In The Matter Of Property Seized From Bo (Brian) Li, Na Tian, And Wei Tian, 911 N.W.2d 423

Police investigated Therapeutic Spa in Dubuque after neighbor complaints and online listings suggesting sexual services; owner Bo Li and employees Wei and Na Tian operated the spa without massage licenses.
Officers conducted surveillance, seized garbage containing toilet paper that tested positive for semen, and later executed search warrants seizing $16,278 (Li), $4,341 (Na Tian), and $858 (Wei Tian), plus phones, an iPad, prepaid cards, and records.
The State filed civil in rem forfeiture actions alleging the cash was proceeds of prostitution or the unlicensed practice of massage therapy. Claimants denied prostitution and claimed the money was legitimate business proceeds.
The district court concluded (1) practicing massage therapy without a license is not a serious misdemeanor because a civil penalty is provided under Iowa Code §152C.4, and (2) the State failed to prove the cash was proceeds of prostitution by a preponderance of the evidence; the court ordered return of the cash but allowed law enforcement to retain noncash items for ongoing investigation.
The State appealed; the claimants did not cross-appeal the retention of noncash items. The Iowa Supreme Court retained the appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether practicing massage therapy without a license is a "serious misdemeanor" under Iowa Code §147.86	Unlicensed practice is unlawful and thus a serious misdemeanor under §147.86	§152C.4 provides a specific civil penalty, so §147.86's criminal penalty does not apply	Not a serious misdemeanor; civil penalty in §152C.4 precludes criminal classification under §147.86
Whether seized cash is forfeitable as proceeds of unlicensed massage business	Cash is proceeds of illegal unlicensed practice and thus forfeitable	Claimants: unlicensed practice is not criminal; cash not proven to be proceeds of crime	Forfeiture not supported on this ground because unlicensed practice is not a serious misdemeanor
Whether seized cash is forfeitable as proceeds of prostitution	Circumstantial evidence (surveillance, Rubmaps listings, semen in trash, male-only customers, cash kept at home) shows prostitution occurred and cash are proceeds	Claimants rebutted with plausible innocent explanations; State lacked direct undercover/customer testimony	State failed to prove by preponderance that cash were proceeds of prostitution; forfeiture denied
Whether district court erred in allowing retention of noncash items	State: items needed for ongoing criminal investigation	Claimants sought return of property	Claimants did not cross-appeal; issue not preserved for review; retention affirmed by procedural default

State v. Iowa Dist. Ct., 888 N.W.2d 655 (Iowa 2016) (standard of review for statutory construction)
Dykstra v. Iowa Dist. Ct., 783 N.W.2d 473 (Iowa 2010) (statutory interpretation principles)
In re Prop. Seized for Forfeiture from Young, 780 N.W.2d 726 (Iowa 2010) (appellate review of forfeiture proceedings)
In re Prop. Seized from Chiodo, 555 N.W.2d 412 (Iowa 1996) (viewing evidence in light most favorable to district court in forfeiture cases)
In re Prop. Seized from DeCamp, 511 N.W.2d 616 (Iowa 1994) (substantial-evidence standard where inconsistent inferences exist)
McGill v. Fish, 790 N.W.2d 113 (Iowa 2010) (textual-first approach to statutory interpretation)
Shumate v. Drake Univ., 846 N.W.2d 503 (Iowa 2014) (using related statutes to infer legislative intent)
Oyens Feed & Supply, Inc. v. Primebank, 808 N.W.2d 186 (Iowa 2011) (selective statutory language use informs meaning)
Freedom Fin. Bank v. Estate of Boesen, 805 N.W.2d 802 (Iowa 2011) (relying on statutory placement and omission to determine meaning)
State v. Nall, 894 N.W.2d 514 (Iowa 2017) (avoidance of surplusage in statutory interpretation)
State v. Hagen, 840 N.W.2d 140 (Iowa 2013) (rule of lenity and appellate preservation principles)
State v. Hearn, 797 N.W.2d 577 (Iowa 2011) (rule of lenity as last resort)