An innocent elderly woman has suffered the terror of armed police throwing flash grenades into her home and smashing through her front door when they accidentally targeted the wrong address.

Louise Milan, 68, is suing the US city of Evansville after the SWAT team arrested her and her 18-year-old adopted daughter Stephanie in a bungled investigation.

Video from the helmet of one of the heavily-armed officers shows the force used as they swooped on the Indiana home on June 21, 2012.

After shattering the front glass door and tossing in flash grenades, the officers raided the home to find and arrest Ms Milan and her daughter, who are seen yelling for the police not to hurt them.

The officers were looking for evidence of who had made anonymous posts to an internet message board threatening the police department and its chief. However, the person who had sent the offending messages had hacked into Ms Milan's unprotected wireless internet connection, the Courier Press reports.

Her lawyer, Kyle Biesecker, said police used more force than was needed.

"We're talking about a search warrant, not an arrest warrant," he said.

Police claim they were justified in their approach because of the "unprecedented threat assessment".

Following the fruitless raid, the FBI later arrested Derrick Murray, a suspected local gang leader who lived nearby.