Asset Forfeiture

Feds Graciously Agree Not to Steal Restaurateur's Bank Account

|

Google Maps

Federal prosecutors have stopped trying to steal $33,000 from an Iowa restaurateur who irked the IRS by making deposits of less than $10,000. The New York Times highlighted the case in October, noting that federal law lets the IRS "seize accounts on suspicion, no crime required."

Mrs. Lady's, Carole Hinders' Mexican restaurant in Arnolds Park, does not take credit cards, so she has a lot of cash to deposit. There is nothing illegal about that, although the Bank Secrecy Act requires financial institutions to report deposits of $10,000 or more. Deliberately keeping deposits below that threshold to avoid the reporting requirement is a crime (known as "structuring"), but Hinders was never charged with it. Instead federal prosecutors argued that her bank account had facilitated the crime of structuring, making it subject to civil forfeiture. 

Larry Salzman, the Institute for Justice attorney representing Hinders, said she never intended to break the law. "After her deposition, at which it became overwhelmingly clear that Carole was an innocent and hardworking restaurateur, the assistant United States attorney on the case told us that he informed the I.R.S. that they should not go forward with the case," Salzman told The New York Times.

On Saturday, the Associated Press reports, Assistant U.S. Attorney Matthew Cole filed a motion saying "the case should be dropped to conserve judicial resources even though he had evidence Hinders intentionally skirted bank reporting rules." Cole said Hinders had told investigators that her mother advised her to keep deposits below $10,000 as "a convenience to the bank." 

[Thanks to Mark Lambert for the tip.]

NEXT: Oh Look, NYC Corrections Officers Union Blocking Reforms, Investigations at Rikers Island

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. “Deliberately keeping deposits below that threshold to avoid the reporting requirement is a crime”

    So complying with the law is also a crime.

    1. Catch-22

      You make deposits larger than 10K, and they’re flagged by the feds for investigation

      You make deposits smaller than 10K, and you’re flagged as potentially trying to avoid federal scrutiny

      basically, they are trying to make cash itself illegal/problematic so that they don’t have to work as hard to rape you for their tax bite.

      1. Wouldn’t it be funny if all this was a conspiracy by Bitcoin?

    2. See how perfectly that works out for them?

      Remember: government’s ultimate goal is to be able to do whatever the fuck it wants to you whenever the fuck it wants. That is the end result of government–tyranny. Always.

      1. If the government can fuck with us at their whim, isn’t that RAPE. Government is free to rape whomever they choose, so the SJWs are actually right about rape culture being a problem, they’ve just misidentified the rapists.

      2. Yeah but Epi the government has to follow the law too. And it’s not like they can just change the law or have the judiciary retroactively justify their actions to make anything they do perfectly legal or anything.

        1. The Nazgul has different ideas about this, at least regarding 4A and traffic stops….but I’m sure they’d be willing to extend it to….basically anything.

        2. That’s a good point, Hugh. It was foolish of me to think the government wouldn’t always operate in a completely honorable way.

    3. I deposited my annual bonus, of slightly less than $10,000, this morning. Is that a crime? Should I have thrown in some petty cash to push it over the threshold?

      1. But then the government would have received the currency report from the bank and then would have went after you for your suspicious transaction (adding petty cash? Where’d you get it?)

  2. On Saturday, the Associated Press reports, Assistant U.S. Attorney Matthew Cole filed a motion saying “the case should be dropped to conserve judicial resources even though he had evidence Hinders intentionally skirted bank reporting rules.”

    So, it’s the asshat lawyer version of sport fishing.

  3. OT: Just finished my Con Law exam. One of our questions used Michael Brown’s stepfather’s “Burn this bitch down!” remark as an issue of incitement.

    Fortunately, nobody in my class was offended, unlike those great minds at Berkeley.

    1. I don’t understand; I thought all law students were supposed to be in recuperative therapy sessions until they came to grips with the inherent racism of our judicial system

      1. They’re truly insane, yet juvenile. Just the kind of people to become our elected representatives and bureaucratic officers!

    2. ” Fortunately, nobody in my class was offended, unlike those great minds at Berkeley.”

      Which proves that your class is insufficiently diverse and/or compassionate. And that’s why you’ll never be a Justice on the Supreme Court.

  4. When I was young I worked at a number of small businesses that made daily deposits in the 5-10 k range. I would think that is very common for small businesses.

    I doubt there is an argument that would convince me the IRS and the US Attorneys are not using selective enforcement here to just fuck with people unlucky enough to land in their sights.

  5. So complying with the law is also a crime.

    Exactly.

    Fucking LOOPHOLES- how do they work?

  6. Is there a more useless class than bureaucrats?

    1. By useless I mean those who are charged to protect us but act in this way.

  7. Has anyone seen this horse shit?

    https://www.projectsunlight.us/stories
    /376655/Fight-Hunger-in-your-own-Backyard.aspx

    *this comment contains a word that is too long, i.e. the link is spaced so it will post.

    I was at my brother’s this weekend visiting and an ad came on television for this where a young, angry black man claimed that one in five children “don’t know where their next meal is coming from” followed by a young white woman choking back tears while claiming that no children should have to deal with hunger.

    Total crock of shit, and shades of Jackie’s rape. They simply redefined what hunger means. They don’t know where their next meal comes from because they don’t know if it will be McDonalds, Taco Bell, Kentucky Fried Chicken or Pizza Hut. They probably asked a bunch of obese kids if they ever had to eat something their mother cooked that they didn’t like instead of the fast food they prefer.

    If I demand to be shown that those claims are true, if I do not accept them at their word is it because I want children to starve? I would bet that if I cast enough doubt on their stats then some Proggie hack-reporter would publish a fabricated story about starving children in America.

    No matter the problem proggies only have one solution, one course of action.

    1. I tried to find the television ad on youtube but did not see it. What I did see were lots of videos for project sunlight and got the notion that they really mean one in five children in the world, not the US. Definitely not the impression that ad gave.

      I have heard some other outfit beg for money claiming that one in eight people in america ‘struggle with hunger’. Also horse shit.

    2. The thing about using bullshit stats to make their claims is that they can simply point to your attempts at discrediting it as your cultural opposition to helping out people in need, and either way, “They Win”

      (by the terms they’re waging the game)

      ‘Winning’ is for them

      a) establishing the narrative – identifying the victim classes

      b) using your attempt to counter the narrative to highlight your role as the Oppressor Class

      The facts don’t matter because the rough outline of the story is all people get, and all they care about is “who seems more sympathetic”

      1. Honestly, for me, worrying about the left controlling the narrative was always a waste of time. I’ve always known they were about spending money, and that they’d eventually run out. As a result, I have this naive idea that controlling the narrative, when it can’t feed people, give them jobs, or makes them wipe their ass with the money because it’s worthless, isn’t a winning strategy.

        However, I also know that’s after a great deal of ugliness.

    3. …”a young, angry black man claimed that one in five children “don’t know where their next meal is coming from””…

      I chased that stat back to what I think was the origin last year some time.
      The actual claim is that “one in five is ‘food-insecure’ sometime in a year”.
      Where “food-insecurity” is defined as hungry for at least one day.
      IOWs, if you’re on welfare and blow it on your fave drug and your kid didn’t get to eat on the 30th of the month, why, your kid is one who ‘doesn’t know where his next meal is coming from.

  8. This article reminds me of Barney which reminds me of Ann. I can’t help feeling the wrong Frank died in the closet.

    1. In the closet? No no no, Kyle Mclaughlin was in the closet, and Frank was screaming DONT FUCKING LOOK AT ME!!

  9. [Claiming] he had evidence Hinders intentionally skirted bank reporting rules[,”] Cole said Hinders had told investigators that her mother advised her to keep deposits below $10,000 as “a convenience to the bank.”

    Cole had jolly well better be prosecuting Hinders’s mother for ? something.

  10. It cannot be stressed enough that according to the Consumer Price Index, adjusting $10,000 from the time this was enacted to the present gives an adjusted value of over $60,000. Of course, the law has not been updated to reflect that.

    1. Good Point, but seems moot to me. Does anyone think that the IRS or any Fed snoop couldn’t know all your transactions–to the penny–in minutes? I know this law has forced banks to do the work of flagging certain transactions, but that is no longer necessary.

Please to post comments

Comments are closed.