If The Government Cannot Say What You Did Wrong, It Shouldn’t Take Your Stuff

Innocent until proven guilty. Proven guilty beyond a reasonable doubt. If you cannot afford an attorney, one will be provided for you. Decades of TV shows about law enforcement and attorneys have made Americans familiar with some of their basic rights when they are charged with a crime. The government cannot haphazardly lock people away in prison. But what about if the government wants to take your money, your car, or your home? Sadly, Americans don’t necessarily have the same rights when defending their property.

In Los Angeles, hundreds of people found themselves unexpectedly fighting for the valuables they stored at a security deposit box business. US Private Vaults was located in the heart of Beverly Hills, a mile from glamorous Rodeo Drive. From all outward appearances, it looked like any other legitimate business.

What many of those customers did not know is that the business was on the radar of federal law enforcement. In the spring of 2021, the FBI dramatically raided US Private Vaults and held a press conference to announce that it had found drugs and illegal weapons. What went unmentioned was that the warrant for the raid did not actually permit the FBI to criminally search or seize the contents of hundreds of peoples’ private safe-deposit boxes.

The federal magistrate judge who gave the go ahead for the raid only issued the warrant to seize the business’s property. That property included only the “nest” that the boxes were held in—not the boxes nor the contents of those boxes. The FBI was given permission to open individual boxes, but only to determine who the property owner was and to inventory the items. In fact, many box renters had taped letters on top their boxes with their contact information, giving the FBI no reason to go any further.

Now, a lawsuit by box owners and the Institute for Justice has uncovered that the FBI’s plan was never to simply prosecute the owners of US Private Vaults while returning property to box renters. Despite the government’s promises that it wouldn’t conduct a criminal search or seizure of the boxes themselves, it ignored the boundaries of the warrant. Agents broke into every box, taking close notes of anything incriminating they found inside. They identified all the currency and valuables and told box renters to reach out to the FBI and provide their personal information in order to get their possessions back. Two months later, the Department of Justice filed a notice announcing that it would take hundreds of renters’ cash, precious metals, and other valuables through civil forfeiture.

That placed hundreds of individuals in the position of having to prove their innocence to keep their property. This included people like Joseph Ruiz, who used his box to store cash from a legal settlement that was meant to provide for his medical care. Jeni Pearsons and her husband stored precious metals that they had purchased as retirement savings. The lawsuit uncovered that the FBI collected and catalogued deeply personal items like password lists, wills, personal notes, and even cremated remains.

The mass forfeiture, which could have netted federal law enforcement well over $100 million, ground to a halt thanks to IJ’s lawsuit. Jeni, Joseph and many others were eventually able to get their property returned. But even today the FBI is keeping records of every box and the photos and videos agents made.

The lawsuit maintains that the search of the individual boxes violated the Fourth Amendment’s protections against unreasonable searches and seizures and is asking the judge to order these records destroyed. On the other side of the country, a recent appeals court decision was also good news for property owners’ rights in civil forfeiture cases.

The Fourth Circuit Court of Appeals’ decision concerned nearly $70,000 seized from Dereck McClellan in North Carolina. The facts are not flattering. McClellan was found asleep in his car at a gas station with a marijuana blunt in the ashtray and an empty liquor bottle in the passenger seat. The money was found in the trunk of his car.

He pled guilty to public intoxication, ending his criminal case. But police separately sent his money to the federal government to be taken by civil forfeiture through the “equitable sharing” program. This allows federal forfeiture procedures to be used rather than state procedures, which often have greater protections for property owners. Up to 80% of the proceeds are then returned to local law enforcement.

To keep his money, the government had to prove that it was more likely than not that the cash constituted drug proceeds. But McClellan contested the forfeiture and provided evidence that the money was from a legitimate clothing business. The district court judge ruled for the government without a trial. The appeals court overruled, holding that the government’s allegations were not solid or specific enough to skip the jury trial McClellan requested. Having a large amount of cash on you isn’t a crime. The government cannot assume that drivers found with large amounts of cash in their vehicles are engaged in drug trafficking.

Proving that someone committed a crime is hard, but that is how the American justice system is intended to work. The government may not take shortcuts when it is trying to take your property. If someone can’t be and sent to prison because of guilt by association or vague allegations, likewise they shouldn’t lose their life savings by such flimsy conjecture.