Reported / Citable
Background
In August 2014, the FBI executed a lawful search of a home linked to Lionel Cannon during a drug trafficking investigation and found $585,000 in cash in a safe. The next morning — before the money was officially counted — FBI Special Agent Scott Bowman pocketed $218,200. The FBI’s official inventory listed only $366,800 as seized. The agency caught on to Bowman’s theft shortly after; Cannon himself helped identify Bowman, who in 2016 pleaded guilty to conversion of government property and was ordered to pay $136,462 in restitution (roughly representing the Cannon-safe portion of his thefts).
In 2017, Cannon pleaded guilty to drug trafficking charges and agreed to forfeit $366,800 from the safe — the amount the government claimed it had seized. The charging documents never pursued forfeiture of the additional $218,200 Bowman had stolen. Even at sentencing, the government acknowledged on the record that more money had been taken, yet Cannon’s plea addressed only the $366,800. Cannon subsequently moved under Federal Rule of Criminal Procedure 41(g) for the return of the $218,200 that Bowman stole and that was never subject to a forfeiture order.
The United States District Court for the Central District of California treated the Rule 41(g) motion as a civil complaint, concluded that Cannon had impliedly agreed to forfeit all funds seized from the safe, and granted summary judgment for the government. Cannon appealed.
The Court’s Holding
A divided Ninth Circuit panel reversed and remanded. The majority opinion by Judge Bybee (joined by Judge Forrest) held:
Sovereign immunity does not bar the claim. Under Ordonez v. United States, 680 F.3d 1135 (9th Cir. 2012), the court had held that money damages for lost or destroyed property are barred by sovereign immunity under Rule 41(g). But the Ordonez rule does not apply when the government has recovered money traceable to the stolen funds. A Rule 41(g) motion for return of specific recovered property is an equitable action for the “return of the thing itself,” not a claim for money damages as compensation. Because Cannon sought the return of specific property — the cash the government seized but never forfeited — not a damages substitute, sovereign immunity does not apply.
The government cannot retain the money without justification. When the government has recovered funds traceable to property it lost, the person from whom the property was originally seized may move for its return. At that point, the government bears the burden of demonstrating a legitimate reason to keep the money. Cannon provided evidence — wages, vehicle sales, gifts — that some of the cash in the safe was lawfully earned, not drug proceeds. The government failed to rebut that evidence. Because a genuine factual dispute existed about whether and how much of the unforfeited $218,200 constituted drug proceeds versus lawfully obtained funds, summary judgment for the government was error. The court remanded for further proceedings.
Judge Kenneth K. Lee dissented, arguing that because there is no evidence in the record that the government currently possesses the specific $218,200 stolen from Cannon’s safe (as opposed to restitution funds in a pool), Rule 41(g)’s waiver of sovereign immunity — which covers only property “in the government’s possession” — does not extend to this claim.
Key Takeaways
- Federal Rule of Criminal Procedure 41(g) allows a person to move for the return of property the government seized but never properly forfeited — and sovereign immunity does not block the claim when the government has recovered money traceable to the seized funds.
- The key distinction is between a claim for the specific property itself (equitable, permissible under Rule 41(g)) and money damages as compensation for lost property (legal, barred by sovereign immunity) — the majority held that seeking seized cash falls in the first category.
- When a Rule 41(g) motion for recovered property is at issue, the government bears the burden of showing it has a legitimate reason to retain the money.
- A defendant who produces credible evidence that seized funds were commingled lawful and unlawful money can survive summary judgment, even against a government claim that all the seized cash was drug proceeds.
- The dissent highlights an unresolved tension: whether Rule 41(g) immunity extends to situations where the government recovers money through restitution rather than recovering the exact seized funds — courts in future cases may have to trace the money more precisely.
Why It Matters
The Cannon case is a striking example of government misconduct that fell into a legal crack: an FBI agent steals money from a drug suspect, the government officially “loses” the money, and the suspect ends up forfeiting only what was left in the official inventory — never having an opportunity to challenge the forfeiture of what Bowman took. The Ninth Circuit’s ruling creates a pathway for similarly situated individuals to seek return of seized property that the government later recovers through its own enforcement proceedings, without being defeated by sovereign immunity arguments.
For California practitioners and criminal defense attorneys in the Ninth Circuit, the case matters in two ways. First, it confirms that Rule 41(g) is a viable post-conviction vehicle to challenge the government’s retention of seized-but-not-forfeited property, even years after a guilty plea. Second, it shifts the evidentiary burden to the government once a claimant makes a prima facie showing that seized funds were not entirely proceeds of the offense. The dissent’s concern about traceability will likely shape future litigation: claimants must be prepared to document the legitimate sources of commingled funds, and the government will likely argue that only funds it can directly identify as returned from the stolen cache are subject to Rule 41(g) recovery.