“There is no crime in this country for doing business in cash,” he said. “But the government treated Lyndon worse than a criminal, by taking his property and forcing him to prove his own innocence to get that property back.”
According to Johnson, despite an IRS pledge in November to curb forfeitures that weren’t connected to criminal activity, the Department of Justice filed a claim in December saying McLellan had violated the structuring law. The money was held in what is called a “customs suspension account” under the Treasury Department while his case was in limbo.
McLellan had been struggling for months to recover the $107,000, while keeping his business – a store, restaurant and gas station operation – afloat.
In that time, the government never pressed any criminal charges against McLellan. Meanwhile, the DOJ changed its own policy to rein in its restructuring prosecutions in March. But that didn’t necessarily mean that McLellan could get his savings back retroactively.
At a February 2015 hearing before the House Ways and Means Oversight Subcommittee, Rep. George Holding, R-N.C., mentioned to IRS Commissioner John Koskinen that he had reviewed McLellan’s case — though he did not specifically name it.
“If that case exists, then it’s not following in the policy I’ve been advised,” Koskinen testified, adding that he had “lengthy meetings with the senior leadership” of the IRS’s criminal investigation division and was assured that employees were trained in and advised about the new policy.
Two months ago, the government offered McLellan 50 percent of his money back and warned him against chasing publicity, even going so far as to suggest it would rile people inside the IRS and could hurt his chances of seeing his cash again, his attorneys said.
“Today the the DOJ is giving him 100 percent,” said Institute for Justice spokesman J. Justin Wilson. “We got him an enormous amount of publicity – and it did work.”
From 2005 to 2012, the IRS seized more than $242 million from alleged structuring violations in more than 2,500 cases, according to an Institute for Justice study. In more than 830 of those cases, no other criminal activity was alleged.