Asset Seizures: Feds Extorting Ordinary Citizens?

WASHINGTON -- People like Georgia gun dealer Andrew Clyde and Maryland farmer Randy Sowers are used to doing a lot of business in cash and dropping large sums in the  bank.

But in the last few years, federal agents have started seizing that kind of cash, threatening folks like Sowers and Clyde with prison and, after much legal wrangling, often refusing to give the money all back.

Now Congress has heard these aggrieved citizens' stories at a Wednesday hearing of the House Ways and Means Oversight subcommittee. Lawmakers -- both Democrat and Republican -- said what the government did to these Americans was outrageous.

How it Began

The IRS wanted to catch criminals by keeping an eye on large amounts of cash -- having banks report deposits of more than $10,000. That made banks encourage law-abiding folks frequently dropping off large amounts of cash to always deposit less than $10,000 at any one time to avoid entanglement with the government.

But the IRS didn't like that at all. And that's now a criminal offense. It's called "structuring."

Everyone acknowledged at the hearing the IRS and federal agents have certainly seized many illegal assets and much dirty money from actual criminals. But what was rankling the lawmakers was how much legal, hard-earned money the IRS and these agents have been seizing from good citizens guilty only of depositing their own money in a way the IRS doesn't like.

IRS Commissioner John Koskinen also appeared before the lawmakers. He told them as of October 2014 the IRS was no longer going after citizens like Clyde and Sowers.

When asked to apologize to such innocent victims, Koskinen did give tepid apologies. But he also kept suggesting what they did was technically illegal.

Too Busy to be a Criminal

For years, farmer Sowers in an average week would make several thousand dollars at farmers' markets and then put the money in the bank. Then federal agents appeared at his South Mountain Creamery farm and announced they'd seized his money.

In negotiations over how much they'd keep, they threatened to throw Sowers and his wife in prison. When all was said and done, the Sowers has lost some $66,000 and Randy Sowers is still reeling three years later.

"We're just out here trying to make a living and hire some people, make a business, and help the economy," Sowers told CBN News. "And they're out here trying to -- I don't know what they're trying to do. It's never made sense to me what they were trying to do."

In one light moment at the hearing, Sowers recalled the feds trying to make him and his wife feels like criminals.

"We're just hardworking farmers," he told the Congress members. "We don't have time to be criminals. We have thousands of animals to take care of."

Veteran Feels Attacked

Another citizen, former service member Andrew Clyde, testified he'd always take less than $10,000 to the bank because his insurance wouldn't cover any more than that if he was robbed on the way.

But feds saw this as evidence of "structuring" and grabbed more than $900,000 of his company's money. When he refused to settle and forfeit much of that seized cash, the feds threatened to charge him with a felony. That would have instantly killed his gun business.

"It would have shut me down immediately," Clyde told CBN News. "You can't be a felon and run a gun business."

"I did not serve three combat tours in Iraq only to come home and be extorted by my government's use of civil forfeiture laws," he said at the hearing.

By the time he'd finally settled with the government in an effort to save his business, it had cost him $149,336.

'Gestapo-Type Tactics'

Even after the hearing where Sowers finally had a chance to tell his story to Congress, Sowers' lawyers were still upset at what happened to ordinary citizens like their client and Clyde.

"Honest American people should not be subject to these Gestapo-type tactics where you are presumed to be guilty, when the government seizes all your money, and then you have to fight and settle with them to get your money back," attorney Paul Kamenar said. "That's just totally outrageous and totally unAmerican."

Another Sowers' lawyer, David Watt, said after the hearing, "Now there's kind of collective outrage amongst everyone -- the Democrats and Republicans are collectively outraged. But this process has been going on for years and years and years."

Lawmakers announced at the hearing Congress hopes to stop these attacks on innocent, law-abiding Americans permanently.

Subcommittee Chairman Rep. Peter Roskam, R-Ill., told the witnesses, "And now what is happening is your country is kind of trying to come over the hilltop and try to rescue you and be a part of fixing this."