Defunct Beverly Hills safe company fined $1.1 million

LOS ANGELES — A company that rented safe deposit boxes in Beverly Hills to customers who wished to remain anonymous was fined $1.1 million on Monday for money laundering after admitting it was looking for drug traffickers. drugs and other criminals as customers who often kept stacks of illegally obtained cash. coffers.

US Private Vaults, a Nevada-based company that operated on West Olympic Boulevard, was raided by the FBI and US Drug Enforcement Administration last year. Officers broke open boxes, seized drugs, firearms and large amounts of gold and silver bullion, along with other valuables, from about 396 of the rented boxes, according to a deed of charge alleging three separate conspiracies to violate federal law.

Since then, box holders who have denied criminal guilt have successfully petitioned a federal judge in Los Angeles to reclaim their property.

The company pleaded guilty in March through an attorney to a federal charge of conspiracy to launder money.

US District Judge Mark Scarsi sentenced US Private Vaults to three years probation and the maximum fine of $1.1 million. He also ordered that a preliminary order confiscating his business equipment be made final.

The federal government has remained silent on its case against the now-defunct company, whose board has not been charged or named.

The company admitted to having “recruited as customers drug dealers and other criminals” who paid more than $550,000 in cash and bitcoins in exchange for the anonymous use of safes “to store the proceeds of their offences, most often in stacks of $100 bills”. according to the plea agreement filed in federal court in Los Angeles.

The box rental payments were made to US Private Vaults with the company’s knowledge that the money came “from the proceeds of the distribution of controlled substances and other crimes,” the plea agreement says.

The company would deposit the money with banks, using the money to pay for its costs of maintaining the business, “thus furthering the distribution of controlled substances and other crimes by its customers,” federal prosecutors wrote.

Box holders seeking the return of their property said the government had overstepped constitutional protections in its effort to uncover illegal activity. About $86 million in cash and millions more in jewelry and other valuables were reportedly seized, but no specific criminal conduct was alleged against the customers.

In the indictment, Los Angeles prosecutors allege that US Private Vaults engaged in “business practices that attracted customers in possession of the proceeds of criminal offenses, including drug trafficking” and other crimes .

US Private Vault customers were not required to use their name to access their boxes. Instead, the company used iris scans and other means to keep customer identities secret.

The warrant authorizing the US Private Vaults raid said it “does not authorize a criminal search or seizure of the contents of the vaults,” according to Rob Johnson, senior counsel at the Institute for Justice, who filed a complaint for the return of box contents on behalf of customers.

Despite the direction of the judge who signed the warrant, “the FBI opened all the boxes in the safe and forced the individuals to prove their own innocence to recover their property,” Johnson said.

The government dropped its forfeiture claims against the institute’s clients and finished returning assets seized late last year, Johnson said.

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