RALEIGH — A federal District Court judge has dismissed a case in which more than $107,000 was seized from a Fairmont business owner.
It was announced in May that Lyndon McLellan would get back the $107,702.66 seized from him by the IRS and Department of Justice, but the case remained open as McLellan sought reimbursement for nearly $20,000 in attorney and accountant fees he accumulated during the process.
The case was dismissed Tuesday by Judge John C. Fox with prejudice, meaning that it cannot be resurrected.
“Today’s decision recognizes that Lyndon should not have to pay for the government’s outrageous use of civil forfeiture laws against a totally innocent property owner,” said Institute for Justice attorney Robert Everett Johnson in a statement. “The government took Lyndon’s property even though he did nothing wrong, forcing him into a prolonged and expensive legal nightmare. Now the government will have to comply with its obligation to make Lyndon at least partly whole.”
McLellan can now seek to recover money he spent through the case under the Civil Asset Forfeiture Reform Act.
“This court will not discard lightly the right of a citizen to seek the relief Congress has afford,” the court’s decision says.
McLellan, a lifelong Fairmont resident, owns L&M convenience store.
McLellan’s money was seized in July 2014 using civil forfeiture, a policy that allows law enforcement officials to seize property they believe is tied to crime. It is then the property owner’s responsibility to prove otherwise. McLellan was never charged with a crime.
Officials alleged that he had over the years intentionally broken up his deposits into sums smaller than $10,000 — the threshold at which banks must report deposits to the government.
McLellan told The Robesonian in May that his niece, who makes most of the deposits for the business, was told by a bank teller that making deposits lower than $10,000 would save extensive paperwork.
He was confident at the time that he would see his life savings again.
“What’s wrong is wrong, and what the government did here is wrong. I just hope that by standing up for what’s right, it means this won’t happen to other people,” he told The Robesonian.
Two months before the civil forfeiture complaint was filed in federal court, the IRS announced it was changing its complicated and controversial civil forfeiture policy, saying “it will no longer pursue the seizure and forfeiture of funds associated solely with ‘legal source’ structuring cases.”
The Institute for Justice announced in May that it would represent McLellan free of charge in his efforts to get his money back. With the help of press releases, video and photos produced by the Institute for Justice, McLellan’s case grabbed national attention. About two weeks later, the government filed a motion to voluntarily dismiss the case.
