Controller to Seek More Funds to Search for Box Owners

California State Controller Kathleen Connell will ask the Legislature’s permission to spend more money to search for the owners of unclaimed property after The Times, on the eve of a huge state auction of supposedly abandoned safe deposit box contents, was able to quickly locate people the banks didn’t find.

The state controller’s office went ahead Thursday with a two-day sale of jewelry, coins and other valuables from more than 2,000 boxes, although a bomb threat briefly interrupted the morning auction at Los Angeles’ Hotel Sofitel.

Banks are required by law to search for the owners of safe deposit boxes and other bank accounts that have been inactive for three years for any reason, although there is no penalty if they don’t find owners. Some owners may have moved and forgotten their box, or died without leaving instructions.

If no owners can be found, the banks are required to turn over the contents to the state. Memorabilia and papers with little intrinsic value, such as marriage certificates, photographs and love letters, are eventually destroyed, while jewelry, coins, stamp collections and other salable items are auctioned once a year. The state then holds the money until someone steps forward to claim it.

In the 24 hours before Thursday’s sale, however, The Times was able to locate and contact six people from a sample list provided by the state of 24 supposedly lost property owners. Three said they had not changed addresses in decades, and two had active checking accounts at the banks that had labeled their boxes abandoned, leading to questions about how vigorous the banks’ searches for them had been.

Connell said her office has been constrained by state law from spending more than $15,000 to inform the public about the unclaimed property program. A search unit that once looked for missing owners was cut back during the state’s budgetary crises in the early 1990s. Connell’s spokesman, Byron Tucker, said she would ask the Legislature to delete two paragraphs of state code that limit how much the controller’s office can spend to find missing property owners.

“$15,000 worth of outreach is nothing,” Tucker said.

At Thursday’s auction, two bidders paled when told that some of the people The Times found had originally been given free box rent for opening an account, but that that deal had been rescinded after bank mergers.

“We have a free box, and we haven’t been there in 10 years,” said Glenda Beddoe, a Montrose media buyer who attended the auction with her husband, Arthur, hoping to add to his collection of pocket watches. “We’re going to have to stop by the bank when we leave here.”

Some bidders confessed to having mixed feelings as wedding rings, engraved lockets and baseball card collections came up for sale.

“Those poor people saved all these things, and they ended up here,” said Barbara Nichols, a Westwood resident who observed the bidding Thursday. “It’s so sad.”

Among the items offered in the auction’s first hour, an inscribed gold wedding band sold in 15 seconds for $37.50. Lively bidding broke out over a collection of coins, boosting its $35 estimated value to a final bid of $220. Another batch of 33 U.S. silver dollars, worth at least $200, was withdrawn at the last minute, claimed by its owner.

The auction was interrupted at about 10:15 a.m. by a bomb threat that police said specifically targeted the sale in the hotel’s second-floor ballroom.

About 200 bidders were sent to a first-floor hotel restaurant for free coffee while Los Angeles police officers searched the room for about half an hour. The auction is scheduled to continue today at 9 a.m.