I disagree that this applies to dog sniff-searches in general. It depends on what the dog is sniffing for. How much of the currency in circulation nowdays is tainted by explosive residue? Have there been any studies conducted on that subject?
I am also curious as to whether the "suspect" was arrested and charged with anything, or was his money simply stolen, oh sorry, ... er siezed by the po-po. It seems that if they didn't charge him with anything, the seizure of his money would be illegal, and could be challenged in court. If this is allowed, and it is true that up to 90% of all currency is tainted by illicit drug residue, cops would have permission to steal, oh sorry, ...er sieze anybody's cash at will.