A pair of Americans, who had their property taken following a raid by the FBI, are now alleging that the organization lost or stole their property.
In March 2021, the FBI raided U.S. Private Vaults, a company based in Beverly Hills, seizing property from at least two people, Don Mellein and Jeni Pearsons.
After they prevailed in court the first time, the FBI agreed to return their property, but both clients discovered that some of their property was missing, and suspected that some of their valuables were either stolen by the FBI or lost in the chaos of the raid.
This has prompted yet another pair of lawsuits, launched on Friday by the nonprofit law firm Institute for Justice.
“All we know is that their property was in a box and safe before the FBI broke into the box,” Joe Gay, an attorney with Institute for Justice, told Fox News. “Once the FBI broke into the box, we honestly don’t know exactly what happened.”
“We don’t know if they lost it. We don’t know if somebody pocketed it and walked away,” he continued. “We have no way to know.”
“There’s literally been no explanation,” Pearsons said. “I think you have to assume that it’s the simplest explanation, and I think, unfortunately, the simplest explanation is they took it or lost it.”
Mellein, a 79-year-old retired civil servant, kept cash and 110 gold coins, worth hundreds of thousands of dollars, in the box as a safeguard for his financial security. He invested in the precious metals with the money he received from selling his Malibu home with his wife in 2002.
Meanwhile, Pearsons, and her husband Michael Storc, similarity rented a security deposit box in 2017 as a financial safeguard, storing around $20,000 in silver and $2000 in cash.
Neither of the injured parties were charged with a crime, as the FBI had been investigating U.S. Private Vaults, which shut down after the raid and ultimately pleaded guilty to conspiracy to launder drug money.
After the FBI seized their property, along with that of 1,400 other customers, Mellein and Pearsons both received a notice stating that the FBI wanted to keep their property through a process known as civil asset forfeiture.
When Pearsons did some research into the topic, she discovered that one of the options to reclaim items presented on the notice basically allowed the FBI to decide what is done with the property and were handed over all rights in that decision.
“It was very disingenuous and shady even,” she told Fox News. “It’s the least transparent process. It’s not something that you would do if your intent was to find out who these items belonged to.”
Pearsons worked with the Institute of Justice to fight the FBI, while Mellein hired an attorney and spent $40,000 to reclaim his items. Both prevailed, but when they went to the FBI’s office in Los Angeles to claim their property, they realized that some items were missing.
For example, Mellein was given the cash from his box, but none of the 110 gold coins. The FBI claimed they had no record of the missing coins and that they weren’t listed on the property receipt of the box’s contents.
When Mellein pressed for a copy of the video inventory of the box, the FBI said that in its rush to process so much property, it decided against filming the process and completed inventory paperwork instead, according to the Institute for Justice.
“What we learned was that their incentive to forfeit everything they found crowded out their obligations to safeguard their property,” said Gay, the Institute for Justice attorney. “They crowded dozens of agents into this vault, and they spent the next week ransacking through the boxes, looking for cash, looking for property to forfeit.”
Gay added that the FBI will inventory listed items such as “miscellaneous coins” or “miscellaneous items,” which were “utterly useless,” for the purpose of protecting owners’ property.
Mellein first sued the government to force the return of the coins in August 2021. Months later, the government found and returned 47 of them, but told him he must dismiss his lawsuit and file a claim with the FBI to track down the remaining 63.
When he did so in March 2023, the FBI told Mellein it had investigated itself and that there was no evidence it had done anything wrong or careless, according to the Institute for Justice.
“The FBI had no reason to go through my box and they were careless in losing my savings,” Mellein said in a press release. “For months I was told they didn’t have any of my coins before they eventually found some of them.”
“I’m disappointed that I have to sue again in order to get property back that should have been given back to me over two years ago,” he added.
When Pearsons attempted to claim her property in 2021, she noticed that the $2,000 in cash from her box was missing.
“’They’ve never said, ‘oh, no, that wasn’t in the box.’ They just didn’t give it back,” Pearsons told Fox News. “And they told us at the time that someone from the U.S. Marshal’s office was going to call and talk to me about it, and then no one ever called.”
“Could be that the way that the FBI and the law enforcement carried this out is just really sloppy work,” she added. “Or there was never any intention of giving it back, and so it really didn’t matter because they thought they just got to keep everything. So to them, there was one pile.”
Gay said that, regardless of how the property went missing, the lack of legal recourse for owners is wrong.
“We don’t know for sure how the property disappeared, we just know it disappeared,” he said. “And whether it’s negligence, whether it’s something worse, the government shouldn’t be able to rely on its own shoddy recordkeeping to avoid responsibility for losing their property.”
The Institute for Justice says that these lawsuits aren’t just to get Mellein and Pearson’s property back but also to give victims of civil forfeiture the ability to challenge agencies if their property goes missing.
“We’re basically fighting against the notion that people shouldn’t have a remedy against the government when the government takes their property,” Gay said.
Mellein and Pearson agreed that the most eye-opening part of the experience was feeling that law enforcement had cheated and lied to them.
“When I was growing up, we trusted and respected law enforcement, especially the FBI,” Mellein said. “I’m not filing this lawsuit just for me, I’m fighting for a better world where people can trust law enforcement to do the right thing. I’m fighting to make law enforcement better.”
“I would love to be able to be thankful to law enforcement for taking care of whatever criminal circumstance there was and for making sure that my involvement with it didn’t have to be painful,” Pearsons said. “But rather, they’ve literally stolen.”
“They don’t even have the ability to show me a video of them opening this up and going through it to say, ‘Oh, no, look, see, it wasn’t here,’” she added. “It’s just it’s so absolutely galling.”
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