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Judge speaks out against FBI in Beverly Hills vault raid

Federal authorities suffered two more legal setbacks in their attempt to confiscate tens of millions of dollars seized from Beverly Hills safes that the government was legally prohibited from searching.

U.S. District Judge R. Gary Klausner, in rulings released Friday, rejected prosecutors’ justification for keeping the money two people stored in boxes they rented from the US Private Vaults store on West Olympic Boulevard.

The FBI is attempting to confiscate approximately $ 86 million in cash and millions more in jewelry and other valuables that officers found in approximately 369 boxes, based on unspecified allegations of criminal acts committed by the box holders. The warrants authorizing the store raid in March prohibited the government from searching anything inside about 800 boxes containing valuables because the FBI had failed to demonstrate that it had probable reasons to believe that evidence of crimes would be found in each.

In the case of a box holder who sued the government under a pseudonym to recover more than $ 914,000 in cash that was seized, Klausner rejected prosecutors’ request to drop the case, saying the government did not had “made no evidence that there was anything illegal” about the person’s money.

In the case of another casket holder, Joseph Ruiz, the judge gave the government seven days to return his money or provide an adequate explanation for his confiscation attempt. Ruiz, an unemployed restaurant worker from Los Angeles, said he had stored his savings of $ 57,000 in cash in his box.

Klausner found that “the facts and the law clearly favor” Ruiz in his claim that the government violated his rights by seizing and refusing to return the money. The government “did not provide any justification” for holding the money, Klausner wrote.

Klausner said it was “disturbing” that Ruiz said in an affidavit that he was “desperately” in need of money for food and medicine because he saw canned food he stored for. the pandemic.

In March, a federal grand jury indicted US Private Vaults for conspiring with clients to sell drugs, launder money and structure financial transactions to evade government detection. But the only clients identified by prosecutors so far are a Drug Enforcement Administration agent working undercover and anonymous government informants.

The FBI and the U.S. Attorney’s Office in Los Angeles say most of the people who stored valuables anonymously in safes in U.S. private safes were criminals, but declined to specify the crimes that they would have committed.

An FBI spokeswoman asked questions of Thom Mrozek, a spokeswoman for the U.S. Attorney’s Office, who declined to comment.

When FBI agents and prosecutors initially sought permission to tear all the safes from the store’s walls, U.S. Magistrate Steve Kim set strict limits. The FBI could seize the boxes, Kim decided, but had to return the contents to the owners.

“This warrant does not authorize a search or criminal seizure of the contents of safes,” Kim said in her March 17 clearance.

Ruiz, 47, is skeptical that the FBI will give him back his money.

Joseph Ruiz tries to recover his savings of $ 57,000 in cash after it was seized by the FBI in the US Private Vaults store in Beverly Hills.

(Al Seib / Los Angeles Times)

“I can’t really hope too high,” Ruiz said over the phone. “If they can just step on our Constitution and wipe their feet on it, they just can’t be trusted.”

A previous Klausner ruling blocked the government’s confiscation of money, gold and silver belonging to four box holders, including Ruiz, who sued the government.

Ruiz’s attorney, Robert Frommer, said he should not initiate a class action lawsuit “to get the FBI to comply with the Fourth Amendment.”

“We call on the FBI to drop its $ 85 million seizure and get people back to business,” Frommer said.

In the other case Klausner ruled on Friday, the Assistant U.S. Attorney. Andrew Brown, the prosecutor in charge of the investigation, asked the judge to dismiss the action brought by a box holder using the pseudonym Charles Coe asking for the restitution of more than $ 914,000 in cash. Brown said Coe was “a wealthy person living in the United States who can afford to hire a large law firm to make his offers and spends well over a thousand dollars a year to store items anonymously at the store. ‘USPV’.

“This argument is wrong,” Klausner said in an order dismissing the prosecutor’s request. “While the claimant may indeed be a ‘rich person’, the claimant is also a ‘person living in the United States’ and therefore enjoys the protections of the Constitution of the United States.”

Brown argued that Coe should be required to identify himself to the FBI so that the government can investigate whether the money was acquired legally. But Klausner agreed with the plaintiff that the government was trying to force Coe to choose between losing 4th Amendment protection against unreasonable search and seizure and losing 5th Amendment protection against self-incrimination.

Klausner rejected the government’s argument that Coe should not be able to proceed anonymously.

“Whether the applicant is rich or poor, a criminal or a model citizen, requiring the applicant to self-identify would leave the applicant vulnerable to the investigative powers of the federal government,” Klausner wrote. The judge also said the government had “shown no evidence that there was anything illegal about the property it seized” in Coe’s box.

Coe’s attorney, Benjamin Gluck, called the move “very important” as the government continues to pursue a dozen lawsuits over its seizure of the safes.

“Judge Klausner has ruled quite clearly that the government cannot take a citizen’s property and use it as a hostage to allow the government to investigate that person,” Gluck said. “Judge Klausner categorically rejected this idea and said the citizen had no obligation to provide the government with information to assist the government in its investigation of this person.”

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