U.S. Settles TV Shack Extradition Case, Is Kim Dotcom Next?

Good news for 23 year old Richard O'Dwyer, who is charged with copyright infringement in the U.S. and had been ordered extradited from the UK to face charges. D.O.J. has offered him a "deferred prosecution" agreement, under which he agrees to come to the U.S. voluntarily to enter the agreement and pay a fine, and promises not to violate U.S. copyright laws in the future. He will then return home to the U.K. When the UK court receives the agreement, it will dismiss the extradition proceedings. Assuming he complies, eventually, the charges will be dropped with no plea of guilty required.

Is this how Kim Dotcom's case will end?

A source close to Dotcom said his legal team was studying it closely as it showed US authorities could be softening their previously hard-line approach. [More...]

Non-prosecution and deferred prosecution agreements have become pretty standard for corporate defendants. Here's a list of them in recent years, with links to the actual agreements.

Deferred Prosecution Agreements (“DPAs”) and Non-prosecution Agreements (“NPAs”) are considered a form of pre-trial diversion. D.O.J. also has pre-trial diversion agreements, which seem a lot simpler to me.

The offender must acknowledge responsibility for his or her behavior, but is not asked to admit guilt. The period of supervision is not to exceed 18 months.

Who is eligible? Anyone who is not:

  • Accused of an offense which, under existing Department guidelines, should be diverted to the State for prosecution;
  • A person with two or more prior felony convictions;
  • A public official or former public official accused of an offense arising out of an alleged violation of a public trust; or
  • Accused of an offense related to national security or foreign affairs.

The deferred and non-prosecution agreements can be pretty onerous. I can't see Kim Dotcom agreeing to one with terms like this, entered three weeks ago by MoneyGram, Int'l.

In April, AOL entered this non-prosecution agreement for aiding and abetting securities fraud in the Eastern District of Virginia (where Kim Dotcom is charged.)

While such an agreement might allow DOJ to save some face and salvage something of the case, I don't see that it offers much to Megaupload and Kim DotCom. Most of the agreements seem to require monitoring of the business and cooperation with the Government. Also, I can't see the Government agreeing to return the Megaupload website or the seized money -- or the Carpathia servers the data is stored on.

Kim DotCom keeps getting stronger in New Zealand. Last night, he appeared with the Mayor of Auckland and turned on the Christmas lights. He's now eligible under NZ law to buy his $30 million mansion, which he has said he wants to do.

Kim Dotcom may want to keep pushing for vindication -- especially since his extradition hearing is unlikely to occur before July. His army of lawyers here and in NZ have been doing great work. Disclosures in recently unsealed search warrant affidavits pose new problems for the Government.

Evidence has emerged showing the Department of Homeland Security served a search warrant on Mr Dotcom's file-sharing company Megaupload in 2010 which he claims forced it to preserve pirated movies found in an unrelated piracy investigation. Mr Dotcom said Megaupload co-operated with the US Government investigation into copyright pirates NinjaVideo and was legally unable to delete the 39 movies identified in the search warrant.

Mr Dotcom said: "We were informed by (the US Government) we were not to interfere with the investigation. We completely co-operated. "Then the FBI used the fact the files were still in the account of the ... user to get the warrant to seize our own domains. This is outrageous."

Dotcom lawyer Ira Rothken says:

He said the discovery of the FBI's evidence of wrongdoing was part of a "trail of misconduct" stretching from the US to New Zealand which would ultimately lead to asking for the FBI charges to be dismissed.

"What we have uncovered, in our view, is misleading conduct. It looks like the Government wants the confidentiality because they would be concerned their conduct would be scrutinised."

Of course it's possible Kim Dotcom and the other defendants could lose the extradition battle and get convicted in Virginia. But he's got a lot in his favor, and I think we don't know the half of it. I hope he keeps fighting.

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  • Display: Sort:
    some pretty fine hairsplitting there: (5.00 / 1) (#1)
    by cpinva on Sat Dec 01, 2012 at 11:07:27 PM EST
    The offender must acknowledge responsibility for his or her behavior, but is not asked to admit guilt.

    i wonder if that would work with my kids, if we can ever figure out what it actually means? as far as i can tell, it translates to:

    "i admit responsibility, for doing that which i admit no guilt for having done." which basically means, well, nothing at all. oh, wait, it could mean that the state has no real case, and would certainly prefer not to go to trial, because, well, it has no real case. but, it wants to make it seem like they had something (to justify god only knows how much taxpayer dollars were spent on the case), so they came up with this nonsensicle drivel, to cover their butts, and make a few nominal requirements, end of case.

    based on mr. dotcom's actions thus far, i don't see him agreeing to anything but a full blown trial, something i suspect the DOJ would dearly like to avoid, for a variety of reasons, not the least of which is that they don't appear to have much of a case. that, and it will come out that they've been the pawn of the publishing companies, doing their dirty work for them, free of charge.

    it will probably require a supreme court decision, to extract mr. dotcom's assets from the clutches of the FBI. they have them, and they aren't going to give them up easily.

    So was the business model legal? (none / 0) (#2)
    by EL seattle on Sun Dec 02, 2012 at 01:25:24 AM EST
    If the USA isn't able to bring the company leaders of TVShack and Megaupload to the USA for trial, does that mean they were legal? Can similar operations follow the same operational system without having to worry about being hassled by the feds or by copyright lawyers?

    Maybe all they have to worry about is making sure their headquarters are located in specific countries that the lawyers recommends.

    I don't know about the US feds, but I'm guessing that (for whatever reason) the Hollywood types are cool to have Kim Dotcom running around acting like the clown prince of the free-for-all internet pardigm. If Hollywood really wanted him to stand trial ASAP, all they'd have had to do would be threaten to shift production of The Hobbit movies to somewhere besides NZ. If that had happened, I think that DotCom would have been out of the country just like that.

    Clown Prince? (none / 0) (#3)
    by sj on Sun Dec 02, 2012 at 03:02:02 AM EST
    He didn't start this mess.  As far as I can tell he was running a legitimate business and he is defending that business and his business reputation with whatever tools he has at his disposal.  He's up against the FBI and he's just not letting them quietly confiscate his assets.

    It seems to me that the part of The Fool was played by the US Feds.