Andrew Wimer
Andrew Wimer · September 22, 2023

LOS ANGELES—Don Mellein was never accused of a crime, but his security deposit box was seized in an FBI raid. After the government gave up on trying to take his savings, it failed to return 63 precious metal coins worth more than $100,000. The same thing happened to Jeni Pearsons and her husband Michael Storc: The FBI returned some of their property, but not the $2,000 cash they stored below a liner in their box. In each instance, the FBI claimed there was no property to return and said it had done nothing wrong by failing to return it. Now, Don, Jeni, and Michael are teaming up with the Institute for Justice (IJ) filing separate lawsuits demanding that their coins and cash be returned.

“If normal people are held accountable for stealing or losing your property, then the government should be, too,” said IJ Attorney Joe Gay. “Don, Jeni, and Michael did nothing wrong. The government never should have broken into their safe-deposit boxes, but once it did, it became responsible for keeping their property safe. If it doesn’t give it back, there must be a legal remedy.”

Don, Jeni, and Michael rented security deposit boxes from US Private Vaults, a Beverly Hills business. They were unaware that the business was being investigated by the FBI and shocked to learn that agents had raided the vault and searched through their boxes. Months later, they received notices stating that the government was seeking to keep their property forever through civil forfeiture. Don hired an attorney to fight back while Jeni and Michael joined an IJ class action lawsuit.

After effectively proving his own innocence, the government gave up on forfeiting Don’s savings. But the FBI did not return 110 gold coins stored in the box. In fact, the FBI’s inventory receipt for his box did not list any coins. But after Don sued, agents conveniently “discovered” 47 of the coins that had gone missing and returned them.

“The FBI had no reason to go through my box and they were careless in losing my savings,” said Don. “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.”

Jeni and Michael also successfully fought against the FBI’s forfeiture efforts. But when the FBI returned precious metals Jeni and Michael stored in their security deposit box, it did not return $2,000 in cash they had placed in it. With the assistance of IJ, Jeni and Michael petitioned the FBI for their money to be located and returned. But in March 2023, the FBI responded that it investigated itself and found that it had not done anything wrong.

“The FBI made a choice to open our box rather than reach out and give it to us still locked,” said Jeni. “The agency shouldn’t be able to just investigate itself and find that agents did nothing wrong. We’re fighting for our money, but also to hold the government accountable when it takes people’s property and then steals or loses it.”

IJ’s earlier class action lawsuit shined a light on the FBI’s raid, uncovered the agency’s forfeiture motives, and showed how the FBI’s rushed inventory of hundreds of boxes could have resulted in misplaced property. The agent in charge of forfeitures testified that months before seeking a warrant for the raid, the FBI had already planned to try to take any box with property worth more than $5,000 using civil forfeiture. All told, the FBI sought forfeiture of more than $85 million in cash and tens of millions of dollars’ worth of precious metals, jewelry, and poker chips.

The lead agent testified that the process of searching boxes took longer than anticipated. Only about half of the boxes that were opened were video recorded. The FBI justified opening the boxes by saying it needed to create an “inventory” of the contents to protect them. But after searching the boxes for evidence of criminal wrongdoing, there often wasn’t time to create meaningful inventories. Many inventories were essentially useless, using vague, general terms, like “miscellaneous coins” or “assorted jewelry” or “miscellaneous general items.”

“Unfortunately, civil forfeiture creates a powerful incentive for law enforcement to seize money since the proceeds flow into accounts that are controlled by the agencies, not Congress,” said IJ Senior Attorney Rob Frommer. “Law enforcement does not have to convict or even charge someone with a crime to take property. It’s a flawed system that turns citizens into ATMs.”

The legal pathway for Don, Jeni, and Michael to getting back their property is filled with procedural obstacles, so IJ is bringing a number of legal claims to ensure that the government cannot easily evade accountability. While the precise legal mechanism that courts should use may be unclear, the U.S. Constitution guarantees due process and requires the government to compensate people when it takes their property.

The Institute for Justice defends property rights nationwide and 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 currently has two class action lawsuits stemming from the raid on US Private Vaults. The first is challenging the unconstitutionality of the search and the FBI’s continued retention of records. The second is challenging the FBI’s unconstitutional and confusing forfeiture notices.

Don, Jeni, and Michael are also represented by local counsel Nilay Vora and Jeff Atteberry of the Vora Law Firm PC.