In the long, convoluted and complex legal battles facing Megaupload founder Kim Dotcom, there was some bizarre stuff that happened late last year. As you may recall, early on, the US government seized basically all of his stuff and money. Dotcom has made efforts to get some of it returned, as it's tough to fight the most powerful government in the world when it's holding onto all of your money. Keep in mind from our previous discussions on asset seizure and forfeiture, the government can basically seize whatever it wants, just by claiming it was somehow related to a crime, but the seizure is only a temporary process. If the government wants to keep
it, it then needs to go through a separate process known as civil asset forfeiture, which is effectively the government suing the assets
. Back in July, the US government moved to forfeit everything it had seized from Dotcom in a new lawsuit with the catchy name USA v. All Assets Listed In Attachment A, And All Interest, Benefits, And Assets Traceable Thereto
. As you may have guessed, Attachment A
[pdf] is basically all of Kim Dotcom's money and posessions.
Back in November, the DOJ argued that it should get to keep all of Kim Dotcom's money and stuff because he's a "fugitive"
, which is a bizarre and ridiculous way to portray Kim Dotcom, who has been going through a long and protracted legal process over his potential extradition from New Zealand (though he's offered to come to the US willingly if the government lets him mount a real defense by releasing his money). Dotcom's lawyers told the court that it's ridiculous to call him a fugitive
, but it appears that Judge Liam O'Grady didn't buy it.
In a ruling
[pdf] that was just posted a little while ago, O'Grady sided with the government, and gave the DOJ all of Dotcom's things
. You can read the full reasoning here
and it seems to take on some troubling logic. Dotcom's lawyers pointed out, as many of us have, that there is no secondary copyright infringement under criminal law, but the judge insists that there's enough to show "conspiracy to commit copyright infringement." But the reasoning here is bizarre. Part of it is the fact that Megaupload did remove links to infringing content
from its top 100 downloads list. To me, that seems like evidence of the company being a good actor
in the space, and not trying to serve up more infringing downloads. To Judge O'Grady and the DOJ, it's somehow evidence of a conspiracy. No joke.
has alleged that the conspirators knew that these files were infringing copyrights, as evidenced
by their exclusion of infringing files from the "Top 100" list. The "Top 100" list purported to
list the most frequently downloaded files on Megaupload.... According to the
government, an accurate list would have consisted almost entirely of infringing content, so the
claimants "carefully curated" the list to make the site look more legitimate.... Additionally, the
claimants regularly told copyright holders, including many U.S.-based organizations, that they
would remove infringing content, when in actuality they only removed particular links to the
files.... The actual infringing files remained on the Mega-controlled servers and
could be accessed from other links.
As for that latter part, there are tons of perfectly legitimate reasons to only remove the links and not the underlying files. If Megaupload was doing deduping, then some version of the same file could be perfectly legitimate. Let's take an example: say that you and I have an MP3 of a Katy Perry song. I upload it to Megaupload to keep as a backup. You upload it to distribute to the world. Megaupload dedupes it, and just has the file stored one time. Your link could be potentially infringing if you distribute unauthorized copies, whereas my copy may be a legitimate personal backup. Given that, Megaupload should
only delete the links that are called out as infringing, rather than the underlying files, which -- depending on their use -- may or may not be infringing. But the court just takes the DOJ's version and says "good enough for me."
The court also has no problem with the fact that most of the assets aren't in the US, noting that since some of the "conspiracy" took place in the US, that's good enough. It more or less brushes off the concerns raised by Dotcom and the other defendants that this appears to violate existing treaties between New Zealand and the US -- basically saying that because Dotcom refuses to come to the US, it's not "punitive." Huh? On top of that, the judge says that taking all of Dotcom's assets shouldn't interfere with the legal process in New Zealand, because the New Zealand courts could (yeah right) reject the DOJ's request after this ruling to hand over Dotcom's assets.
Then we get to the whole "fugitive" bit. Judge O'Grady notes that the statute does allow him to call anyone who "declines to enter" the United States a fugitive, and argues that Dotcom fits that description. Furthermore, he actually argues that Dotcom's offer to the DOJ to come willingly to the US if the money is freed for his defense actually works against
Dotcom, and gives weight to the fugitive claim:
As demonstrated, Dotcom need not have previously visited the United States in order to
meet the prerequisites of § 2466. The statute is satisfied where the government shows that the
claimant is on notice of the criminal charges against him and refuses to "enter or reenter" the
country with the intent to avoid criminal prosecution. Because the court assesses intent under the
totality of the circumstances, it is certainly relevant that Dotcom has never been to the United
States and that he has lived in New Zealand since 2011, where he resides with his family. This
tends to show that he has other reasons for remaining in New Zealand besides avoiding criminal
prosecution. However, the existence of other motivations does not preclude a finding that he
also has a specific intent to avoid criminal prosecution. Dotcom's statements, made publicly and
conveyed by his attorneys to the government, indicate that he is only willing to face prosecution
in this country on his own terms. See Technodyne, 753 F.3d at 386 (2d Cir. 2014) ("The district
court was easily entitled to view those [requests for bail], evincing the [claimants'] desire to face
prosecution only on their own terms, as a hallmark indicator that at least one reason the
[claimants] declined to return in the absence of an opportunity for bail was to avoid
prosecution"). Dotcom has indicated through his statements that he wishes to defend against the
government's criminal charges and litigate his rights in the forfeiture action. If it is truly his
intent to do so, then he may submit to the jurisdiction of the United States.
In short, damned if you do, damned if you don't. This is the justice system, ladies and gentlemen. The DOJ gets to seize and keep all your money, and merely asking for access to it to fight to show your innocence is used as a reason to allow the DOJ to keep it. So he comes to the US and has to fight criminal charges without his own money, or he stays in New Zealand and the government uses it as an excuse to keep all the money. How is any of this even remotely fair? Where is the "due process" in totally handicapping Dotcom from presenting a defense?
Again, it is entirely possible
that Dotcom and the others broke the law -- though the case certainly does look pretty weak to me. But what's really astounding is how far the DOJ appears to want to go to make it absolutely impossible for Dotcom to present a full defense of his case.