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Megaupload Points Out That The Feds Want To Destroy Relevant Evidence (techdirt.com)
93 points by tilt on April 7, 2012 | hide | past | favorite | 30 comments



Techdirt (of course) acts like the forfeiture of MU's assets is unprecedented, but SCOTUS established more than 20 years ago that the direct proceeds from illegal enterprises can't be used to fund the legal fees of the accused:

A defendant has no Sixth Amendment right to spend another person's money for services rendered by an attorney, even if those funds are the only way that that defendant will be able to retain the attorney of his choice. Such money, though in his possession, is not rightfully his.

And, of course, the case against MU is far more straightforward than Techdirt implies.

Stories like this (the Slashdot "Your Rights Online" stuff) are the only things from Techdirt that routinely make it to the front page of HN, but it's worth noting (and I'm not the only person to note it; I got tipped off to this by 'tzs, who went to law school) that Techdirt sucks at legal analysis.


> that the direct proceeds from illegal enterprises can't be used to fund the legal fees of the accused

I like how the determination that something is an illegal enterprise did not require a trial. Our gov't must save a lot of money that way.


No, this guy quoting things is wrong. In the case he's referring to the defendant plea bargained and admitted guilt. They said he couldn't use the money, because it was an established fact (to which he himself confessed) that it was illegally gotten.

Whenever you see someone quote SCOTUS without providing the case, assuming they're taking shit out of context to prove a point. This guy even altered the quote slightly to make it harder to find, but the case itself is here -http://bulk.resource.org/courts.gov/c/US/491/491.US.617.87-1...


Which is why Angelo Mozillo is broke and serving 10-20 in Federal prison for fraud. Oh, wait...

Seems to me the punishment tends to fit the size of the pockets of the ox that's gored. (i.e., screw a few million consumers and investors, get a slap on the wrist, screw with the MPAA, RIAA, prepare to meet thy doom.)


Legal analysis that conflicts with decisions of the supreme court and done by someone with possibly little more than a high school diploma is still valid legal analysis. Said analysis clearly isn't useful when trying to figure out the likely outcome of the modern "criminal justice" system. However, such analysis is quite relevant when talking about how far the country has diverged from the original intent of its constitution.

When the Supreme Court sets precedents that conflict with a straightforward logical interpretation of the Constitution, how can anyone claim that the Constitution is at all relevant?


It's very easy to think of cases where it would be illogical to presume the 6th Amendment shielded assets for use in legal defenses; for instance: the accused has robbed a bank of several hundred thousand dollars, and, having been apprehended, now insists the funds be transferred to the best criminal defense lawyer in the state.

Nevertheless: it's been the law of the land for over 20 years that you can't run a massive criminal conspiracy and expect to have all its proceeds available to you in the ensuing criminal trial. Techdirt is clearly disinterested in learning this fact, or, worse, having learned it, Techdirt is clearly disinterested in the rageview dissipation associated with disclosing the fact to its readership.

So, I call "not productive argument".


But we're not talking about a bank robbery here and we're not talking about a sack of dye-stained bills that was found on the passenger seat of the getaway car.

Megaupload is a business and data storage and file hosting services are not inherently illegal. Clearly, Megaupload has some baseline amount of business that is not the subject of the complaint. However substantial the infringement and related charges may be, it's entirely possible that a large amount of Megaupload's business is completely legitimate. But this a question for the court and there's no purpose to be served by the destruction of evidence en masse.

To find that all of Megaupload and Schmitz's assets are forfeit as proceeds of criminal activity is to foreclose any possibility that the defendants might be found innocent.

To seize the entirety of a business's assets on the basis that some as-yet-undetermined portion of their revenue is alleged to be infringing is not only disproportionate, it is a violation of due process.

Where does this end? If a collection of infringing files is found to be hosted on Amazon's servers somewhere does that allow the government to seize all of Amazon's assets, cherry-pick the evidence and destroy the rest, to the point that Amazon are unable to mount an effective defense?


Your arguments in both cases rely on presupposing that the defendant is guilty. I understand that you personally have made up your mind that Megaupload was running a "massive criminal conspiracy", but you're not allowed to use this assumption when arguing the case.


For whatever it's worth, after having read the full indictment against Kim Schmitz and his partners, particularly their excerpted intra-company emails, I am now presuming the government has an especially good case, is likely to win, and is generally serving the public good by pursuing the case.

(It is thus a good thing that I am not the trial judge overseeing the case.)


So just to be clear, you believe gut-instinct "public good" overrides due process and the rule of law? This is certainly a very common and hence reasonable opinion, backed up by decades of juris-"prudence". I'd just like to be explicit about its general prevalence, lest people are misled into thinking that the lofty ideals in the country's founding documents have much relevance to modern society.


No? Do you just read the middle sentences out of comments, start fuming, and then get to typing?


Funnily enough, I was replying to the general progression of your three comments. You started off arguing as if abstract legal analysis was the most important thing, moved to a guilty-by-construction example while implying that Supreme Court precedent is the most important, and ultimately fell back on the court of public opinion. It's fine to hold a barbershop "he's guilty" viewpoint, but framing it as something much more philosophical is dishonest.


No. You alluded to the notion that I'd already made up my mind about this case. As a courtesy to you & the thread, I confirmed your suspicion, and then stated that my bias is why we're glad I don't decide the case. You repaid the courtesy by ignoring the last sentence and then hitting my over the head with other sentences of mine out of context.


For what's it's worth too, the bail for MU and others were granted because most of what the police said were made up stuff. You probably heard about this when they seized empty accounts.

I wouldn't be surprised if the indictment was also an overton window to make MU crack and seek a plea deal because of USA's enforcement reputation for trumped up charges.


This is not a quirk of logical thinking, but of the justice system. If you want to take that money from him, establish that the money are ill gained funds. And the only way to do that is to hold a trial. Not to mention that this isn't your standard criminal conspiracy either; thousands of people including many government officials happily transferred money to his company, and he probably paid taxes, too.

We don't directly proceed to executing murderers in flagrante delicto either.


Your logic thus presumes that it's perfectly reasonable for the law to allow a bank robber to transfer the still bound packets of stolen bills to their attorney. Ok? I guess there's a reasonable case to be made there, but I don't agree with it, don't think it's unreasonable to disagree with it, and again note that it conflicts with the law of the land as established by the Supreme Court, which considered this issue directly.

I think I'd have been more comfortable with a 7-0 unanimous verdict that set up a series of tests for when the government can/can't withhold assets from legal defense teams than I am with the 5-4 outcome that gives prosecutors blanket discretion to confiscate criminal proceeds. But I'd be equally uncomfortable with a 5-4 Blackmun opinion saying that the right to fund attorneys is inviolate, as that produces an incentive to double down on criminal enterprises to build warchests of legal defense funds.

Generally, I want criminal conspiracies to be shut down. I think that's the reasonable-people consensus.


But not all of the money seized was gotten illegally. In fact noone except MU knows that for sure at the moment, but what we can be sure of, is that the amount is less than 100%.

In the robbed bank case, you know exactly how much was stolen and you can prove it, so seize the $100,000 - but should you seize his car and house too, before he has even been tried?


If the man is a career thief, then yes they should seize his car and house too.

The point is that when someone is a "career criminal", everything they own is in one way or another traceable to crime.

If I rob a bank and use the money to buy a Dominoes franchise, and then use the money I make off of that to buy a house. It's all ill gotten gains.

The reason the feds seize everything, is because they may have to trace your entire fiscal history to find out where money went and came from.

What happens if you owned your house for 5 years, and then started using criminal gains to pay your mortgage for the next 10. What happens when ~20% of your house is criminal gains? Do the feds get to come take your garage, or you guest suite? What about your cars new transmission, do they get to just rip that off the vehicle?


Once the ill-gotten gains are reinvested, they become dilute. Other people get involved.

If it was a civil matter, the plaintiff could go after your stuff Until They Got Their Money Back. Then they have to stop.

For criminal cases, the 'take everything that's tainted' smacks of punishment, not justice. And with other people involved (parents, children, spouse) it can be cruel.


> Your logic thus presumes that it's perfectly reasonable for the law to allow a bank robber to transfer the still bound packets of stolen bills to their attorney.

Great! So all a cop has to do is get someone forge a withdrawal of someone's funds, wrap the bills, pull the person over for an invented traffic violation, and claim that he found the bills in plain-view during the stop.


I think the one half of the problem is: is freezing, confiscating funds considered a fine, a penalty, a sentence? In my non-lawyer opinion, I think so.

The other half is: can the accused still have a fair trial without the funds? Given that there are assigned counsel, the answer to that question is 'yes'. But as a non-lawyer, I also know that for one, the outcome of a trial can very much depend on your counsel, and two, big-money counsel are better than those assigned.


What SCOTUS case are you referring to, and quoting from?


That would appear to be

CAPLIN & DRYSDALE, CHARTERED, Petitioner v. UNITED STATES.

http://bulk.resource.org/courts.gov/c/US/491/491.US.617.87-1...


Thanks, I had a feeling it would be something like this. Looking it over that case clearly doesn't apply to this situation- the defendant there plead guilty, so it was already known that the money was illegitimately earned doing criminal activities.



I don't quite understand something. If I'm not mistaken, defendants in an US court have the right to know what evidence will be used against them in a timely manner. It's called discovery. So if MU were to destroy the evidence now that would me both the prosecution and defendant would have no evidence, right? So I'd assume the prosecution has a copy of any evidence and that would be disclosed to MU's attorneys before the trial. So MU wouldn't hold on to the evidence but it'd be out there somewhere.

Right? I feel like an idiot. I feel like I've noticed something so simple that somehow it was already explained but I'm still not getting it.


Once the only evidence is in possession of the prosecutor, they are legally required to provide it all to you. On the other hand, things can often get 'lost,' 'misplaced,' or 'forgotten' that are crucial to the defense's case. I assume that MegaUpload wants access to the servers to extract the evidence themselves.


I gather that what makes this problematic is the expense of recovering evidence from the servers, as the hosting company is owed millions of dollars for them. MU does not have millions of dollars anymore.


>> MU does not have millions of dollars anymore.

They do not have access to it.

Whether they still have millions of dollars is as yet undecided.


I believe the point of the filing is that the defense is claiming that the prosecution is only keeping evidence that supports the prosecution.




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