FBI Misled Judge in Obtaining Warrant To Seize Hundreds of Safe Deposit Boxes

New court documents show that the FBI planned for months to seize and forfeit property found inside safe deposit boxes in an L.A. raid under the pretext of doing an inventory.

The FBI told a federal magistrate judge that it intended to open hundreds of safe deposit boxes seized during a March 2021 raid in order to inventory the items inside—but new evidence shows that federal agents were plotting all along to use the operation as an opportunity to forfeit cash and other valuables.

Federal agents failed to disclose those plans to the federal magistrate judge who issued the warrant for the high-profile raid of U.S. Private Vaults, a private business in Beverly Hills, California, that had been the subject of an FBI investigation since at least 2019. When the raid took place, the FBI also seems to have ignored limitations imposed by the warrant, including an explicit prohibition against using the safe deposit boxes as the basis for further criminal investigations.

Those details regarding the planning and execution of the FBI’s raid of U.S. Private Vaults are now out in the open after a different federal judge ruled this week that the government could not keep those details out of the public record. As Reason has extensively reported, the raid on U.S. Private Vaults resulted in federal agents seizing and attempting to forfeit more than $86 million in cash as well as gold, jewelry, and other valuables from property owners who were suspected of no crimes. Attorneys representing some plaintiffs who are trying to recover their possessions interviewed the FBI agents who planned the raid, but federal prosecutors tried to keep some details of those depositions redacted.

The unredacted legal documents, filed in federal court on Thursday, show why the government was eager to keep those details under wraps. (Reason submitted an amicus brief in the case arguing that the redacted documents should be made public.)

In the affidavit submitted as part of the effort to obtain a warrant for the search, Assistant U.S. Attorney Andrew Brown wrote that federal agents intended to merely inventory the contents of the seized safe deposit boxes. But the newly unredacted documents show that the FBI had drawn up plans months earlier to forfeit property from the boxes, and failed to inform the magistrate judge about those plans.

“We had already determined that there was probable cause to move forward” with civil forfeiture proceedings against the contents of the safe deposit boxes before the search occurred, FBI Special Agent Jessie Murray said in a deposition, according to court documents.

Those crucial details were omitted from the affidavit submitted to the magistrate judge who granted the warrant that allowed the FBI to search U.S. Private Vaults. As Reason has previously detailed, that same warrant expressly forbade federal agents from engaging in a “criminal search or seizure of the contents of the safety [sic] deposit boxes.”

The newly unredacted documents suggest the FBI never intended to abide by that limitation. In a deposition, Special Agent Lynne Zellhart said she drew up “supplemental instructions” for the agents who would be conducting the raid of U.S. Private Vaults. They were instructed to be on the lookout for cash stored inside the safe deposit boxes and to note “anything which suggests the cash may be criminal proceeds.” Agents arranged to have drug-sniffing dogs present for the supposed inventory of the contents of the safe deposit boxes—which doesn’t do anything to help inventory items, of course, but makes more sense if the actual goal is to initiate forfeiture proceedings

“The government misled the court about its forfeiture plans when applying for the seizure warrant, intentionally disregarded the warrant’s substantive limitations, and conducted a pretextual sham ‘inventory’ while searching for evidence of criminality,” wrote Robert Frommer and Robert Johnson, attorneys with the Institute for Justice, which is representing some of the victims of the U.S. Private Vaults raid.

In court documents, the attorneys say the government’s behavior “before, during, and after” the raid at U.S. Private Vaults is a violation of the Fourth Amendment, which protects Americans from unreasonable searches and seizures.

As Reason has previously reported, the inventories themselves were sloppily done, leaving the impression that agents were using the procedure as justification for a fishing expedition. The newly unsealed depositions seem to corroborate that view, as Zellhart’s supplemental instructions told agents to note cash that had “strong odors” or was packaged in such a way that might indicate it was connected to drug purchases.

The FBI had been investigating U.S. Private Vaults for more than five years and had previously targeted individuals suspected of using the business to stash the proceeds of criminal activity. In 2019, according to some of the newly unredacted depositions, federal agents shifted their approach and began building a case against the company as a whole.

But the raid that targeted the businesses also swept up the private property of hundreds of people suspected of no crime. In the same way that criminality by a landlord would not allow the police to search every apartment in a building the landlord owns, attorneys for the victims of the raid argue that there was no reason for the FBI to open and rifle through hundreds of safe deposit boxes belonging to people who were suspected of no crimes.

“The ‘inventory’ was a sham,” argue Frommer and Johnson in court documents. “Indeed, the whole idea of inventorying the vault was unreasonable on its face, as the best way to serve the purposes of an inventory would have been to leave the property safely locked away and appoint a receiver to wind down USPV’s business without an invasion of privacy.”

Unless, of course, that invasion of privacy was the whole point of the raid. The newly unredacted documents seem to suggest it was.

Newly Declassified Document Indicates FBI Misled Congress on Reliability of Steele Dossier

According to the Senate Intelligence Committee

Senate Judiciary Committee Chairman Lindsey Graham (R-South Carolina) today released a newly declassified FBI document that indicates the Bureau misled the Senate Intelligence Committee in 2018 about the Steele dossier’s Primary Sub-source and, therefore, the reliability of the Steele dossier.

“This document clearly shows that the FBI was continuing to mislead regarding the reliability of the Steele dossier. The FBI did to the Senate Intelligence Committee what the Department of Justice and FBI had previously done to the FISA Court: mischaracterize, mislead and lie. The characterizations regarding the dossier were completely out of touch with reality in terms of what the Russian sub-source actually said to the FBI.

“What does this mean? That Congress as well as the FISA Court was lied to about the reliability of the Russian sub-source. I will be asking FBI Director Wray to provide me all the details possible about how the briefing was arranged and who provided it.

“Inspector General Horowitz’s team found this briefing document. Inspector General Horowitz and his team deserve great credit for uncovering systematic fraud at Department of Justice surrounding the Carter Page FISA warrant. I’m also very appreciative of the Department of Justice’s release of the FBI document used to brief the Senate Intelligence Committee.”

The document includes talking points from the FBI’s briefing of the Senate Intelligence Committee in February 2018 and details the FBI’s assessment of the primary source of the information contained in the Steele dossier. This FBI briefing to Members of Congress occurred after the FBI had learned that the Steele dossier was unreliable in 2017. [Document]

Among the most misleading statements from the FBI:

The FBI told Congress that the Primary Sub-source “did not cite any significant concerns with the way his reporting was characterized in the dossier to the extent he could identify it.

  • However, documents previously declassified by the Senate Judiciary Committee revealed the Primary Sub-source told the FBI that he “has no idea” where some of the language attributed to him came from or that his contacts “never mentioned” some of the information attributed to them.
  • The Primary Sub-source told the FBI he “did not know the origins” of other information that was supposedly from his contacts and he “did not recall” other information attributed to him or his contacts.
  • Further, the Primary Sub-source said that Steele used “incorrect source characterization” for one of the Primary Sub-source’s contacts.

The FBI told Congress that “At minimum, our discussions with [the Primary Sub-source] confirm that the dossier was not fabricated by Steele.

  • However, as Inspector General Horowitz’s December 2019 report on Crossfire Hurricane revealed, the Primary Sub-source told the FBI that the corroboration for the dossier was “zero” and that he takes what the sources for the dossier told him with “a grain of salt.
  • Moreover, the Primary Sub-source told the FBI that Steele presented some of the information in the dossier as fact reported by sub-sources when the information was really just Steele’s own “analytical conclusions” and “analytical judgments.”
  • The Primary Sub-source explained to the FBI that his information came from “word of mouth and hearsay” and “conversation that [he] had with friends over beers”, and that some of the information, such as allegations about Trump’s sexual activities, were statements made in “jest.

The FBI told Congress that the Primary Sub-source maintains trusted relationships with individuals who are capable of reporting on the material he collected for Steele.

  • However, the FBI interviews with the Primary Sub-source revealed that there were many degrees of separation between the Primary Sub-source’s contacts and the persons quoted in the reporting and that it could have been multiple layers of hearsay upon hearsay.
  • For example, the Primary Sub-source stated to the FBI his contacts did not have direct access to the persons they were reporting on. Instead, the Primary Sub-source told the FBI that the information was “from someone else who may have had access.

Today’s release is another milestone in the Senate Judiciary Committee’s ongoing investigation into Crossfire Hurricane and related FISA abuses.

This declassified document and other related material may be accessed at the following link: judiciary.senate.gov/fisa-investigation.

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