Grocery Store Owners File Federal Lawsuit Over Seized Funds


The owners of Schott’s Supermarket in Fraser are filing a federal lawsuit today alleging the government unfairly seized $35,000 from their store’s checking account in January.

This case challenges civil forfeiture, or the governmental power to take property suspected of being involved in criminal activity. According to a statement from the Institute of Justice, a civil liberties law firm based in Virginia, the government claimed that store owners — Tarik “Terry” Dekho and his daughter Sandy Dekho— violated federal banking laws by making frequent deposits of their store’s cash receipts in amounts less than $10,000. (Banks are required to report larger deposits to the IRS, and it is illegal to structure one’s bank activity to avoid those reporting requirement).

As Schott’s Supermarket takes in a significant amount of cash each day from customers, “Terry’s policy has always been to send one of his store’s clerks to the bank — located just across the street — to avoid letting too much cash accumulate at the store … the store’s insurance policy specifically limits coverage for theft or other loss of cash to $10,000 — a common provision for small business policies,” notes the document.

The family says their financial records and practices were reviewed by the Internal Revenue Service, once in 2010 and once in 2012, and were given a clean bill of health. However, in January 2013, the IRS obtained a warrant and withdrew all of the money from the store owner’s bank account on the grounds the family’s frequent cash deposits violated federal structuring law.

Although the government filed a forfeiture complaint seeking to validate its seizure of the Dehko’s bank account in July, the Dekhos still have not gone to court over the matter — something that the Institute of Justice hopes to help them do.

“One of the arguments that we’ll be making in court (Wednesday) is that due process requires a prompt hearing whenever the government takes your property through forfeiture,” says Clark Neily, senior attorney for the Institute of Justice. “If a local sheriff had showed up at the Dekho’s store to repossesses a refrigerator or an oven, the Supreme Court has made it very clear that the Constitution requires the opportunity to have a hearing in front of a judge before that happens or immediately after. Incredibly, in this case, the Supreme Court has yet to hold that that applies to forfeitures of cash, and the Dekho’s have been waiting for eight months for their day in court.

“We’re asking to give them that day in court immediately.”

Neily says that there are two lawsuits involved in this case. The first relates back to the government’s original forfeiture complaint, and the Dekhos will argue that their money was unjustly taken. In the second lawsuit, the Dehkos will seek a court ruling that property owners be entitled to a prompt hearing either before or immediately after the government takes their property and that it is not illegal for law-abiding businesses to make frequent cash deposits for legitimate business purposes.

The Dehko’s litigation team includes Neily and Larry Salzman, an attorney at the Institute of Justice. They will be assisted by local counsel Stephen Dunn of Dunn Counsel in Troy.

A spokesperson for the United States Attorneys’ Office said that she had not yet reviewed the lawsuit and was unable to comment on the matter.