Federal Judge John Holcomb declined this week to issue a temporary order to stop a California sheriff from using civil forfeiture in robbing armored cars containing marijuana money. U.S. district judge John Holcomb ruled that Empyreal Logistics was a Pennsylvania company transporting cash between banks and businesses. However, it had not met the “high burden” necessary to obtain a TRO.
Three times, in December, January and November, Empyreal vans were stopped by San Bernardino County sheriff’s deputies. They made off with more than $1million, including cash, during two of their stops. This money was then transferred to FBI, so that the Justice Department could seek forfeiture in accordance with federal law. Under the Justice Department’s equitable sharing program, up to 80 per cent of money will be awarded to the sheriff’s Department if they prevail in forfeiture proceedings. California law does not allow for the forfeiture of earnings from state-licensed cannabis suppliers.
Empyreal, represented by Institute for Justice, claims that San Bernardino County Sheriff Shannon Dicus is not authorized to seize cash from businesses which are in compliance with state law. They also claim that the van search violated the Fourth Amendment. The stop was made because of financial reasons. Empyreal filed suit against the Justice Department and Attorney General Merrick Galrland. Empyreal also sued the FBI Director Christopher Wray, San Bernardino County Sheriff Shannon Dicus, the FBI, Anne Milgram, the Drug Enforcement Administration, and Anne Milgram, the DEA Administrator. According to the company, federal officials are collaborating with Dicus and violating a congressional expenditure rider which bars the Justice Department, which includes the FBI, from interfering in the state implementation of medical marijuana laws.
Holcomb stated that the evidence to support Empyreal’s claim regarding that final claim was insufficient. According to the company, three out of four businesses that were seized with money on November 16, had medical marijuana licenses. According to the company, all money taken on December 9 was from these businesses.
Holcomb writes that Empyreal must show by a preponderance evidence it has strictly adhered to state medical marijuana laws. It hasn’t even come close to fulfilling that burden. Deirdra A. O’Gorman, Empyreal CEO is the only witness to Empyreal’s strict compliance. They have limited utility.
Empyreal’s attorney Dan Alban from the Institute for Justice notes that “the Appropriations Rider requires DOJ not spend any money interfering a state in its implementation of its medicinal cannabis laws.” Although the “rider does not cover every Empyreal business,” he said, “it should be protected those with medical marijuana licenses that comply with state law. Federal agencies should not have any right to seize their proceeds.”
Holcomb wasn’t persuaded that Dicus had overstepped his authority. That claim depends on showing that businesses that Dicus seized were in compliance with state law. In its TRO application, Empyreal stated that it and its clients were in complete compliance with state cannabis laws. Holcomb believes that this assurance does not support a TRO because Empyreal’s CEO has made self-serving statements.
Holcomb states that Empyreal does not have sufficient evidence to support its claims against Dicus under the Constitution. It is clear that there are not sufficient evidence At this momentHe writes that he was attempting to say Empyreal’s Constitutional Rights were violated. The judge emphasizes that the order doesn’t address Empyreals rights or whether any laws were broken by the defendants.
Empyreal claims that traffic stops were pretextual. Although they are justified as minor traffic violations, the stop was actually intended to generate revenue for the sheriff’s department. Jonathan Franco, Sheriff of New York, claimed that the December 16 traffic stop which led to the seizure $712,000 was justified. The Empyreal van had been following too closely a tractor-trailer. The same deputy pulled over the vehicle on December 9 by the same driver, according to the Empyreal lawsuit on January 14. They claimed that the driver had “slightly exceeded speed limits” and activated his turn signals too soon.
The complaint states that the driver of the Empyreal car was operating it lawfully in this case. According to the company, “the Deputies planned the stop and would have stopped the driver and Empyreal vehicle no matter how lawful or careful it was.”
It was disappointing that the deputies only took $350,000. Empyreal’s lawsuit, which was based on audio recordings from the van’s security, describes this exchange. “One deputy said, That’s it? He laughed. 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.
Even more disappointing were the sheriff’s deputy who stopped an Empyreal van and took it into custody on January 6. It was filled with rolled coins which had nothing to do the pot industry. They were even more disappointed. Like the previous stops, they didn’t issue tickets.
“Because cannabis sales and proceeds from cannabis transport (including
in localities where dispensaries are prohibited) are lawful under California law,” Empyreal says in its TRO application, “the Fourth Amendment prohibits the Sheriff from stopping, searching, or seizing Empyreal’s personnel or property (namely, vehicles, safes, and cash) without reasonable suspicion or probable cause to believe that the property is associated with or is the proceeds of cannabis sales that violate state law….The Sheriff is using pretextual traffic stops to search and seize Empyreal’s property without probable cause. Indeed, the Sheriff is not even issuing traffic citations during these stops—just taking Empyreal’s cash.”
Empyreal states that the subsequent searches, even though the traffic violation stops were justifiable, were still unconstitutional. The “traffic-violation stop” doesn’t give police the right to search the vehicle. A warrantless search under the automobile exception is only allowed if there’s probable cause to suspect that contraband was found at the location being searched. Contrary to the wishes of the Sheriff, a traffic violation stop does not grant permission for a search warrantless on a vehicle.
The December 9th stop was made by the police. They claimed that a drug sniffing dog had alerted the van. Empyreal claims this is false. “Video footage of the vehicle doesn’t show the dog alerting on the vehicle.” The footage shows instead that the dog seems to be very interested in the vehicle.
Although the search warrant was obtained by the deputies prior to the seizure on November 16, Empyreal claims that the application contained misleading or false statements. According to Empyreal, the deputy that applied for the warrant incorrectly claimed Empyreal makes money by selling marijuana and also falsely claimed some clients are not licensed. Also, the deputy claimed Empyreal didn’t have a cannabis business license. This is required for money transportation from dispensaries and banks. Additionally, the 2020 law provides that companies providing services for state-licensed cannabis businesses do not violate any California laws.
Holcomb did not consider information concerning the search warrant as he weighed in on the TRO request. Holcomb claimed that it had been presented too late without giving defendants the opportunity to reply. Alban claims that the information Empyreal provided in its replies briefs was based upon “new evidence” that Empyreal had just received and didn’t have when it filed its TRO application.
New evidence also included unredacted portions of the November 16 search order. Alban states, “We tried for months to obtain those documents from defendants,” but received them only last week. Alban states that although Holcomb refused to take into consideration the evidence, they can use them to support a motion to a preliminary order.
These claims are still being litigated. However, Empyreal has reimbursed clients for any money seized by Dicus’ officers. Empyreal also refunded $165,000 taken last May during a Dickinson County traffic stop. Empyreal claims that all the Kansas money taken was from Missouri-licensed medical cannabis dispensaries. The cops worked with the DEA, and the Justice Department to pursue forfeiture according to federal law, just like in California.
Empyreal states it wants to avoid more trouble and routing money from pot businesses throughout Kansas and San Bernardino County. It leads to unneeded extra travel. Empyreal announced that it has canceled plans to build a vault and currency processing center in Dicus. The company claims that it invested $100,000 and pays $21,000 per month rent and utilities. Empyreal states that harassment and threats of seizures have cost clients and threatened its ability to expand, in particular California.