IRS/DHS Illegally Seize Business Assets

Back in February 2025, federal agents descended upon Ayala's Mini Market, a Glendale, AZ, convenience store. The store provided basics such as groceries, snacks, sodas, and cigarettes. It also offered check cashing, money transfer, shipping, and cellphone repair services. Agents from the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS), seized three computers, five cellphones, and business records, plus about $460,000 in cash and checks…

… without explanation.

The store's owner, Mario Ayala, still doesn’t know why. Not only that, but the government hasn’t told him what it plans to do with his property... or how to get it back. Ayala’s lawyers argue it’s a blatant violation of the Constitution, and have filed a motion in the U.S. District Court of Arizona. The motion seeks the return of the property saying there is no legitimate reason for the government to keep it.

"The government can't take your stuff, disappear, and then never explain itself," says Institute for Justice attorney, Betsy Sanz. "For over a year and a half, the government has been holding Mario's money and property. This prolonged seizure violates the Fourth Amendment and federal law. The government cannot hold onto your property indefinitely without explanation so it can eventually take it permanently using civil forfeiture."

To make matters more appalling, the raid happened while Ayala was visiting his soon-to-be deceased father in Mexico. When the agents left, they told Ayala's son that "the business would receive a letter within thirty days." It hasn’t happened. Ayala has heard nothing from the government since they raided his business and seized his property.

The agents did leave a one-page inventory of the property they took, as well as the first page of a warrant signed by a federal magistrate judge. It referred to attachments, but the attachments were missing. Hence, there was no information about the crime they were supposedly investigating.

There is only one clue. On the same day the agents raided his store, they also searched 18 other businesses in the Phoenix area, all of which offered money services. Judging from those warrants, the legal justification for the searches are suspected violations of 31 USC 5324. That law makes it a felony to "structure" a financial transaction with intent to evade federal reporting requirements by financial institutions for cash transactions of more than $10,000. Reports go to the Financial Crimes Enforcement Network (FinCEN). Even if a crime isn’t involved (like money laundering), someone can be found guilty if deliberately breaking up a transaction into smaller amounts.

However, a 2019 federal law bars the agency from seizing money when “structuring” is the ONLY suspected crime. The law was passed by Congress due to previous IRS forfeiture abuses. The IRS even violated the Civil Asset Forfeiture Reform Act (CAFRA) which requires the federal government to notify property owners of attempted forfeitures within 60 days of the seizure.

While his business has recovered from the illegal seizure, it has cost him severe additional financial loss. Could the reason perhaps be… Ayala immigrated to the United States from Mexico in 1991? DHS was involved.

Source used: Institute for Justice

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