Schott's Market, in Fraser, Michigan, was robbed in January of this year. Unfortunately for Terry Dehko and his daughter, Sandy, who own the place, the thieves are government agents in the employ of the Internal Revenue Service. The IRS doesn't even allege that the Dehkos committed a crime to justify cleaning out their bank account using civil asset forfeiture—they even sent the Dehknos a letter clarifying that "no violations [of banking laws] were identified." So, why the mugging? The feds just don't like the way the grocers have been depositing money in their bank account. Really.

According to the Institute for Justice, which represents the Dehkos, the problem is that the Dehkos run a cash-heavy business, and don't like to keep lots of lucre on hand. So they make frequent deposits.

Like most grocery store owners, Terry and Sandy receive cash every day from their customers. Their commonsense practice has always been to avoid letting too much cash accumulate in their store. Moreover, their insurance policy specifically limits coverage for theft or other loss of cash to $10,000—a common provision for small-business policies. Over the past several years, however, the government has been collecting vast amounts of private information about Americans, including entrepreneurs like Terry and Sandy that deal in cash. In 2001, the Patriot Act amended federal law to make it easier for the government to seize money and other private property through civil forfeiture. Federal law requires banks to report cash transactions above $10,000, and it is illegal to "structure" cash deposits for the purpose of avoiding this requirement.

So you have to report deposits of over $10,000, but keeping deposits under $10,000 is considered suspicious, even if your insurance company insists on the practice. Get it?

Under the circumstances, IRS agents dropped by for a friendly chat in 2010, and then again in 2012. After the second visit, the feds sent the Dehkos a letter saying that "no violations [of banking laws] were identified."

And then, nine months later, the IRS emptied the Dehkos' bank acount of $35,000 without warning.

In the Dehkos' case, the IRS used civil asset forfeiture, which requires no criminal action or proof of guilt on the part of a property owner to seize that property—technically, it's a legal action against the property itself. Not surprisingly, it's a hugely lucrative practice for government agencies and a hugely controversial one for everybody else. Last year, Pennsylvania Judge Dan Pellegrini called the practice "state-sanctioned theft." Shelby County, Texas, was forced to return money and property that its officers essentially stole from motorists just passing through. Amidst much screaming from mugged constituents, Washington, D.C.'s city council is considering reforming (thought not abandoning) the practice. Some Tennessee lawmakers want to dump it altogether.

But the use of asset forfeiture, both civil and criminal, soared at the federal level under the current administration, growing from $500 million in 2003, to $1.8 billion in 2011.

The Dehkos have been charged with no crime, and still await a chance to ask a judge to force the IRS to return the money.