Government Moves To Seize All Backpage Assets Prior To Securing Convictions

from the civil-asset-forfeiture:-because-proving-your-case-takes-too-much-time dept

The DOJ rounded up the cast and crew from Backpage and threw a 93-count indictment at them. It did this prior to FOSTA’s passage — legislation portrayed as the only way the government could take sites like Backpage down. History is being rewritten to give FOSTA the credit for the Backpage takedown, but the truth is the government didn’t need the legislation to target the site. Of course, for all the talk of sex trafficking, sex trafficking is not among the 93 charges the government brought against the site’s personnel.

Now that it has Backpage execs facing criminal charges, the government is doing what it can to make sure they can’t mount a solid defense. The government is coming after their money via civil asset forfeiture, hoping to lock up their property even if it can’t lock up the Backpage site runners.

The complaint [PDF] — titled “United States of America v. Various Internet Domain Names” — claims everything the site’s personnel owned was obtained through illegal activity, even if it’s likely at least some of the assets are completely unrelated to Backpage’s income. It also must be noted these assertions are being made prior to anything being proven in the DOJ’s prosecution, but will receive far less scrutiny from the judge making the determination on the ultimate ownership of the property.

The complaint also contains a large amount of “surrendered” property, which was apparently handed over voluntarily after the arrest of Backpage execs. This list includes internet detritus such as domain names and bitcoin. There are millions of dollars at stake, scattered across multiple banks located around the world. The DOJ is busy consolidating its purloined fortune in advance of convictions.

This is a bullshit, but completely legal, tactic. In addition to depriving the accused of the finances needed to secure solid legal representation, it also forces them to fight a legal battle on two fronts. The money the defendants no longer have access to won’t help them find top lawyers willing to take on the government in both criminal and civil actions.

In addition, the complaint plays small ball to hoover up funds from accounts in the names of Backpage execs’ family members. Sure, the governments wants what’s in joint accounts or those controlled by significant others, but the decision to empty personal checking accounts of what appear to be the children of the defendants seems unnecessarily punitive.

Here’s what listed under Backpage co-founder James Larkin’s seizable assets:

$278.73 seized from Bank of America account ‘8225 (“BA ‘8225 Funds” or “Account 22”), held in the name of Troy C. Larkin (“T. Larkin”)

$1,038.42 seized from Bank of America account ‘7054 (“BA ‘7054 Funds” or “Account 23”), held in the name Ramon Larkin (“R. Larkin”)

Then there’s some questionable claims about the legality of certain expenditures. These allegations are made to shore up the government’s seizure of all funds in certain accounts. The nefarious activities alleged include [re-reads complaint] paying for phone service, internet service, and site backup.

Plaintiff alleges that a substantial percentage of outgoing payments from Account 1 have been payments for the operation of Backpage.com. For example, between July and October 2017, funds were wired from Account 1, as following:

a. $570,530 to Verizon Digital Media Services in Los Angeles for services related to the Backpage.com website; and

b. $1,497 to “Backupify,” a company that provided data backup services for Backpage

Linking “Account 2” to “Account 1” — supposedly as evidence of criminal activity — the government finds money was moved around to… pay for internet service. The lead-up and denouement are unintentionally hilarious.

Funds from Account 2 were also used to promote and facilitate prostitution. For example:

a. On December 2, 2016, the Netherlands Account transferred $324,055.85 to Account 2;

b. On December 8, 2016, the Netherlands Account transferred $499,970.00 to Account 2;

c. On December 27, 2016, the Netherlands Account transferred $199,970.00 to Account 2; and

d. From March to December 2017, Account 2 paid over $9,000 to “Cox Communications,” an internet services company that Backpage used to facilitate its internet presence and promote its sale of prostitution advertising.

Whatever you may think about Backpage and its execs, you should not be applauding the government’s decision to move forward with seizing assets before securing convictions and proving its case in court. This gives the government two shots at these funds — via civil asset forfeiture and, if this fails but the government secures convictions, via criminal asset forfeiture post-trial.

It’s a Congress-ordained scam — one that separates people from the assets they need to fight criminal charges while they’re still under the presumption of innocence. Civil asset forfeiture allows the government to declare inanimate objects “guilty” using a lower standard of proof and could conceivably allow the feds to keep every cent they seized even if the arrested Backpage execs are found innocent. And, while the government can drag out criminal proceedings for as long as it can get away with it, the clock starts ticking immediately on civil forfeiture, forcing defendants already tied up in one court to somehow find a way to fight the proceedings with limited time and funds.

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Companies: backpage

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Comments on “Government Moves To Seize All Backpage Assets Prior To Securing Convictions”

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53 Comments
That One Guy (profile) says:

How many times does it need to be said...?

The complaint also contains a large amount of "surrendered" property, which was apparently handed over voluntarily after the arrest of Backpage execs. This list includes internet detritus such as domain names and bitcoin. There are millions of dollars at stake, scattered across multiple banks located around the world. The DOJ is busy consolidating its purloined fortune in advance of convictions.

The people with badges are not your friends, doubly so if they’re currently bringing a legal case against you.

If they want something, demand a legal order forcing you to give it to them(and if you think you can fight that, by all means make them work for it), do not just hand it over unless you want to risk making their job easier at your expense.

If the accused really are guilty of the charges against them then by all means, demonstrate that and then the government can start linking individual pieces of property with the crimes they are found guilty of, seizing property and funds that has been positively linked to criminal activity. Taking it beforehand is little less than robbery-at-badgepoint, flipping ‘innocent until proven guilty’ on it’s head and ensuring that the accused can’t effectively fight back, which I’m sure is a major goal of the act.

Wendy Cockcroft (user link) says:

Re: Re: How many times does it need to be said...?

Due process is not an impediment to justice.

That being the case, since due process hasn’t been done here, how can justice be done unless the Backpage operators prevail? Asset forfeiture without a conviction in place ought to be illegal. Anyone crying out for due process to be observed should cry out for it to be observed in all cases. Even if the Backpage operators were the heinous gimps they’re presented as, denying them due process because they’re “credibly accused” means that anyone else can be denied due process for the same reason.

“Innocent till proven guilty” needs to apply at all times.

Anonymous Coward says:

Re: How many times does it need to be said...?

If they want something, demand a legal order forcing you to give it to them(and if you think you can fight that, by all means make them work for it), do not just hand it over unless you want to risk making their job easier at your expense.

Your advice is pointless as this article indicates. The US government doesn’t care about due process, innocent until proven guilty, or any other such nonsense in this case. They want Backpage on a silver platter and they will get it by any means necessary.

The only real question here is: Who the fuck did Backpage piss off so badly? This is a little more than I’d normally expect from the fascist US when it comes to "crimes against society." They’ve used every conceivable trick in the book except outright assassination. If these people ever do get into a court room, I hope there’s cameras live streaming to Youtube. Should be quite the circus, and educational for for those who still believe they live in a free society.

Uriel-238 (profile) says:

Re: Re: Who did Backpage piss off so badly?

The answer is enough people.

Kamala Harris was DA when she started going after Backpage, and is now a US Senator and was / is a FOSTA / SESTA supporter.

But this is how law enforcement works in the US. It’s not about whether or not you committed a crime, but whether or not your a criminal type. Once they decide (arbitrarily) you’re the latter, they come for you, and will use all tools at their disposal to ruin you, if not shoot you dead.

That One Guy (profile) says:

Re: Re: 'You may get my head, but you'll need to bring your own platter'

Your advice is pointless as this article indicates. The US government doesn’t care about due process, innocent until proven guilty, or any other such nonsense in this case. They want Backpage on a silver platter and they will get it by any means necessary.

Sure, but my point was don’t make it easy for them by climbing on the platter yourself. If they want your head on a pike make them work for it, don’t hand them an axe and kneel down with your head bowed.

Daydream says:

Re: Re:

It wouldn’t be the first time; Napster had a search engine, it was considered to be facilitating deliberate copyright infringement. Megaupload had no search engine, that was considered conspiracy to conceal copyright infringement.

I can only assume that when prosecutors are trying to make a case, obeying the law can only be interpreted as concealing evidence of wrongdoing. “If you give me six lines written by the hand of the most honest of men…” indeed.

Anonymous Coward says:

Re: US Law

If you did not pay attention to the Kavanaugh nomination the psychology is “We do not need any stinking proof.”

If we assert that you did something that is enough proof.

Thus you are guilty of whatever we say, when we say, and how we say regardless of what you did or did not do anything.

Anonymous Coward says:

Re: Re: Re: US Law

The question is not “Did he lie” but is “Can you PROVE he lied”.

Or is it simply your opinion he lied and thus he is guilty because you believe he lied.

To put this in another context.

The cop stops you.

You have a 100 dollars cash your grandmother gave you for your birthday.

The cop then seizes the 100 dollars under civil asset forfeiture because having 100 dollars money in cash proves you are engaged in criminal activity.

In all three cases you are guilty because someone asserts you are guilty.

With NO any damn stinking proof required because you are guilty by assertion.

Anonymous Coward says:

Re: Re: Re:2 US Law

I do not think there is any question about it, but it is not up to me. It would be consistent with the policies and procedures in place for our government to investigate said claims prior to any court appointments, but apparently that is just too difficult for them and they want their judge right now! They are acting like petulant children.

Uriel-238 (profile) says:

Re: Re: Re:2 Asset forfeiture contrasted to a SCOTUS confirmation

One is an act.by law enforcement allegedly as part of a legal process, and is supposed to be followed by an arrest and indictment. When property is kept but no indictment is made (not even an arrest, sometimes) it looks like wrongful conduct on behalf of state agents.

In the case of the confirmation of a Supreme Court appointment, that is a job interview. In most states hires are made and rejected at the pleasure of the boss. There is no standard for proof regarding suspicious historical incidents. Commonly hires are rejected for rumors of being gay or pervy, let alone rumors of actual sexual misconduct.

Regarding Kavanaugh, we don’t know if he lied specifically about sexual assault, but he was caught in casual lies that were obvious and dispelled with fact checking. He lied about his drinking habits (which he contradicted once caught) and his claims about his yearbooks were contradicted by both peers and expert witnesses.

Contrast Kavanaugh’s behavior with Dr. Ford who was neither evasive nor confrontational, (where Kavanaugh was) and was entirely plausible (where Kavanaugh was not) and we have enough evidence to warrant an indictment and full investigation, let alone enough to justify rejecting Kavanaugh for a SCOTUS bench.

JMT (profile) says:

Re: Re: Re:2 US Law

"Or is it simply your opinion he lied and thus he is guilty because you believe he lied."

His lies were plentiful, on the record, and proven as such by multiple people. Even if you dismiss the sexual assault claim, he lied about numerous other things. Whether he’s "guilty" isn’t the question, only whether he proved himself unsuitable for such an important role, which he did.

Anonymous Coward says:

Re: Re: US Law

Not sure what you are attempting to say, but there are few things you may be unaware of.

1) It was not a trial. There is no determination of guilt/innocence.

2) There is plenty of proof, not sure why they do not want to look at it as they have stated many times their commitment to law and order.

3) The hearing showed the world his unsuitability for the position and was appointed anyways.

btr1701 (profile) says:

Re: Re: Re: american government is a poof

Knock on your neighbours’ doors and ask them to ensure
> they are registered to vote in November. Then help them
> to get to the polling station on the day.

But only if they’re going to vote the ‘correct’ way, amirite? Otherwise, leave them at home.

(And I think if I got home today and my neighbor banged on my door and wanted to know if I’m registered to vote, I’d feel like that was a “none of your business” sort of situation.)

Wendy Cockcroft (user link) says:

Re: Re: Re:2 american government is a poof

Fair dues. Personally, I don’t believe it’s any of my business who people vote for as long as they vote. RE: worthwhile people on the ballot, what can be done to influence who gets on the ballot on the first place?

People need to engage more. Defeatism will not save us and there’s no messianic figure going to ride in on a white horse and make everything better. It’s up to us.

Bamboo Harvester (profile) says:

Same old...

“The money the defendants no longer have access to won’t help them find top lawyers willing to take on the government in both criminal and civil actions.”

The above was the sales pitch for the RICO act. We screamed about it in 1970 and it passed into law anyway.

I’m not kidding – the above quote is practially word for word the “justification” seen constantly in the press for why we “needed” RICO. Criminals were getting away scot-free because they could hire better lawyers.

One more feather in Nixon’s cap.

Anonymous Coward says:

i seem to remember something similar happening to megaupload. it’s obviously done so that the accused has no way of fighting back and all assets are taken regardless of guilt or innocence. just another tactic being employed by the Trump government to ensure that no one can have anything unless already on the ‘rich, famous, powerful’ list of his friends. the damage being done to the people, the economy and the country is unbelievable but until he is replaced, the truth wont come out and supporters wont change opinions. trouble is, it’ll be too late then and take too long to correct the harm done

Bamboo Harvester (profile) says:

Re: Re: Re: US Law

No, it makes anyone claiming it’s Trump’s fault look like a partisan hack without a clue.

You don’t like him. We get it. Put him down for Original Sin, he’s Shaitan made flesh. Great.

But no matter how much you don’t like a Law, it IS the Law at the moment. Why would law enforcement NOT use every tool at it’s disposal?

You don’t agree with this Law. I don’t either. But to blame it on Trump? Seriously?

Anonymous Coward says:

Re: Re: Re:2 US Law

You don’t agree with this Law. I don’t either. But to blame it on Trump?

There are two general types of laws, as pertains to federal law enforcement.

The first type are laws which require that law enforcement act in a certain way. Examples of these include defendants access to legal counsel, warrant requirements, evidence handling, and similar things that, if law enforcement does not properly follow, leads to the case being thrown out of court. Trump, alone, can do nothing about these particular laws, as that would require acts of Congress (and sometimes constitutional amendments). As such, the Trump administration has no responsibility for actions taken regarding these laws.

The second type are laws which allow law enforcement to act in a certain way. These include things like subpoenas, asset forfeiture, and similar things. These are tools that law enforcement can legally make use of, but are not in any way required to use. Trump, alone, can allow or prohibit federal law enforcement from using any or all of these tools as he sees fit. You and I might disagree with this law, but Trump clearly does agree with it, else he would write off an official policy prohibiting federal agencies from using these tools. He can, on a whim, require that all federal agencies use warrants even when subpoenas are legally sufficient. He can, tomorrow, write out a policy which prohibits federal agencies from pursuing asset forfeiture cases. So yes, he is directly responsible for all current activities falling under these laws, just as previous presidents were directly responsible for all similar activities occurring under their administrations.

Now, the Nixon era Congress/administration continues to share such responsibility in the case of asset forfeiture, but responsibility is one of those things that does not reduce when additional groups are added as long as each group has the ability to act independently to control it.

Bamboo Harvester (profile) says:

Re: Re: Re:3 US Law

I hadn’t realized the Executive branch had more power than the Judicial or Legislative branches.

ANY President can ASK that, and this is the important part, the Law NOT be followed.

Obama did it deliberately with illegal aliens.

Has trump said anything about Civil Forfeiture or RICO? If he has, I’ve missed it. With the howling going on about how trump is such a thief, tax evader, etc., you’d think trashing those Laws would be at the top of his ToDo list.

You’ve fallen into the Benevolent Dictator as President belief. That any President, with a stroke of a pen, can make or unmake the Law of the land.

YES, they can issue Executive Orders and Presidential Decision Directives.

But they have no power over the other two branches of government. If they did, trump could simply issue an EO stating that Democrats will no longer be permitted to hold Congressional or Senate Seats.

While the Judicial and Legislative branches MAY follow an EO or PDD, they are not required to. They usually do, simply because alienating a full third of the government is going to kill any changes that need a Presidential Signature.

Do you recall all the cheering every single time obama issued an EO?

Do you recall the howling every single time trump issued an EO retracting one of obama’s?

The only thing a President can do to change or revoke a Law is to suggest to the SCOTUS that they review it. He can’t outright ask them to, but he can give them a word before he attacks that Law in the media asking “why hasn’t the Supreme Court overturned this?”, shifting the blame to them.

As I said, we screamed about this half a century ago when Nixon signed RICO into Law – it’s a blatant violation of the Fourth Amendment. Which is why Civil Forfeiture Seizures aren’t used as evidence, or in any way related to the person they’re seized from. They’re literally charged as if they were a person. Through various contortions, the last fifty years of SCOTUS has avoided the issue completely.

Anonymous Coward says:

Re: Re: Re:4 US Law

Who said anything about changing laws? Or brought up other branches of government at all?

If Congress or the courts wanted to require that law enforcement use asset forfeiture, then they would have written the law (or interpreted the law) to that effect. They did not, they simply said that asset forfeiture is a legal process. Whether or not they make use of asset forfeiture is left entirely up to the discretion of law enforcement. Since the President is the head of all executive agencies, including federal law enforcement, he has complete discretion in whether or not to make use of asset forfeiture. If he doesn’t wish to, he will simply order federal law enforcement not to do so. The law is still being followed to the letter, Congress says they can do this, not that they must do this.

Uriel-238 (profile) says:

Re: Credit where it's due

The Dotcom raid (by ICE…in New Zealand) was clearly during the Obama administration. Both sides of the aisle are owned by corporate and aristocratic interests. let’s not forget this has been a long fight that hasn’t slowed down regardless of which party is in power. Both parties ignore the rights and needs of the public.

Some courts uphold asset forfeiture by law enforcement while others see it as overreach and in violation of the Fourth Amendment. It doesn’t matter so long as law enforcement profits directly from the practice and has no disincentive from trying. And no judicial philosophy serves the public over the Department of Justice.

But current practices by law enforcement delegitimize them in the eyes of the public, demonstrating it functions more like a mob syndicate running a protection racket and shaking down anyone it doesn’t like. The US doesn’t have suspects to be ruled out but undesirables to be routed into prisons or disposed of. In regarding the entire civilian population as the enemy, US law enforcement has positioned itself as an antagonistic institution, serving interests unrelated to policing society for the people.

They’re a garrison for an occupational administration.

btr1701 (profile) says:

Re: Re:

i seem to remember something similar happening to
> megaupload. it’s obviously done so that the accused has
> no way of fighting back and all assets are taken
> regardless of guilt or innocence. just another tactic
> being employed by the Trump government to ensure that no
> one can have anything unless already on the ‘rich,
> famous, powerful’ list of his friends.

Umm… the MegaUpload case happened during the Obama Administration.

That Anonymous Coward (profile) says:

It’s like they are trying to take a victory lap to prove that this clearly illegal law is the bestest thing ever.

And considering the responses of many Judges to dubious legal claims made by the government (see also Mega) that its perfectly okay they might be screwed.

Government had evidence the banks knew the loans were toxic, but b/c it would be hard they never tried to prosecute.
Government had evidence the banks were robosigning and stealing homes they had no rights to, but never tried to prosecute.
Government wants to grandstand about a problem they can’t even prove exists, grab all their cash so we can ram this through.

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