Empyreal Logistics, a Pennsylvania-based company that transports cash from state-licensed marijuana businesses, has reached a settlement with the San Bernardino County, California, Sheriff’s Department, which had seized more than $1 million from Empyreal’s armored cars. The Justice Department, which was holding the money pending federal forfeiture, agreed to return all of it last month. According to a joint statement that Empyreal and the sheriff’s department issued on Friday, “both parties understand that each [was] acting in good faith when the stops were conducted and have come to an understanding that will enable both sides to move forward amicably.”
Empyreal, represented by the Institute for Justice, sued Sheriff Shannon Dicus, Attorney General Merrick Garland, and other officials in January, arguing that Dicus had exceeded his legal authority and that the Justice Department was flouting a congressional spending rider barring interference with state medical marijuana programs. Empyreal dropped the federal defendants from its lawsuit after the money was returned. Now the company plans to resume operations in San Bernardino County, and the sheriff’s department concedes that Empyreal, far from being implicated in criminal activity, “is part of the solution to help with financial transparency.”
Dicus’ deputies stopped Empyreal’s vans on three occasions in November, December, and January, making off with a total of $1.1 million. The joint statement avers that the deputies “are not highway robbers as previously reported in the media.” But that remains a fair characterization, since the businesses whose proceeds the deputies stole and Empyreal itself were operating in compliance with state law.
Money earned by state-licensed marijuana businesses is not subject to forfeiture under California law. Dicus therefore transferred the loot to the FBI, seeking federal “adoption” of the seizures, which would have allowed his department to claim up to 80 percent of the money under the Justice Department’s “equitable sharing” program. That adoption fell through once the department agreed to give the money back.
Dicus had described Empyreal’s lawsuit as “no more than a special-interest crusade and a blatant attempt to interfere with ongoing local criminal investigations.” He did not elaborate on the nature of those “investigations” or explain why they implicated Empyreal’s clients.
Now Dicus has changed his tune, saying his department “will continue its mission to fight illegal marijuana grows and criminal enterprises through its Narcotics Division” while Empyreal “will continue operating in San Bernardino County, working with law enforcement in the area for the benefit of citizens and local business owners.” The joint statement says Dicus “supported” the return of the money his deputies took, which raises the question of why they took it to begin with.
According to the complaint that the Institute for Justice filed in the U.S District Court for the Central District of California on January 14, Sheriff’s Deputy Jonathan
Franco stopped an Empyreal van on November 16, supposedly because it was following a tractor trailer too closely. The van was carrying about $700,000 from four state-licensed marijuana businesses, three of which held medical cannabis licenses.
The driver explained what he was doing and referred Franco to his supervisors, who “explained to Deputy Franco the legitimacy of the business, where the cash was coming from and where it was going, the identity and licensure of the companies whose cash was being transported, and offered GPS data to confirm this information.” Franco and his colleagues took the money anyway. “Despite knowing the names of the companies whose proceeds they were seizing based on the labeling of the bags containing the cash,” the complaint says, “the deputies made no effort to inquire about whether any of those companies were state-licensed medical cannabis businesses, state-licensed adult use cannabis businesses, or otherwise ‘legit.'”
On December 9, the same deputies pulled over the same vehicle, driven by the same employee, ostensibly because he “slightly exceeded the speed limit and prematurely activated his turn signal.” This time the van was carrying about $350,000 from four businesses with medical marijuana licenses. The complaint says “the driver offered to call the CEO of Empyreal, who could explain the legality of Empyreal’s business to the deputies, but they declined.”
As in the previous stop, no citation was issued. According to the lawsuit, “the driver’s operation of the Empyreal vehicle was completely lawful.” The company alleged that “the deputies had planned the stop in advance and would have pulled over the driver and the Empyreal vehicle regardless of how carefully or lawfully it was driven.”
The deputies claimed a drug-sniffing dog alerted to the van, which Empyreal says also is not true: “Video footage from the vehicle does not show the dog alert on the vehicle. Instead, it shows the dog is barely interested in the vehicle.”
The deputies, who were audibly excited about the $700,000 haul, were somewhat disappointed by the relatively small size of the second seizure. Based on an audio recording by the van’s security system, the lawsuit describes this exchange: “One of the deputies said, ‘That’s it?’ and chuckled. He then said: ‘You set the bar too high.’ When another deputy remarked that he thought they’d get ‘a million or two,’ the [first] deputy responded, ‘At least we got over a million'”—apparently referring to the combined take from the two seizures.
After they pulled over an Empyreal van on January 6, Dicus’ deputies were even more disappointed. The company had stopped transporting marijuana money through San Bernardino County in light of the threat signaled by the two previous armored-car heists. Because the van was carrying rolled coins that had nothing to do with the cannabis industry, there was nothing to seize this time. And once again, no citation was issued. “When the Empyreal driver asked a deputy why Empyreal vehicles were being stopped so frequently,” the complaint says, “the deputy told him it was ‘political’ but declined to elaborate.”
Whether that response alluded to Dicus’ own motive or a federal agenda, it certainly does not sound like a reason that would pass muster under the Fourth Amendment. Empyreal argued that “pretextual traffic stops” aimed at supplementing police budgets rather than enforcing state law cannot qualify as “reasonable.”
Given these details, it is hard to see how Dicus’ deputies “were acting in good faith.” They took the cash without regard to the legality of its sources or a statute that explicitly says Empyreal was committing no crime under state law, and they aimed to keep the money for the benefit of their own department. If that does not qualify as highway robbery, I’m not sure what would.
“Empyreal, our financial institution clients and their state-licensed cannabis customers operate within the law, which is why we chose to bring a legal challenge to the seizures in San Bernardino County,” says Empyreal CEO Deirdra O’Gorman. “Now that the funds have been returned and after meeting with the Sheriff, we are confident that we can continue serving state-legal businesses without future disruptions.”