The U.S. Department of Justice (DOJ) agreed April 13 to return that money to Denver-based Empyreal Logistics, the cash management company whose vehicles were targeted Nov. 16 and Dec. 9 in San Bernardino, according to an Institute for Justice press release.
Providing cash logistics solutions in 28 states, Empyreal transports bank deposits for state-licensed medical cannabis businesses as a financial infrastructure for those businesses. Large sums of cash are often related to the lack of safe banking for the cannabis industry.
As a result of the settlement, Empyreal Logistics will drop its federal lawsuit against the DOJ, Drug Enforcement Administration (DEA) and FBI that alleged the government entities acted beyond their legal authority, which plaintiffs claimed is limited by the Rohrabacher-Farr amendment.
Named after former U.S. Reps. Dana Rohrabacher and Sam Farr, both of California, the amendment was an appropriations rider that prohibits the DOJ from spending funds to interfere with the implementation of state medical cannabis laws. It became law in December 2014 after six previously failed attempts.
The Empyreal lawsuit also alleged that the San Bernardino County Sheriff and federal law enforcement agencies violated Fourth, Fifth and Fourteenth amendments of the U.S. Constitution.
“Empyreal was operating legally under California law, but with current federal civil forfeiture laws, even compliant businesses can be targeted,” Dan Alban, a senior attorney for the Virginia-based Institute for Justice, which represents Empyreal, said in a statement. “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.”
Empyreal CEO Deirdra O’Gorman said in the release the company remains committed to providing its fintech and armored car services to state-legal businesses.
“Empyreal has always viewed ourselves as a partner to financial institutions and law enforcement,” she said. “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 exchange for the return of $1.1 million, Empyreal will dismiss its case against the federal government agencies over the seizures. However, the April 13 settlement does not include the San Bernardino County Sheriff.
While the confiscated funds were transferred to federal law enforcement for civil forfeiture proceedings (but now are being returned), those seizures were a result of “policing for profit” by the county sheriff’s deputies, the plaintiffs alleged.
Since May 2021, Empyreal’s vehicles have been stopped and searched by sheriff’s deputies five times, including three times in San Bernardino County, two of which resulted in the seizure of that roughly $1.1 million of state-legal proceeds, according to the company.
“Each time deputies seized these legal proceeds, they handed them over to federal agencies to take through federal forfeiture procedures,” Institute for Justice’s litigation team, which also includes attorney Kirby Thomas West, claimed in the lawsuit. “If successfully forfeited, up to 80% of the proceeds taken through the federal ‘equitable sharing’ program would then return to local sheriffs to spend as they please.”
As a result, Empyreal filed a lawsuit against the San Bernardino County Sheriff for allegedly “seizing property without the legal authority to do so.”
“Nowhere in [the California Government Code] is a sheriff authorized to search and seize property without any evidence of criminal activity,” the plaintiffs claimed in the lawsuit. “Here, the sheriff’s office not only had no indication of any criminal activity but in fact had ample evidence that Empyreal was engaged in a business expressly endorsed as legal by California statute.”
The plaintiffs also claimed the ongoing stops, searches and seizures are profit-motivated. Otherwise, sheriff’s deputies would investigate, raid, make arrests and shut down operations from which the proceeds came from rather than “merely seizing their proceeds and trying to keep it for themselves,” the plaintiffs claimed.
In a separate civil forfeiture action, Empyreal vehicles have also been targeted twice in Kansas since May 2021, including one traffic stop by a sheriff’s deputy in Dickinson County that resulted in roughly $165,600 in cash being seized. That money was being transported from medical cannabis dispensaries in Kansas City, Mo., to a credit union in Colorado, NPR reported.
Empyreal is represented by separate counsel in that forfeiture action.
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