Michigan State Police
Department Phone Number(s): West Michigan Enforcement Team (WEMET) 231-759-9600 Det. Kate Straus 616-430-5606

On Wednesday, July 9th 2014, my store and both my homes were raided by state police (WEMET). I received a call from my fiance mid-afternoon informing me that there was somebody from the Department of Treasury, Tobacco Enforcement Division, at the store inspecting our merchandise. He wanted to speak to the owner so I told her to put him on the phone. He stated that there were items in question at the store and that he was going to search the rest of the building. I told him he needed to leave and come back with a warrant. He told me that he was not going to leave.

Immediately, I dropped what I was doing and headed for the store. Upon my arrival, I found four people in my store that I did not recognize. Right away, I pulled out my phone and started videotaping everything. He asked about tobacco products in the store and I notified him that our products are not for use with, nor intended for use with tobacco. Then I showed him the sign on the wall which states this as well. I then asked him to leave, which he did not. I asked the identity of two officers who were accompanying him, who then identified themselves as Sgt. Schmitz, and Trooper Vogt. After my refusal to show them identification, I asked them for theirs and they refused. I insisted that if they are proclaiming to be officers of the law, that they needed to prove as much. They finally did.

Again, I asked these four persons to leave the store and get a warrant. They refused and proceeded to the rear of the building which is a completely separate business entity with its own tax identification number as well as a separate electrical meter. The people from the department of tobacco enforcement had no business going back there as it is not open to the public. They proceeded anyway. Upon searching the rear of the building, accompanied by the two state police officers, they observed marijuana that we were legally allowed to be in possession of. Again, the officers were told to leave and follow due process of law and obtain a warrant. Once again, they refused to leave. Det./Sgt. Schmitz then contacted Det. Phillip Marshall of WEMET and notified him of the marijuana found in the rear of the building.

Three years ago, WEMET raided our place of business and our home after illegally searching our vehicle without a warrant and against our will, and found us to be in possession of less than 12 ounces of marijuana. Under the state’s medical marijuana law, we are allowed to be in possession of 17.5 ounces. WEMET seized the marijuana along with all the cash we had and then proceeded to violate our rights after we had both invoked our Fifth and Sixth Amendment rights. We were then taken into custody and further questioned against our will. To shorten that story, no charges were filed against us and our belongings, including the less than 12 ounces of marijuana, were returned to us after protesting outside the Muskegon County Hall of Justice where nearly 100 supporters stood with us. We filed a lawsuit against WEMET, Muskegon Police, and Muskegon County Prosecutor’s Office. The attorney we retained to handle this case screwed us around for two years and we ended up having to retain a local attorney to go after him for our retainer back. We in turn retained an attorney based in Lansing who handles these kinds of lawsuits against government entities. Unfortunately, the case exceeded the three year statute of limitations as is no longer active…which brings us back to this story.

After getting information of the marijuana found, Det. Phillip Marshall of WEMET contacted Det. Kate Straus of WEMET and notified her as to what the situation was, and a team was formed at my store. When they arrived, I asked them to see a warrant, which they did not provide because they didn’t have one. They were asked several times to leave the premises and come back with a warrant, but they continued refusing to do so. Finally, our Muskegon based attorney arrived on the scene and we were escorted out of the building while they attempted to obtain a warrant. We were being detained at this time, but were not under arrest. Note that I had my two older sons with me at this time and my youngest son was at home sleeping while my buddy was there doing some electrical work for me.

By this time, I had been at the store with my sons for nearly an hour when I had their biological mother come pick them up. At this time, we were made aware of the fact that another team had assembled at my home on Green Creek where my son was sleeping, and also at my home that is for sale on Farr Rd. Finally, around 5:15 pm, we were served with a search warrant for 885 East Apple, the location of my store. Upon reading the warrant, I found it very disturbing that the warrant was based on the fact that on June 4, 2013, one Det. Adam Dent entered the store showing a previously prepared FICTITIOUS application for a medical marijuana card under the Michigan Medical Marijuana Program MCL 333.2642, and a FICTITIOUS cancelled check made out to the State of Michigan. The application and a copy of a cancelled check is needed by a patient before they actually receive their tangible Patient Registry Identification Card in the mail, to prove to law enforcement that they have actually registered their application with the state. The state only cashes the check if the application is approved, THUS, the copy of the cancelled check is the only way of knowing a patient has been approved before obtaining their actual card.

With that being said, Det. Adam Dent’s entrapment of using FICTITIOUS credentials gained him access to the rear of the building where he impersonated himself as a Crohn’s patient and purchased some medical marijuana. Note: The MMMA allows a caregiver to possess up to 2.5 ounces of usable marijuana for each patient whom he or she is connected to through the department’s (LARA) registration process. It also allows a caregiver to possess up to 12 plants for each patient whom he or she is connected to through the department’s registration process. Furthermore, the act also states that a registered primary caregiver may receive compensation for costs associated with assisting a registered qualifying patient in the medical use of marijuana. Any such compensation shall not constitute the sale of controlled substances. It does NOT specify that such a patient need to be connected to them through the department’s registration process. Many patients who are new to the program are not convenienced by pharmacies that distribute the medicine; they are forced to obtain it through licensed caregivers who have what is referred to as “overage” until either (a) their own plants are harvested, which takes upwards of 5 months, or (b) someone who they have assigned as their caregiver through the state’s registration process, harvests their plants…which cannot be started until caregivership is approved by the state and take upwards of five months to grow.

As disturbing as it is that the state police waste taxpayer dollars by creating fake medical marijuana credentials, and then go after caregivers attempting to service the needs of the sick, what is even more disturbing is the fact that I later learned that while we were in custody at the 885 East Apple location, police entered my home and had my 12 year old son at gunpoint from a dead sleep, and began conducting a search BEFORE THE WARRANT WAS ISSUED! When my attorney asked Det. Kate Straus about my son’s statement of this happening, she admitted that officers entered the home before a warrant was issued. When asked about officers drawing weapons on my son and waking him up with flashlights and pistols in his face, she didn’t respond.

During the raid, officers seized cash, computers, cell phones (including those that were used earlier to record officers and their conduct in the store) and all marijuana and marijuana plants found. When I asked them why they were taking the marijuana and the marijuana plants, Det. Kate Straus stated that they were being seized because they were not in a properly secured facility. I asked her how this was when they had to kick down the door to enter the home and she replied, “because your realtor has a key for showing the house to prospective buyers and therefore has access to the marijuana.” I informed her that the area of the home where the marijuana is stored and cultivated is locked separately and nobody else has access to it, but it was too late. Officers had already came upon the area of the home where the marijuana was stored and cultivated and kicked in a second door now, into where the marijuana was stored. From there, they kicked a hole in the wall to gain access to where the marijuana was cultivated. After gaining entry to the cultivation area, they found the main door to the room and cut the master lock that was securing the facility. That’s how much of an improperly secured facility it was; so much so that they kicked a hole in the wall, and cut a lock. The plants had already been uprooted and the marijuana seized. Not only did they violate 333.26424(h) which states that any marijuana, marijuana paraphernalia, or illicit property that is possessed, owned, or used in connection with the medical use of marijuana, as allowed under this act, or acts incidental to such use, shall not be seized or forfeited, but they also violated the due process of law by entering and searching the home on Green Creek before a warrant was issued, and used excessive force by holding my 12 year old son at gunpoint. Oh, and I forgot to mention that they also seized my cell phone and were going through it BEFORE the warrant was obtained.

Now, whether or not you are a supporter of marijuana use for medical purposes, the law is the law, and the law was passed by 63% of the voters in 2008. Surely it was not the intent of the voters to have their tax dollars expended in such a way where law enforcement would prepare fictitious credentials and use them to purchase medical marijuana from a licensed caregiver and then go after them for providing an alleged patient a service where the state does not provide it, in order to alleviate the symptoms of a debilitating condition as permitted in the definition of medical use in section 3 of the law. MCL 333.26423(f) “medical use” means the acquisition, possession, cultivation, manufacture, use, internal possession, delivery, transfer, or transportation of marijuana or paraphernalia relating to the administration of marijuana to treat or alleviate a registered qualifying patient’s debilitating medical condition or symptoms associated with the debilitating medical condition. These officers MUST be held accountable for their actions and prevented from conducting themselves in such a way in the future.

They are pursuing criminal charges for two counts of delivery, which would not only incarcerate my fiance, but would get her medical marijuana patient card revoked, not to mention the five patients that she is a caregiver for, one of whom is a former Florida State Narcotics Agent who now resides in Michigan and uses marijuana to treat four different diagnosed kinds of cancer. This was all because they used fictitious paperwork that showed them to be approved by the state’s registration department. We have retained Nick Bostic in Lansing to file a lawsuit against them for their conduct, and to return any and all items seized in violation of MCL 333.26424(h).

It should again be noted that my cell phone was seized and searched before the warrant was obtained, and that the business was extensively searched after they were told to leave the premises, also before the warrant was obtained.

– Derek Antol

Video of the 2011 Protest in Front of the Muskegon County Hall of Justice:

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