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Restaurant not entitled to return of insurance proceeds seized

January 29, 2015

A Mexican restaurant that is part of a chain which has been under investigation by Marion and Tippecanoe county officials will not have insurance funds seized from a bank account returned, the Indiana Court of Appeals ruled Thursday.

The Tippecanoe County Prosecutor’s Office served a warrant in November 2013 for seizure of El Rodeo No. 11’s funds in a PNC bank, which consisted of nearly $1 million in insurance proceeds following a fire that destroyed the Greenfield location. After that prosecutor’s office obtained the funds, the Marion County Prosecutor’s Office got a court order to freeze the restaurant’s PNC account, but at that point the balance was zero.

Earlier this year, civil lawsuits were filed in Tippecanoe and Marion counties, accusing the owners of the El Rodeo restaurant chain and others involved with the business of illegally obtaining millions of dollars. The owners of the chain recently agreed to plead guilty to criminal theft charges and forfeit more than $4.5 million for failing to report accurate sales figures to the state.

El Rodeo No. 11 sought a return from Marion County of the $967,840.81 seized by Tippecanoe County officials. Marion County then filed a motion to dismiss the restaurant from its forfeiture complaint since the Tippecanoe County Prosecutor’s Office had possession of the money and also filed a forfeiture complaint against it.

The trial court denied Marion County’s motion to dismiss and granted the restaurant’s request that Marion County turn over the seized funds. On interlocutory appeal in State of Ind., Consolidated City of Indianapolis/Marion Co., et al. v. El Rodeo #11, LLC, 49A05-1406-MI-257, the Court of Appeals reversed.

The money was seized by and located in Tippecanoe County when the Marion County Prosecutor’s Office sought forfeiture of it; therefore, it could not meet the statutory requirements for filing a forfeiture complaint under I.C. 34-24-1-3 or 34-24-2-2, wrote Judge Paul Mathias. And because El Rodeo No. 11’s funds were not located in Marion County, the trial court should have granted the county’s motion to dismiss.

In addition, El Rodeo No. 11’s request for the seized funds is moot because Marion County cannot produce funds that it does not and never possessed, Mathias continued. Tippecanoe County is not a named party in the case, and the judges disagreed with the restaurant’s assertion that it does not matter which prosecutor’s office is holding the funds because the “agency holds it by and under the laws of the State of Indiana.”

The judges remanded for further proceedings, including instructions to grant Marion County’s motion to dismiss its forfeiture complaint.
 

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