Some Lost-Property Owners Under State’s Nose

If you want to know how hard the state of California is looking for the owners of lost property, just ask Gerald Holt Jr. of Palmdale.

“They’re not looking at all,” he says.

Holt recently spent time searching the state’s online database. He found that the state’s unclaimed-property division, which holds property “abandoned” by people and entities that cannot be found, owes the city of Los Angeles more than $11,000. It owes Los Angeles County more than $100,000. The IRS has more than 150 accounts, some for thousands of dollars each. The Franchise Tax Board, the agency that collects state taxes, has 201 abandoned accounts.

A Web search of the state’s online database for “Orange County” and the “County of Orange” brought up six unclaimed accounts ranging from $70.24 to $2,544. And some prominent companies in Orange County have abandoned accounts that add up to several thousand dollars.

The state controller’s office acknowledges that there may be many easy-to-find owners of so-called abandoned property. But the state says it has no obligation to seek them out.

The controller’s office is hamstrung by a law that prevents it from spending more than $15,000 annually on efforts to find the roughly 6 million owners of $2.4 billion in abandoned property held by California, says Byron Tucker, spokesman for the office. The controller has asked the Legislature to lift this restriction so that state officials can try to find property owners. But until and unless that happens, if you don’t find your property, it won’t find you--no matter how visible you might be.

Oddly enough, the state owes itself hundreds of thousands of dollars, though that may be a moot point since California holds all the unclaimed assets until a claim is made.

While some of the property is from abandoned safe-deposit boxes whose contents are eventually auctioned if no claim is made, most of the accounts consist of misdirected checks for tax payments and refunds, or miscellaneous items such as vendor payments and refunds from escrow accounts.

The accounts range wildly in size. One unclaimed account remitted by Bank of America is for $574,319.50. Others are as tiny as a few dollars.

A total of 301 accounts are owed variously to “California,” “The State of California,” “California, State of,” “State of CA” and “State of Calif.”

“It blows me away. How hard can the IRS be to find? I manage to find them every year,” Holt says. “The state of California cannot find themselves? This thing just fascinates me.”

Though Holt, 33, has a full-time job and no economic interest in finding people--beyond the hundreds of dollars he discovered for himself, his boss and his girlfriend--he’s spent hours searching for interesting accounts and printing out the details.

Why this undertaking? He started by looking for property for himself and people he knew. When seemingly everyone in his circle had a claim, he began to wonder about others who were obviously not missing--such as movie stars and major companies.

He searched for celebrities ranging from actor Kevin Costner to author Louis L’Amour. They both have abandoned accounts stored with the state, he says. Could these accounts be for like-named non-celebrities? Perhaps. But Costner’s abandoned $569 was a payment from “American Broadcasting Corp.” and L’Amour’s $30 payment was from Walt Disney Co.’s movies and TV unit, he notes.

Numerous major entities, including the Los Angeles Times and its parent, Times Mirror Co., as well as Disneyland, also have abandoned accounts. Neither The Times nor Disneyland--nor the city of Los Angeles, for that matter--have moved in decades. Indeed, the property owners’ addresses shown in the electronic database are often correct. Yet for unknown reasons, the property was escheated to the state and remains unclaimed.

But no matter how easy people and entities are to find, the state cannot make any effort to contact them, according to Tucker of the controller’s office. That responsibility lies solely with the banks, phone companies, escrow firms and others that turned over the funds to the state.

“The state of California is prevented from contacting people who are owed abandoned property by state law,” Tucker says, referring to the budgetary constraints. “We can no sooner contact the city of Los Angeles than we could John Doe. We are prevented from doing so.”

The property division’s $15,000 annual allotment goes toward generic print advertising and other expenses, but the office says it’s insufficient to conduct any true outreach.

Many companies that are owed money don’t bother to claim it, even when they know it’s there. That’s because claimants must fill out a lengthy form for each account and, in most cases, the claims are small. The Times, for example, has 18 abandoned accounts totaling about $2,000. The largest is a $473.83 refund from GTE of California, while the bulk are $20 to $50 checks from companies such as Hertz Corp. and Beaver Insurance Co.

A Times spokesman said he would investigate the matter but could not yet say whether the company would make an effort to recoup its abandoned funds.

In Orange County, Quiksilver, a casual clothing company headquartered in Costa Mesa, has vendor payments worth $1,928.99.

Ingram Micro, the world’s largest hardware and software distributor, has a refund of $2,106.76 reported by Xerox Corp.

Kirsten Frosh, Ingram’s director of public relations, said she had “no knowledge” of the state trying to contact the company about the abandoned account. Ingram, she added, “will get right on this to claim the money.”

The abandoned accounts owed to the IRS and the Franchise Tax Board may have serious implications. Many appear to have been tax payments, made with cashier’s checks, that somehow went astray. Of course, if the tax authorities don’t receive their due within the required time, taxpayers are subject to penalties and interest as well as the taxes.

After recently being alerted to its hundreds of accounts sitting in state coffers--sometimes for years--the IRS launched an investigation, seeking to match these “abandoned” amounts with past and pending collection activity.

The Franchise Tax Board heard about its accounts earlier this year and began an investigation of its own. But after months of trying to match these accounts with past and pending collections, the effort has met with no success.

“It is perplexing to us because we never suspected that we would be on this [abandoned property] list,” says Denise Azimi, spokeswoman for the tax board in Sacramento.

“At this point, none of the money has been accounted for,” she said. “We collect $2 billion annually, and some of these amounts [in the state’s database] aren’t dated.”

If a taxpayer has a dispute involving a missed payment to the state that’s at least 3 years old and believes the amount was paid but never credited, Azimi suggests calling the board at (800) 852-5711.

The IRS, meanwhile, says it is weeks away from figuring out whether it can match abandoned accounts to taxpayer disputes.

Times staff writer Marc Ballon in Orange County contributed to this report.

Times staff writer Kathy M. Kristof can be reached by mail at Personal Finance, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053, or by e-mail at kathy.kristof@latimes.com.