Alleging that the San Diego district attorney's office missed a deadline to file a formal forfeiture petition, the attorney for a marijuana entrepreneur whose business assets, along with $100,000 of his family's money, were seized in a civil asset forfeiture case plans to file a motion today initiating the process to demand that the family's money be returned.
On January 28, 2016, a joint drug task force raided Med-West, a medical marijuana CO2 oil manufacturer founded by James Slatic. The police seized the company's equipment, products, and more than $300,000 in cash found at the warehouse after an anonymous source said the company was using illegal solvents to extract THC from marijuana, according to the search warrant. On February 2, 2016, police, with another search warrant signed by a judge, froze the personal bank accounts belonging to Slatic, his wife, and two stepdaughters. Slatic has not been charged with a crime, but his company's money and his family's money have been seized because the state alleges the funds are proceeds of an "illegal marijuana extraction" business.
In California Superior Court on November 15, 2016, deputy district attorney Jorge Del Portillo told judge Jay Bloom that the state had until February 2017 to file a petition of forfeiture against the money in bank accounts belonging to James Slatic and his family because the one-year statute of limitations on filing that petition began running when the family's funds were frozen by a February 2, 2016, search warrant. But this week, a spokesperson for the San Diego district attorney's office said Del Portillo was mistaken about the statute of limitations deadline and the actual deadline is in June.
Tanya Sierra, the spokesperson, says the yearlong statue of limitations started on June 7, 2016, because that is the day Judge Bloom signed the seizure orders to transfer the money from the Slatics' frozen bank accounts to the DA--months after judge Frederick Maguire signed the search warrants to freeze the family's bank accounts on February 2, 2016.
Wesley Hottot, an attorney at the Institute for Justice who is representing the Slatic family's money, says according to California Health and Safety Code 11488.4, which the DA's office used to seize the Slatic family's assets, the statute of limitations for the government to bring a forfeiture action against a person's property is within one year of seizure, or within one year of some "other process against the property, whichever is earlier."
"The freezing orders, which they obtained from a judge in February 2016, were considered 'other process' against the property," says Hottot. "Rather than acknowledging this and returning the money, the DA's office is forcing us to litigate for the money's return."
Hottot says he is filing a motion on Friday to begin the legal process of demanding that the money be returned because of the DA's failure to file a forfeiture motion within the one-year period starting February 2, 2016.
But Hottot is not going to have an easy time of it. Over the past year, the Slatics have lost every court decision in their efforts to get the money returned. The state also can use exceptions built into asset forfeiture law, including "good cause" to extend deadlines. Most important, the district attorney strongly believes the state did not miss the deadline.
The DA's office says that according to its interpretation of California's Health and Safety Code 11488.4, it still has until June 2017 to file an action against Slatic's property.
"We believe it is the seizure that starts the [statute of limitations] clock and not the freeze order," says Sierra. "We do not consider [a search warrant to freeze a bank account] a 'process' within the meaning of asset forfeiture laws."
Days after Hottot sent an email on February 2, 2017, to deputy DA Del Portillo asking if the DA's office planned to return the family's money after missing the statute of limitations, Del Portillo said no and the district attorney's office amended its petition of forfeiture against the $300,000 in cash found at Med-West to include the family's $100,000 seized from the bank. The petition against the cash found at Slatic's business was originally filed in March 2016.
"I don't think they would've done that if they didn't have concerns about how they ran passed the limitations period," says Hottot.
Attorney Michael Cindrich, a former prosecutor with the San Diego DA's office before becoming a defense attorney, says his legal interpretation is that the California statute of limitations for civil asset forfeiture starts as soon as the individual is deprived of his or her property. Nicholas Moore, a San Diego criminal defense lawyer, says a search warrant to freeze a person's bank account, in most cases, would be a formal action that begins the running of the statutory time limit.
The Department of Justice's Assets Forfeiture Fund generated $93.7 million in revenue in 1986 and by 2014 the fund generated $4.5 billion.
Last week, during a meeting with county sheriffs from around the country, President Donald Trump said he "encourages" the use of asset forfeiture. Hottot says with Jeff Sessions as U.S. attorney general, who is known to support civil asset forfeiture, more marijuana businesses could suffer from forfeiture actions.