USA: The long arm of American copyright-Asia Sentinel

March 21, 2012

facthai.wordpress.com on March 17, 2012 released the following:

“Kim Dotcom and America’s Debatable Hegemony

America’s long arm might be too long. Washington attempts to rewrite the concept of sovereign borders in Megaupload copyright case

Paul Karl Lukacs
Asia Sentinel: March 13, 2012

On Feb. 29, a New Zealand judge reminded the United States government that its power has limits. Washington is unlikely to heed the message.

The issue before the Auckland High Court was whether Kim Dotcom (previously Kim Schmitz) should be given bail for house arrest and electronic monitoring pending his August extradition hearing. The US Justice Department, alleging that Dotcom’s Megaupload family of web sites constituted a criminal conspiracy to infringe copyrights, demanded that Dotcom be held in a Kiwi jail until formally transported to the States for trial.

In his judgment, Justice Timothy Brewer rejected the Americans’ argument, noting “the presumption at law that Mr. Dotcom should have his liberty,” and ordered that the defendant remain out of prison. Justice Brewer, a junior bench officer who has held his post for less than two years, found that Dotcom was not a proven flight risk since, among other factors, the US and allied governments had seized about US$25 million in assets, which Dotcom would presumably fight to regain.

The judge, addressing only the specific issue before him, did not ask the larger question: How exactly was the United States claiming authority over Dotcom, a European operating in Asia and Oceania?

It is a good question. American prosecutors allege that Dotcom, known for his extravagant lifestyle, engaged in criminal copyright infringement. But federal courts have made it clear that US copyright laws apply only within the physical territory of the United States and do not apply outside the country.

“Copyright laws do not have extraterritorial operation,” according to the federal appeals court in New York. Its coordinate court in California agreed, thereby setting the rule for the country’s entertainment industry.

Consequently, the US assertion of jurisdiction against Dotcom is problematic on its face. A review of the factual allegations in the Justice Department’s 72-page indictment reveals that the case is based on a weak jurisdictional foundation, specifically that Dotcom allegedly had a banking relationship with PayPal and that he allegedly stored some data on a few servers in Virginia (possibly without his knowledge). In other words, it is obvious from the prosecutors’ own one-sided version of events that Dotcom operated outside the United States and that investigators were charged with digging deep to find one or two gotchas on which the US could premise its exercise of personal jurisdiction.

While other nations are limited by resources and principles from exerting their will outside of their borders, the US has not been shy about attempting to dictate global rules. In 1977, Congress passed the Foreign Corrupt Practices Act in which it commanded that US nationals doing business abroad were required to adhere to American anti-bribery standards regardless of the economic impact or the on-the-ground reality.

In 2003, anti-pedophile hysteria resulted in the PROTECT Act, which prohibits US travelers from engaging in sexual intercourse with persons under 18 anywhere in the world no matter the local age of consent. Recently, US expats have been subject to financial reporting requirements that strip them of banking privacy.

While the extraterritorial reach of those laws was justified by the drafters on the grounds that they applied only to US nationals, the Dotcom case is a flat-out assertion by the United States that its laws can be applied to anyone anywhere — even when, as with the Copyright Act, federal judges have plainly said that they can’t.

Dotcom appears to have had nothing to do with the United States, and if he did, the Justice Department would have said so. Rather, Dotcom holds passports from Germany and Finland under different names (all of which are legal, as the New Zealand judge noted). His businesses are headquartered in Hong Kong. He lives with his children and pregnant wife in New Zealand.

Yet the US government has used the shakiest of jurisdictional pretexts to close his business, freeze his assets and arrest him, all of which happened without an adversarial hearing on the merits. In a routine civil copyright case, an injunction or attachment of assets can issue only after notice and an opportunity to test the plaintiff s evidence in open court. Here, the US government avoided those safeguards.

In an equally troubling development, multiple foreign governments have assisted the US in its prosecution. For example, at the bail hearing before Justice Brewer, the United States was represented not by independently retained counsel but by the New Zealand government’s Crown Law Office.

When executing the initial arrest warrant, the Kiwi police were armed, an unnecessary show of deadly force when dealing with a businessman accused of a property crime. In the Chinese territory of Hong Kong, police are reported to have dispatched about 100 officers to raid Dotcom’s offices and residences.

The United States is re-writing the very concept of borders. Previously, a nation’s ability to exert its authority was limited by physical restraints which stopped at, or, in some cases, well short of a line on a map. With modern electronics and communications equipment (not to mention mobile armed forces), a wealthy nation can exert pressure where ever it wants against whomever it targets.

Assertions of extraterritorial jurisdiction by major powers may become one of the most controversial legal issues of the decade.”

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Douglas McNabb – McNabb Associates, P.C.’s
International Extradition Lawyers Videos:

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To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Tesler No Longer Fighting Extradition; Faces Federal Criminal Charges in U.S.

February 22, 2011

A British solicitor is abandoning his battle against extradition and flying to the United States to face corruption charges, his legal advisers have announced.

Jeffrey Tesler, 62, is accused of involvement in a conspiracy to bribe senior officials in Nigeria. His solicitors say he will leave the U.K. within 28 days, but that is just an estimation. Tesler may take longer before heading to the U.S.

Tesler, who has dual British-Israeli nationality, fought a long legal campaign to avoid extradition.

Last month the High Court in London ruled he could be extradited. They said there was a sufficient American connection to justify his removal for trial.

His lawyers argued extradition should be blocked because the case also had “strong links” to the U.K., and British prosecutors were carrying out their own investigation.

Tesler, who has lived in Tottenham, north London, for more than 50 years, was due to make a last-ditch application for permission to appeal to the Supreme Court. But last Wednesday, Tesler withdrew his appeal.

Tesler and another U.K. citizen were indicted on Feb. 17 last year by a federal grand jury in Houston, accused of violating the Foreign Corrupt Practices Act. It seems unreasonable for the U.S. government to hold a U.K. citizen criminally liable for violations of a U.S. law, but as long as the U.S. government can prove sufficient ties to the U.S. arising from the alleged criminal conduct, Tesler’s charges will stand.

The case is part of an investigation into Houston-based KBR over claims it bribed officials to win contracts to build a liquefied-natural gas project in Nigeria. In February 2009, KBR agreed with former parent company Halliburton to pay $579 million to resolve U.S. criminal and regulatory charges related to the Nigeria project.

Tesler has been accused of being hired as the agent of a four-company joint venture, to bribe Nigerian officials out of a U.S. $132 million slush fund. The alleged bribes went towards securing U.S. $6 billion worth of contracts on behalf of the Nigerian government, to build and expand the Bonny Island liquefied natural gas terminal.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Litigation, International Extradition and OFAC SDN Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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British Attorney Loses Appeal; Extradition to U.S. Underway

January 20, 2011

An attorney from north London will be extradited to the United States to face corruption charges following a ruling today by the High Court in London.

A London court previously granted the U.S. extradition request, but Tesler appealed the decision.

Jeffrey Tesler, 62, is accused by the American authorities of involvement in an international conspiracy to channel bribes to senior officials in Nigeria.

It is alleged that bribes were paid from a $132 million dollar slush fund to influence the awarding of a $6 billion dollar construction contract for a natural gas plant on Bonny Island in Nigeria.

Tesler, who has lived in north London for over 50 years, is accused of acting as the middleman in the conspiracy, said to have occurred between 1994 and 2004.

He was arrested at the request of the U.S. government after a grand jury indictment was filed at a U.S. district court in Houston, Texas, in February 2009.

The charges fall under the Foreign Corrupt Practices Act (FCPA), which aims to prevent the bribery of foreign officials regarding international business transactions. However, there must be sufficient evidence that proves a link to the United States in order to hold Tesler accountable under the FCPA.

Britain is set to introduce their version of the FCPA this April, known as the Bribery Act. Critics and businesses believe the Bribery Act will impose significant regulations on business practices in the U.K., more so than the FCPA. It will be interesting to follow the enforcement of the Act once it takes effect in April and to what effect it will have on business dealings with the U.S.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Italian Executive Extradited from Germany to the US; Faces Foreign Bribery Charges

July 12, 2010

Italian citizen Flavio Ricotti, a former executive of Rancho Santa Margarita, Calif.-based valve company Control Components Inc. (CCI), has been extradited to the United States from Germany in connection with his alleged participation in a conspiracy to secure contracts by paying bribes to officials of foreign state-owned companies as well as officers and employees of foreign and domestic private companies. Ricotti, 49, of Bientina, Italy, was arrested on Feb. 14, 2010, in Frankfurt, Germany, and arrived in the United States on July 2, 2010.

Ricotti and five other former executives of CCI were charged on April 8, 2009, in a 16-count indictment for their alleged roles in the foreign bribery scheme. According to the indictment, Ricotti, who served as CCI’s vice president and head of sales for Europe, Africa and the Middle East from 2001 through 2007, allegedly caused CCI employees and agents to make payments totaling approximately $750,000 to officers and employees of state-owned companies, and payments totaling approximately $380,000 to officers and employees of private companies. Allegedly, these payments occurred in connection with CCI projects in various countries around the world, including in the United Arab Emirates, Kazakhstan, India and Qatar. According to court documents, the valve company designs and manufactures service control valves for use in the nuclear, oil and gas, and power generation industries worldwide.

The other five former CCI executives also charged are Stuart Carson, CCI’s former chief executive officer; Hong (Rose) Carson, CCI’s former director of sales for China and Taiwan; Paul Cosgrove, CCI’s former director of worldwide sales; David Edmonds, CCI’s former vice president of worldwide customer service; and Han Yong Kim, the former president of CCI’s Korean office. Trial is scheduled to begin Nov. 2, 2010.

Ricotti is charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (“FCPA”) and the Travel Act, one count of violating the FCPA, and three counts of violating the Travel Act. The conspiracy count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The Travel Act counts each carry a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the pecuniary gain or loss.

An indictment is merely an accusation and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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