Victory! After Gold Coins And Cash “Go Missing,” IJ Finds Accountability For The FBI

When the FBI lost Don Mellein’s gold coins and Jeni Pearsons’ and Michael Storc’s cash after illegally searching their safe-deposit boxes, it thought it could dodge accountability forever. But not on IJ’s watch. After a federal judge rejected the FBI’s arguments that it can lose people’s property with impunity, the FBI agreed to compensate Don, Jeni, and Michael for every cent that went missing from their boxes.
This is IJ’s latest victory involving the FBI’s outrageous raid at U.S. Private Vaults (USPV) in Southern California. In another IJ case, the 9th Circuit held that the FBI violated the Fourth Amendment when it broke into hundreds of individual safe-deposit boxes belonging to innocent USPV customers. A separate challenge to the FBI’s attempts to administratively forfeit the valuables it pilfered is ongoing.
Meanwhile, numerous reports have surfaced about valuables going missing during the FBI’s slapdash search at USPV. For Jeni and Michael, $2,000 disappeared by the time the government stopped trying to forfeit their box. For Don, a retired civil servant who secured part of his retirement savings in his box, 110 gold coins vanished. The FBI eventually found some of them, but 63 were still gone. What could Don, Jeni, and Michael do about their missing valuables?
Ordinarily, if someone loses or steals your property, they’re on the hook for it. But the FBI believed that it didn’t have to play by the normal rules. So Don, Jeni, and Michael teamed up with IJ to hold the FBI accountable for losing their belongings.
The government deployed a patchwork of immunities and statutory loopholes to try to escape responsibility. In one filing, it said you can’t sue individual FBI agents for losing your property, insisting you have to sue the government directly. In a second filing a few minutes later, it said you can’t sue the government directly, because it’s immune from those types of claims. Heads, the government wins; tails, ordinary Americans lose.
The federal district court refused to play the government’s constitutional shell game. At bottom, it held that if the FBI takes someone’s property, it needs a good reason for not giving it back. And losing stuff? That’s not a good enough reason.
As the FBI was forced to finally reveal what it did with the property from USPV, its jaw-dropping carelessness became increasingly clear. The FBI didn’t even realize it had Don’s gold coins—worth hundreds of thousands of dollars—for months. At one point, the coins sat outside in a parking lot. Later, they sat in a general evidence locker instead of the secure vault for valuables. As the troubling details mounted, the FBI decided to throw in the towel.
By fighting back and winning, Don, Jeni, and Michael blazed several trails for vindicating our rights against federal law enforcement. IJ will continue that fight until it’s beyond dispute that every American has a remedy when government agents lose or steal their property.
Joe Gay is an IJ attorney.
Related Case

Civil Forfeiture | Private Property
US Private Vaults Missing Property
After giving up on using civil forfeiture to claim their safe deposit boxes, the FBI did not return all of Don, Jeni, and Michael's property. They are suing to get their missing coins and cash…
Subscribe to get Liberty & Law magazine direct to your mailbox!
Sign up to receive IJ's bimonthly magazine, Liberty & Law, along with breaking news updates about the Institute for Justice's fight to protect the rights of all Americans.
