The state must pay back more than $700,000 to a money services business who had cash seized following a traffic stop, the Indiana Court of Appeals has ruled, finding “no evidence whatsoever that a crime was committed.”
Olympic Financial Group is a money services business as defined by the Bank Secrecy Act of the Financial Crimes Enforcement Network. It physically transports currency across the U.S. to the location of its bank to serve U.S. citizens, immigrants and residents by sending money to disadvantaged and vulnerable families, friends and associates located in East African countries.
In order to transport the money to its Minneapolis headquarters, Olympic hires couriers to deliver funds. Two such couriers were pulled over as part of a routine traffic stop while on a route from Vermont to Minneapolis to deliver cash to cover wire transfers, according to the Friday opinion in Olympic Financial Group, Inc. v. State of Indiana, 21A-CR-1017.
Mohamed Ali and Daud Weydow, both legal Somali immigrants with limited English skills, were en route to deliver the money in April 2021 when they were stopped in Jasper County by Lake County Detective Rex Ibarra. After asking where they were headed and clearing their driver’s licenses, Ibarra was set to let the men go with a warning.
But when asked if they had large amounts of money in the vehicle, the driver indicated “no,” causing the detective to suspect criminal activity. A consented search revealed a suitcase in the vehicle containing bags carrying $709,880 in U.S. currency, but no illegal substances. However, a test later conducted on the money “resulted in a positive manner for the presence of illegal narcotics residue.”
The cash was seized and the drivers were free to go, but Olympic sent the state a “Verified Claim to and Demand for Return of Property” containing a description of Olympic’s business, its money transmitters’ licenses for Vermont and Minnesota and its MSB registration. A written notice authorizing the couriers to carry and transport the money was also included. It also attested it was “not aware of, not involved in, nor facilitates criminal activity or violations of the law to sustain the confiscation of its Property and/or any forfeiture.”
But the state submitted a “Verified Petition for a Turnover Order” seeking for the money to be transferred to the federal government for forfeiture proceedings. It did not mention Olympic or that a third party was claiming ownership of the money in the petition.
The Jasper Superior Court granted the petition without holding a hearing and subsequently denied Olympic’s motion to reconsider. But the Indiana Court of Appeals disagreed with that ruling, finding that under the circumstances, the state failed to prove the cash was properly seized pursuant to Indiana Code Chapter 34-24-1.
“Therefore, it has failed to show that it is entitled to a turnover order under Indiana Code section 35-33-5-5(j), and the trial court erred by granting the State’s motion,” Judge James Kirsch wrote for the appellate court.
“However, Olympic’s money has been turned over to the federal government, which is now in possession of it, and it is unclear whether the money has yet been subject to forfeiture proceedings,” Kirsch continued. “Given the circumstances of this case, especially the fact that there is no evidence whatsoever that a crime was committed, we do not believe that it is fair to require Olympic to undertake the process of retrieving its money from the federal government.
“Therefore, as in (Lewis v. State, 125 N.E.3d 655 (Ind. Ct. App. 2019)), we reverse and remand with instructions that the State reimburse Olympic instanter, and the State may then try to recoup that money from the federal government.”
In a separate opinion, Judge Nancy Vaidik concurred with the majority’s reversal of the turnover order but not its reliance on the standard set forth in Lewis. Instead, she looked to Hodges v. State, 125 N.E.3d 578 (Ind. 2019).
“Hodges, not Lewis, sets forth the proper standard for the initial seizure of property under the forfeiture statutes: probable cause to believe there is a nexus between the property and certain criminal activity,” Vaidik wrote.
“That said, not even this lower standard was met in this case. For all the reasons laid out by the majority, I see no probable cause to believe the cash seized is related to criminal activity. Therefore, I join in the reversal of the turnover order,” she concluded.
Lastly, Vaidik agreed that the state should be required to immediately return the seized funds to Olympic, pointing out that Indiana turned the funds over to federal authorities before the time for appeal had run “at its own peril.”