Exclusive | Californias fiscal watchdog accused of using fake addresses to seize fortunes in bombshell lawsuit

California’s top fiscal watchdog and private contractors are accused of falsifying foreign investors’ addresses to seize and sell hundreds of thousands of dollars in stock, according to a federal court filing seeking to halt the state’s $15 billion unclaimed property program.The allegations are part of a lawsuit that accuses state Controller Malia Cohen and two contractors, Kroll LLC and Kelmar Associates LLC, of taking private property without adequate notice and improperly profiting from its sale.Under California law, banks and other businesses must turn over financial assets — including cash, stocks and insurance payouts — to the state Controller’s Office when owners fail to claim them or make contact for a specified period, typically three years.The biggest news, opinion and culture shaping California right now.

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Never miss a story In a motion filed Wednesday, plaintiffs accused Cohen of “seizing the property she cannot control from persons she has no authority over.” The filing alleges that officials changed overseas investors’ addresses to make their assets appear connected to California, allowing the state to claim property it otherwise might not have been entitled to seize.One investor, Edmilson César Martim Jr.of Brazil, alleges that California seized and sold $708,641.22 in Google retirement stock without notifying him.According to the filing, his Brazilian address was replaced in property records with the designation “CA 00000.”Martim said he traveled several hours to a U.S.

Embassy to obtain notarized documents required to recover his money, only to have his claims repeatedly denied by the controller’s office.Another plaintiff, British investor Karl Whitty, alleges that contractor Kroll changed his address from Cardiff in the United Kingdom to “CARDIFF, CA 00000.”Whitty ev...