New Jersey Unclaimed Property Lawsuit: Is the State Unlawfully Seizing Your Assets?

Case Overview: A new class action lawsuit is challenging New Jersey's unclaimed property law, alleging the state seizes and sells assets without proper notice, violating constitutional rights.

Consumers Affected: Individuals and entities whose property has been seized by New Jersey under its unclaimed property law.

Court: U.S. District Court for the District of New Jersey

A new lawsuit is challenging how New Jersey handles unclaimed property, accusing the state of seizing assets without proper notice and profiting from their sale. The lawsuit, filed in federal court, argues that the New Jersey Uniform Unclaimed Property Act violates constitutional protections by taking property deemed "abandoned" with little to no warning.

Critics say the state’s aggressive approach has led to wrongful seizures of stocks, bank accounts, wages, and even safe deposit box contents—often auctioned off, with proceeds going to state coffers. The lawsuit also highlights how Kelmar Associates, LLC, a private auditor working with the state, allegedly prioritizes profit over due process, further compounding the issue.

New Jersey Unclaimed Property Law Under Fire

The lawsuit was brought by a Chilean engineer representing the estate of Rene Correa Borquez, a Chilean lawyer and investor who died in 2006. His heirs, all residing in Chile, never received notification that Borquez’s U.S. investment accounts had been flagged as abandoned and seized by New Jersey.

Despite providing extensive documentation proving ownership, Borquez’s representative received a payout far below the fair market value of the confiscated stock—nearly $120,000 less than what it should have been worth. The lawsuit argues that had the state provided adequate notice, the heirs could have taken action to prevent the seizure.

The plaintiff, Jaime Vial, now fears more assets could be at risk and argues that New Jersey’s system makes it nearly impossible for foreign property owners to protect themselves.

State Seizes Assets Without Warning, Lawsuit Claims

Historically, unclaimed property laws were meant to safeguard abandoned assets and eventually return them to rightful owners. However, in the mid-20th century, states like New Jersey expanded these laws to cover intangible assets such as bank accounts, stocks, and retirement funds—realizing they could generate billions in revenue, the lawsuit alleges.

Under NJUPA of 1989 assets are considered abandoned after just three years of inactivity. This can apply even to long-term investment accounts where no deposits or withdrawals occur, meaning a "buy-and-hold" investor could unknowingly lose their property to the state.

New Jersey has one of the nation’s most aggressive unclaimed property laws, earning a “D” grade from the Council on State Taxation. Unlike many states that focus on reuniting owners with their assets, critics argue New Jersey’s system operates more like a revenue stream.

New Jersey's "Aggressive" Approach to Unclaimed Property

The lawsuit points out numerous flaws in how New Jersey administers NJUPA. It says that financial institutions must report and transfer abandoned property to the state, but the notification process is deeply flawed, with issues including that property worth less than $50 requires no notice at all before being seized. Reportedly, notices are sent only by certified mail within the U.S., making it nearly impossible for foreign owners to be informed, and owners’ names may be posted on a state website, but without specific details about what was taken.

For many, this means their assets vanish without warning—only to be discovered after it’s too late. The lawsuit seeks to challenge these practices and prevent further wrongful seizures, potentially reshaping how unclaimed property is handled in New Jersey.

In his lawsuit, Maher Muoio wants to represent any person or entitiy owning purportedly “abandoned” property transferred to the Administrator under the Act who were denied constitutionally adequate notice under the NJUPA because they did not reside in the United States, the value of the property at issue was less than $50, or for any other reason. 

Case Details

• Lawsuit: Vial v. Elizabeth Maher Muoio, in her official capacity as Treasurer of the state of New Jersey, et al.
• Case Number: 3:24-cv-11301  
• Court: U.S. District Court for the District of New Jersey

Plaintiffs' Attorneys

• Kevin P. Roddy (Wilentz, Goldman & Spitzer, P.A.)
• William W. Palmer (Palmer Law Group, PLC)
• Jonathan Massey, Bret R. Vallacher, and Matthew Layden (Massey & Gail LLP)

Have you had property seized by New Jersey under its unclaimed property law? Share your experience and join the fight in the comments below.