A federal judge ruled Friday that the FBI’s seizure of tens of millions of dollars in cash and valuables from 700 Beverly Hills safe deposit boxes did not violate anyone’s constitutional rights.
US District Judge R. Gary Klausner’s decision upheld law enforcement tactics that tested the limits of aggressiveness by federal agents in seizing funds and property without evidence that the owner had committed a crime.
Klausner agreed to dismiss a class action lawsuit filed on behalf of nearly 400 people who rented boxes that agents searched at the US Private Vaults store on Olympic Boulevard.
The judge found no inappropriateness in the way the government obtained or executed the warrants authorizing the March 2021 raid.
The ruling didn’t address some of the most controversial aspects of the raid, such as the FBI’s attempt to seize assets from box owners on the assumption they were criminals, even in cases where agents had no evidence to confirm their suspicions.
The prosecutor welcomed the decision.
“This ruling demonstrates that the actions taken in relation to a company targeting criminals were lawful, within policy and conducted in full compliance with the Constitution,” said Thom Mrozek, a spokesman for the US Attorney’s office in Los Angeles
Rob Johnson, an attorney for crate owners, vowed to appeal.
“If today’s shocking decision stands,” he said, “it will set a dangerous precedent that will allow the FBI and other law enforcement agencies to circumvent the 4th Amendment,” which prohibits “unreasonable searches and seizures.”
The raid, which virtually paralyzed US Private Vaults, came two weeks after the company faced sealed indictments on conspiracy to sell drugs and money laundering. Some of the customers were storing proceeds of crime in their boxes, the government accused.
In their warrant filing, the FBI and US Attorney’s Office asked US Judge Steve Kim for permission to seize the store’s locker shelves for forfeiture, but “Not their content.”
They assured Kim that the agents would follow the FBI’s written guidelines to inventory the contents of the box to protect against allegations of theft, and then would notify the owners that they could retrieve their belongings.
The warrant application missed a key part of the FBI’s plan: to permanently confiscate all items in a box containing at least $5,000 in cash or merchandise, according to a senior FBI agent recently.
The FBI’s justification for the undisclosed wholesale forfeiture was its assumption that all customers who rented their boxes anonymously were storing assets somehow connected to unknown crimes, court records show.
The FBI has attempted to seize more than $86 million in cash and millions more in gold, silver, rare coins and jewelry, but in the process has accused many box owners of crimes it had no evidence of.
Klausner dismissed the box owners’ claim that the government had breached its duty of disclosure to the court by excluding the dragnet search plan from the warrant application.
The omission didn’t affect whether Kim found a probable reason to seize the company’s equipment, so it was “irrelevant” to the warrant, Klausner said.
Klausner’s ruling made no mention of the invasion of privacy documented by the plaintiffs: Federal agents took photos and videotaped password lists, bank statements, payslips, immigration records, and many other private papers belonging to Box owners who are not criminals.
The FBI archived files on everything it found in the boxes in a database that agents use to store information for criminal investigations. Klausner denied the plaintiffs’ request to order the FBI to remove their private information from the database known as the Sentinel.
Klausner also dismissed allegations that the government exceeded the bounds of the warrant, which expressly precludes “a criminal search or seizure” of the carton’s contents.
The plaintiffs, led by Los Angeles aerospace engineer Paul Snitko, argued that the government’s plan to inventory everything found in the boxes was an excuse to search them for evidence.
Klausner said there was no question that the government “expected, or even hoped, to find criminal evidence in its inventory.”
“Unfortunately, for the plaintiffs, the mere existence of such a motive alone is not sufficient,” he wrote, citing a U.S. 9th Circuit Court of Appeals ruling in another search and seizure case. “There must be an inadmissible motive for the investigation only Reason the agents did the inventory.”
FBI spokeswoman Laura Eimiller said the ruling made it clear that the agents were handling the case “without malice and in accordance with the law, FBI policy and in compliance with the US Constitution.”
https://www.latimes.com/california/story/2022-09-30/judge-backs-fbi-beverly-hills-safe-deposit-box-raid Judge backs FBI’s Beverly Hills safe-deposit box raid