The children's father, Robert Preston, was arrested and charged with child-endangerment.
Stephany Moses, 25, was nabbed after her children, ages 2 and 4, were discovered at around 10:30 a.m. on Tuesday by a Good Samaritan "left unattended in a car... wearing only light clothing" inside a car parked in a lot located on Market Place Drive in Council Bluffs, Iowa.
Michelle Booker-Hicks shot Rickey Wright, 36, in the head after he tried to steal her car from a gas station.
"You looking at that video, you see she opened up the cage, let the kids out the cage out the trunk of the car, I mean it don't look good," a neighbor said.
"He was cursing at her, calling her a 'retard' for no reason," said the victim's mother.
"I've never seen anything like it," Perkins Township Assistant Chief Vince Donald said.
Butler County Sheriff Richard Jones has urged parents to conduct background checks, and talk to neighbors, friends and family before allowing someone to watch their children.
The couple allegedly told police that they got the idea of waterboarding their daughter as a form of punishment from a movie.