Plaintiffs in the class-action suit have asked U.S. District Judge R. Gary Klausner to declare the raid unconstitutional. If he grants the request, it could force the FBI to return millions of dollars to box holders whose assets it has tried to confiscate.
The FBI’s attempt to confiscate tens of millions of dollars from Beverly Hills safe deposit boxes draws resistance and charges of government misconduct.
Around 2015, it began attracting police attention. Local detectives and federal agents spotted drug suspects walking in and out.FBI agent Lynne Zellhart, a former Sacramento attorney, first heard about it from a Los Angeles County sheriff’s deputy. Customers, who could rent boxes without identifying themselves, entered the store’s vault with a biometric eye scan, the deputy told her.
Through surveillance, informants and undercover work, they surmised that U.S. Private Vaults and a precious-metals store next door were helping drug dealers launder cash by converting it into gold and silver they stashed in their boxes.Customers of U.S. Private Vaults are suing the FBI over its attempt to confiscate gold and silver, jewelry and $86 million in cash from safe deposit boxes.
The only way the FBI could seize the racks of boxes would be to take possession of the contents too. Any judge reviewing the warrant request would recognize a threat to the rights of what turned out to be about 700 customers who had locked away some of their most private and valuable belongings. The Fourth Amendment protects people against “unreasonable searches and seizures.” It requires the government to get a warrant by showing in a sworn statement that it has probable cause to believe that a particular place needs to be searched and describing specific people or things to be seized.
Other customers were showing up in rental cars, and that too, she claimed, was a sign of drug dealers evading law enforcement. An owner of U.S. Private Vaults told a government witness that the store’s best customers were “bookies, prostitutes and weed guys,” Zellhart wrote. “I don’t sort of know how to answer your question as to whether it was all of them, it was most of them,” she responded. “I don’t — I don’t have a percentage.”
What Brown wrote contradicts the FBI’s plan for hundreds of box confiscations. He underlined the government’s lack of evidence to justify any criminal search of the customers’ property.their contents,” his section of the affidavit said. “By seizing the nests of safety deposit boxes themselves, the government will necessarily end up with custody of what is inside those boxes initially.”
In the summer of 2020, she testified, Matthew Moon, then one of the highest-ranking FBI agents in Los Angeles, asked her if her team “was capable of handling a possible large-scale seizure” of safe-deposit boxes at U.S. Private Vaults. To confiscate an asset under U.S. forfeiture laws, the government must first have evidence that it was derived from criminal conduct or used to facilitate it.
They said the FBI did not need to tell Kim “how later actions, such as criminal investigations against boxholders or forfeiture of box contents, would play out.” The FBI also had dogs sniff all the cash for any odor of marijuana or other drugs, a step that was outside the bounds of the “written inventory policies” that the government vowed to follow.
The company went out of business. It was sentenced to pay a $1.1-million fine for laundering drug money, but prosecutors conceded it lacked the means to pay it. When the FBI vacated U.S. Private Vaults, it posted a notice in the store window inviting customers to claim their property. The FBI went on to investigate anyone who stepped forward, checking their bank records, state tax returns, DMV files and criminal histories, agents testified.
Some of those, and many others, have faced baseless FBI accusations of criminal wrongdoing. In May 2021, the FBI claimed the contents of 369 boxes — including the $86 million in cash — were linked to crime and filed papers for confiscation through forfeiture. In some of those cases, prosecutors cited no evidence that the money was tied to any specific crime, alleging simply that a dog smelled drug residue on the cash, or that it was bagged or wrapped in a way that aroused suspicion of drug trafficking.
Prosecutors falsely accused the man of fraud, racketeering, conspiracy, drug trafficking and money laundering. FBI agent Madison MacDonald — who co-authored the raid plan — filed a sworn statement saying the allegations were true.
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