Kansas and California Cops Used Civil Forfeiture to Stage Armored Car Heists, Stealing Money Earned by Licensed Marijuana Businesses

Banks and payment processors are now cautious about accepting state-licensed cannabis suppliers because of the ongoing federal prohibition. Many businesses that rely on cash face a higher risk of being robbed. This danger doesn’t just apply to criminals of the garden variety, as a federal lawsuit demonstrates. This includes police officers who steal state-legal marijuana money using federal civil forfeiture laws.

California sheriff’s officers have stopped the operation of five armored cars owned by Empyreal Logistics. The Pennsylvania-based firm serves both marijuana companies and banks that deal with them. Three of the stops saw cops seize $1.2million in cash. However, they didn’t issue any citations nor file criminal charges. Civil forfeiture does not allow property to be confiscated. Police can use this process to boost their budgets and seize assets they suspect are linked to criminal activity.

Empyreal, represented by Institute for Justice, argues the seizing of clients’ funds violated federal and state law. Empyreal, in a U.S. District Court complaint filed last Friday, argued that it was entitled to protection against highway robberies. This applies regardless of whether the robberies are carried out by criminals or the Sheriff, federal law-enforcement agents acting under the colour of law.

Kalen Robinson, Dickinson County Sheriff, pulled one Empyreal’s van over on Interstate 70. He believed that the Colorado tag number had been partially blocked by the license plate frame. Robinson interrogated the driver and she explained to Robinson that she intended to take cash to Colorado’s credit union, after which she would have to travel through Kansas. Robinson did not issue a citation and the driver continued her route. The federal Drug Enforcement Administration (DEA), however, kept watch on the van as it passed the Missouri dispensaries.

Robinson later stopped the van as it was traveling west on Interstate 70. He took $165,000 from its vault. The Justice Department brought a civil forfeiture suit in September seeking to preserve the money. The Justice Department’s equitable sharing program will allow the Dickinson County Sheriff’s Department to receive up to 80 per cent of the loot if they prevail.

Bryson Wheeler, DEA Special Agent noted in the affidavit that marijuana is a controlled drug and was made illegal by Kansas and federal law. But Empyreal argues that the DEA’s participation in this scheme ran afoul of the Rohrabacher-Blumenauer Amendment, a spending rider that bars the Justice Department (which includes the DEA and the FBI) from using any of its funds to interfere with the implementation of state laws authorizing the medical use of marijuana. The company claims that the DEA broke this restriction and also breached the Fourth Amendment’s prohibition on unreasonable searches or seizures. The lawsuit claims that the Fifth Amendment guarantees due process because it was motivated by financial gain.

California’s seizures and stoppages raise legal questions because, unlike Kansas which bans marijuana sales for medicinal or recreational purposes, California allows it. The law explicitly shields Empyreal companies from being harassed by state or local law enforcement authorities. A 2020 law says a business that “transports cash or financial instruments, or provides other financial services does not commit a crime under any California law…solely by virtue of the fact that the person receiving the benefit of any of those services engages in commercial cannabis activity as a licensee pursuant to this division.” San Bernardino County sheriff’s deputies found that Empyreal vans were being used to transport cash or financial instruments. They also seize more than $1,000,000, despite this law.

One of the vehicles was pulled over by Jonathan Franco, Sheriff’s deputy. He claimed that it had been following too closely a tractor-trailer vehicle. Franco, like Robinson did not issue any citations. Franco, according to the lawsuit, “asked numerous questions about Empyreal’s business” after the driver said that the van had cash. Although it was obvious that Empyreal wasn’t violating state laws, cops confiscated $700,000. Later, the sheriff’s office informed the lawyer of Empyreal that the money was “transferred to the FBI for civil forfeiture.”

Empyreal claims that the same officers pulled over the vehicle on the 9th of December. It was driven by an identical employee. The reason for this, Empyreal said, was because he had “slightly exceeded his speed limit” and pre-activated his turn signal. Again, however, there was no citation. According to the lawsuit, the Empyreal vehicle’s driver was in compliance with all laws. The company claims that the deputies knew about the stop and would have stopped the driver and Empyreal vehicle, regardless of its legality or care.

Empyreal said that the deputies falsely claimed that a drug sniffing dog alerted the van. However, the video footage of the vehicle doesn’t show any dog on it. The footage shows instead that the dog seems to be very uninterested in the vehicle.

About $350,000 was seized by the police this time. The second seizure was smaller than the first. This disappointed the deputies who had been audibly thrilled about the $700,000. The lawsuit describes the following exchange based on audio recordings from the van’s security camera: “One deputy said, That’s it? The deputies laughed and then said: ‘That’s all?’ Then he said, “You have set the bar too high.” Another deputy commented that they were likely to get “a million” or more. [first] deputy responded, ‘At least we got over a million'”—apparently referring to the combined take from the two seizures. In the midst of federal forfeiture proceedings, the FBI informed Empyreal’s attorney that it also had possession of money seized December 9.

Shannon Dicus from San Bernardino County believes that the federal government should be involved. California law does not allow for the forfeiture of money earned from state-legal cannabis businesses. Law enforcement agencies, however, would only be allowed to 65 percent of proceeds under California law, as opposed to the 80 percent permitted by federal law. California’s law demands “clear, convincing evidence” for cash forfeitures exceeding $40,000; federal law only requires “a preponderance or the evidence”.

California lawmakers have banned federal adoption of seizures by local or state law enforcement agencies, recognizing their appeal. This restriction does not apply to anti-drug task teams that comprise both federal and local authorities. Empyreal suspects that California’s stops were influenced by this task force, the Inland Regional Narcotics Enforcement Team.

Federal participation still implicates the Rohrabacher-Blumenauer Amendment. Empyreal asserts that the money it was transporting had been paid by three medical marijuana licensed businesses. However, all money seized on December 9 from these businesses has come from those with the same licenses. According to Empyreal, Dicus is one of the plaintiffs. He allegedly allowed or instructed his deputies, without any evidence, to stop and search the vans of the company.

This strategy is revealed in the third California stop. The lawsuit claims that on January 6, San Bernardino County sheriff’s deputies arrested an Empyreal driver for “picking up an Order of Rolling Coin Boxes from Empyreal’s Vendor, which happens be found in San Bernardino County, to replenish its supply of rolled coins.” The deputies discovered that the coins were not related to cannabis and decided to leave them behind. The deputy who answered the question of the Empyreal driver about why Empyreal cars were stopped frequently told the Empyreal driver that it was “political”, but declined to give more details.

Although Dicus may have responded to this question with a reference to his motivations or the federal agenda of Dicus, it doesn’t sound reasonable under the Fourth Amendment. Empyreal asserts that “pretextual stops of traffic” which were intended to supplement police budgets, rather than enforce state law, is not “reasonable.”

Empyreal has an additional focus on traditional businesses, such as convenience and restaurants, and is currently operating in 28 states. DeirdraO’Gorman CEO, Empyreal says that the company is proud to offer a secure and professional way for customers to transport money into the financial systems. “This increases transparency and reduces the risk of people getting their money on the streets.” We have had no problems because we both work within the laws, as do our clients. We cannot help but stand for our constitutional rights in order to continue our service to our clients.

Empyreal reimbursed clients for money it seized in California and Kansas, which means that the company is now out $1.2million, plus the legal costs of challenging the forfeitures. According to the company, it wants to prevent further problems by routing money from cannabis businesses in Kansas and San Bernardino County. This leads to unnecessary extra travel. Empyreal is removing plans for the “vault” and currency-processing facility in Dicus. The company claims that it invested $100,000 and pays $21,000 monthly in rent and utilities. Empyreal states that harassment and threats of seizures have cost clients and threatened its ability to expand, in particular California.

Kirby Thomas West of the Institute for Justice said that Empyreal’s situation “potently illustrates” why civil forfeiture can be called “policing for Profit.” “Law enforcement is trying get more than one million dollars without any charges being brought against anyone for a crime. This is completely unconstitutional and absurd. Another reason legislators should eliminate civil forfeiture is because it’s absurd.