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Innocent Investors Caught Up in Safe-deposit Box Seizure

Back in March, in a multi-agency raid led by the FBI, the contents of hundreds of safe-deposit boxes at a Beverly Hills, California, company were seized. But in executing the warrant, which was targeted at the company and several of its clients, the FBI took the property of all the lockboxes, the vast majority of which were owned by clients that had done nothing wrong. Now, the case is being reviewed federally to see if the raid is deemed to have been unconstitutional. Confiscation without representation!


The “BFI” of the BFI Capital Group stands for “Balance, Freedom, Independence” and these values reflect the way we approach our work, our partners, our clients, in everything that we do. This is why when we initially started following this story back in March, it struck a chord. These are exactly like the types of stories that keep investors up at night; investors doing everything they can to preserve and protect their wealth, only to be stepped over in the name of “justice”.


The contents of hundreds of safe-deposit boxes were confiscated in the raid on U.S. Private Vaults in Beverly Hills, CA, in March, where federal authorities had suspected for years that criminals were holding their cash, jewelry, rare coins and precious metals. The problem? US Private Vaults was the target, as well as a few of their suspected clients, yet now it’s clear that an overwhelming number of innocent people were caught up in the seizure. Over a half-year later, little to no evidence has been produced of criminal activity by the majority of the box holders. It’s clear the authorities over-stepped their boundaries.


And, as you could probably imagine, it’s taking time for valuables to be returned to their rightful owners. After reading a few different news stories on the situation, accounts of the innocent investors are simply scary. Court papers shared the case of one couple who stored roughly $20,000 worth of silver in their box, originally purchased as an investment and now being saved for retirement.


The couple heard from the FBI that it would return their property. However, authorities have allegedly not made any further moves to return the silver, according to the filing. Authorities are saying that metals have been returned, but cash would take longer, because money has to be deposited in the client’s bank account.


Another case reported by the Los Angeles Times was equally unsettling: “The lax standard of evidence was apparent in the forfeiture complaint filed Monday against two brothers from Woodland Hills. The government wants to keep the $960,100 in cash it took from one of their safe deposit boxes and the $519,000 it took from the other. Prosecutors say that theft, fraud and money laundering justify the forfeiture. But the complaint’s only evidence was that one of the brothers — it did not say which one — had allegedly “been in contact with” suspected armed robbers of cellular phone stores.”


Understandably, the US government has remained quite silent regarding the case.


Another subtle reminder for international diversification of your wealth


The next steps start now in November, when a scheduling conference has been set for the proposed class action lawsuit on behalf of many of the innocent box holders. In any case, many law-abiding citizens will continue to wait for all of their assets to be returned.


Regardless of how long the return of seized items will take, the damage has been done to the trust of the “normal” investor just trying to protect what is theirs. When your assets can simply be seized on the government’s whim, it makes a strong case for considering holding, storing, or investing outside of your home country.


While we would never suggest internationalizing all assets and keeping everything outside of your home country, the fact is that jurisdictional diversification certainly helps prevent nightmare scenarios exactly like this from happening. What if all of your life savings were stored in one of these boxes, and now, 7-8 months later, you still need to wait for them to be returned?


As governments get increasingly desperate, diversifying your wealth, not only in different investments, but different jurisdictions, has never been more prudent.


>> Read more here.


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