FBI affidavit misled a magistrate judge on a search warrant in plot to seize and forfeit contents of safety deposit boxes

In a case with a direct bearing on the search warrant issued on Mar A Lago, the March 22, 2021 FBI raid on a private safe deposit box operator in Beverly Hills, California just got even dodgier, according to court documents released by a different federal judge than issued the warrant. You may recall that the FBI raided US Private Vaults in Beverly Hills and seized the contents of boxes of people accused of no crimes.

Eric Boehm of Reason reports on the latest revelations that show a pattern of FBI abuse of magistrate judges for the purpose of obtaining search warrants that amount to fishing expeditions – a violation of the Fourth Amendment

The FBI told a federal magistrate judge that it intended to open hundreds of safe deposit boxes seized during a March 2021 raid in order to inventory the items inside—but new evidence shows that federal agents were plotting all along to use the operation as an opportunity to forfeit cash and other valuables.

Federal agents failed to disclose those plans to the federal magistrate judge who issued the warrant for the high-profile raid of U.S. Private Vaults, a private business in Beverly Hills, California, that had been the subject of an FBI investigation since at least 2019. When the raid took place, the FBI also seems to have ignored limitations imposed by the warrant, including an explicit prohibition against using the safe deposit boxes as the basis for further criminal investigations. (snip)

As Reason has extensively reported, the raid on U.S. Private Vaults resulted in federal agents seizing and attempting to forfeit more than $86 million in cash as well as gold, jewelry, and other valuables from property owners who were suspected of no crimes. Attorneys representing some plaintiffs who are trying to recover their possessions interviewed the FBI agents who planned the raid, but federal prosecutors tried to keep some details of those depositions redacted.

The unredacted legal documents, filed in federal court on Thursday, show why the government was eager to keep those details under wraps.

The documents reveal that the FBI misled the judge as to the purpose of the raid:

…Assistant U.S. Attorney Andrew Brown wrote that federal agents intended to merely inventory the contents of the seized safe deposit boxes. But the newly unredacted documents show that the FBI had drawn up plans months earlier to forfeit property from the boxes, and failed to inform the magistrate judge about those plans.

"We had already determined that there was probable cause to move forward" with civil forfeiture proceedings against the contents of the safe deposit boxes before the search occurred, FBI Special Agent Jessie Murray said in a deposition, according to court documents.

Those crucial details were omitted from the affidavit submitted to the magistrate judge who granted the warrant that allowed the FBI to search U.S. Private Vaults. As Reason has previously detailed, that same warrant expressly forbade federal agents from engaging in a "criminal search or seizure of the contents of the safety [sic] deposit boxes."

The newly unredacted documents suggest the FBI never intended to abide by that limitation. In a deposition, Special Agent Lynne Zellhart said she drew up "supplemental instructions" for the agents who would be conducting the raid of U.S. Private Vaults. 

This FBI misbehavior has not resulted in the evidence unjustly obtained being thrown out of court. In fact, the feds have already obtained a guilty plea from US Private Vaults:

The company that owned and operated U.S. Private Vaults in Beverly Hills, which has been under investigation since at least March 2021 for allegedly renting safe deposit boxes that were used by some customers to stash drugs, valuables and cash, pleaded guilty to a money laundering charge in a plea agreement entered on March 2 in United States District Court.

U.S. Private Vaults, a company based in Nevada and registered as a California corporation, was formerly located at 9182 W. Olympic Blvd. It has been closed since federal agents raided the business on March 22, 2021, and seized drugs, firearms and large amounts of gold bullion, cash and other valuables from safety deposit boxes rented by private customers.

U.S. Private Vaults advertised that it offered safe deposit boxes that were safer than those in banks. The company was charged in a three-count federal indictment unsealed on April 2, 2021, alleging it allowed customers to store controlled substances in safe deposit boxes, that it conspired to offer safe deposit boxes for the purpose of hiding currency and valuables from the government, and that at least one employee was involved with arranging drug sales at the site.

As part of the agreement to plead guilty to money laundering, the company will be dissolved, and the government will drop the other charges. Fines and restitution imposed could be up to $500,000. The specific sentence will be determined by a judge at a future hearing.

The Institute for Justice has filed a class action lawsuit on behalf of box renters whose property has been seized. Some have already recovered their property, but others must prove that they received the finds through legal means in order to recover their property. 

I think that it is fair to say at this point that the FBI does not deserve the benefit of the doubt for any search warrant applications they have issued, and that full disclosure of affidavits they have filed is mandatory, given the proven, calculated misbehavior the Bureau has engaged in.

Photo credit: Корзун Андрей (Kor!An) CC BY-SA 3.0 license

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