By Mark Gutglueck
The U.S. Department of Justice last week agreed to return $1,062,176.36 in revenue from several licensed marijuana-related commercial business operating in San Bernardino County seized from the Empyreal Logistics armored transport company in what federal officials now concede was a “rogue” operation run out of the San Bernardino County Sheriff’s Department.
Despite federal law enforcement officials considering marijuana an illegal Schedule I drug indistinguishable from heroin and cocaine and the willingness of federal prosecutors to use civil forfeiture statutes to confiscate the proceeds from the sale of marijuana in states that have legalized its use for medicinal or intoxicative purposes, the action and statements of San Bernardino County Deputy Sheriff Jonathan Franco and another publicly unidentified deputy caught on an audio recording so unnerved federal prosecutors that they have elected against participating with the sheriff’s department in a cooperative effort to dissuade cannabis entrepreneurs from plying their trade in San Bernardino County.
Previously, the U.S. Attorney’s Office, the FBI, the Drug Enforcement Agency and the San Bernardino County Sheriff’s Department have cooperated in applying the U.S. Department of Justice’s authority to confiscate money generated by the drug trade. According to the U.S. Justice Department, through forfeiture statues that allow the proceeds from illegal activity to be seized by the government by means of the equitable sharing program, the San Bernardino County Sheriff’s Department’s participation in the Inland Regional Narcotics Enforcement Team, which is dedicated to stemming the trafficking of drugs in Southern California, enables it to receive up to 80 percent of the proceeds recovered from civil forfeitures. The Inland Regional Narcotics Enforcement Team, which is known by its acronym IRNET, has received slightly less than $18 million in equitable sharing funds since 2016.
The sheriff’s department had sought to inveigle the U.S. Justice Department into using the seizure authority under the auspices of the U.S. Department of Justice’s equitable sharing program relating to civil forfeitures against Empyreal Logistics. Based upon a multitude of factors, administrators within the U.S. Justice Department in Riverside and Los Angeles concluded that it would be best to distance itself from the San Bernardino County Sheriff’s Department and IRNET, which is spearheaded by the sheriff’s department and involves or coordinates with several federal and state investigative agencies including the Riverside County Sheriff’s Department, the Ontario Police Department, the Riverside Police Department, the Bureau of Narcotic Enforcement, the federal Drug Enforcement Agency and the FBI.
Federal prosecutors grew concerned that the motives of elements within the sheriff’s department in making the monetary seizures were tainted, and might compromise the reputation and effectiveness of other anti-drug task forces with which IRNET networks, such as Southern California Drug Task Force, also known as HIDTA Group 50; the California Multi-Jurisdiction Methamphetamine Enforcement Team, known by its acronym CALMMET; the Regional Methamphetamine Task Force, known by its acronym RMTF; and a Drug Enforcement Agency task force based in Riverside.
The misadventure involving the $1,062,176.36 seized began on November 16, 2021 when Deputy Franco made a freeway traffic stop of an Empyreal Logistics vehicle on the I-15 Freeway near Barstow for what Franco said was “following too closely behind a tractor-trailer.” Empyreal Logistics carries quantities of money for its clients, usually between a place of business involved in cash transactions and banks. According to Franco, when he learned through his exchange with the operator of the armored car that the vehicle was carrying the proceeds from cannabis-related commercial enterprises, he initiated action that led to the department’s seizure of the $712,176.36 that was at that point being transported. The vehicle’s driver used his company-issued cell phone to put Franco in communication with Empyreal Logistics corporate officials who identified the businesses the company was transporting money for and those companies’ state licensure and business permits, together with global position data for the vehicle that would allow the deputies to verify the legitimacy of the operation. That telephonic exchange, however, did not dissuade Franco and his department colleagues from proceeding with the seizure of the money. Based upon the exchange the deputies had with the driver, they obtained a warrant to confiscate the money.
Twenty-three days later, on December 9, 2021, Franco made another stop of the same vehicle while it was traveling on the freeway, this time, the deputy said, because the driver had “slightly exceeded the speed limit and prematurely activated his turn signal.”
“You don’t remember me, do you?” Franco said, in greeting the driver on December 9. “I remember you.”
A crew of other deputies accompanied Franco on that date. One of them told the driver they were going to take the money he was carrying and that they had a right to it because it was the ill-gotten gains of the drug trade. Inside the armored van, the deputies tallied the money, which totaled approximately $350,000. While the money was being counted, one of the deputies remarked, rather dejectedly, “This is, uh, more small,” a reference to the amount of money on board the vehicle being roughly half of what had been seized on November 16. Upon completing the counting of the money, one of the deputies said he had believed the haul would be “a million or two.” One of his colleagues replied, “At least we got over a million,” referring to the combined totals of the November 16 and December 9 traffic stops.
The deputies made an effort to obscure what they were doing, covering the vehicle’s video cameras, and confiscating the driver’s personal and company phone/communication devices.
Unbeknownst to the deputies, there was a running audio recording system inside the vehicle.
There is evidence to suggest that the December 9 traffic stop was planned ahead of time. That clashes with Franco’s report. No warrant was obtained for the December 9 seizure.
Initially, the FBI and the U.S. Justice Department expressed enthusiasm about engaging in an equitable sharing arrangement with the sheriff’s department for the civil forfeiture of the money taken from Empyreal.
On January 6, 2022 the sheriff’s department made a third traffic stop of an Empyreal armored vehicle. It turned out, however, that the money carried that time consisted of rolled coins from a non-cannabis-related business. That money, a far lesser amount than was present at the previous two traffic stops, was not seized. During the January 6 stop, one of the deputies acknowledged to the driver that Empyreal was being targeted for enforcement action by the sheriff’s department for “political” reasons.
On January 14, 2022 Empyreal, represented by the Arlington, Virginia-based Institute for Justice, sued the U.S. Government; the U.S. Department of Justice; Attorney General Merrick Garland; the FBI; FBI Director Christopher Wray; Kristi Koons Johnson, the special agent in charge of the Los Angeles Office of the FBI; Anne Milgram, the administrator of the Drug Enforcement Agency; and San Bernardino County Sheriff Shannon Dicus. The suit was filed in U.S. District Court in Riverside, and sought a declaration from the court that Dicus and his department and the federal defendants had had acted beyond the scope of their power and had violated Empyreal’s 14th Amendment rights and to prevent the defendants from doing the same in the future as well as to have the sheriff’s department and the federal defendants cover Empyreal’s costs arising from the seizures, which include the reimbursements they made to their clients of the money seized and the costs Empyreal had sustained as a result of the seizures and filing suit. The case was assigned to Judge John W. Holcomb. On March 16, the Institute For Justice and the Roseville-based law firm of Koeller, Nebeker, Carlson & Haluck filed a first amended complaint, redrafting the allegations and pleadings in the January 11 suit.
In defending the action of his department, Sheriff Dicus asserted “80 percent of marijuana at dispensaries was grown illegally. I am confident when these claims make it to court, they will collide with the facts. My deputies are professional, and I am confident we will prevail.”
Pressure mounted on the FBI in the aftermath of the January 14 legal filing when, according to an individual knowledgeable about the Los Angeles FBI office’s inner workings, someone “dimed out” the San Bernardino County Sheriff’s Department, that is, informed agents about certain irregularities with regard to the department’s actions pertaining to cannabis-related businesses in San Bernardino County. Those irregularities involve a protection racket that has allowed marijuana entrepreneurs connected to several of the county’s politicians – including ones based in Adelanto and Needles – to function in the open while the sheriff’s department has targeted its competitors, among which are Empyreal’s clients. The FBI has information suggesting the sheriff’s department took action against Empyreal and Empyreal’s clients because those clients were “interfering” with businesses kicking back a percentage of its marijuana sales proceeds to politicians and public officials connected to the sheriff’s department. FBI agents were also confronted with demonstrably false statements from members of the San Bernardino County Sheriff’s Department, members of which did not realize Empyreal had audio recordings of deputies’ verbal exchanges while they were in and around the armored vehicles the department had stopped.
The U.S. Department of Justice on April 13 said it will return approximately $1.1 million in money law enforcement officers had seized from Empyreal.
As a result of the settlement with the U.S. Department of Justice, Empyreal Logistics has agreed to dismiss the defendants from its federal lawsuit. Empyreal’s legal claims in that action against the San Bernardino County Sheriff’s Department, which seeks the discontinuation of what the Institute for Justice and the law firm of Koeller, Nebeker, Carlson & Haluck characterize as “highway robbery” targeting Empyreal, remain before the court.
Justice Department Leaves Sheriff Dicus On His Own To Contest ‘Highway Robbery’ Allegations In His Deputies’ Seizure Of Money From Armored Vans
By Mark Gutglueck