FRASER, Mich. -

Imagine having federal officers come into your home or office, flash their badges, and they tell you they've seized a bank account holding $35,000 of your money.

That's exactly what a Fraser grocery store owner says happened to him in January. He said it happened without warning, no questions, no court hearing, and he was stunned.

"I said, what do you mean you took my account? How am I going to pay my supplier ... This is the capital we work with! She said, 'I don't care,'" Terry Dehko, owner of Schott's Market on 14 Mile Road, told Local 4.

What could have happened to trigger this seizure of property? Dehko's attorneys say the IRS used an anti-money laundering statute, triggered because the store made frequent deposits of less than $10,000. Federal law requires banks to report deposits of more than $10,000 to the IRS.

Dehko says his deposits had nothing to do with skirting IRS regulations. He says it's all about his insurance policy.

"Well, we can't keep $10,000 in cash in the store either because of our insurance," he said. In addition to insurance concerns, Dehko says it’s also store policy to not allow the cash to build up in the store to prevent a robbery.

No charges, long wait

Sandy Thomas helps her dad run the store. She says the policy of seizing money makes sense if the government has evidence of wrongdoing. However, her father has never been charged with any wrongdoing, and she says the government shouldn't be able to hold the money for so long without providing evidence of any wrongdoing.

Thomas says having that much money in the government's hands has made running their family business more difficult. "We have a business to run and it’s a struggle. It's embarrassing that some of the companies that we've had credit with have pulled our credit," she said.

Dehko hired an attorney soon after the seizure in January. He says he spend about $10,000 in legal fees. Currently, the Institute for Justice, a Virginia-based non-profit, public-interest law firm, is representing Dehko. They have asked a judge to speed up this process, which has already taken 10 months. They are currently waiting for the judge's ruling.

The United States Attorney's Office in Detroit says the process is moving along as required by law, and it cannot comment further on pending litigation. The IRS referred any questions to the United States Attorney's Office.

Shoppers back grocer

Frequent shoppers who were buying groceries at Schott's said they were standing by their favorite local grocer. "I love the store, along with other people. It always has many people in here. The IRS is wrong!" said Debbie Koslowski, of Fraser.

"I think it’s terrible," said customer Mary Ann Kuechle, "How can you seize property without any proper paperwork?"

Given the expense of a long legal fight, Sandy Thomas says if the Institute for Justice hadn't stepped in, they probably would have made a business decision to give up the fight. She fears that's what happens to many people caught in similar situations, they can't afford to right, give up, and the government keeps the money.

Her father says he's standing up for a principle.

"I'm fighting for myself and fighting for all America!"