A Los Angeles man said he lost $57,000 in March after FBI agents raided U.S. Private Vaults, a safe deposit box business in Beverly Hills. After a prolonged back-and-forth, prosecutors have agreed to return the cash following an order that the government needed to show cause to continue holding onto the money.
U.S. Private Vaults had been charged in a sealed indictment with conspiracy to launder money and sell drugs. Federal prosecutors alleged assets contained in the safe deposit boxes were the fruits of criminal activity.
That charge did not extend to U.S. Private Vaults’ customers, however. Joseph Ruiz, 47, told City News Service it nevertheless took more than four months for the government to agree to return his property.
Ruiz is a food service worker who said he received the money through court settlements and opted to store them in a safe deposit box out of a mistrust of institutional banking.
Federal prosecutors agreed to return the funds after U.S. District Judge R. Gary Klausner issued an order in July instructing the government to “show cause to the court in writing” as to why it continued to hold Ruiz’s money.
On Aug. 3, the government responded, claiming that after a review of the facts, a formal forfeiture action would not be filed against Ruiz and the cash would be returned.
Ruiz’s attorney told City News Service that he still had to submit copies of settlement checks proving to the government where the cash came from.
“It’s amazing that the FBI needs to be told this, but the government cannot go around seizing property without a good reason,” Ruiz’s attorney, Rob Johnson, told City News Service. “The FBI grabbed over $85 million from U.S. Private Vaults customers, including [Ruiz], and it has never provided a good explanation why.”
Johnson told City News Service the warrant authorizing the March raid on U.S. Private Vaults did not permit agents to search or seize the contents of individual deposit boxes.
As part of the raid, FBI agents reportedly seized cash and millions of dollars worth of jewelry and other valuables from 369 boxes. Specific criminal conduct was never alleged against the box owners.
It is unclear if litigation against the government arising out of this controversy will end with the return of confiscated property. The Los Angeles Times reported in June that U.S. Private Vaults’ customers were lining up to file lawsuits alleging violations of their Fourth Amendment rights against unreasonable searches and seizures, and Fifth Amendment rights not to self-incriminate.
The Institute for Justice, the legal nonprofit that employs Ruiz’s attorney, alleged that “the FBI opened every box in the vault and forced individuals to prove their own innocence to get their property back.”