FBI and California sheriff illegally seized marijuana cash belonging to licensed dispensaries, lawsuit claims
By Josh Campbell, CNN
Federal agents and a Southern California sheriff’s department engaged in “highway robberies” after seizing more than a million dollars in cash from vehicles transporting funds from marijuana dispensaries to financial institutions during a series of traffic stops last year, a new lawsuit claims.
In the civil suit filed in federal district court, lawyers for Empyreal, a Pennsylvania-based company that transports money on behalf of institutions that include cannabis dispensaries, accuse the FBI and the San Bernardino County Sheriff’s Department of scheming to illegally pull over company vehicles and seize money from its clients.
The lawsuit claims that Empyreal vehicles have been stopped by local law enforcement five times between Kansas and California since May 2021, twice resulting in the seizure of cash totaling more than a million dollars, which was then turned over to the FBI.
“These repeated, ongoing stops, searches, and seizures are costly to Empyreal and extremely disruptive to its business. Empyreal has been forced to suspend business operations in the largest county in the United States, San Bernardino County, and has stopped driving through Kansas,” the lawsuit says, adding the company has lost customers because of these incidents, and hasn’t rolled out new services in multiple states because of similar concerns.
“If these incidents continue to occur — and there is every indication they will — it will threaten Empyreal’s business model and its ability to continue providing financial infrastructure for the state-legal medical cannabis industry by safely moving cash from business premises into the legal banking system for greater transparency.”
The company claims in its lawsuit that “Empyreal and its clients operate in full compliance with applicable state cannabis laws and all applicable federal and state money laundering compliance requirements,” yet it remains unclear what violations federal agents were asserting in order to allegedly seize money from the company.
Speaking on behalf of the federal defendants in the suit, an FBI spokesperson declined to comment on the pending litigation.
However, in a written response to the lawsuit filed in court, the Justice Department insisted Empyreal lacked legal standing in the lawsuit, as the company merely served as a transport service for money owned by the cannabis dispensaries.
In response to an initial report on the lawsuit by the Los Angeles Times, San Bernardino County Sheriff Shannon Dicus tweeted a statement in which he said “over 80% of marijuana at dispensaries was grown illegally,” adding that “illegal cultivation sites have created quality-of-life issues for many of our county’s residents.”
Dicus stands by his deputies, saying, “I am confident when these claims make it to court, they will collide with the facts.”
In an attempt to bolster its claim that the company vehicles were initially pulled over for dubious reasons, the lawsuit alleges “not a single traffic citation was issued to an Empyreal driver during any of the traffic stops discussed in this complaint.”
The lawsuit further claims, “Defendants know that Empyreal vehicles are transporting the cash proceeds of state-legal cannabis businesses and want to seize that money and forfeit it using civil forfeiture.”
Central to the lawsuit are traffic stops the San Bernardino County Sheriff’s Department allegedly made in November and December 2021.
In the November incident, Empyreal’s lawyers claim, deputies covered up security cameras on the vehicle while executing the traffic stop, and seized “approximately $700,000 in legal currency from one of Empyreal’s vehicles, seized the vehicle itself, and seized the driver’s business and personal cellphones,” according to the complaint.
The company said the cash being transported was “entirely from state-licensed cannabis businesses in good standing, operating lawfully under California law,” the complaint states.
In a similar traffic stop in December, the company alleges in the complaint that deputies seized approximately $350,000 belonging to state-licensed cannabis businesses operating legally under California state law.
As part of the lawsuit, Empyreal sought a temporary restraining order allowing it to resume operations without fear of continued law enforcement intervention. That request was denied by Judge John W. Holcomb, who noted in his response that the company did not give sufficient notice to the government prior to filing the order.
The showdown between Empyreal and federal authorities is only the latest example of the often legally convoluted system of federal versus state marijuana law enforcement.
Although the US Justice Department prides itself on independently enforcing federal criminal law, attorneys general have also historically received guidance from new presidential administrations on what particular criminal justice issues should be prioritized by federal prosecutors. Thus far, President Joe Biden has not issued public guidance to the Justice Department on how potential conflicts between federal and state marijuana laws should be handled.
As CNN previously reported, a spokesperson for then-candidate Biden in 2019 said he supported the decriminalization of marijuana, adding Biden “would allow states to continue to make their own choices regarding legalization and would seek to make it easier to conduct research on marijuana’s positive and negative health impacts by rescheduling it as a schedule 2 drug.”
CNN has reached out to the White House for comment.
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CNN’s Arlette Saenz contributed to this report.