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.