Searching for a Secure Place to Store Precious Possessions
Paul and Jennifer Snitko needed a place to store their family heirlooms, but their bank had a long waiting list to rent a security deposit box. Security was at the forefront of Paul and Jennifer’s minds: After all, they wanted to protect not just watches that Paul and his father had been rewarded with for years of service at their jobs, but backups to their home hard drives, Paul’s father’s will, and Paul’s flight log, which he needed to have with him whenever he flew. Keeping these items safe, private, accessible and protected from wildfires was paramount.
When Paul and Jennifer began looking for private security box companies, they did a Google search that brought up U.S. Private Vaults, which operated out of a strip mall in Beverly Hills and offered hundreds of security boxes of various dimensions. The company was by no means a fly-by-night operation, having first opened its doors in 2011. It also had a significant web presence: maintaining its own website and advertising its services on Facebook, Twitter and Yelp. And it was a member of the Beverly Hills Chamber of Commerce. By all accounts, U.S. Private Vaults looked like a safe place for Paul and Jennifer to store their private possessions.
Paul and Jennifer’s experience is far from unique. In recent years, banks have stepped away from the security deposit box business, increasingly viewing them as, according to a story in the New York Times, “more of a headache than they’re worth. They’re expensive to build, complicated to maintain and not very lucrative.” The dearth of boxes available at banks means that people are looking to private companies, which have begun offering their own security boxes to fill the void.
Private security box facilities like U.S. Private Vaults also offer other advantages compared to bank vaults. First, box renters at U.S. Private Vaults did not need to provide their identity or require the help of employees to access their security box. That is because renters could use their own biometric data (such as an iris scan or a handprint) to access the outer vaults. Second, renters at U.S. Private Vaults got to keep all the keys to their security boxes. This meant that, unlike a bank security deposit box, renters at U.S. Private Vaults could rest easy that no one at the business could access their box without their knowledge. And U.S. Private Vaults offered customers a wide variety of box sizes, insurance in case of loss or theft, and better hours than banks.
These features convinced Paul and Jennifer, along with hundreds of other people in the Los Angeles area, to rent from U.S. Private Vaults. Many people like Paul and Jennifer found out about the business by searching for “security deposit boxes” on the internet or from noticing the facility while driving by. This includes Joseph Ruiz, another U.S. Private Vaults customer who rented a safety deposit box in February 2021 as a safe place to keep his savings.
The Federal Government Raids U.S. Private Vaults
But the federal government had its sights on U.S. Private Vaults. On March 9, 2021, the United States Attorney in Los Angeles indicted the company for money laundering and fraud. The government did not indict any of U.S. Private Vaults’ officers or employees. Curiously, the main sanction that the government sought in the indictment was to forfeit the relatively inexpensive rack of boxes, drawers and doors that held the private property of U.S. Private Vaults’ customers.
Importantly, the indictment did not allege that U.S. Private Vaults’ customers violated any law by holding their property in a secure and private place. Nor could it, as there is no law against that kind of privacy. But the indictment nonetheless attempted to tar customers as criminals, baselessly asserting that anyone who would desire the kind of financial privacy that U.S. Private Vaults could provide could not possibly be “law-abiding citizens.”
Once the government indicted U.S. Private Vaults, it obtained a warrant to seize items connected to the business, including the “nests of safety deposit boxes and keys” that it was seeking to forfeit in the indictment. But, in doing so, the government didn’t even try to argue it should be able to seize the contents of the boxes. It promised the court that when it seized the nest, it would only “inspect the property as necessary to identify the owner” and that its inventory search would “extend no further than necessary to determine ownership.”
In other words, the only thing the government was supposed to do was seize the nest of boxes. While the government would temporarily hold the contents of those boxes, it was supposed to return those contents to their owners. The warrant specifically stated that it “does not authorize a criminal search or seizure of the contents of the safety deposit boxes.”
The FBI Goes Beyond the Warrant to Crack Open Individual Boxes
But the government immediately broke its word. On March 22, the government executed its seizure warrant. The easiest way to have secured everyone’s property would have been to keep the nest intact at U.S. Private Vaults and notify renters to come down and get their stuff. But instead, the government broke into every security deposit box, destroying the very nest of boxes it claimed that it had wanted.
Even then, the government should have never looked inside peoples’ boxes. Many property owners, including Paul and Jennifer, had followed U.S. Private Vaults’ advice and put their contact information on top of their security box’s interior plastic sleeve. But even though the FBI’s search authority was limited to determining a box’s owner, which that information clearly provided, the FBI opened and searched those boxes anyway.
The FBI’s behavior defied both the warrant and renters’ Fourth Amendment rights. The government ran any currency they found in the boxes in front of drug-sniffing dogs, an action that makes no sense outside a criminal investigation. Agents videotaped the search as they conducted it, holding documents from peoples’ security boxes up to the camera to capture their contents. And while the FBI was supposed to inventory the boxes to protect against claims of loss and theft, its efforts were woefully inadequate. For boxes with significant amounts of gold and silver coins, for instance, the FBI simply wrote “misc. coins.” This shoddy work has already resulted in at least one claim that the FBI lost over $75,000 in gold coins that were in one renter’s box.
Worse still, the government has forced renters into an endless waiting game in which the government treats them all with unfounded suspicion. First, the government directed box renters to submit their information through an FBI website. Renters were told that they were not the targets of the search and would have their property back within a few weeks. But at the same time the FBI was saying one thing to renters, the government was telling the federal court that it presumed that, “the majority of the box holders” were “criminals who used [U.S. Private Vaults’] anonymity to hide their ill-gotten wealth.” Despite lacking any evidence that a box owner did anything wrong, the government has told courts that it plans to hold onto renters’ property in order to force them to submit to an investigation so it can “distinguish between honest and criminal customers.”
The government’s duplicity has kept hundreds of property owners in limbo for over two months. Having submitted their claim forms to the FBI, many have heard nothing in response. When Paul and Jennifer Snitko recently asked an agent what the process was to get their property returned, the agent didn’t know. And when they asked when they would get their property back, the agent couldn’t give any sort of timeframe.
The government’s games have hurt box renters, especially Joseph Ruiz. An accident severely injured Joseph’s back, and he relied on the money that he kept in his security box to get medical care and buy food. But the government took and held Joseph’s money for over two months, and now has baselessly alleged that it should be forfeited to the government. Joseph is running out of options: Cut off from his funds, Joseph has been forced to stop seeking treatment and physical therapy at a nearby gym. And his diet consists almost exclusively of staples that he purchased during the runup to the pandemic. Those stores of food, just like Joseph’s patience, are running low.
The Legal Claims
The government’s callous actions towards Paul, Jennifer, Joseph and hundreds of other U.S. Private Vaults renters are a direct assault on the concept of financial privacy. The government has tried to portray box renters as criminals who are trying to hide their ill-gotten gains. It used a seizure warrant against the physical nest of boxes as a pretext to do the very kind of criminal search that the court ordered it not to do. It created copies of records during those searches (such as video images of people’s private documents) that it has no right to possess. And over two months after the seizure, the government continues to hold onto renters’ property by demanding that those renters submit to an investigation and prove their own innocence in order to get their own property back.
The government’s behavior, both past and present, violates the Constitution. Back when the government originally secured its seizure warrant, it promised the court that it would only do a limited inventory search to protect owners and the government from claims of loss and theft. The easiest way to accomplish that goal would have been simply to leave the nest of security boxes alone; at most, it meant the government was authorized to open individual boxes to determine ownership. But the limited “inventory search” the court authorized doesn’t require the government to run all money found in front of drug-sniffing dogs or to make video records of documents in peoples’ boxes. And it certainly did not give the government license to blow off its responsibilities to renters by creating completely useless inventories. The FBI’s behavior shows that it misled the court in executing the warrant and violated the Fourth Amendment.
But the government’s misbehavior is ongoing. Renters have repeatedly asked why their property continues to be held, only to hear nothing in response. This is completely unreasonable: federal courts in California have held that the Fourth Amendment requires the government justify not only its initial seizure, but also its retention of the property. Here, the government has not told renters anything, and the default presumption is that the government must return property unless it has a good reason not to. As Joseph’s story shows, depriving renters of their property causes them real, immediate harm every day it continues.
Nor can the government say that it wants to hold onto property in order to coerce people into submitting to an “investigation” whereby they prove the provenance of their property. A bedrock decision from the Supreme Court explained that “any forcible and compulsory extortion of a man’s own testimony, or of his private papers to be used as evidence to convict him of crime, or to forfeit his goods” violates both the Fourth and Fifth Amendments to the Constitution. More recently, the Supreme Court explained that a fundamental principle of our Constitution is that people are presumed innocent, which means the government cannot hijack peoples’ property and use it as leverage to extract information from owners.
The Court and the Parties
This case is brought in the United States District Court for the Central District of California.
IJ is representing Plaintiffs Paul and Jennifer Snitko, Joseph Ruiz and Tyler Gothier. The defendants are the United States of America as well as Acting United States Attorney Tracy L. Wilkison and FBI Assistant Director Kristi Koons Johnson, both of whom are being sued in their official capacity.
The Litigation Team
This case is being litigated by IJ attorneys Robert Frommer, Robert Johnson and Milad Emam, as well as by Law & Liberty Fellow Michael Greenberg. They are ably assisted by Nilay Vora from the Vora Law Firm, who is serving as local counsel.
About the Institute for Justice
The Institute for Justice is the nation’s leading advocate for property rights. This case is the latest in IJ’s nationwide initiative to secure property owners’ rights against unconstitutional searches, seizures, abusive fines and civil forfeiture. IJ is currently litigating on behalf of property owners and tenants facing unconstitutional home inspections in Illinois, Washington State and Pennsylvania. And in New York, IJ is challenging law enforcement’s coercion of individuals’ waiver of their right to be free from unconstitutional searches.