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.]