Drug Dealer May Sue U.S. Over Seized Funds Stolen by Agent

Wednesday, July 1, 2026

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Ninth Circuit:

Drug Dealer May Sue U.S. Over Seized Funds Stolen by Agent

Opinion Says Sovereign Immunity Does Not Bar Convict From Seeking Return of Cash That Was Pilfered After Search of Home as Waiver for Actions Seeking Return of ‘Property’ Applies, Drawing Dissent

By a MetNews Staff Writer

The Ninth U.S. Circuit Court of Appeals held yesterday that a convicted drug dealer may be entitled to recoup more than $218,000 from the U.S. that was seized during a search of his mother’s San Bernardino property and later pocketed by one of the FBI agents involved in the investigation, saying that a waiver of sovereign immunity applicable to actions seeking the return of “property” applies, drawing a dissent over whether cash qualifies under the section.

At issue is Federal Rule of Criminal Procedure, rule 41(g), which provides:

“A person aggrieved by an unlawful search and seizure of property or by the deprivation of property may move for the property’s return.”

Yesterday’s opinion, authored by Senior Circuit Judge Jay S. Bybee and joined in by Circuit Judge Danielle J. Forrest, acknowledges case law providing that a party is not entitled to monetary damages in compensation for property seized and later lost by the government. However, Bybee declared:

“Cannon seeks the return of the very thing to which he is entitled, namely ‘the property’ under Rule 41(g). In this case, that is the cash the government seized but did not pursue in forfeiture proceedings….The fact that Cannon seeks the return of cash does not make his claim one for money damages.”

Adding that the District Court judge erred in determining that the money need not be returned based on a finding that it was contraband in contradiction to jurisprudence providing that currency does not qualify, he said that summary judgment in favor of the government was wrongly granted.

Circuit Judge Kenneth K. Lee dissented, saying:

“The majority assumes that because money is fungible, Cannon is seeking a ‘return’ of his ‘property’ when he demands the government give him $218,200. But the fact that money may be fungible does not mean it is the same property. His ‘property’ of $218,200 in his safe is gone: The government no longer has it and cannot return it under Rule 41(g).”

Search of Residence

The question arose after FBI agents conducted a lawful search of Lionel Cannon’s residence in August 2014 based on evidence that he was trafficking narcotics in violation of federal law. During the inspection, $585,000 in cash was seized from a safe in Cannon’s bedroom.

Special Agent Scott Bowman of Moreno Valley pocketed $218,200 of the funds before they were placed into a cash-counting facility, resulting in an inventory listing the total amount seized from Cannon as $366,800. The FBI discovered the discrepancy, and Cannon confirmed that the total amount in the safe at the time of the search was $585,000.

Bowman pled guilty to theft charges in September 2016 and agreed to repay $136,462 to the federal government. The following April, Cannon entered into a plea deal in which he admitted to certain drug-trafficking charges and agreed to forfeit $366,800 of the money recovered from the safe.

In March 2018, a forfeiture order was issued reflecting that amount, and the government never initiated further proceedings regarding the missing $218,200. In December 2019, Cannon moved to recover the stolen cash under Rule 41(g).

Because no criminal proceedings were pending, District Court Judge Fernando Aenlle-Rocha of the Central District of California opted to treat the motion as a civil complaint and the government’s opposition as a motion for summary judgment. In December 2024, he denied Cannon’s request and granted judgment for the U.S., saying:

“Plaintiff has not raised sufficiently a genuine issue of fact by which a jury could conclude the portion of the money taken by [Special Agent] Bowman had been earned through lawful means and was ‘clean’ as a result, while the remaining $366,800 was tainted.”

Aenlle-Rocha did not address immunity in the order.

Two Issues

Saying that the case presents the two issues of whether sovereign immunity bars Cannon’s Rule 41(g) claim and, if not, whether the claimant is entitled to recover any cash seized during the search of his home, Bybee noted that the former topic may be raised at any time because it goes to the question of jurisdiction.

Turning to the question of how the rule is to be applied where “the government seizes, loses, but then recovers,” he noted that “the exact bills are never kept by the government” because, “[w]hen federal law enforcement seizes cash during a criminal investigation, federal regulations require that the cash be inventoried,” “deposited into the Seized Asset Deposit Fund,” and eventually transferred via electronic means to the U.S. Marshals Service.

Rejecting the government’s characterization of his request as one for money damages, he wrote:

“[T]hat the money the United States is recouping from Agent Bowman is not the same ‘physical currency’—that is, the exact same bills that were taken from Cannon’s safe—does not alter the result. Such a hyperformalistic approach misconstrues the nature of money.”

Commenting that “[t]his peculiar quality of money is why our law has long assessed and identified money by its amount, not by the physicality of bills,” he said:

“The relevant question then is not whether the bills Agent Bowman is remitting to the government have the same serial numbers as the ones from Cannon’s safe, but whether he is remitting the value or amount traceable to the money taken from Cannon’s safe. We think it clear that he is….[E]ven if not the exact bills Bowman stole, the money judgment represents precisely the property Bowman stole.”

Rebuttal of Presumption

Concluding that “sovereign immunity does not bar Cannon’s claim for the money the United States has or will recoup from Agent Bowman,” he remarked that “[w]e have recognized three ways the government can rebut a defendant’s presumptive entitlement to return of the property,” including by establishing that the assets are contraband or subject to forfeiture.

Saying that Aenlle-Rocha erred in finding the currency to be contraband, he added:

“[T]he additional $218,000 seized from the safe is not subject to forfeiture. At oral argument, the government conceded that it had not brought timely forfeiture proceedings for the missing cash and that no forfeiture proceedings could be brought because of the statute of limitations….The government cannot use Rule 41(g) to circumvent the statutory protections of forfeiture proceedings.”

Writing that “[t]he bare fact that Cannon had money in a safe—admittedly, a lot of money—is not proof that the money was obtained from entirely illegitimate and unlawful sources, and Cannon’s admission in his plea deal that some of the money was drug proceeds is not an admission that all of it was,” he declared:

“The government—not Cannon—bears the burden of demonstrating a legitimate basis for refusing to return the money; if it cannot, it must return Cannon’s property….On this record, it has not done so, and summary judgment was in error. We return the case to the district court for additional proceedings.”

Lee’s View

Lee wrote:

“Lionel Cannon—a drug dealer who lived with his mother—kept $585,000 in cash in a safe in his bedroom. Federal agents discovered that cache of money during a lawful search of his mother’s house, but FBI agent Scott Bowman secretly took $218,200 and reported finding only $366,800. Agent Bowman spent most of the stolen money on cars, a Vegas trip, and plastic surgery for his wife. He later pleaded guilty.”

Arguing that “[t]he property here, however, cannot be returned because the money has already been spent,” he asserted that “Cannon is essentially seeking money damages from the United States—even though Rule 41(g) does not waive immunity to allow it.” He continued:

“Contrary to the majority, I would join the Second, Fifth, Seventh, and Tenth Circuits, which have held that the government has not waived sovereign immunity for claims for money no longer in the government’s possession.”

In a footnote, he added:

“[E]ven if we addressed the merits of Cannon’s claim, his lawsuit would fail because the government has shown that the $218,200 found in Cannon’s safe was likely the fruit of unlawful drug-dealing….The government’s evidence shows that Cannon was actively engaged in a drug dealing venture that involved trafficking cocaine and heroin in the summer of 2014, the same period in which the money was seized. Cannon did not…establish a genuine issue of material fact as to his lawful possession of the $218,200. For example, Cannon claimed that he earned $158,600 (presumably post-tax) through his work as a personal trainer during this time period, even though that job paid him only $16 per hour….”

The case is Cannon v. U.S., 24-1317.