FBI wants to keep fortune in cash, gold, jewels from Beverly Hills raid. Is it abuse of power?

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.

6/10/2021 5:15:00 AM

Forfeiture is a controversial tool used heavily in recent decades by federal, state and local law enforcement agencies nationwide. From 2000 to 2019, forfeitures generated $46 billion for the federal government, an Institute for Justice report found.

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.

PrintWhen FBI agents asked for permission to rip hundreds of safe deposit boxes from the walls of a Beverly Hills business and haul them away, U.S. Magistrate Steve Kim set some strict limits on the raid.The business, U.S. Private Vaults, had been charged in a sealed indictment with conspiring to sell drugs and launder money. Its customers had not.

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So the FBI could seize the boxes themselves, Kim decided, but had to return what was inside to the owners.“This warrant does not authorize a criminal search or seizure of the contents of the safety deposit boxes,” Kim’s March 17 seizure warrant declared.

AdvertisementYet the FBI is now trying to confiscate $86 million in cash and millions of dollars more in jewelry and other valuables that agents found in 369 of the boxes.Prosecutors claim the forfeiture is justified because the unnamed box holders were engaged in criminal activity. They have disclosed no evidence to support the allegation. headtopics.com

Box holders and their lawyers denounced the ploy as a brazen abuse of forfeiture laws, saying prosecutors and the FBI were trampling on the rights of people who thought they’d found a safe place to stash confidential documents, heirlooms, gold, rare coins and cash.

If the FBI wanted to search the boxes, the lawyers say, it first needed to meet the standard for a court-issued warrant: Probable cause that evidence of specific crimes would be found.The government “can’t take stuff without evidence in the hopes that you’re going to get it later,” said Benjamin Gluck, an attorney who represents box holders suing the government to retrieve their property. “The 4th Amendment and the forfeiture laws require the opposite — that you have the evidence first, and then you can take property.”

Subscribers get early access to this storyWe’re offering L.A. Times subscribers first access to our best journalism. Thank you for your support.Forfeiture laws enable the government to confiscate assets tied to criminal activity. The generally low standard of proof makes it an appealing tool for prosecutors, who in criminal trials must prove guilt beyond a reasonable doubt.

FBI spokeswoman Laura Eimiller referred questions to the U.S. attorney’s office in Los Angeles.AdvertisementA video screen capture taken from U.S. District Court documents shows agents during the raid of U.S. Private Vaults in Beverly Hills(U.S. District Court) headtopics.com

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Thom Mrozek, a spokesman for the office, denied the government was misusing its powers by trying to confiscate box holders’ belongings.“We have some basis to believe that the items are related to criminal activity,” he said.In general, Mrozek said, a number of factors would lead the FBI to pursue forfeiture of the boxes’ contents — such as large stacks of cash kept by a person with a criminal record or no known source of income.

AdvertisementPossession of cash in any amount is legal.Beyond the $86 million in cash, the FBI is seeking to confiscate thousands of gold and silver bars, Patek Philippe and Rolex watches, and gem-studded earrings, bracelets and necklaces, many of them in felt or velvet pouches. The FBI also wants to take a box holder’s $1.3 million in poker chips from the Aria casino in Las Vegas.

The money and goods are among the contents of about 800 safe deposit boxes the FBI seized in late March during a five-day raid of the U.S. Private Vaults store in an Olympic Boulevard strip mall known for its kosher vegan Thai restaurant.Federal agents spent five days in late March searching the U.S. Private Vaults store where customers stored valuables in roughly 800 safe deposit boxes. A magistrate authorized the FBI’s seizure of the store’s “business equipment” for a drugs and money laundering investigation, but barred searches of the boxes’ contents.

(Irfan Khan / Los Angeles Times)AdvertisementThe FBI has returned the contents of about 75 boxes and plans to give back the items found in at least 175 more, because there was no evidence of criminality, Mrozek said. Federal agents have not determined who owns what was stored in many other boxes. headtopics.com

The indictment says U.S. Private Vaults marketed itself to attract criminals who wanted to store valuables anonymously and keep tax authorities at bay. An owner and a manager of U.S. Private Vaults were involved in drug sales, it says, and co-conspirators helped customers convert cash into gold to evade government suspicion.

Among those ensnared in the government’s dragnet was Joseph Ruiz, who lost his life savings in the raid: $57,000 in cash. An unemployed food service worker who lives near Crenshaw Boulevard and the 10 Freeway, Ruiz, 47, distrusts banks and sees world affairs as deeply unstable, so he kept his money at U.S. Private Vaults.

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He obtained the money in two legal settlements, one for a spinal injury in a car accident and another for chronic housing code violations in his apartment building, Ruiz said.AdvertisementThe FBI seized it, rejected his requests to return it and is now moving to confiscate it without explanation.

“They just kind of stole my money,” said Ruiz, whose most recent job was at Gate Gourmet, an airline caterer.When he stopped by U.S. Private Vaults during the FBI raid to claim his money, Ruiz said, a federal agent asked if he belonged to a drug cartel.

“I’m made out to be a criminal, and I didn’t do anything,” said Ruiz, the son of a retired Los Angeles police officer. “I’m a law-abiding citizen.”AdvertisementRuiz has joined Jennifer and Paul Snitko, a Pacific Palisades couple who kept jewelry and baptism certificates in their U.S. Private Vaults box, in filing a class-action complaint against Tracy L. Wilkison, the acting U.S. attorney in Los Angeles, and Kristi Koons Johnson, who heads the FBI’s L.A. field office.

It is one of11 suits filed by box holdersthat seek the return of their property and court orders declaring the seizures unconstitutional. Read more: Los Angeles Times »

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Sheesh… just gonna get me an old Yuban can and a shovel nice FBI has no right to claim anything unless it pertains to the Investigation with DOJ signed off on the Order, otherwise all other items get released to the owners...period... good justinamash RickDHarrington Crooked af

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