IRS Seizes Iowa Restaurant’s Money Despite ‘Not Doing Anything Wrong’, Case Gets National Attention

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ARNOLDS PARK, Iowa – A northwest Iowa restaurateur’s fight with the Internal Revenue Service is gaining national attention.

In August of 2013, the owner of Mrs. Lady’s Mexican restaurant in Arnolds Park, Carole Hinders, had about $33,000 seized from her checking account by the IRS despite not committing a crime.

The reason? She had been depositing less than $10,000 at a time.

“How can this happen?” Hinders told the New York Times. “Who takes your money before they prove that you’ve done anything wrong with it?”

Larry Salzman with the Institute for Justice, who is helping Hinders, explained the case in a video.

“Federal law requires banks to report cash deposits greater than $10,000. The federal government used civil forfeiture to seize Carole’s bank account, claiming by making small deposits, she was evading that requirement.”

Civil asset forfeiture is when the government takes money or property without proving the person is guilty of a crime. They’re only suspected of it.

Sen. Rand Paul has introduced an act to change the law.

“A dismaying combination of perverse incentives, unfair laws, and lack of oversight makes civil forfeiture one of the most dangerous and blatantly unconstitutional policies America has ever seen.” Sen. Paul wrote using Hinders’ case as an example.

That can’t come quick enough for Hinders, who has run the cash-only restaurant for 38 years. She has described the situation as “a year from Hell.”

“I didn’t do anything wrong. They took my money and I don’t think they should have the right to do that. At least they should have to prove that I did something wrong before they take my money,” Hinders said.

According to KIWA Radio, Hinders has sold the restaurant and will be closing the doors this week.


  • Betsy Fickel

    Nothing but thievery under guise of law. Yet IRS is NOT fed govn’t but a private corporation. We have been so deceived to believe it is a part of the fed.

    Date: Wed, 29 Oct 2014 15:32:45 +0000 To:

      • Brutally Honest

        How about educate yourself before making ignorant comments.

        Answer: The IRS appears to be a collection agency working for foreign banks and operating out of Puerto Rico under color of the Federal Alcohol Administration (“FAA”). But the FAA was promptly declared unconstitutional inside the 50 States by the U.S. Supreme Court in the case of U.S. v. Constantine, 296 U.S. 287 (1935), because Prohibition had already been repealed.
        In 1998, the United States Court of Appeals for the First Circuit identified a second “Secretary of the Treasury” as a man by the name of Manual Díaz-Saldaña. See the definitions of “Secretary” and “Secretary or his delegate” at 27 CFR 26.11 (formerly 27 CFR 250.11), and the published decision in Used Tire International, Inc. v. Manual Díaz-Saldaña, court docket number 97‑2348, September 11, 1998. Both definitions mention Puerto Rico.
        When all the evidence is examined objectively, IRS appears to be a money laundry, extortion racket, and conspiracy to engage in a pattern of racketeering activity, in violation of 18 U.S.C. 1951 and 1961 et seq. (“RICO”). Think of Puerto RICO (Racketeer Influenced and Corrupt Organizations Act); in other words, it is an organized crime syndicate operating under false and fraudulent pretenses. See also the Sherman Act and the Lanham Act.

        After much diligent research, several investigators have concluded that there is no known Act of Congress, nor any Executive Order, giving IRS lawful jurisdiction to operate within any of the 50 States of the Union.


        The IRS acts above the law all the time. The simple fact that federal income tax is unconstitutional and illegal to enforce, yet people go to prison for not paying, proves this. The IRS is just another part of a new American way where we are all forced to follow the unjust and the corrupt. It’s not hard to see.

  • RJ

    The IRS is another government agency that is too big and out of control. EPA, DNR, DOT,FMSCA, the list goes on and on. President Reagan said it best in 1980, “It’s time to get the government off of the backs of the American people”. We are right back at that point again. In fact, it is worse than ever. I would have never thought in my lifetime I would see my government spying on my fellow citizens and seizing personal property but look at what is going on. I always vote but this nation is becoming something unrecognizable . What is the answer? And please don’t say it is time to get violent. That will not work.

    • RS

      And yet Ronald Reagan enacted the most sweeping executive order (12333) for domestic surveillance before the horrific Patriot Act. How’s that for ‘getting the government off people’s backs’? These same orders that did not stop the Oklahoma City bombings, the first WTC bomb, nor the attacks on the WTC and Pentagon, and the crash of flight 93.

      His fiscal policies were based on Trickle Down and Keynsian economics which have been largely discredited after the deregulation and easy money policy from the Fed led to the recession in the early 90s. I’m sorry, but you’re looking back at history with rose colored glasses.

      Supposedly there was a law enacted a while back (don’t remember exactly when) that required the IRS to be able to prove a criminal act before they could actually seize anything. Apparently they are ignoring it. I’ve never made any deposit over 10,000 USD, just my paychecks. Are they going to come after me now?

      Definitely agree with her lawyer on this one, the IRS’s actions are probably illegal under the due process clauses. This one will certainly end up in Federal court.

  • Richard

    The people should rise up and burn that criminal private inhuman organization to the flipping ground. They have been destroying peoples lives under the color of law for a very long time..

  • Cathy Wilson

    I have eaten in that restaurant many times. I live in Florida now but when I go back to visit I always made sure to stop there it’s always clean and nice and everyone works together well I can not understand that a lawyer cannot help her keep her doors open

  • FuzzyBill

    I am sorry, she’s guilty. She had been structuring her deposits for years. Banks file a CTR Report for deposits over $10,000.01 in cash. They also file CTR Report when u withdrawal over $10,000.01. Banks don’t tell you this because the government do not-want you to know. Also, if you take $3000 or more & convert it into a Monetary Instruments like a money order or cashiers check, the bank reports you as well. If she was smart she would have put the cash in a safe deposit box or in another’s account that she trusted. The government are crooks, but so are others. She was cooking the books just like Enron & others before here. Why would you have a cash only business? That right there throws up a red flag, especially in a cashless society, credit & debit cards. Next time she just needs to be smarter about structuring. She had been doing this for years & never considered the reprocutions. Old people doing old crimes. I don’t feel sorry for her. They just didn’t pick her out of the blue. She probably made a $10,000.01 deposit before & was in the system, then someone told her because the banker must collect information on individual making deposit, she got pissed & decided she would structure her transactions so IRS wouldn’t find out & then after 33 years she got popped. She’s lasted longer than Al Capone & those other thugs. I guess my college degree actually paid off. Just like Yogi Bear said, “you got to be smarter than the average bear, hey boo-boo”

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