Carole Hinders

Prosecutors Drop Asset Seizure Case Against Iowa Restaurant Owner

Carole Hinders
Carole Hinders at her restaurant, Mrs. Lady’s. Photo: YouTube

Federal prosecutors have dropped their civil forfeiture case against Carole Hinders, a restaurant owner who was targeted by the IRS last year for making cash deposits that the agency considered suspicious.

Hinders, who has owned and operated Mrs. Lady’s for 38 years, had her bank account seized by the IRS simply because of her deposit amounts. Hinders, whose restaurant did not accept credit cards, frequently made cash deposits at her bank that amounted to just under $10,000. Federal law requires banks to report deposits over that amount, and Hinders was suspected of illegal activity because her deposit amounts were close to that $10,000 threshold. Hinders had been using the same bank for 30 years and said she had never been informed that “I was making my deposits wrong.”

Hinders had never actually been criminally charged with conducting any illegal activity, yet her money was taken because civil forfeiture explicitly allows the seizure of assets based solely on suspicion with no requirement of criminal charges. Civil forfeiture, while legal, places extraordinary burdens on businesses and individuals who have had their property or assets seized by the government to claim their innocence.

The Institute for Justice, an organization focused on challenging civil forfeiture, reported that the government will return the $33,000 that was taken from Hinders. “I actually wanted a trial, which would have cleared my name and helped to protect others, but it is good to get the money back. My fight is far from over, though. I am willing to tell my story to Congress to help change forfeiture laws so that no one else has to go through what I suffered,” said Hinders. The Institute for Justice has been helping Hinders fight to get her money back from the IRS.

Despite prosecutors dropping her case, Hinders still faces the possibility of the IRS reopening her case. According to the Institute for Justice, the IRS claimed that their case was “justified” and requested the right to be able to refile the case at another point in time. IJ attorney Wesley Hottot criticized this move, saying “Instead of simply returning the money with interest and an apology to Carole for the nightmare they put her through, the IRS is shamefully attempting to mask their retreat by insisting on the right to refile the case in the future.”

The Institute for Justice plans to ask the court to deny the request from the IRS and allow Hinders to receive interest on the money that was seized.

The story of Carole Hinders, profiled by The Institute for Justice, is shown below.