Crime in the Suites: An Analyis of Current Issues in White Collar Defense
Posts Tagged ‘Extradition’
Mar 03
2013

New Zealand Court Hands U.S. a Victory in Kim Dotcom Piracy Case

A year ago, we wrote about the indictment in the Eastern District of Virginia of the executives and founders of Megaupload, one of the leading file-hosting sites on the Web. The charges were copyright infringement through the facilitation of piracy of copyrighted materials, money-laundering, and conspiracy. The site was shuttered after the indictment.

The case quickly got tied up in the U.S. Justice Department’s effort to extradite Kim Dotcom, Megaupload’s chief founder, from New Zealand, where he lives. After a series of setbacks, the DOJ just won a victory before a New Zealand appeals court. The extradition hearing is set for August 2013.

The issue before the appeals court was how much information the DOJ was required to turn over to Dotcom before the hearing. One of Megaupload’s defenses is that its activities were protected by the “safe harbor” provisions of the Digital Millennium Copyright Act, which protects Internet service providers from copyright liability for the activities of people who merely use their Web sites.

Dotcom wanted the DOJ to turn over, in advance of the hearing, information that it had about possible copyright infringement on the site – in other words, a good deal of the government’s evidence. Reversing a lower court, the New Zealand appeals court held that the DOJ need not turn over much of this material at this point.

“If a suspect was entitled to demand disclosure of all relevant documents on the basis that he or she wished to challenge not the reliability of the summarised evidence but rather the inferences that the requesting state seeks to draw from it,” the court wrote, then the extradition hearing process would not work properly. Rather, the suspect is entitled to a summary of the evidence but not to the government’s entire case at this juncture.

It thus appears that Dotcom will be able to get access to the DOJ’s entire case and to mount a full defense only if he is extradited to the United States and faces a criminal trial. But in order to hold such a trial, the DOJ will need to make a prima facie case at the extradition hearing, which Dotcom will be allowed to rebut, that Dotcom is guilty of the charged offenses. The appeals court said that this hearing will only involve a “limited weighing of evidence” and that the DOJ is entitled to some deference as to its reliability.

We have said before that this is a highly dubious prosecution. We are confident that despite this setback, Dotcom will get a full chance to present his case before an impartial tribunal.

Jul 23
2012

In Effort to Extradite UK Man in Piracy Case, DOJ Is Overreaching

A current anti-piracy case demonstrates the U.S. government’s intent to enforce its copyright laws not just beyond national borders, but beyond the extent of logic. The U.S. Department of Justice has issued an arrest warrant and extradition order for a 24-year-old college student in England who ran a website that contained links to independent websites that hosted pirated television shows and movies. By holding a mere intermediary accountable for allegedly pirated content offered on other websites, the department has set an alarming precedent with major free speech implications.

Richard O’Dwyer, who has never left the United Kingdom, is at the center of a heated debate regarding U.S. laws related to copyright, free speech, and jurisdiction. O’Dwyer ‘s website, TvShack.net, is registered in the United States, thereby giving the U.S. government a claim to exert jurisdiction over it and its owner even though the servers hosting the website are not U.S.-based. The website allowed users to search for and link to other websites; the government alleges that some of those links led to pirated movies and television shows. The government seized the domain on June 30, 2010, for “violations of federal criminal copyright infringement laws.” O’Dwyer has been charged with conspiracy to commit copyright infringement and criminal infringement of copyright.

The government’s case against O’Dwyer raises a number of important issues. First, O’Dwyer himself did not host the allegedly infringing material. His website allowed users to run searches that returned links to both legal and allegedly illegal content on external websites. If O’Dwyer can be criminally prosecuted for the dissemination of copyrighted content that he did not host, where would the chain of liability for such content end? Would search engines linking to such websites bear responsibility for their content? Would anyone sending a link to that website face criminal prosecution, even someone who actually download or view the content? There is no telling how far the DOJ intends to push this issue, but O’Dwyer’s case is a good indication that the DOJ seeks to extend the limits as far as the courts will allow.

O’Dwyer’s status as a British subject raises less novel but no less compelling questions about the United States’ jurisdiction to extradite and prosecute individuals on copyright infringement charges. O’Dwyer’s extradition has been approved by the British courts as well as the British home secretary, but many still believe that any trial should take place in Britain since O’Dwyer has never set foot in the United States and the servers hosting the website were also not on our shores.

O’Dwyer is currently appealing the extradition. Last month, Wikipedia founder Jimmy Wales, in a rare political intervention, called upon British Home Secretary Theresa May to stop the extradition efforts.

The circumstances of this case are reminiscent of the high-profile Megaupload case, in which the U.S. government issued an extradition order for Kim Dotcom in New Zealand. Dotcom ran an internet “lockbox,” in which users could upload content, including video and music, to a website and then share access with other users. Factually, these cases differ in that Megaupload hosted the content that was uploaded by users, whereas O’Dwyer only provided links to other websites. New Zealand also appears less willing to approve extradition, having pushed a hearing on the matter to March 2013, while Dotcom remains free on bail.

In instances of intermediary liability, the need to protect copyrighted works is outweighed by an individual’s interest in remaining free from criminal prosecution for the acts of another. The remedy, if one is justified, is better addressed through civil penalties rather than criminal prosecution.

 

 

Apr 23
2012

Suspect Extradited From Estonia to Face Massive Internet Fraud Charges

One of the features of crimes committed over the Internet is that they may be committed from anywhere in the world where a defendant has access a computer. A current case in New York shows that extradition likewise can reach around the globe.

On April 19, 2012, Anton Ivanov was extradited from Estonia to face charges of conspiracy to commit wire fraud and computer intrusion, among other offenses, in the U.S. District Court for the Southern District of New York. Ivanov is one of a number of defendants accused of a technologically sophisticated scheme that used malware and other techniques to reroute Internet traffic to websites chosen by the defendants because they were paid for driving traffic to those websites. According to the government, more than four million computers located in over 100 countries were infected with the malware as part of the scheme, which allegedly netted millions of dollars for the defendants.

Victims’ computers allegedly became infected with the malware when they visited certain websites or downloaded certain software to view videos online. The malware enabled the defendants to digitally hijack internet searches by changing the DNS server settings on victims’ computers to reroute their searches to “rogue DNS servers” controlled and operated by the defendants. Victims were re-directed to unwanted websites either when they clicked on internet search links that they thought would take them to other websites (what the government refers to as “click hijacking”) or through advertisements that Ivanov and others allegedly substituted for advertisements that were supposed to appear on particular web pages (what the government calls “advertising replacement fraud”). Arrangements have been made to substitute legitimate servers for the rogue servers as a temporary remediation measure so that victims’ computers will not lose their ability to access websites.

Ivanov has not yet indicated what his defense will be to the charges. He faces a maximum sentence of 85 years in prison in the case, which is pending before U.S. District Judge Lewis A. Kaplan. His next court appearance is set for April 23, 2012. Ivanov’s co-defendants in the case include five other Estonian nationals also arrested in November 2011 who are in custody in Estonia, and one Russian national, who remains at large.

As the Internet continues to expand to include a greater portion of the global economy, the ability to reach enormous numbers of computers will create incentives for technologically savvy wrongdoers to manipulate Internet users for illegal purposes. This case shows that the scale on which Internet conduct operates will mean that affiliate marketers and others who direct traffic on the Internet will be the subject of scrutiny by federal authorities. Even companies that are engaged in legitimate Web-based businesses need to be aware of this possible scrutiny.

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About Ifrah Law

Crime in the Suites is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, health care, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen and George Calhoun, counsels Jeff Hamlin and Drew Barnholtz, and associates Rachel Hirsch, Nicole Kardell, Steven Eichorn, David Yellin, and Jessica Feil. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

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