Judge declines to stop seizures of marijuana cash

A federal judge refused Monday to issue an emergency order that would have blocked law enforcement agencies from continuing to seize money an armored car company transports for licensed marijuana dispensaries.

Judge John W. Holcomb of U.S. District Court in Riverside said he was not taking a position on allegations by the company, Empyreal Logistics, that the FBI and San Bernardino County Sheriff’s Department were breaking both federal and state law by stopping its vans and seizing the money inside.

But he castigated Empyreal’s lawyers for their legal tactics, saying they failed to meet the high burden of qualifying for a temporary restraining order.

“Empyreal may very well have an excellent case on the merits — the court respects Empyreal’s zeal and does not doubt its sincerity — but Empyreal’s counsel does their client no favors by cutting procedural corners and ignoring the court’s guidance,” Holcomb wrote in a 14-page ruling.

In traffic stops of Empyreal vans in November and December, sheriff’s deputies seized more than $1 million in cash and turned the money over to the FBI for forfeiture. The FBI says it suspects the money comes from illegal drug sales and money laundering, but it has revealed no evidence to support the claim and no one has been charged with any crime.

Empyreal says it only transports the cash of marijuana dispensaries if their state licenses to sell the drug are in good standing. Its lawsuit accuses law enforcement officers of stopping its vehicles and taking the money with no evidence of criminal wrongdoing.

The case has raised questions about whether the Justice Department under President Biden is intentionally interfering with licensed marijuana businesses in California and the other 35 states where pot is legal. Possession or sale of marijuana remains a federal crime.

Holcomb rejected the allegation that the FBI was breaking a federal law that bars the Justice Department from spending money in a way that interferes with medical marijuana businesses in states where they are legal. Citing Empyreal’s statement that most of its cannabis clients hold medical marijuana licenses, Holcomb said the company implied that some of them didn’t.

The judge also questioned whether there was enough evidence to allege that Sheriff Shannon Dicus “acted beyond the scope of his authority.”

“Put simply, there is not enough evidence at this time to suggest that Empyreal’s constitutional rights were violated,” Holcomb wrote, using bold and italics to emphasize the possibility of future findings to the contrary.

The judge refused to consider Empyreal’s late filing of court papers Thursday that accused sheriff’s deputies of misleading the state judge who approved a Nov. 16 search warrant for one of the company’s vans, saying the company had unfairly given law enforcement agencies no opportunity to reply.

Empyreal said in its late filing that a deputy’s apparent confusion over how the company operates led him to falsely tell the judge that it converts dispensaries’ cash into cryptocurrency. Empyreal alleged that the deputy also falsely told the judge that some of the pot stores whose $712,000 was in the van were unlicensed.

In addition, the warrant application stated that Empyreal lacked a marijuana business license, but the company said in the late filing that no license is required to carry cash from legal dispensaries to banks.

Holcomb’s order also faulted Empyreal for seeking an emergency order after he had already ruled that he would not handle the case on a rushed basis.

Empyreal lawyer Dan Alban of the libertarian Institute for Justice said the company would comply with the court’s order and pursue its lawsuit on a nonemergency timetable. A spokesperson for the U.S. attorney’s office in Los Angeles declined to comment. A spokesperson for the sheriff did not respond to a request for comment.