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Robert Frommer: FBI can't seize safe-deposit boxes first and ask questions later

Section: Daily Dispatches

But it did.

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By Robert Frommer
Orange County Register, Anaheim, California
Thursday, April 22, 2021

Late last month, hundreds of people across Southern California woke up to a nightmare: their private security-deposit boxes had been raided by federal law enforcement. Customers of U.S. Private Vaults learned the FBI raided the Beverly Hills company after an indictment for federal crimes. More to their horror, those customers learned their precious valuables were being held at an undisclosed location and that they would need to identify themselves to the FBI to reclaim their property.

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Those customers must have been gobsmacked. The government’s allegations were against U.S. Private Vaults, not them.  The indictment didn’t allege that U.S. Private Vaults customers had done anything wrong.  And many customers who found U.S. Private Vaults (often through Google) liked the company because renters could keep the keys to their security boxes. U.S. Private Vaults also boasted of faster in-and-out times and better hours than banks, as well as larger security boxes and included insurance. It was even a member of the Beverly Hills Chamber of Commerce!  So, many innocent people who wanted security and privacy for their most valued possessions found it at U.S. Private Vaults.

But to listen to the feds, every one of the company’s customers is a potential criminal. The indictment points out that U.S. Private Vaults advertised the anonymity of its services, including the fact it wouldn’t force customers to divulge personal information. To the government, any individuals who may want anonymity cannot be “law-abiding citizens.”

So it’s little surprise that the government broke into every deposit box at U.S. Private Vaults, emptied them, and took all their contents. Now the FBI refuses to return any customer’s stuff until he or she comes forward, identifies him or herself as the box’s owner, and submits to an FBI “investigation.” In other words, people must prove their own innocence to secure their property’s return.

The feds have created a privacy nightmare that demands the courts’ immediate involvement. The Fourth Amendment guarantees that the people will be secure against unreasonable searches and seizures. Here the government seized the property of hundreds of people, not because the feds had any evidence those people did anything wrong, but because they rented from a business the government doesn’t like.

The Constitution does not abide guilt by association. The government can seize a customer’s property if it submits evidence linking that customer’s specific property to a crime. But what the government has done here is completely backwards. The government cannot search every apartment in a building because the landlord is involved in a crime. After all, when somebody rents an apartment, that apartment is theirs.

Under basic principles of contract and property law, the same is true for U.S. Private Vaults.  When people rented those security boxes, they became their property, the place where they could store their most valued items.  The government had no more right to break into those boxes because they think U.S. Private Vaults’ owners are crooks than they have to break into peoples’ apartments.

But thanks to the government’s reckless actions, hundreds of people are suffering. Numerous cases seeking the return of customers’ property now clog a federal district court.  To vindicate peoples’ constitutional rights, that court should order the government to return everyone’s property immediately. Probable cause is not dispensed in gross, and the government had no right to seize hundreds of people’s property without showing that each person did something wrong.

Increasingly, law enforcement seems to view financial privacy as an evil. Banks are required to file reports detailing their own customers’ activities—with large banks filing reports as often as once per minute. Large amounts of cash are viewed as inherently suspect, and government frequently seizes cash and forces owners to prove it was lawfully earned to get it back. And cryptocurrency, or other private means of exchange, is viewed with suspicion and distrust. The seizure here is part of that broader trend.
But the mere fact that people want some modicum of financial privacy does not make them criminals.  Indeed, the Framers wrote the Fourth Amendment to guarantee our security in our persons and property. That means we Americans have the right to choose where to put our money and how to structure our affairs, free from the specter of constant government surveillance.

Courts should reject the government’s “seize first, ask questions later” approach and demand that it respect customers’ property and constitutional rights by returning all their seized items at once.


Robert Frommer is a senior attorney at the Institute for Justice in Arlington, Virginia. He litigates on issues surrounding searches and seizures, civil forfeiture, and economic liberty.

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