A retired flooring contractor was watching television one evening last month when he saw a report about federal agents attacking US Private Vaults, a store in a Beverly Hills mall that allowed customers to rent safes -forts anonymously.
He knew the place well. It’s near his home, and for years he has rented a long, narrow box there to keep about $ 60,000 in cash, gold and silver. It also contained the title certificate for his pickup truck.
The 69-year-old, who declined to be named due to privacy and security concerns, said he had held onto the stockpile of currencies and precious metals since being scared of the financial crash from 2008. “You never know what’s going to happen, the way the world is changing today,” he said.
This financial net disappeared – at least for the moment – during the raid.
Armed with a warrant, FBI and Drug Enforcement Administration agents each pulled hundreds of boxes from the store from the walls and seized all the contents. It took five days to inventory everything and take it to an undisclosed warehouse. Prosecutors said drugs, weapons and stacks of currency that caught the attention of the drug sniffer dogs have been discovered.
To reclaim property, people must identify themselves with federal authorities and prove that they are the rightful owners of the items – a bar that can be difficult to clear when it comes to silver, gold. , antique jewelry and other undocumented items.
The raid sparked legal challenges from five box holders who claim the government violated the constitution’s ban on unreasonable search and seizure.
U.S. District Judge R. Gary Klausner on Tuesday denied a client’s request for an emergency order that would have prevented prosecutors from using the contents of the boxes as evidence in the investigation. It would also have prevented the FBI from requiring box holders to identify themselves as a condition to retrieve their valuables.
Klausner, however, left open the possibility that the radical nature of the foreclosures violated the rights of box tenants.
Klausner’s decision came in the first of five lawsuits filed by U.S. customers of Private Vaults, who estimate there were between 600 and 1,000 boxes in the store.
Prosecutors have argued in court that they have a solid legal foundation, saying they can prove that the business itself is a criminal enterprise and that most of the box holders are criminals hiding “wealth. badly acquired ”. But they also acknowledged in court records that innocent people had been swept away in the case. No charges have been filed against any of the store’s customers.
Lawyers say the US attorney’s office in Los Angeles is testing constitutional restrictions on the government’s power to seize private property.
“It was basically the execution of an arrest warrant in a company,” said Orin Kerr, professor of law at UC Berkeley. “What made the difference was that hundreds of customers had their own 4th Amendment protected areas in their safes. This is what makes it unusual. It’s not just the case. It’s also the users who store their stuff – some engage in criminal activity, some not, I guess. “
A federal grand jury indicted U.S. private coffers last month on three counts of conspiracy – to distribute drugs, launder money and structure cash transactions to circumvent currency reporting rules. The indictment lists four anonymous people affiliated with the company as co-conspirators but did not indict them. Other charges may be filed later.
In a court statement defending the seizure, FBI agent Kathryn E. Bailey said officers searching the boxes found fentanyl, OxyContin, guns, gold bars and stacks of 100 dollar bills. Some of the larger boxes each held over $ 1 million in cash, she said.
Clients who sued the government said prosecutors were prohibited from seizing the contents of their boxes because they had no evidence that would give them reason to suspect the clients were hiding contraband or committing another crime.
Jeffrey B. Isaacs, a lawyer for a client, has accused prosecutors of trying to force people who wish to reclaim their property to reveal their names to the FBI, submit to a criminal investigation and prove that they legally acquired what they stored in the boxes.
“This is such an illegal search and seizure as I have ever seen,” Isaacs said. “It’s rather shocking.”
His client is identified in court documents by the pseudonym James Poe. The other four who have sued are also seeking anonymity: John Doe, Charles Coe, Michael Moe and Richard Roe.
The retired Pico-Robertson contractor did not sue, but attempted to file a theft report with Beverly Hills Police, who refused to take it.
Klausner’s decision denied Doe’s request for a temporary restraining order that would have unsealed the court-approved seizure warrant; stopped the inspection of any box, the government has no specific justification for searching; prohibits officers from using anything they find in these boxes for criminal investigations; and stopped the FBI from demanding personal information from people trying to recover their valuables.
Doe rented three boxes to store jewelry, coins, and bullion, but sought a court order that applied to the entire store.
“It is possible that the government seizure and search of these other boxes violated the 4th Amendment rights of their owners,” Klausner wrote. But the demand was “much broader than necessary” to protect Doe from harm.
The court is still considering Doe’s request for a preliminary injunction. Benjamin Gluck, his lawyer, said that “the government’s plan is clearly unconstitutional”.
In court documents filed last week, US aide Atty. Andrew Brown said officers “seized the vault nests because there was overwhelming evidence” that US private vaults “were a criminal matter.” The company’s promise of anonymity has attracted criminals seeking to protect cash, he said. Brown acknowledged that some customers were “honest citizens” who should get their things back.
The standards for what makes research legal have changed in recent years as digital communications pose new challenges. Courts have demanded warrants for searches of places where people have a “reasonable expectation of privacy.” Exceptions, however, were made when law enforcement searched for personal data and other things that suspects technically put in the possession of a third party such as a phone company or a storage facility.
In 2018, the Supreme Court narrowed down those exceptions, ruling that police needed a warrant to collect cell phone tracking records that can reveal anywhere a person goes. Even though the location data is kept by a private company, Chief Justice John G. Roberts wrote: “We refuse to grant the state unrestricted access.
Hadar Aviram, professor of law at UC Hastings, said the warrant that remains sealed in the US private vaults case is key to whether prosecutors have met the legal standard to break the expectation of confidentiality. box holders. Prosecutors would have to show they had probable reason to believe evidence of criminal activity would be found in a large part of the boxes – perhaps nearly a third of them, she said. “There are good reasons to be concerned here,” she said.
Kerr, the UC Berkeley law professor, said he expected the seizure of all the boxes to ultimately stand up in court, but the legal question still did not appear to be “settled.”
Robert Frommer, senior lawyer at the Libertarian Institute for Justice in Virginia, called the seizure of the boxes “flagrant.”
“These owners have their own independent rights to be secure in their person and property,” he said. “The government cannot step in and say, because the company would have done something wrong, that these people are not entitled to the protections of the 4th Amendment.”