A federal judge ruled on July 16 that the federal government cannot keep property belonging to two individuals who had stored cash and valuables at U.S. Private Vaults in Beverly Hills, which FBI agents raided in March.
While the ruling was viewed as positive, according to an attorney representing the two property owners, it still does not mean they will be getting their property back anytime soon. It also does not answer the question of what will happen to property belonging to hundreds of others who stored items at U.S. Private Vaults, which was formerly located at 9182 W. Olympic Blvd.
U.S. Private Vaults offered safe deposit boxes that the company advertised as being more secure than those at banks. Federal agents raided the business on March 22 and confiscated the contents of more than 400 boxes. The federal government has filed a criminal complaint against U.S. Private Vaults Inc., a Nevada-based company, but has not charged its owner or any employees, or any of the individual box holders. Authorities said U.S. Private Vaults was involved in three separate conspiracies to violate federal law, but they have not offered specifics. The federal warrant authorizing the search remains sealed.
Robert Frommer, an attorney with the national nonprofit Institute for Justice, called the situation a “cash grab” by the government. The Institute for Justice has filed lawsuits on behalf of seven people who had items stored at U.S. Private Vaults. On July 16, U.S. District Judge R. Gary Klausner issued a ruling that the FBI cannot keep items belonging to Joseph Ruiz, who had approximately $57,000 in a safe deposit box, and Travis May, who had approximately $63,000 in cash and gold in a box at U.S. Private Vaults, Frommer said.
Because each individual box holder must file a claim with the government to get their property back, the Institute for Justice has filed claims on behalf of some of the individual owners, as was the case with Ruiz and May, as well as a class action lawsuit that pertains to all of the box holders. The ruling on July 16 specifically addressed a motion filed only on behalf of Ruiz and May, and only stipulates that the government cannot confiscate the items without justification, Frommer said. A ruling on a second motion filed on behalf of Ruiz and May that would force the FBI to actually return the property is pending in federal court, he added. The class action lawsuit is also pending.
“It’s part of the process,” Frommer said. “It means if the government wants to keep the stuff belonging to Joseph and Travis, they have to say what they did wrong or give it back.”
The FBI has instituted a process for returning the property to the box holders and previously encouraged people to file online claims for review. Frommer said Ruiz and May instead filed legal claims in court because they worried the government would fail to respond. The Institute for Justice is also helping some of the other property owners navigate what Frommer described as a very complicated process. Two of the Institute for Justice’s clients, Jeni Pearsons and Michael Storc, who are married, filed online claims weeks ago and are still awaiting a decision on whether their property will be returned. Frommer said the government has up to 90 days to respond. Another couple and an individual box holder represented by the Institute for Justice had their property returned by the FBI, Frommer added.
“They had all been getting a runaround,” he said. “It’s taken weeks to coordinate.”
Ruiz, who is on disability as the result of being injured in a vehicle collision with a drunk driver, said the $57,000 stored in his box at U.S. Private Vaults was his “nest egg.” He received the money in a settlement resulting from the collision and another settlement stemming from a dispute with a former landlord.
“It’s just red tape. They are making us jump through rings of fire,” Ruiz said. “I kept my money at U.S. Private Vaults because I didn’t trust banks and the government. But I didn’t think they were ever going to come in and raid our vaults. I never thought the government cared that much about people, but now I know they don’t care about us. It’s terrible. They just left me high and dry.”
Ruiz also alleged that an inventory of the contents of his box provided by the government showed there was approximately $400 to $600 less than what he thought he had stored.
A representative from the U.S. Attorney’s Office declined to comment further because the government’s case against U.S. Private Vaults is ongoing.
Frommer added that he is hopeful there will be a ruling soon that will force the FBI to return Ruiz and May’s valuables, and he said it could come anytime. He foresees a ruling in the class action lawsuit filed on behalf of all the box holders to take more time because the legal system moves slowly.
“We’re still waiting on that, but federal law is pretty clear. If the government doesn’t find any criminal wrongdoing, it has to return the property,” Frommer said. “The government took all of these people’s stuff and has never had to prove anything about these people. I’d have to guess that this ruling has put it in damage control mode. The government grossly overstepped here on people’s constitutional rights.”
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