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United States v. Thirty-Two Thousand Eight Hundred Twenty Dollars & Fifty-Six Cents ($32

United States District Court, N.D. Iowa, Western Division

January 9, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
THIRTY-TWO THOUSAND EIGHT HUNDRED TWENTY DOLLARS AND FIFTY-SIX CENTS ($32,820.56) IN UNITED STATES CURRENCY, Defendant, and concerning, CAROLE HINDERS and MRS. LADY'S INC., Claimants

For United States of America, Plaintiff: Martin J McLaughlin, LEAD ATTORNEY, Matthew J Cole, U.S. Attorney's Office, Northern District of Iowa, Cedar Rapids, IA.

For $32,820.56 in United States Currency, Thirty-two thousand eight hundred twenty dollars and fifty-six cents ($32,820.56) in United States Currency, Defendant: Lawrence Salzman, LEAD ATTORNEY, PRO HAC VICE, Institute for Justice, Arlington, VA; Wesley Patrick Hottot, LEAD ATTORNEY, PRO HAC VICE, Institute for Justice, Bellevue, WA.

For Carole Hinders, Mrs Ladys Inc, Claimants: James L Benz, LEAD ATTORNEY, Benz Law Office, Spirit Lake, IA; Lawrence Salzman, LEAD ATTORNEY, PRO HAC VICE, Institute for Justice, Arlington, VA; Wesley Patrick Hottot, LEAD ATTORNEY, PRO HAC VICE, Institute for Justice, Bellevue, WA.

Page 928

ORDER

LEONARD T. STRAND, UNITED STATES MAGISTRATE JUDGE.

I. INTRODUCTION

This case is before me on a motion (Doc. No. 25) by plaintiff the United States of America (USA) to dismiss without prejudice. Claimants Carole Hinders and Mrs. Lady's Inc. (Claimants) have filed a resistance (Doc. No. 28) in which they contend, among other things, that any dismissal of this action must be with prejudice. USA has filed a reply (Doc. No. 29). No party has requested oral argument. The motion is fully submitted and ready for decision.

II. FACTUAL AND PROCEDURAL BACKGROUND

USA commenced this civil in rem action on October 24, 2013. In its complaint (Doc. No. 1), USA states that it is seeking to enforce certain statutory provisions " for the forfeiture of property which represents proceeds traceable to and/or property involved in transactions in violation of Title 31, United States Code, Section 5324." Doc. No. 1 at 1, ¶ 1. The complaint then incorporates an attached affidavit which describes the seizure of $32,820.56 from a Northwest Bank account maintained by

Page 929

Claimants (the Account).[1] Doc. No. 1 at 2, ¶ 4 (referencing Doc. No. 1-2). The affidavit, executed by Internal Revenue Service (IRS) Task Force Officer Christopher Adkins, states that cash deposits totaling more than $315,000 were made into the Account between April 2012 and mid-February 2013, with no single deposit exceeding $10,000. Doc. No. 1-2 at 3, ¶ ¶ 12-13. The affidavit asserts that the pattern of cash deposits suggests the intentional structuring of transactions " to avoid the preparation and submission of CTRs." [2] Id. at 4-5, ¶ 15. According to the affidavit, Ms. Hinders admitted during an interview conducted May 22, 2013, that she intentionally broke cash deposits up into increments of less than $10,000 so her bank would not have to " fill out extra paperwork." Id. at 6-7, ¶ ¶ 24-26.

The complaint states:

The United States alleges that the defendant property represents proceeds from structuring offenses committed by Carole Hinders, doing business as Mrs. Lady's Inc., in violation of Title 31, United States Code, Section 5324, and is, therefore subject to forfeiture to the United States of America pursuant to Title 31, United States Code, Section 5317(c) and Title 18, United States Code, Section 984(a).

Doc. No. 1 at 2, ¶ 5. The complaint concludes by requesting the following relief:

(1) process of warrant in rem issue for the arrest of the defendant property;
(2) due notice be given to all parties to appear and show cause why the forfeiture should not be decreed;
(3) judgment be entered declaring the defendant property be forfeited to the United States of America for ...

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