The federal government has agreed to return more than $1 million that California sheriff's deputies stole from an armored-car company that serves state-licensed marijuana businesses. The partial settlement of a lawsuit that the Institute for Justice filed on behalf of the Pennsylvania-based company, Empyreal Logistics, embodies a notable irony: The Justice Department is returning money earned by businesses that federal law still treats as criminal enterprises, thereby defeating San Bernardino County Sheriff Shannon Dicus' attempt to evade California law, which does not allow forfeiture of the money that his deputies seized because it came from businesses that the state views as perfectly legitimate.
San Bernardino County sheriff's deputies stopped Empyreal vans three times in November, December, and January, making off with about $700,000 the first time and about $350,000 the second time. During the third stop, they came away empty-handed because the van was carrying rolls of coins that had nothing to do with the cannabis industry. Since the marijuana businesses whose proceeds the deputies seized are legal in California, Dicus handed the loot over to the FBI, hoping to ultimately keep up to 80 percent of the money through federal forfeiture under the Justice Department's "equitable sharing" program.
That "adoption" fell through after Empyreal sued the Justice Department, the FBI, and the Drug Enforcement Administration, arguing that federal forfeiture of the money would violate a congressional spending rider that bars the Justice Department from interfering with state medical marijuana programs. The company said much of the money came from medical marijuana dispensaries.
"Empyreal was operating legally under California law, but with current federal civil forfeiture laws, even compliant businesses can be targeted," says Institute for Justice senior attorney Dan Alban. "Civil forfeiture enabled law enforcement to seize over a million dollars in legal business proceeds and threaten to keep it. Returning this money is the right thing to do, and we're pleased to have helped Empyreal secure this outcome."
As part of the settlement, Empyreal dropped the federal defendants from its lawsuit. It is still suing Dicus, and the settlement does not address a separate seizure of $165,000 by Kansas sheriff's deputies, who targeted an Empyreal van carrying money from state-licensed medical marijuana dispensaries in Kansas City, Missouri, last May.
Dicus has described Empyreal's lawsuit as "no more than a special-interest crusade and a blatant attempt to interfere with ongoing local criminal investigations." He has not elaborated on the nature of those "investigations" or explained why they implicate Empyreal's clients, which the company says are all operating in accordance with California law.
Empyreal argues that Dicus exceeded his lawful authority by robbing its vans. It notes that a California statute enacted in 2020 explicitly says a company that transports money from state-licensed marijuana businesses "does not commit a crime under any California law."
Because Empyreal compensated its clients for the money that Dicus' deputies stole in their armored-car heists, it was out $1.1 million. The company also complained that the risk of further robberies had forced it to route vans around San Bernardino County and suspend plans for a "vault and currency processing facility" there, a project in which it had already invested $100,000, plus $21,000 a month in rent and utilities for the building.
"Empyreal has always viewed ourselves as a partner to financial institutions and law enforcement," Empyreal CEO Deirdra O'Gorman says. "Our service increases transparency and makes communities safer. Empyreal is committed to continuing our mission of working with financial institutions and their state-legal business customers."
In January, U.S. District Judge John Holcomb declined to issue a temporary restraining order against Dicus, saying the evidence at that point was not sufficient to meet the "high burden" for a TRO. But he added that Empyreal "may very well have an excellent case on the merits" and emphasized that his ruling "does not now address whether Empyreal's rights were violated, nor whether Defendants violated any laws."