Following the Justice Department’s decision to seize tens of millions of dollars in money and assets from the foreign CEO of a now-defunct website deemed criminal by the U.S., American legal experts now say other businesses abroad should by weary of the reach of the DoJ.
Attorneys with the National Association of Criminal Defense Lawyers, the Institute for Justice law firm and the nonpartisan Cato Institute think-tank filed a legal brief on Wednesday this week to voice their concerns surrounding the recent federal court decision to seize roughly $67 million from Kim Dotcom, the German-born internet entrepreneur who has been wanted by the U.S. government for copyright infringement and racketeering, among other charges, since early 2012.
According to prosecutors, Dotcom and his former colleagues behind the website Megaupload were able to generate massive profits by hosting copyright-protected material that was uploaded by users around the world to their servers to be shared across the web, all the while bilking legitimate copyright holders out of millions. Without the issue having gone before the court, however, neither Dotcom nor the signees on the amicus filed in the Eastern District of Virginia this week say those assets should go to Uncle Sam.
The DoJ’s decision this past March to demand that Dotcom forfeit cash and assets without first standing trial “undercuts the Court’s dignity—and, indeed, the dignity of the US Government,” the legal experts wrote this week, adding that they consider that conduct to be “heavy-handed and unconstitutional.”
“The federal government’s aggressive use of forfeiture poses a grave threat to property rights and can cause irreparable injury when property is forfeited without any hearing,” they wrote.
It’s been more than three years since Dotcom’s home in Auckland, New Zealand was raided by an internationally-coordinated law enforcement operation carried out in connection with the unsealing of an indictment in the U.S. against he and his associates for their part in running Megaupload—one of the most visited websites in the world before being seized by the FBI. Nearly all of those accused of being involved in a so-called “Mega conspiracy” have avoided extradition to the US in the span since. However, the DoJ says that this failure to appear has branded Dotcom and company as fugitives of the law and thus leaves them with no legal ground to appeal the forfeiture order.
Dotcom, who legally changed his name in 2005 from Kim Schmitz, has so far successfully fought the DoJ’s efforts to extradite him from his home in New Zealand. Even as the matter looms in legal limb, though, he’s now fighting on a different front to keep not just himself out of America, but his money.
“The U.S. government wants to extend the jurisdiction of US courts globally,” he told The Washington Times on Friday. “My case is the best example: a foreigner who’s legally fighting extradition was labelled ’fugitive’ by a US court and robbed of all his ’global’ assets without due process.”
“A business with 220 employees destroyed, millions of users lose their digital property and we lose all of our assets without due process,” added Dotcom.
Indeed, the amicus filed by critics of the court ruling warn that other businesses should be weary of what the US can accomplish given its ability so far to succeed in strangling funds from Dotcom.”The U.S. government is the most powerful organization in the history of humankind. Anyone who becomes the target of the government’s power—whether from a criminal accusation, a regulatory infraction, or, as here, a civil-forfeiture proceeding—is immediately at an extreme disadvantage. Due process protections ensure that the government is wielding its astonishing power legitimately rather than just exercising pure, irresistible force,” they wrote.
“In a property forfeiture proceeding initiated by the government, the irreducible minimum of due process is a right to be heard and to present every available defense. The right to be heard in an action brought against you is fundamental…and it is irrelevant whether the claimants are foreign citizens, or even whether they’re in open rebellion against the United States,” it continues. “Under the arguments proffered by the government, anyone who has ever been online and happened to have payments routed through American servers could be subject to U.S. jurisdiction. Couple this de facto universal jurisdiction with the ability to invoke fugitive disentitlement in civil forfeiture proceedings, and this Court could ratify a dangerous mix of perverse incentives and unchecked government profiteering.”
Dotcom’s team appealed the forfeiture order earlier this month, and he told the Washington Times that he’s confident he will prevail. Andruss Nomm, an Estonian computer programmer who worked on Megaupload, surrendered himself to American authorities earlier this year and is currently serving a one-year prison sentence after cutting a plea agreement to resolve charges.
“This conviction is a significant step forward in the largest criminal copyright case in US history,” Assistant US Attorney General Caldwell said after Nomm was sentenced in February. “The Mega conspirators are charged with massive worldwide online piracy of movies, music and other copyrighted US works. We intend to see to it that all those responsible are held accountable for illegally enriching themselves by stealing the creative work of US artists and creators.”
• Andrew Blake can be reached at ablake@washingtontimes.com.
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