DOJ Responds To Megaupload's Accusations Of Misleading The Court... By Misleading The Court

from the that's-how-that-works? dept

Tue, Jan 15th 2013 4:44am — Mike Masnick

We've discussed a few times now how Megaupload is arguing that key elements in the warrant used to criminally charge the company and its principles were misleading to the court. In particular, Megaupload has pointed out that part of the "evidence" for criminal conspiracy was that Megaupload knew about infringing activity on the site, but chose not to do anything about it. However, as Megaupload made clear in its filing, the reason it knew about it was because it was informed that the content was subject to a federal investigation, and that the "evidence" needed to be preserved. As we detailed in our last post on the subject, the DOJ went straight to Megaupload's hosting partner, Carpathia, to let them know about this. Carpathia pleaded with the DOJ to talk directly to Megaupload (after receiving assurances that Megaupload was not the target), but the DOJ rejected that request.

However, since this was evidence of potentially criminal activity, Carpathia told Megaupload about it, implying that the DOJ was making it clear that Megaupload should not delete the files.

Notably, the Government avoided communicating with Megaupload directly, instead deputizing Carpathia to do so on its behalf. (See June 25, 2010 email from Phil Hedlund to Mathias Ortmann and Kim Dotcom, Ex. 1 ("Please know that we attempted to convince the Government to work directly with Mega on this matter, but given the complex jurisdictional issues, they have been unwilling").) Far from warning Megaupload that the Government considered it to be part of a worldwide criminal organization, which the Government even at the time was terming the "Mega Conspiracy," the Government, through its anointed agent Carpathia, represented to Megaupload that "[w]e have no reason to believe the [sic] MegaUpload is the target of the investigation."

Megaupload cooperated with the Government and voluntarily arranged with Carpathia to supply the Government with the files identified in the sealed warrant. In accordance with the Government's express admonitions--as conveyed to Megaupload through the sealing order and Carpathia's instructions--Megaupload avoided signaling that anything was afoot or otherwise compromising the investigation, preserving the files in their original condition without alerting users or the public that anything had changed. At no time did the Government or Carpathia indicate that Megaupload could or should remove the files identified in the warrant from its cloud storage platform without compromising the stated secrecy of the investigation, much less did they suggest that Megaupload was legally obliged to do so lest it be complicit in an ongoing criminal conspiracy.

The DOJ has now responded to these claims, and it's done so in its typically misleading fashion. For example, it insists that Megaupload is misleading in its own filing, because the DOJ never directly spoke to Megaupload. They leave out the whole part about the DOJ talking to Carpathia, who had to talk to Megaupload if it wanted to preserve the evidence in question without risk of it being deleted. But, no, in the DOJ's version, this is all just Megaupload fantasy talk.

Megaupload's pleading and the search warrant materials at issue disproves the allegation that the government misled the court as part of a conspiracy to entrap Megaupload. For instance, Megaupload alleges that the government "affirmatively [led]" Megaupload to retain certain files on its servers.... Yet Megaupload does not cite a single communication between the government and Megaupload or a single instruction from any member of the government to Megaupload; there are none.

Notice the lack of any mention of the Carpathia communications between the DOJ and Carpathia, or between Carpathia and Megaupload. That seems like relevant info that the DOJ conveniently just skips right over.

Is this really the best argument that the DOJ can put forth? The filing also does highlight that the DOJ made other arguments against Megaupload in its filings -- which is true -- but it doesn't mean that the questionable aspects concerning some of the key claims should simply be ignored, as the DOJ would prefer.

120148034 Mega Baseless (PDF)120148034 Mega Baseless (Text)

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Filed Under: doj, entrapment, evidence
Companies: megaupload

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Ninja (profile), 15 Jan 2013 @ 3:39am

It is clear that the case is pure garbage much like the case against Aaron was. It's clear that they are just trying to destroy Kim Dotcom. It's clear that the US Government is out of control.

Wake up, Americans.
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Aria Company (profile), 15 Jan 2013 @ 4:50am

I said it before: this isn't a case. Its entire purpose is to do exactly what it intended to do: get MegaUpload off the internet.

This case is going to drag on for years, and it doesn't matter if the DoJ loses.

MegaUpload is still off the internet.
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Anonymous Coward, 15 Jan 2013 @ 4:53am

I'm going to laugh my organs off when later this year the charges are dropped or substantially changed to something much milder (as in, pay a fine, go home like nothing happened).

It has happened before. Like so many others, the whole point of this operation is to dismantle Megaupload at all costs (even if they trample the law) and scaring the shit out of all other online service providers. In the meantime, the copyright cartel can enjoy the illusion that they don't have to innovate and provide a better value to stay relevant.
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Rikuo (profile), 15 Jan 2013 @ 4:57am

Hmm, how long before the usual trolls burst forth saying MU is still guilty, even though every single thing the prosecution has done has only served to weaken their own case?
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Anonymous Coward, 15 Jan 2013 @ 4:58am

this is going to continue for as long as the DoJ wants. there is no way that they are going to admit to the fraud they have committed (and it is exactly that!) and there is no way the courts are going to go against them. what this proves more than anything is that, when law enforcement want to be right, they are going to be right, regardless of hoiw often they are really wrong and regardless of the crimes they themselves commit in order to be right! the US justice system isn't now worth the paper it's written on and that goes for the Constitution as well!
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gorehound (profile), 15 Jan 2013 @ 4:58am

Re:
I am awake and I await the downfall of this Government.Been watching this for Decades now.I really do dislike our Government and wish to see the lot of them stripped naked in Public so they can all receive their measure of Tar & Feather.
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Anonymous Coward, 15 Jan 2013 @ 5:00am

It looks like the DOJ has been captured by the MAFIAA and are using business tactics to gain their objectives. The use of half truths, innuendo and FUD are all standard business tactics which should have no place in the legal process.
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Anonymous Coward, 15 Jan 2013 @ 5:20am

I'm curious does anyone know after Megaupload decided to not delete those files "in case they were needed by the feds" if they could still be downloaded freely by anyone?
It would actually be a big plus for Megaupload if they could say no they were locked out of view from the public soon as they became evidence.

At least that way they could be like.
1. We preserved evidence.
2. We locked it out of any possible public access to prevent future infringements of the files in question.
3. They did not instruct us whether to delete the files or keep them. Either way if 2 is true it's going to be another blow to the already absurd case.
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Average_joe, 15 Jan 2013 @ 5:21am

the government are really scummy, megaupload should be found not guilty but i guess the point wasnt to enforce the law but to get it off the internet and warn others.
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Planespotter (profile), 15 Jan 2013 @ 5:24am

Re:
In a similar way to Dajaz1 and Rojadirecta and the others, it isn't about the law.
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Anonymous Coward, 15 Jan 2013 @ 5:43am

Re:
Point 2 would have alerted the file owners that some form of 'anti piracy' action was being taken against them, which would be interfering with an investigation.
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Mr. Applegate, 15 Jan 2013 @ 5:56am

Re:
I have long been awake. I have watched as America stopped being a world leader and shifted to being the neighborhood bully. Of course we all know what happens to bullies in the end. It is sad to watch this once great nation self destruct in slow motion.

Actually, the US government is not out of control at all, it is under the complete control of the scummy, self serving, greedy, Corporate America.
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Keroberos (profile), 15 Jan 2013 @ 6:06am

Re:
No, the usual cast of shills have been steering clear of this case for a while now--kinda hard to spread your FUD once the facts start coming to light.
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saulgoode (profile), 15 Jan 2013 @ 6:13am

One way or another
I have not seen the original documents, but as reported by CNET:
"In asking for the search warrant, prosecutors said in June 2010 they warned MegaUpload via a criminal search warrant that the company's servers housed more than 30 pirated video files and managers had not removed them even as late as November 2011."
If the above is true then the prosecutors are lying now; if the above is false then the prosecutors were lying when they sought the search warrant. Either way they engaged in deceiving the courts.
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Manabi (profile), 15 Jan 2013 @ 6:14am

They also claim they didn't mention the June 2010 warrant, but they did
Another little bit of misdirection is this:
Similarly unfounded is the allegation by Megaupload that the government "planted Megaupload's alleged knowledge of infringing files" and misled the Court. Megaupload Supp. Br. 11-12. Megaupload claims that the government inserted a misleading "snippet" into "each relevant affidavit," id. at 2, and that the "snippet" misinformed the Court by highlighting Megaupload's failure to remove content deemed infringing in the June 24, 2010 warrant. To the contrary, no such "snippet" appears anywhere in the primary search warrant at issue in Mr. Goodwin's motion. That warrant, the search warrant executed at Carpathia Hosting in January 2012 (Case No. 1:12 SW 41), does not even mention the June 24, 2010 search warrant.
Which may be technically true (I can't find a copy of SW 41 online), but if you look at the redacted search warrant to GoDaddy to seize the domains names (SW 34, available here) you'll see this:
17. On or about June 24, 2010, members of the Mega Conspiracy were informed, pusuant to a criminal search warrant from the U.S. District Court for the Eastern District of Virginia, that thirty-nine infringing copies of copyrighted motion pictures were present on their leased servers at Carpathia Hosting, a hosting company headquarted in the Eastern District of Virginia. A member of the Mega Conspiracy informed several of his co-conspirators at that time that he located the named files using internal searches of the Mega Conspiracy's systems. As of November 18 2011, thirty-six of the thirty-nine infringing copies of copyrighted motion pictures were still being stored on servers controlled by the Mega Conspiracy.
So maybe they didn't mention it in that particular warrant but they mentioned it and relied on it in seizing other stuff, so pretending they didn't rely on the June 2010 warrant for their case is highly misleading.
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Hans, 15 Jan 2013 @ 6:22am

Sting?
"However, as Megaupload made clear in its filing, the reason it knew about it was because it was informed that the content was subject to a federal investigation, and that the "evidence" needed to be preserved."

I think the right phrase for this is "a sting operation" or "being set-up". The DOJ used Carpathia to trick Megaupload into preserving evidence against itself.

Does it really show anything more than Megaupload didn't think it was guilty?

Unless the DOJ's case is based on the (circular) reasoning that because of Carpathia informing MU that the data were the subject of a federal investigation, that it knew the data were illegal, and thus eliminates MU's DMCA safe-harbor, it seems like this who-told-who is just a side show.

Am I missing something?
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Richard (profile), 15 Jan 2013 @ 6:33am

Re: Sting?
Yes - you're missing the SOPA/PIPA protests.

The MAFIAA were really upset over them - and so they demanded that something spectacular be done - the megaupload case was cobbled together in a hurry using spare bits from other existing investigations.

This is mostly cockup rather than conspiracy...
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Anonymous Coward, 15 Jan 2013 @ 6:54am

Were all this incompetent people in the DOJ today came from?
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weneedhelp (profile), 15 Jan 2013 @ 7:01am

Re:
"the whole point of this operation is to dismantle Megaupload at all costs "

Its a shame the cost is our credibility around the globe. Bullies don't care what others think of them.
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Lord Binky, 15 Jan 2013 @ 7:05am

If the US government wants to evidence that he was paying pirates to upload then that's one thing. The method of aquiring evidence and information should be straightforward, legal, and follow able. That's how you PROVE beyond reasonable doubt that he is guilty.

Crap like this is just harassment, and is full of 'We know he knows. He knows we know. And we both know we don't have shit on him.' Which is bullshit, and not a standpoint for a legal warrant. I hope they fail for mucking up what they should have known better than to do, much less fail if they didn't know better.

The argument, 'They kept data that should have been deleted' is bullshit and null as well. The 'DATA' in question can be legal for one person, and not legal for another. If the groups that manage that legality of the data can NOT reliably distinguish when it is or isn't legal, than there is no reasonable expectation that MegaUpload should either. Simply, there is no mechanism in existence to correctly tell upon examination alone data's legality in terms of ownership and licensing.

Also, the impact of 'LIKELY' is not an expectable quantification of legality. If that was, the functional operations of businesses across the US would come to a halt. (i.e. Any bank is LIKELY to have laundered or illegally gained money in its ownership. Any storage facility is likely to have illegal items (stolen or otherwise) in its facility. etc.)

There are some actions that would be illegal with evidence (like paying someone to upload data they knew was illegal for that person to possess), but anything except EXPLICIT knowledge of an item being UNIVERSALLY illegal is just harassment, wrong, and illegal behavior of the government.

In physical items, this is like police handing you a paper bag. You don't know this, you know that it's heavy and in a bag. It could be illegal for you to handle this item, it could not be. Upon examination, you would not be able to tell, the information that determines this is not attached to the item, does not transform the item, is not revealed upon inspection in any way. Inspection reveals it's a gun. It is not a universally illegal gun, it's a nondiscript gun. The police decide to charge you for having illegal items, because the owner of the gun, is not legally allowed to own the gun. In fact, it wasn't legal for the police to have the gun either, because if they did, then it's just a hypothetical owner, in which case it's not illegal. They'll just put you in prison until they sort this out....Bullshit isn't it?
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Anonymous Coward, 15 Jan 2013 @ 7:29am

Megaupload made clear in its filing, the reason it knew about it was because it was informed

I can't tell from the article above, but is Megaupload planning to use lack of knowledge as their defense? That sounds a lot like willful blindness, which is something judges get very angry about.
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That One Guy (profile), 15 Jan 2013 @ 7:30am

I'm confused...
There are only three ways I can see something like this even somewhat working to convince a judge, given it's following up MU's filing.

The DOiJ either:

A) Believes the judge is so on their side he'll be willing to ignore any pesky 'evidence' that MU might submit, and will therefor ignore MU's filing in favor of this one.

B) Believes the judge is so incompetent that he'll believe anything people tell him.

Or C) Believes the judge has an insanely lousy memory, and will have already forgotten that MU specifically said that the DOiJ didn't contract them directly, instead going through Carpathia, making their 'argument' here moot.

On a side note, given all the smoke and mirrors the DOiJ is employing throughout this whole case, all the shenanigans they've pulled so far, does anyone still think they actually had a solid case against MU to begin with? Because the more I read about the case, the more it looks like someone told the DOiJ 'Jump!', and they were so eager to do so they were already in the air before bothering to check to see if they actually had a solid place to land.
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Anonymous Coward, 15 Jan 2013 @ 7:31am

Re: Re: Sting?
rather than conspiracy
Er, the scenario you describe IS conspiracy.
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shane (profile), 15 Jan 2013 @ 7:33am

Organize the Data
I wonder how hard it would be for Masnick or some others to put up a page collecting instances of government bullying in defense of outdated IP laws and the industries who survive off of them?

The US DOJ is on a roll this week for sure.
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saulgoode (profile), 15 Jan 2013 @ 7:39am

Re:
No, MegaUpload is claiming the opposite: they were aware that the particular files were infringing -- because the DOJ told them so -- but that they didn't remove the files because the DOJ was investigating the people who uploaded the files and removing the files would have exposed that investigation.
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jupiterkansas (profile), 15 Jan 2013 @ 7:40am

Re:
Wake up and do what?
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Anonymous Coward, 15 Jan 2013 @ 7:40am

Re: Re:
And in three years' time, the DoJ will be crying about Mean Old China bullying them.
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That One Guy (profile), 15 Jan 2013 @ 7:44am

Re:
No, more like they knew that the files were infringing ones because they were told(indirectly) by the DOiJ, but that they were told not to delete them, as the files were being used as evidence in another investigation.

The DOiJ's argument, and in fact the information they presented to get the warrant they used to seize MU's servers, was that they knew about the infringing files, but refused to take them down, making them 'willful infringers', all the while ever so conveniently leaving out the whole reason MU didn't take the files down was because they were told not to.
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anonymouse, 15 Jan 2013 @ 7:46am

Re:
I am sure the court is going to have no option but to dismiss this case against Mega, this is not going to go on for years as the DOJ have just proven beyond any doubt that they are trying to mislead the Court, the court really has no other option but to dismiss this case, whether it be now or in a years time, and if they do not it will show to the world a clear conflict of interest and failure to follow procedure. And MEGA is coming back, this month if i am not mistaken.
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anonymouse, 15 Jan 2013 @ 7:48am

Re:
I am sure the court is going to have no option but to dismiss this case against Mega, this is not going to go on for years as the DOJ have just proven beyond any doubt that they are trying to mislead the Court, the court really has no other option but to dismiss this case, whether it be now or in a years time, and if they do not it will show to the world a clear conflict of interest and failure to follow procedure. And MEGA is coming back, this month if i am not mistaken.
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Another AC, 15 Jan 2013 @ 7:48am

Re: Re:
It is interfering with an investigation to tell the party being investigated that they are being investigated?

mind = blown
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Anonymous Coward, 15 Jan 2013 @ 7:50am

Re: Re: Re: Sting?
The word you're looking for is farce. It's far too inept to be described as a conspiracy. And you can't have a conspiracy without piracy.
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Anonymous Coward, 15 Jan 2013 @ 7:50am

regardless of what the DoJ does or tries to do to 'mislead the court', the court will only be misled if it wants to be, or is forced to be, by the DoJ or another law enforcement agency applying pressure
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Manabi (profile), 15 Jan 2013 @ 7:57am

Re: Re: Re: Re: Sting?
A Mega Farce at that.
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Anonymous Coward, 15 Jan 2013 @ 7:58am

Re: Re: Re:
"It is interfering with an investigation to tell the party being investigated that they are being investigated?"

If you tell someone they are being investigated (as opposed to telling them they're assisting in the investigation of someone else), it may alert them to the fact they, themselves are being investigated, and cuse them to alter their behavior or actions.
(Unless, of course, they're innocent...)
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Anonymous Coward, 15 Jan 2013 @ 7:59am

Re: Re: Re: Re: Re: Sting?
"A Mega Farce at that."

Wasn't that a bad movie starring Barry Bostwick?
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Wally (profile), 15 Jan 2013 @ 8:00am

Re:
Actually it's not us Americans...it's our stupid DOJ whom we are not responsible for electing. The head of the DOJ is the Attorney General...Currently Eric Holder...whom the President appoints and the US Supreme Court (whom we do not vote on) approves. In no way do these actions against MegaUploadrepresent the interests of the average US citizen.
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nasch (profile), 15 Jan 2013 @ 8:03am

Re: Re:
The head of the DOJ is the Attorney General...Currently Eric Holder...whom the President appoints and the US Supreme Court (whom we do not vote on) approves.

The Attorney General is confirmed by the Senate, not the Supreme Court.
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Wally (profile), 15 Jan 2013 @ 8:04am

Re: I'm confused...
You forgot D) All of the Above...
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Anonymous Coward, 15 Jan 2013 @ 8:13am

Megaupload made clear in its filing, the reason it knew about it was because it was informed

I can't tell from the article above, but is Megaupload planning to use lack of knowledge as their defense? That sounds a lot like willful blindness, which is something judges get very angry about.
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Anonymous Coward, 15 Jan 2013 @ 8:14am

Ladies and Gentlemen please wait in your seats whilst we take a break for 5 minutes and when we return the next act of the Megaupload case will be the DOJ doing a parody of Prenda Law.

Cue Benny Hill slapstick music.
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Richard (profile), 15 Jan 2013 @ 8:21am

Re: Re: Re: Sting?
the scenario you describe IS conspiracy.

A badly cocked up conspiracy...
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PaulT (profile), 15 Jan 2013 @ 8:29am

Re:
"I can't tell from the article above, but is Megaupload planning to use lack of knowledge as their defense?"

How do you get "lack of knowledge" from the text you quoted saying that claimed "it knew because it was informed"?

Anyway, the article states that MU used the fact that they were informed (and told not to do anything) as their defence on this point. The DOJ appear to be coming back claiming that they didn't tell MU directly, but are omitting the fact that they told Carpathia, who in turn had to notify MU for the requested action (or lack thereof) to be undertaken).

So, MU are not claiming that they were not informed. The DOJ appears to be claiming that they weren't as they weren't *directly* notified by the DOJ, but just happen to be omitting the part where they knew they were being informed via Carpathia.
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Anonymous Coward, 15 Jan 2013 @ 8:56am

This is pretty absurd. So the DOJ's defense is "Hey no official government representative told Mega they had infringing files" but at the same time they're trying to say "Mega is guilty because they knew these files were infringing, because they were told they were being used in an investigation" You can't have it both ways.
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Anonymous Coward, 15 Jan 2013 @ 9:04am

Re: Re: Re:
Ok lets say I work at a train station. The cops come in and say, "Your public locker 36A is being used to distribute drugs, please don't touch it or do anything weird we are gonna keep an eye on it and see who goes in and out of it."

Then I as a station attendant walk over to 36A and put a padlock on it and a note that says "closed due to police investigation" I'm pretty sure the cops would be pretty upset about me letting the criminals know the cops are onto them.

Of course I also wouldn't expect the cops to arrest everyone who works at the train station and close it down because the staff knowingly allowed illicit substances to be distributed after the cops told us to ignore the people pulling drugs out of the locker.
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btrussell (profile), 15 Jan 2013 @ 9:29am

Re:
Is this a demonstration of willful blindness?
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Anonymous Coward, 15 Jan 2013 @ 9:42am

Re: Re:
So vote for a President that will take the AG to task when shit like this happens instead of turning a blind eye or worse encourage it. If you voted for a major party candidate in the last presidential election you are part of this problem absolutely and with no equivocations.
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Anonymous Coward, 15 Jan 2013 @ 9:56am

TD makes it so that every day I laugh more and more at the people in power in the US.

Thanks TD for brightening my day.
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Hephaestus (profile), 15 Jan 2013 @ 9:59am

Re: Re:
How often can the DOJ screw up before it become a matter that the public takes interest in?
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Anonymous Coward, 15 Jan 2013 @ 10:06am

Re: Re:
i'm wit'ya, bro...

not too many years ago, used to be a funny joke that this or that gummint action was going all 1984 on our ass...

then it became ironic, then it became alarming, *now* it is getting scary-true...

the 1984 propaganda ministry is in full force, can the jackboots be far behind, citizen ? ? ?

('member how we used to *joke* about 'show us your papers, citizen', 'member those innocent days ? ? ?)

art guerrilla
aka ann archy
eof
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out_of_the_blue, 15 Jan 2013 @ 10:38am

Government have been terrible, megaupload should get compensation for what has been done to it.
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Anonymous Coward, 15 Jan 2013 @ 11:09am

Re:
how do the doj compensate arron swartz
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Bergman (profile), 15 Jan 2013 @ 12:10pm

Re:
I wonder if you can petition a court for an injunction against the DOJ to prevent it from filing frivolous or fraudulent lawsuits?
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Anonymous Coward, 15 Jan 2013 @ 12:13pm

Re:
"Government have been terrible, megaupload should get compensation for what has been done to it."

Kim's defense team (which apparently includes more lawyers than the total IQ points of the prosecution) has worked out that Kim may be able to sue for around 2.6 Billion (B, not M) US dollars for damages after the Megaupload case is dropped. The Dept. of inJustice rather rudely and recklessly grabbed a tiger by the tail here, only to find out that the weapons and cages Biden, Dodd, and the MPAA promised to deliver were nowhere to be found. Now they will do anything to hold onto the tail for fear of facing the other end the instant they let go.
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jupiterkansas (profile), 15 Jan 2013 @ 1:22pm

Re: Re: Re:
Nice idea, but there will never be such a president.
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Anonymous Coward, 15 Jan 2013 @ 1:40pm

Re:
Out of work Studio Exec's can't really be expected to know 'that much' about justice now can they?
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JMT (profile), 15 Jan 2013 @ 1:50pm

Re:
From the article:

In accordance with the Government's express admonitions--as conveyed to Megaupload through the sealing order and Carpathia's instructions--Megaupload avoided signaling that anything was afoot or otherwise compromising the investigation, preserving the files in their original condition without alerting users or the public that anything had changed.

So no, they did absolutely nothing to those files, as explicitly instructed.
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MrWilson, 15 Jan 2013 @ 6:27pm

Re: Re: Re:
It's a catch 22. You'd have to convince current members of the ruling parties to break the two party system in order to get third party candidates elected in significant enough numbers in order to break the two party system. Short of a massive national upheaval, this isn't likely to happen. Even the Civil War didn't change the two party system. Parties just reinvent themselves and maybe change names every once in a while. It's still always the two sides though and the third parties standing outside the circle looking in.
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MEGA Launch, 15 Jan 2013 @ 11:27pm

Re:for 3 more days only
The re-launch of MEGA is scheduled for this Saturday in Auckland.

DoJ can do what they want, they are not going to stop Mega from being reborn out of its ashes
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Anonymous Coward, 15 Jan 2013 @ 11:41pm

A badly cocked up conspiracy...
... is still a conspiracy!
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