from confiscation-of-civilian-assets:-because-proving-your-case-takes-too-time department
The DOJ rounded up the cast and crew of Backpage and issued them with a 93-count indictment. He did so before the passage of FOSTA – legislation billed as the only how the government could take down sites like Backpage. History is being rewritten to give FOSTA credit for Backpage’s takedown, but the truth is the government didn’t need the legislation to target the site. Of course, despite all the talk about sex trafficking, sex trafficking is do not among 93 government charges against site staff.
Now that it has Backpage executives facing criminal charges, the government is doing what it can to make sure they can’t mount a solid defense. The government is going after their money via civil asset forfeiture, hoping to lock down their property even if they can’t lock down the runners from the Backpage site.
the complaint [PDF] – titled “United States of America v. Various Internet Domain Names” – claims that everything the site staff had was obtained through illegal activity, although it is likely that at least some assets are completely unrelated to Backpage revenue. It should also be noted that these claims are made before anything is proven in DOJ prosecutions, but will be much less scrutinized by the judge who will determine the ultimate owner of the property.
The complaint also contains a large amount of “returned” property, which was apparently voluntarily handed over after Backpage executives were arrested. This list includes Internet trash such as domain names and bitcoin. There are millions of dollars at stake, scattered in several banks located across the world. The DOJ is busy consolidating its stolen fortune ahead of convictions.
It’s bullshit, but a completely legal tactic. In addition to depriving defendants of the finances necessary to obtain solid legal representation, it also forces them to fight a legal battle on two fronts. The money defendants no longer have access to will not help them find the best lawyers willing to take on the government in criminal and civil suits.
Additionally, the complaint is playing a game to recover funds from accounts in the names of Backpage executives’ family members. Of course, governments want what’s in joint accounts or those controlled by other significant people, but the decision to empty the personal checking accounts of what appear to be the defendants’ children seems unnecessarily punitive.
Here’s what’s listed under the seizable assets of Backpage co-founder James Larkin:
$278.73 seized from Bank of America ‘8225 account (“BA ‘8225 Funds” or “Account 22”), held in the name of Troy C. Larkin (“T. Larkin”)
$1,038.42 seized from Bank of America ‘7054 account (“BA ‘7054 Funds” or “Account 23”), held in the name of Ramon Larkin (“R. Larkin”)
Then there are dubious claims about the legality of certain expenses. These allegations are made to support the government’s seizure of all funds from certain accounts. The alleged harmful activities include [re-reads complaint] pay for phone service, internet service and site backup.
Plaintiff alleges that a substantial percentage of outgoing payments from Account 1 were payments for the operation of Backpage.com. For example, between July and October 2017, funds were transferred from Account 1 as follows:
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
By linking “Account 2” to “Account 1” – supposedly as proof of criminal activity – the government discovers that money has been moved to… pay for internet service. The intro and ending are unintentionally hilarious.
Account 2 funds were also used to promote and facilitate prostitution. For example:
a. On December 2, 2016, the Dutch account transferred $324,055.85 to account 2;
b. On December 8, 2016, the Dutch account transferred $499,970.00 to account 2;
vs. On December 27, 2016, the Dutch 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 service company that Backpage used to facilitate its internet presence and promote its sale of prostitution advertising.
Whatever you think of Backpage and its executives, you shouldn’t applaud the government’s decision to go ahead with seizing assets before securing convictions and proving its case in court. This gives the government two shots at those funds – via civil asset forfeiture and, if that fails but the government wins convictions, via post-trial criminal asset forfeiture.
It’s a congressional-ordered scam — a scam that separates people from the assets they need to fight criminal charges while still under the presumption of innocence. Civilian asset forfeiture allows the government to find inanimate objects “guilty” using a lower level of evidence and could potentially allow federal authorities to keep every penny they seized even if the arrested Backpage executives are found innocent. And, while the government can drag out criminal prosecutions for as long as it can get away with, the countdown begins immediately for civil forfeiture, forcing defendants already tied up in court to somehow find on another a way to fight lawsuits with a limited time. and funds.
Filed Under: civil asset forfeiture, doj, domain names, james larkin, phone service