Did the FBI violate Americans’ Fourth and Fifth Amendment rights when it seized a staggering $86 million in cash and jewelry during a raid on a California safe deposit company accused of money laundering two years ago?
That is the question a panel of judges from the 9th Circuit Court of Appeals will answer following arguments from both sides of the debate on Thursday.
Roughly 1,400 safe deposit boxes from U.S. Private Vaults, a Beverly Hills-based company, were seized by the FBI on March 22, 2021.
While court documents describe the company as one that was regularly used by “unsavory characters to store criminal proceeds,” none of the hundreds of customers whose life savings were suddenly in the hands of the FBI have been accused of any crimes.
Rob Johnson, senior attorney for the Institute for Justice (IJ) is feeling “extremely optimistic” about the panel’s pending decision.
“I think the public sees this and recognizes that this is just a total abuse of people’s constitutional rights,” he told Fox News.
“Agents took about $86 million in cash from the boxes, as well as a trove of jewelry, gold bars and coins, silver and other valuables,” Fox News reports. “In May of that year, the FBI ‘commenced administrative forfeiture proceedings’ against an unspecified number of the boxes, according to court documents.”
According to the U.S. Department of Justice, “civil judicial forfeiture” is a “court proceeding brought against property that was derived from or used to commit an offense, rather than against a person who committed an offense.”
“Unlike criminal forfeiture,” the DOJ explains, “there is no criminal conviction required, although the government is still required to prove in court by a preponderance of evidence that the property was linked to criminal activity. … Civil forfeiture allows the government to file cases against property that would not be reachable through criminal forfeiture, such as property of fugitives, terrorists, and other criminals located outside the United States.”
The Institute for Justice says that the federal government alone has raked in more than $45.7 billion in revenue between 2000 and 2019 thanks to forfeiture.
Ultimately, U.S. Private Vaults (USPV) pleaded guilty to money laundering, Fox News reports, “but as of October 2022, the U.S. Attorney’s Office said it had not filed any other criminal charges.”
“A spokesperson on Thursday declined to comment on the case and could not immediately answer whether additional criminal charges were ever filed,” according to the outlet.
Several uncharged renters of the boxes joined together and filed a class action lawsuit against the government, accusing it “of violating their Fourth Amendment protection from unreasonable search and seizure and their Fifth Amendment protection from having private property taken without compensation.”
IJ attorneys argued on Thursday that, following the raid, the FBI, without probable cause, “broke open hundreds of safe deposit boxes, and then it tried to civilly forfeit everything in those boxes worth over $5,000.”
“The search … had an objective function to uncover evidence of crimes,” Johnson stated.
“IJ wants the appeals court to definitively state that the FBI violated individuals’ rights and to force the federal government to destroy copies it made of customers’ private documents — including medical records, wills and trusts — while agents searched the boxes,” Fox News reports. “The appeal comes after a lower court last year sided with the FBI.”
Fox News continues:
Unsealed court documents showed the FBI and U.S. Attorney’s Office never told the judge in their warrant request that they planned to confiscate the contents of every box containing at least $5,000 in cash or belongings.
The warrant only authorized agents to seize business computers, money counters and surveillance equipment. The judge also allowed them to seize safety deposit boxes and keys, but specifically wrote that agents should only “inspect the contents of the boxes in an effort to identify their owners … so that they can claim their property,” and that the warrant “does not authorize a criminal search or seizure of the contents of the safety deposit boxes.”
Federal Judge Judge R. Gary Klausner noted that attorneys for the plaintiffs showed the government “had a dual motive in inventorying the contents of each deposit box” but ruled that the agents didn’t exceed the bounds of the warrant.
Klausner wrote that any reasonable judge would have “inferred that the inventory could lead to the potential discovery of criminal proceeds in certain boxes, which would then lead to forfeiture.”
Attorney Victor Rodgers, arguing on behalf of the government on Thursday, said a notice was posted on USPV’s window aimed at reuniting customers with their property — a move that was above and beyond what the Bureau needed to do.
“All they had to do was contact the FBI,” Rodgers said.
A decision is expected from the panel in the next few months.
Writers and editors can be contacted at [email protected] with feedback, tips, or corrections.
Melissa Fine is the former executive editor of Casino Player, Strictly Slots, and Poker
Digest magazines. She is a UCLA graduate, news junkie, and dedicated Stargate SG-
1 fan. Melissa currently lives with her dog and two cats in a tiny town in the Sierra
Nevada foothills.
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