A recent class-action lawsuit alleges that FBI agents illegally seized more than $86 million in assets stored in safety deposit boxes located in Beverly Hills, California, under the presumption that the assets were somehow linked to unidentified crimes.
Back in 2015, the FBI began investigating a U.S. Private Vaults store in Beverly Hills, suspecting that the owners were engaging in drug trafficking and money laundering. During the course of the investigation, agents secured six warrants, five of which were rather straightforward and pertained only to the business and the business owners.
However, according to a story from the LA Times, the sixth warrant, signed by U.S. Magistrate Judge Steve Kim in 2021, authorized agents to seize business equipment from the store, including 1,400 safety deposit boxes located in the store, even though agents did not know the identity of the box owners or have probable cause to suspect that the owners were involved in any drug trafficking or money laundering scheme.
“The government did not know what was in those boxes, who owned them, or what, if anything, those people had done,” said Robert Frommer, a lawyer with the Institute for Justice which is representing approximately 400 USPV customers whose safety deposit box contents were seized by the FBI.
“The scope of what the FBI did is unprecedented,” Frommer added. “This was the largest armed robbery in United States history, and it was committed by the FBI.”
According to court filings, the FBI insisted on the affidavit that the “warrants authorize the seizure of the nests of the boxes themselves, not their contents,” and Judge Kim reiterated on the warrant he signed that “[t]his warrant does not authorize a criminal search or seizure of the contents of the safety deposit boxes.” However, the FBI seized and searched the boxes anyway, the lawsuit alleges.
The FBI later claimed that it was under no obligation to inform Judge Kim “how later actions, such as criminal investigations against boxholders or forfeiture of box contents, would play out.” The U.S. Attorney’s Office then sought to keep from the public all court documents which suggest the FBI deceived Kim, but a judge denied that request.
The lawsuit also claims that some of the box holders who came forward to reclaim their seized property were then subjected to another investigation. The FBI supposedly examined their bank and DMV records, tax returns, and other criminal history checks. Approximately 20 to 30 box holders decided to forfeit their property, FBI agent Lynn Zellhart said, and many have speculated that those holders who walked away wanted to avoid either becoming an FBI target or the tens of thousands of dollars in legal fees that people must often pay to defend themselves during such investigations.
Of all 700 USPV customers affected by the FBI raid, just nine were referenced in the FBI affidavit. Thus far, it is believed that none of the customers have been charged with any crimes, and the FBI would not say whether any of them had been the subject of a criminal investigation prior to the USPV raid.
The LA Times further reports that the evidence against any of the safety deposit box holders is “thin.” For starters, Zellhart alleged in an affidavit that only those who are “irrational” or who have criminal motives would rent a box from USPV rather than a bank.
She also claimed that many customers arrived at the store in cars with out-of-state plates, particularly Illinois. “Based on my training and experience in money laundering investigations, Chicago, Illinois is a hub of both drug trafficking and money laundering,” Zellhart wrote. “I believe these patrons were using their USPV box to store drug proceeds.”
Finally, she said that many USPV customers used rental cars, another characteristic associated with drug traffickers. So-called drug dogs were also able to smell traces of marijuana and other drugs on some of the cash seized, but marijuana is now legal in California and traces of street drugs on money are not necessarily evidence of a crime.
Though USPV pled guilty to the drug and money laundering charges, little else came from the investigation. The company went out of business, and the owners were never charged. U.S. District Judge R. Gary Klausner must still determine whether the FBI raid against USPV customers was unconstitutional. It is unclear when he is expected to make that decision.