The FBI was able to crack open more than 1,400 safe-deposit boxes in Beverly Hills, Calif., taking more than $86 million in personal possessions from hundreds of people in 2021. Now a lawsuit is alleging the FBI deceived the judge who signed off the warrant for their controversial raid.
In a March 2021 raid, FBI agents went through various safe-deposit boxes at the U.S. Private Vaults in Beverly Hills. The federal agency has continued to hold onto millions in seized items, which they claimed were tied to unspecified crimes. The Institute for Justice has since filed a lawsuit on behalf of several of the box holders, demanding their return.
In a May 27, 2021 press statement, the Institute for Justice, said the FBI raid was meant to target U.S. Private Vaults, accusing the business of money laundering and other crimes. But rather than only taking the company’s business property, it used civil forfeiture rules to keep the possessions stored at the business by its customers.
Federal civil forfeiture is a process by which law enforcement officers may seize assets that represent the proceeds of a crime or that were used to facilitate the crime.
According to the Los Angeles Times, the criminal case against U.S. Private Vaults has already come to an end with no prison sentences for the business’s operators. The safe-deposit box company did have to pay a $1.1 million fine for laundering drug money, but prosecutors eventually agreed that the company couldn’t feasibly pay that fine.
While the criminal case against U.S. Private Vaults fell through, the items they seized from the vaults of the business’s customers remain in federal custody.
“When the FBI applied for that seizure warrant in March 2021, its affidavit did not allege that the customers had done anything wrong, and both the FBI and the United States Attorney’s Office swore that agents would merely ‘inventory’ box renters’ property,” the Institute for Justice said in an August 2022 press statement. “They promised the warrant would ‘authorize the seizure of the nests of the boxes themselves, not their contents,’ and that agents would pry ‘no further than necessary to determine ownership.’”
“But the FBI and the United States Attorney’s Office failed to tell the judge that, months before, they and other government agencies had already formulated plans to use civil forfeiture against customers’ property,” the Institute For Justice continued. “In fact, before the federal magistrate had even seen the warrant application, FBI officials had concluded they would use civil forfeiture against every asset in every customer’s box that was worth over $5,000.”
$5,000 is the minimum threshold to apply federal forfeiture rules to seized items.
According to a court filing, federal prosecutors do not dispute that they “pursued administrative forfeiture” against “basically any cash that was seized that was above the — that $5,000 FBI minimum.”
In applying for the warrant to raid the business, FBI agent Lynne Zellhart accused safe-deposit box holders of criminal behavior. Zellhart said that it would be “irrational” for anyone who wasn’t a lawbreaker to entrust U.S. Private Vaults with their assets and wrote that “only those who wish to hide their wealth from the DEA, IRS, or creditors would” rent a box anonymously at U.S. Private Vaults.
Zellhart told the Los Angeles Times “I believe these patrons were using their USPV box to store drug proceeds,” but cited no specific evidence of that claim. She did note that some of the store’s customers were showing up in rental cars, which, she claimed, was a sign of their efforts to evade law enforcement.
An owner of U.S. Private Vaults did tell a government witness that the business’s best customers were “bookies, prostitutes and weed guys,” according to Zellhart. She could only identify nine deposit boxes she believes were “linked” or “associated” with law enforcement investigations, and still provided no facts specifying the alleged criminal activity.
“The government did not know what was in those boxes, who owned them, or what, if anything, those people had done,” Robert Frommer, a lawyer representing nearly 400 box holders argued in court, according to the Los Angeles Times. “That’s why the warrant application did not even attempt to argue there was probable cause to seize and forfeit box renters’ property.”
Even with the box holders that are suing to get their belongings back, the government still stands to gain millions of dollars from items some deposit box holders have simply given up on seeing returned.
“There’s a good number of people who just said, ‘I don’t want it,’ ” Zellhart testified. “I think there was 20 or 30 of those.”
In a statement to the Los Angeles Times, FBI spokeswoman Laura Eimiller pushed back on the allegations the agency lied in getting its warrant to break open the safe-deposit boxes. Eimiller said the warrants were lawfully executed “based on allegations of widespread criminal wrongdoing.”
“At no time was a magistrate misled as to the probable cause used to obtain the warrants,” Eimiller added.
Eimiller also noted U.S. Private Vaults took a plea agreement and that the FBI’s investigation is ongoing.
The FBI has faced numerous recent accusations of corruption in recent months. In August, an FBI employee in Utah was charged with sexually abusing five children. Last week, an FBI whistleblower alleged the agency had stopped focusing on child sexual abuse to instead prioritize political investigations.
