Civil Asset Forfeiture

Judge Orders San Diego D.A. to Return $100K it Seized from Family of Marijuana Business Owner

The San Diego D.A. seized this family's bank accounts, accused them of money laundering, and kept their cash for 15 months without charging them with a crime.


James Slatic and family // Institute for Justice

James Slatic was never charge with a crime, but it took 15 months and a twisting legal battle before three different judges for him to get back the more than $100,000 the San Diego District Attorney's Office seized from him and his family—including his daughters' college savings accounts.

On Friday afternoon, a California superior court judge ordered the San Diego District Attorney's Office to return more than $100,000 that it seized from the Slatic family following a police raid last January on James Slatics' medical marijuana company.

"It is about time," Slatic said in a statement through the Institute for Justice, a nonprofit libertarian law firm that was involved in his case. "We did nothing wrong. My business operated openly and legally for more than two years; we paid taxes and had a retirement program for our 35 employees. No one broke any laws but the District Attorney swooped in and took everything from me and my family, even though they had no connection to my business. Our lives were turned upside down. It felt like we had been robbed—by the police."

Police seized the Slatics' money using civil asset forfeiture, a practice that allows police to seize property suspected of being connected to criminal activity. Under civil asset forfeiture laws, law enforcement does not have to convict or even charge property owners with a crime to seize their cash, cars, and even houses.

I wrote about Slatic's case last November:

James Slatic, a California medical marijuana business owner, found out all his family's bank accounts had been seized by the government one day in January [2016] when his 19-year-old daughter tried to buy lunch at the San Jose State University cafeteria and her card was declined.

Slatic's wife tried to transfer money to their daughter, figuring she had simply overdrawn her account, as teenagers are wont to do, but her account wouldn't work, either. What the Slatics soon learned was the San Diego police had frozen all of their bank accounts: $55,258 from Slatic's personal checking and savings account; $34,175 from his wife Annette's account; and a combined $11,260 from the savings accounts of their two teenage daughters, Penny and Lily […]

The trouble for James Slatic began five days before his family's accounts were frozen, when around 30 San Diego police officers and DEA agents raided Slatic's medical marijuana business, Med-West Distribution, and seized nearly $325,000 in cash from a safe.

Slatic says he worked with the city to obtain all the necessary permits for his business, which refined marijuana oils for use in vaporizers and topical ointments. He is also politically involved in California's marijuana regulations and served on the boards of the Marijuana Policy Project and the California Cannabis Industry Association.

"I had heard of [asset forfeiture] before but naively thought it was for people who don't pay their taxes or some other tawdry thing, not people who create jobs and pay taxes and are involved in the political process," Slatic says. "I didn't consider myself to be a potential target, but I was wrong."

The San Diego D.A. fought Slatic's efforts to get his family's money back, saying a potential criminal case against Slatic was still under review. However, those charges never materialized against him or any employees of Med-West. All the while, the Slatics' money sat in the D.A.'s bank account for months. The D.A. eventually dropped its forfeiture case after missing a key deadline, but it switched its legal argument, claiming the funds were evidence in a money laundering investigation. The D.A. never ultimately pursued that case, either.

A judge finally had enough and ordered the money returned on Friday afternoon.

"[The] money that [the] People are holding does not appear to have any evidentiary value on its own, and it cannot be declared contraband without due process," the judge wrote. "The People's investigations have been on-going since January 2016 and there is no indication from the People that criminal charges are going to be filed in this case in the near future. The People cannot hold on to [the Slatics'] money indefinitely without having filed any charges against any of them at the present time."

In a statement to Reason, a spokesperson for the San Diego District Attorney's Office said it is reviewing its options, including a possible appeal.

"The investigation remains under review for potential criminal charges, therefore the District Attorney's Office is not able to discuss the facts, the status of that review or any evidence related to it," the spokesperson said. "The funds ordered returned by a civil judge last week were previously found by a criminal judge to be tainted by criminal conduct, and we are reviewing the court transcript from the demurrer hearing in March to explore further options. This latest ruling in civil court will not impact our ongoing review of criminal charges or the separate petition to forfeit the more than $324,000 in cash found at the hash oil laboratory."

California passed a new law last year requiring police to obtain a criminal conviction before they can seize assets under $40,000.

In a statement, Institute for Justice lawyer Wesley Hottot said the case is an example of the perverse profit incentives that drive civil asset forfeiture, and why the practice should be reformed.

"It shouldn't take a team of lawyers and 15 months of legal battles for an innocent family to get their money back from the government," Hottot said. "This case was never about public safety; it was about policing for profit. The Slatics' ordeal illustrates why the government should not have the power to take people's property without charging anyone with a crime."