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| Sacramento U.S. judge orders state to hold on to unclaimed goods! Freeze on disposal of $5 billion in property. A federal judge has prohibited the state from selling or destroying any unclaimed securities, jewelry and other property it is holding while plans are in the works to locate and notify the owners. U.S. District Judge William Shubb of Sacramento issued a temporary restraining order Monday freezing the unclaimed property accounts kept by the state controller's office until May 29. That's the day a hearing is scheduled on an injunction ordered by a federal appeals court that would require the state to give notice to people when it seizes their property as abandoned. The controller's office is holding $5 billion worth of bank accounts, stocks and other property that it classifies as abandoned in the state. California law allows the state to seize property that is being kept by private caretakers, such as banks and insurance companies, that have not heard from the owner for at least three years. About three-quarters of the property is cash, which is kept until the owners claim it, the state said in court filings. But the controller's office is authorized to sell the securities and other valuables it confiscates, and has often done so without notifying the owners. In the last few years, the controller's office has had a policy of selling property within 30 days of seizure and destroying the contents of confiscated safe deposit boxes if they have no cash value, a procedure that has led to the loss of family mementoes. Controller John Chiang, who took office in January, says he has changed that policy and is holding all property for at least a year. The controller's office runs newspaper advertisements inviting property owners to visit a Web site (www.searchthevault.com) and see if their names are listed as account holders. The state also relies on banks and other former custodians of the property to write to the owners at their last known addresses, as required by law, and also contacts owners who have new addresses listed with the Franchise Tax Board. But the state has no systematic program of locating and notifying all owners of purportedly abandoned property. In an April 30 ruling, the Ninth U.S. Circuit Court of Appeals in San Francisco said the controller's office appears to be violating the owners' constitutional right to be notified and heard before their assets are seized and sold. The court returned the case to Shubb's court, where Chiang's office argued that a restraining order against property sales was unneeded because the controller has halted all such sales while awaiting the injunction hearing. But William Palmer, attorney for property claimants who sued the state in 2001, said an order was necessary to make sure nothing was sold or destroyed without alerting the owners. |
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| posted 5/10/2007 by Admin | 200 views | |
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