FBI, San Bernardino County Sheriff Charged With Breaking Law By Seizing Marijuana Cash | Nation and World
LOS ANGELES — The driver of an armored car carrying $712,000 in cash from licensed marijuana dispensaries was heading toward Barstow on a highway in the Mojave Desert in November when San Bernardino County sheriff’s deputies arrested him. They interrogated him, seized the money and turned it over to the FBI.
A few weeks later, deputies arrested the same driver in Rancho Cucamonga, took another $350,000 from legal pot shops, and gave that money to the FBI as well.
Now the FBI is trying to confiscate the nearly $1.1 million bounty, which it may share with the San Bernardino County Sheriff’s Department. The FBI says the money is tied to federal drug or money laundering crimes, but did not specify any unlawful conduct and did not charge anyone with a crime.
The cash seizures — and another from the same trucking company in Kansas — raise questions about whether the Justice Department under President Biden is set to disrupt the operations of licensed marijuana businesses in California and other states where pot is legal.
The case also reignited allegations that federal law enforcement in Southern California abused forfeiture laws by seizing money and valuables from people when the government did not no evidence that they committed crimes.
The FBI and US Attorney’s Office in Los Angeles were forced to return tens of millions of dollars in cash and valuables seized by federal agents last March from hundreds of safe deposit boxes in Beverly Hills after the government failed to produce evidence to support its claims that the money and property were proceeds of crime.
Some of that money belonged to owners of state-licensed marijuana businesses.
Now Judge John W. Holcomb of the U.S. District Court in Riverside is weighing a request from Empyreal Logistics, the company whose armored cars were dumped in California and Kansas, for an emergency order to force the FBI and the sheriff’s department to stop shooting at his vehicles and seize cash without proof of illegal activity. The company is also trying to recover the money.
Empyreal says it follows U.S. Treasury Department guidelines on how to handle money from state-licensed marijuana companies without breaking federal law and verifies that the dispensaries it carries money from are in good standing with state regulators.
“This is one of the most egregious forfeiture cases we’ve ever seen,” said Dan Alban, senior counsel at the Institute for Justice, a libertarian group that fights nationwide forfeiture abuses. and is representing Empyreal in its lawsuit.
Alban called the cash grabs a “very cynical attempt to exploit the differences between federal and state laws” on marijuana.
Possession and sale of marijuana remain illegal under federal law, but 36 states have legalized medical cannabis, and 18 of them, including California, allow recreational pot.
During the 2020 presidential campaign, Joe Biden promised to let states “continue to make their own choices when it comes to legalization.” He also promised to decriminalize marijuana, but he took no action to fulfill that commitment.
A Justice Department spokesperson did not respond to repeated email questions about whether the Biden administration’s marijuana enforcement policies allow for marijuana seizures. cash from businesses licensed to sell cannabis.
Empyreal’s lawsuit describes their truck traffic stops as “highway thefts” by government agents seeking to bloat their budget with confiscated money.
He accuses the San Bernardino County Sheriff’s Department of violating a California law that protects financial institutions serving cannabis dispensaries. He also alleges that the FBI and the United States Drug Enforcement Administration violated a federal law that prohibits spending government money to interfere with medical marijuana businesses in states where they are legal. Empyreal says seven of the eight state-licensed dispensaries whose money was taken in San Bernardino County were licensed to sell medical marijuana.
The sheriff’s department and federal authorities deny wrongdoing, saying Empyreal is seeking a court injunction that would improperly hinder active criminal investigations into suspected money laundering and illegal drug sales.
Federal prosecutions for marijuana-related crimes have been rare in California since 2013, when a memo from the then-assistant attorney. General James M. Cole has advised US attorneys in states that have legalized the drug to bypass all but the most serious cases, such as those involving violent gangs or cartels.
The Trump administration overturned Cole’s memo, but federal prosecutors in California are still reluctant to bring marijuana cases before juries accustomed to large-scale pot smoking.
Black market marijuana — untaxed, unaffected by environmental rules, and cheaper than legal cannabis — has continued to thrive in the five years since recreational pot was legalized in California, and the San Bernardino County Sheriff, Shannon Dicus, cracked down on illegal farming in the high desert.
In the five months since the launch of Operation Hammer Strike, MPs said they seized more than 400,000 cannabis plants and arrested 527 suspects.
In response to the armored car lawsuit, Dicus released a statement claiming that more than 80% of marijuana sold at licensed dispensaries is grown illegally, but he offered no evidence that any of the eight companies whose deputies cash was seized from Empyreal’s vans were selling cannabis on the black market.
“My assistants are professional and I’m confident we’ll prevail,” Dicus said.
Banks’ reluctance to do business with marijuana dispensaries has forced many to operate entirely with cash. But since 2014, when the government’s Financial Crimes Enforcement Network issued guidelines on how to take deposits from state-licensed dispensaries without breaking federal law, more than 700 banks and credit unions nationwide have begun accepting their money.
Empyreal, a Pennsylvania company that hauls cash for dispensaries, convenience stores and other customers in 28 states, relies on banks and credit unions to do federally mandated due diligence on marijuana outfits whose money she carries, said Deirdra O’Gorman, chief executive of Empyreal. . The company checks state licensing records to verify compliance, she said.
The first sign of trouble for Empyreal came on May 17, when a Dickinson County, Kansas sheriff’s deputy pulled over one of its I-70 pickup truck drivers for an alleged traffic code violation. road and questioned her.
She told the deputy that she was about to collect money from medical pot dispensaries in Kansas City, Missouri, then planned to drive the money back across Kansas the next morning to Deposit it with a Colorado credit union, according to the DEA. . Medical marijuana is legal in Missouri but not in Kansas.
The next morning, the DEA placed the driver under surveillance as she made her stops in Kansas City. On the way back through Kansas, the same sheriff’s deputy pulled her over again on I-70. This time, the deputy seized more than $165,000 in cash that the driver had collected from five Missouri state-licensed clinics.
The DEA and Kansas US Attorney’s Office are trying to confiscate the money, saying it is tied to unspecified federal drug and money laundering offenses by anonymous individuals.
In the Barstow case, sheriff’s deputies said they stopped the armored car on Nov. 16 after they allegedly saw the driver tailgating. The driver and his supervisors, who spoke to a deputy by phone during the stop, made ‘inconsistent statements’, raising suspicions that the van was carrying ‘illicit proceeds from illegal drug sales’, the Sheriff Sgt. . said Alex Naoum in a statement to the court.
The deputy had a state Superior Court judge sign a search warrant authorizing the seizure of currency, electronics and other evidence of illegal transportation of “marijuana products.”
On December 9, deputies arrested the same driver in Rancho Cucamonga, this time for allegedly changing lanes without signaling and “driving too fast for conditions.” The FBI says suspicions of money laundering were raised during the stop, in part because the driver was carrying a document instructing him never to say ‘cannabis’ or ‘marijuana’ if stopped by officers law enforcement, and never to identify Empyreal customers.
A drug detection dog, “K9 Eros”, alerted deputies to the smell of narcotics near the open driver’s door, Naoum said.
Empyreal’s lawsuit says video footage from the van shows K9 Eros was “barely interested in the vehicle.” With mixed success, deputies attempted to cover the van’s cameras, he says, but an audio recording captured them counting the $350,000 in cash and expressing disappointment it was less than half the drive to Barstow.
“That’s it?” one of them asked the deputy who had seized the money in Barstow. “You have set the bar too high.”
One of the deputies said he expected to find “a million or two”, and another replied: “At least we got over a million”.
No tickets were issued to any of Empyreal’s drivers.