A charity accused by the U.S. of having ties to the militant Islamic group Hamas settled its lawsuit against the federal government and will be will removed from the government's list of terrorist organizations.
Both sides acknowledged no wrongdoing in the settlement, released Tuesday by the American Civil Liberties Union, which represented the charity in its lawsuit.
The agreement comes six years after the Treasury Department essentially closed the charity's operation by ordering U.S. banks to freeze the group's assets. It accused the group of funneling money to terrorist-affiliated organizations.
The leaders of KindHearts for Charitable Humanitarian Development in Toledo denied being connected to any terrorist group and sued the government after it refused to say why the charity's money was frozen.
The charity said in January that it had shut down and the settlement says it will remain closed.
The deal also calls for all of the charity's assets to be spent on its debts and as grants for charitable purposes. Once that's completed, the charity will be removed from the list terrorist organizations.
A federal judge sided with the charity in 2009, ruling that the government violated the Constitution because it did not tell the organization why it was freezing its assets or give it a chance to respond. The judge later told the government to halt the investigation because its actions could cause KindHearts to lose its attorneys and harm its reputation.
The Treasury Department in 2006 said KindHearts was connected with the Hamas-affiliated Holy Land Foundation and the al-Qaida-affiliated Global Relief Foundation. KindHearts leaders have said it is a nonprofit charitable organization, providing up to $6 million a year in humanitarian aid to the world's poor.