A class-action lawsuit has been filed against the U.S. government that accuses the FBI of illegally seizing the contents of 400 safe deposit boxes in Beverly Hills, California, as part of a money laundering drug operation.
The raid happened in March 2021 at U.S. Private Vaults, which has since pleaded guilty to conspiracy and money laundering. Yet the FBI is still holding the contents of boxes belonging to hundreds of people who have not been charged with any crimes, according to court documents.
“We brought suit on behalf of seven clients, but we were representing a class of at least 400 people,” said attorney Robert Frommer with the nonprofit group Institute for Justice. “What we’ve been trying to show for the past several months is that the government’s actions violated the search-and-seizure protections of the U.S. Constitution in the Fourth Amendment.”
U.S. District Judge R. Gary Klausner issued a temporary restraining order last year to stop the FBI from keeping assets from 369 boxes.
“This notice, put bluntly, provides no factual basis for the seizure of Plaintiffs’ property whatsoever,” Klausner wrote in his ruling. He cited the Fifth Amendment, which prohibits seizures without due process.
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The government believed U.S. Private Vaults was storing loot from its drug sales in the safe deposit boxes, so when agents sorted through the contents, they wanted to keep $86 million in cash, rare coins, jewelry, and precious metals, the Los Angeles Times reported.
Reported numbers have varied, but court records show that the government confiscated 700 boxes and has returned at least a portion of 430.
One of the victims who managed to retrieve his contents was Joseph Ruiz, an unemployed chef who kept life savings of $57,000 there. The FBI told a judge that Ruiz was an unlicensed drug dealer but was forced to return the money when Ruiz produced proof that the money was legally earned.
Newly unsealed court records show that the FBI and U.S. attorney’s office misled a judge who signed a warrant for the search by not stating they wanted to confiscate valuable property permanently.
The judge gave permission to inventory and inspect the contents, but “this warrant does not authorize a criminal search or seizure of the contents of the safety deposit boxes,” the warrant said.
However, the government accused box owners of committing various felonies without producing proof, the Los Angeles Times reported.
Sometimes, drug-sniffing dogs would smell traces of narcotics on cash — other times, agents decided too much was stored there.
One person was a glassmaker who had $340,000 stored in a box. The man was charged with drug trafficking, racketeering, and fraud, but a judge later dismissed the case due to a lack of evidence.
The government also accused two brothers of being associates of armed robbers because they had $960,100 and $519,000 in their boxes.
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“The government’s theory is that having cash makes you a presumptive criminal, and I think every American should be worried about that,” said Robert E. Johnson, Ruiz’s lawyer.