Feds Seize Long Island Family Business’ Entire Bank Account

Islip, New York—Imagine waking up one day to find out that the IRS had seized your entire savings, without ever charging you with a crime. Unfortunately, that nightmare is a reality for brothers Jeffrey, Richard and Mitch Hirsch.

In May 2012, the federal government used a legal process called civil forfeiture to seize their entire bank account—more than $446,000—even though they had done nothing wrong. More than two years later, with the government continuing to hold their money, the Hirsch brothers have teamed up with the Institute for Justice (IJ) to fight back in federal court.

“Civil forfeiture is one of the most serious assaults on property rights in America today,’ said IJ Attorney Larry Salzman. “The government should not take properly from innocent people.”

Read a Front-Page New York Times story on the Hirsch brothers and structuring civil forfeiture.

For 27 years, the Hirsch brothers have owned and operated Bi-County Distributors, Inc., a small business that distributes candy, snacks, and other goods to convenience stores throughout Long Island. On May 21, 2012, the federal government raided their bank account using civil forfeiture laws and put the company into a tailspin that upended the Hirsch family’s life.

Most of Bi-County’s customers pay in cash, as is the standard practice in their industry. That means the Hirsch brothers frequently make large deposits at their local bank. The federal government alleged that the brothers violated a little-known federal banking law by “structuring” their cash deposits. But rather than investigating and charging them with a crime, the government took their entire business bank account and never gave it back.  For several years, the government has used civil forfeiture to treat legitimate small businesses like criminals just because they make frequent cash deposits.

Using civil forfeiture, law enforcement agencies take cash, cars and other property without so much as charging the property owner with a crime. Shockingly, the agencies that seize the money can use the proceeds of forfeiture to pad their own budgets.

Bi-County never received a warning from either their bank or the government before their money was taken. And now, more than two years later, they’ve never had an opportunity to contest the seizure in front of a judge. That’s because the government has never formally moved to forfeit the property, which is a clear violation of the Civil Asset Forfeiture Reform Act.

“Civil forfeiture laws are broken,” explained IJ Attorney Robert Johnson. “This case is important because a victory for the Hirsch’s will not only return their money but will protect the rights of all Americans against wrongful civil forfeitures.”