The Use of Social Media in Criminal Prosecutions

•October 3, 2016 • 10 Comments

It’s safe to say that social media is here to stay. What was once thought to be a fad among teenagers and young adults, has now crept its way into the hands of all generations. We are in constant connection with each other and share information about our lives much more openly than ever before. For a lot of us it’s been the easiest way to keep in contact with distant family and friends and the fastest way to disseminate information to a large group of people. Social networking sites like Facebook, Twitter, Instagram and Snapchat have created communities where sharing personal details about your life such as travel plans, photos and videos of your daily activities, reposted articles and memes and status updates regarding your thoughts on a particular event are easily accessible. However, social networking sites are used for much more than surface level connectivity.

For employers and prosecutors, social networking sites are a gold mine. Employers can easily google a job candidate and one of the first results to pop up will probably be their Facebook or LinkedIn page. If the candidate’s page is public or the candidate’s privacy settings are lax, employers can legally view tons of information about that candidate to help them in their search for the right employee. Prosecutors also have this same privilege. Collecting evidence via social media may be nontraditional, but it’s the way of the future for trial attorneys in different areas of practice like personal injury, family law and criminal law. Sometimes evidence gathered from social media can be used as direct or circumstantial evidence in trial to prove that someone was at a particular location or that someone committed a crime.

While courts in Florida agree that social media evidence is discoverable, the admissibility of such evidence is still up for debate. Admissibility depends on two major factors: relevancy and authenticity. Relevancy is much easier to determine because if the evidence is not related to any part of the case, it does not need to be introduced into evidence. Authenticity on the other hand is a bit trickier when it comes to social media. Federal Rules of Evidence 901 provides that “to satisfy the requirement of authenticating or identifying an item of evidence, the proponent must produce evidence sufficient to support a finding that the item is what the proponent claims it is.” The rule also provides several examples of evidence that satisfy the requirement which include testimony of a witness with knowledge, non-expert opinion about handwriting, comparison by an expert witness and distinctive characteristics.

Authenticating evidence from social media can be complicated for a few reasons:

  1. The accused may not be the person who actually posted or communicated the message. Someone could’ve hacked into the accused’s account and posted and/or communicated messages that did not truly come from the accused. How can attorneys be sure that the evidence actually came from the accused?
  1. Another concern is that social media evidence, being electronic in nature, can be easily manipulated and misrepresent what was actually posted. How can attorneys determine if material has been altered in any way? How can courts and jurors be sure that evidence presented to them hasn’t been tampered with?
  1. Lastly, tagging people on social networking sites like Facebook and Instagram presents another hurdle. What if the wrong person is tagged or someone is mistakenly tagged in a photo? How can attorneys verify that the right person was tagged in the incriminating evidence?

The same examples given in FRE 901 can also be applied to the social media context. A witness with personal knowledge, distinctive characteristics about the evidence or expert witness testimony by an internet consultant are a few examples of methods that can be used to authenticate the information.

Prosecutors have free reign to search and collect evidence from social media that is public, but what happens when an accused person’s page is private and little to no information other than basic details are accessible? The Stored Communications Act regulates when an electronic communication service can and cannot release electronically stored information about you to private parties. The Stored Communications Act was created to preserve our privacy rights and protect our Fourth Amendments rights against unlawful searches and seizures. It protects information that is electronic communication, transmitted via an electronic communication service, maintained in electronic storage and not accessible to the general public. The government can only gain access to this sort of information after obtaining a warrant or subpoena in which they must prove “specific and articulable facts showing reasonable grounds to believe that the records or other information sought, are relevant and material to an ongoing criminal investigation.” American Civil Liberties Union v. U.S. Department of Justice. So for instance if a prosecutor wanted to collect evidence from an individual’s Facebook wall posts that was not public, the prosecutor would have to obtain a warrant because Facebook wall posts are protected by the Stored Communication Act (SCA). A New Jersey federal court in 2013 was one of the first cases to analyze the SCA’s application to the Facebook wall and held that an employee’s Facebook wall posts were protected by the SCA. Ehling v. Monmouth-Ocean Hospital Service Corp.

There are a number of cases where prosecutors have discovered evidence via social media and used it in court. Courts are still testing the waters and trying to figure out how social media evidence should be used and applied. In Disciplinary Counsel v. Brockler, 145 Ohio St.3d 270, 48 N.E.3d 557 (2016), an assistant county prosecutor assigned to a murder case was terminated from his job and suspended from the practice of law for one year for professional misconduct involving a fictitious Facebook account. In an attempt to disprove the defendant’s alibi, the prosecutor created a fictitious Facebook account and chatted with the defendant’s girlfriend about the case for several hours until he got the information he needed. Ultimately, the case was handed over to another prosecutor and it came to light that the previous prosecutor contacted the defendant’s girlfriend under the fictitious account. The prosecutor had violated Professional Conduct Rule 8.4(c) which prohibits an attorney from engaging in conduct involving dishonesty, fraud, deceit or misrepresentation. The prosecutor wanted the board to carve out an exception for him arguing that a comment to Rule 8.4 has an exception for lawyers who advise lawyers about lawful covert investigative activities. However, because the prosecutor himself was doing the covert act, the board found that the exception did not apply to him.

In another case, Bryant v. State, 2016 WL 4705157 (2016), appellant argued that legally insufficient evidence (photos found on his public Facebook page holding items that were stolen) supported his conviction of a robbery because the State did not introduce any evidence establishing that the appellant was at the victim’s home on the date of the robbery. The appellant argued that there were no witnesses to testify that he was at the scene of the robbery, that the Facebook photos were circumstantial evidence, and there was no DNA evidence to connect him to the robbery. The court overruled the appellant’s argument and decided to look at the combined and cumulative force of all the evidence. The court held that all of the circumstantial evidence was sufficient to support the appellant’s conviction.

In State v. Rund, 2016 WL 4162925 (2016), a 19 year old boy was pulled over by an officer and given a ticket for driving 68 miles per hour in a 60 miles per hour zone. The boy later sent tweets to his friend talking about the incident and how angry he was. The boy posted threatening statements to his friend discussing how he would kill officers and hashtagged the police department. The last part of his threatening tweets referenced a song. The boy was charged with the felony of making a terroristic threat. He quickly admitted he was wrong and showed great remorse. The court imposed a durational departure and modified his sentence from 3 years to two years because he did not really intend to kill officers and his conduct did not involve the typical crime for which he was sentenced. Threats from terrorists as noted by the court are typically face to face or received in the mail directly. I think it’s also interesting to note that the court found that some of the boy’s tweets were lyrics frequently used in gangster rap songs. “The use of language that expresses approval of violence against police, while disturbing in this case, may not indicate actual intent to kill a cop and may merely constitute a protest against police conduct.”

I’d like to discuss one last case that is sparking conversation. California Penal Code 182.5 states that any person who actively participates in a gang with knowledge that its members engage in a pattern of criminal gang activity and who willfully promotes, assists or benefits from the criminal activity of other gang members is guilty of conspiracy to commit that felony. It’s basically guilt by association. San Diego prosecutors charged two men with this penal code and said that they benefitted from murders allegedly committed by fellow gang members. Prosecutors alleged that one man got a boost in his music career because of the murders and the other man had Facebook posts with him flashing a gang sign and even has a gang sign tattooed on him. Prosecutors acknowledge that neither of the men actually committed the murders. There’s plenty of controversy surrounding this case because some feel that the men are basically being targeted for the content of their speech and there’s debate on how the term willfully should be interpreted. Also, this case raises a deeper issue of how police determine gang members and whether it would unfairly include young black men in gang prosecutions. The conspiracy charges were ultimately dismissed because the court found that the men did not willfully benefit from the killings. Penal Code 182.5 is a largely untested law and courts are entering new territory with its prosecution.

Some Questions to Think About:

-Do you think evidence gathered from social media should be used in court or should attorneys focus on gathering evidence another way?

-The Florida Rules of Civil Procedure have been amended to include discoverability of electronically stored information (ESI), but do not provide guidelines for the admissibility of ESI. Is the current framework sufficient? Should Florida amend the rules to also include the admissibility of ESI? If so, what kind of rules would you propose?

-Keeping in mind some of the challenges, what steps can be taken authenticate evidence from social media?

-The Stored Communications Act protects Facebook wall posts. What other types of information do you think the SCA should protect? Facebook chats, messages posted on a friend’s wall, status updates, posts that were previously public then made private?

-Do you think there are any circumstances in which prosecutors should be allowed to create fictitious accounts to gather evidence crucial to their case?

-What do you think about California Penal Code 182.5 and how prosecutors can gather evidence from social media to determine gang affiliation? Do you think it will unfairly target young black men? Is Penal Code 182.5 an attack on free speech?



Racial Bias in Online Search Engine Algorithms

•September 18, 2016 • 10 Comments

I want you to go to Google. In the search bar, type in “three white teenagers”. Hit search. Now click on the images tab. What do you see? Now do another images search, only this time search for “three black teenagers”. Again, what do you see? It is very likely that your search for “three white teenagers” populated a number of different pictures featuring glowing, fresh-faced, wide-eyed, happy-go-lucky Caucasian youngsters. One image might show a group of three young and vivacious white girls, hands on hips, posing for the camera. Another image might show another group of three white teens, smiling innocently into the camera while each holds a soccer ball, football, and basketball. It is also very likely that your search for “three black teenagers” populated only one variety of images: mug shots of black individuals.

But perhaps this is simply just a coincidence. Let’s try a different search, shall we? Try doing an image search for beautiful dreadlocks. What is your result? If it was anything like mine, you perhaps saw row after row of images featuring predominantly white individuals with different styles of dreadlocks. Hm, that’s curious. How about a search for “beautiful braids”? To quote Lewis Carroll: “Curiouser and curiouser!” This search populated even more images of white people than the last, all with various styles of braided hair. Well, this is interesting, particularly noting the widely-established fact that these two particular hairstyles (dreadlocks and braids) not only originated from within the black community but are still most commonly seen within the black community.

Well, let’s try this one more time. This time try a google image search for “professional hairstyles”. What do you see? Again, rows and rows of predominantly white women sporting various updos, ringlets, curls, ponytails, buns, and side sweeps. It seems as though any hairstyle donned by a white individual is deemed as professional, at least by Google. Now, let’s augment this search by typing in “unprofessional hairstyles”. What are the resulting images? Again, row after row of images featuring predominantly black women with a wide variety of different hairstyles.

Does this seem strange to you? It should.

Apparently this is not an uncommon occurrence, as major online tech companies are being criticized as a growing number of individuals have taken to social media to report issues of racial bias in the way these companies display and use information. Most recently, Google has come under fire for obvious racial discrepancies regarding their search results. In fact, less than a month ago your google searches of “black teenagers” would have been quite literally filled with only images of mug shots of young black people. However, these biases have not been isolated solely to incidents involving race, but they also involve issues regarding gender. These racial and gender biases can be seen most clearly and most frequently in three different forms of online programming: search engine algorithms, big data, and online ad delivery.

First of all, what is a search engine algorithm? In its simplest form, a search engine algorithm is a set of rules or a unique formula that the search engine uses to determine the significance of a webpage. [1] These formulas are unique to each individual webpage and can range in their level of complexity, with the most complex of these formulas (such as the ones used by Google) being the most coveted and the most heavily guarded. [2] Online search engine algorithms all have the same basic general construct. They all take into account the relevancy of a particular page (which analyzes the frequency, usage, and specific location of keywords within the website), the individual factors of a search engine (a common individual factor being the number of pages a search engine has indexed), and the off-page factors (such as the frequency of click-through rates). [3] Although most (if not all) online programs involve some type of search engine algorithm that assists in populating results for its users, the most common use of a search engine can be found on popular search engine websites such as: Google, Bing, Yahoo, AOL, and AskJeeves (for us old-timers).

Instances of online racial bias can be seen most clearly through search engine algorithms. Do you recall the experiment we conducted earlier? Similar searches conducted on different search engines produced varying results. For example, a similar search for “black teenagers” as compared to “white teenagers” using the Bing search engine produced different results than that of Google, with images of black teenagers being more consistent with that of the images of white teenagers. Similarly, a search for “three black teenagers” compared to a search for “three white teenagers” using the Yahoo search engine revealed the same stock photos of whimsical teenagers for the search of white teens, while the search for black teens revealed mostly snapshots of racially-biased Google search results for the same, as well as a few peppered images of happy, smiling groups of black teenagers. These results beg the question: is it simply Google that is racist?

Big data is another area in which we can see instances of online racial bias. A similar type of “search engine”, big data describes the large amount of data – both structured and unstructured – that inundates a business on a day to day basis. [4] Basically, big data works similarly to a search engine in that it compiles and stores large amounts of information  and creates suggestions and results tailored to that specific individual. A popular example of one type of use for big data is the Netflix movie suggestion algorithm, which takes the information of users based on what movie or show they just watched and suggests similar movies based on their views and the number of star ratings that the user gave a similar movie. Another example of big data usage is the popular shopping search engine website, Amazon, which compiles information from consumers based on pages they have viewed previously as well as items they have bought and suggests similar items.

The most recent issue with racial bias involving the use of big data suggestion algorithms involved Amazon. The popular e-commerce company recently implemented an upgrade to the Amazon Prime service and now offers Prime Free Same-Day Delivery, which provides Amazon Prime members with same day delivery of more than one million products for no extra fee on order over $35. [5] When Amazon started this new service, it was offered in 27 major metropolitan areas and provided broad coverage in most cities. [6] For example, in its hometown of Seattle, Amazon offered this new service to every zip code within the city, including surrounding suburbs. [7] However, in six major cities, these same services were not offered in zip codes with a high population of black citizens from low socio-economic backgrounds. [8] Which is ironic considering that these types of services would arguably be more beneficial to a black, struggling single mother who (between running from job to job and taking care of her children) is unable find the time or spare the bus fare to go to the store, locate an item, and purchase it, than it would be for a wealthy white yuppie who has no children, has their own vehicle, has the free time to take afternoon Zumba classes  and splurges daily on iced pumpkin spiced lattes from Starbucks.

Online ad delivery is another area where one can see bias and discrimination based on race as well as gender. Ad delivery is the process by which search engines and websites, due to sponsorships and funding from adword companies, display advertisements on their website in the form of picture links and keyword search links based on the content of a user’s search. Recently, Harvard professor Latanya Sweeney conducted a cross-country study of 120,000 internet search ads and found repeated incidents of racial bias. [9] Specifically, her study looked at Google adword buys made by companies that provide criminal background checks. [10] At the time, the results of the study showed that when a search was performed on a name that was “racially associated” with the black community, the results were much more likely to be accompanied by an ad suggesting that the person had a criminal record regardless of whether that person actually did. [11] Obviously, this typically produces adverse results and severely diminishes the employment opportunities for those individuals whose names are accompanied by ads suggesting that they might have a criminal record.

We can also see instances of gender discrimination in targeted online ad delivery.  For instance, Google’s online advertising system showed an ad for high-income jobs to men much more often than it showed the ad to women. [12] Also, research from the University of Washington found that a Google images search for “C.E.O.” produced results where only 11 percent of the images were actually women, even though 27 percent of United States chief executives are women. [13]

The impact that all of these forms of racial and gender discrimination have on current society operates on a subconscious level. It has been argued that these forms of racial and gender bias only serve to reinforce and reify these biases within individuals and society at large. A person searching for pictures of black teenagers and is instead bombarded with images of black teens in a criminal line-up will soon begin to think (or continue to think, if they already adopted this faulty mindset) that all black people are dangerous or criminals. Similarly, employers who are consistently inundated with ads suggesting that individuals with names typically associated with the black community have a criminal record will soon begin to assume that all persons with the name Jerome or Laquiesha have a criminal record. And women who are only targeted with ads promoting lower-paying jobs than men may begin to believe that these are the only jobs that are available or best suited to them. After all, if the internet said it then it has to be true, right?

But are these algorithms, in and of themselves, truly to blame? Although these search engine algorithms are largely self-correcting and self-sustaining, they are all created and programmed by humans. Humans may create these formulas to be unbiased, but they also (whether consciously or subconsciously) input their own human social and cultural stereotypes and biases within these formulas. One area of potential bias comes from the fact that so many of the programmers creating these programs, especially machine-learning experts, are male. [14] And white. Humans recreate their social preferences and biases, and algorithm and data-driven products will always reflect the design choices of the humans who built them. [15]  Once created, these systems simply “learn” from the now embedded information that was originally inputted by their human programmers.

So what does the law say about all of this? Does it say anything? Subsection (a) of section 1981 of the United States Code 42 provides that all persons within the jurisdiction of the United States shall have the same right in every State to the full and equal benefit of all laws and proceedings. [16] Later codifications of this code have included the Civil Rights Act of 1964. Title VII of this Act applies to most employers and prohibits employment discrimination based on race, color, religion, sex, or national origin, and through guidance issuance in 1973, now also extends to persons having criminal records. [17] Title VII does not prohibit employers from obtaining criminal background information; however, certain uses of criminal information, such as a blanket policy or practice of excluding applicants or disqualifying employees based solely upon information indicating an arrest record, can result in a charge of discrimination. [18]

In light of all of this, I would like to pose some questions to you. From the current legislation, there seems to be legitimate legal implications for those who have been found to be engaging in various forms of online discrimination. But who should actually be held liable for these types of abuses? The company, or the individual programmers, or both? Should liability even attach in these instances? Should there be a legally viable cause of action for individuals (or class of peoples) who claimed to have suffered from these types of virtual discrimination (think of instances like Amazon shipping practices or employers influenced by suggestive ads)? Is this even a legitimate issue that should be addressed? If so, what are some potential solutions to this growing problem?



















[16] 42 USC § 1981.








Payment Blockades in the Fight Against Cyberlockers

•September 10, 2016 • 10 Comments

File sharing is the simple term that is used to describe the complex array of processes and technology involved in transferring digital information through online networks. [1]. It can be encountered in some form on almost every website. Among its most popular applications are websites and programs that host files submitted by users, including copyrighted movies and music. Since at least the mid-nineties, file sharing has been in constant friction with artists and industry groups who have lost millions of dollars from violations of their intellectual property (IP) rights. This has prompted attempts by the Federal Government and private organizations to combat illegal file sharing, with differing degrees of success. This blog explores payment blocking, one of the more recent methods, and how it may develop going forward.

First, an overview of illegal file sharing for context. In June 1999, launched a peer-to-peer file service that specialized in the transfer and trade of Mp3 files. [2]. At its peak, the site had over 70 million subscribers, but by July 1, 2001, the company shut down its service in the fallout of an IP lawsuit by members of the Recording Industry Association of America. [3]. Napster was subsequently liquidated in 2002, following bankruptcy, and the company never recovered. [4]. In the years after Napster’s bankruptcy, the use of BitTorrent (a form of file transferring) gained widespread adoption and led to the creation of popular torrent hosting sites and clients such as The Pirate Bay and Limewire. [5]. In addition, other sites, such as (Megaupload), accumulated user-submitted files and made them available for direct download from servers across the globe. [6]. Over time, many of these file sharing systems, generally known as cyberlockers, have been taken down at least once (some permanently) by federal interventions. However, they have always managed to return in some form or another.

The two most popular forms are those that allow for direct downloads, like Megaupload, and those that share content through a steaming service (playing content without transferring the actual file to the user). [7]. Both forms typically generate revenue by selling advertising space, premium memberships, and related software. [8]. The greater the internet traffic, the more revenue these cyberlockers produce, and they produce a lot!

The federal indictment of Megaupload in 2012 alleged that, at one point, the site was the 13th most visited website on the internet. [9]. The indictment further alleged that Megaupload had generated over 150 million dollars in premium memberships and over 25 million dollars in advertising revenue. [10]. Meanwhile, much of the material generating traffic was copyright protected, and each download arguably reduced the value of the owners’ IP.

Overall, for sites that offer direct downloads, the percentage of files violating copyrights has been found to be in upwards of 78%, and as high as 83% for streaming services. In addition, files on cyberlockers tend to include harmful malware and other illegal content. A recent study by NetNames, a staunch advocate of IP rights, found that more than half of current cyberlockers were responsible for infecting computers with malware, at least some of which likely facilitated identity theft. [11]. Further, the indictment of Megaupload alleged that the site was the frequent host of child pornography and terrorist propaganda. [12].

The question remains then, what is being done to stop cyberlockers? In steps the payment blockade. Approximately 80% of online transactions involve the use of a credit or debit card. [13]. Therefore, major credit transaction companies, such as PayPal, Visa, and MasterCard, can effectively slow the flow of money into cyberlockers by refusing to offer them payment processing services. [14]. This limits the cyberlockers’ ability to generate membership revenues and has the added effect of diminishing their capacity to reward pirates for uploading illegal content.

Currently, there are “best practices” frameworks in place that allow IP holders to report IP rights violations to payment processors. [15]. These processes have many steps. One process, for example, requires that IP holders send cease and desist letters, collect evidence of infringement, identify and describe infringing products, and provide evidence of their IP rights – all before submitting a complaint. [16]. However, there is some concern that they may not be implemented fairly. [17].

These frameworks are extrajudicial; they lack the kinds of procedural guarantees that merchants would otherwise receive in a civil trial. [18]. The standard for evidence of infringement is limited only by the effort payment processors are willing to accept in order to ensure just outcomes. Further, the staff investigating and passing on these matters may have no legal background. There is also an alarming incentive to satisfy powerful IP holders to the detriment of smaller merchants, especially where protocols place the burden of proof on the alleged offender. [19]. There may even be the potential for conspiracies between IP owners and powerful merchants to accuse competing merchants to reduce competition. While there may be a requirement to report in good faith, [20] there are still many who might find a benefit in an efficient breach. Thus, the effect is to create a system where merchants could potentially face financial ruin for only minor IP violations with a review standard limited to the payment processor’s business judgment.

It should not come as much of a surprise that payment processors would want some assurance that they can identify and prevent illegal transactions. What is interesting is that the Federal Government has put political pressure on payment processors to adopt these frameworks instead of legislating in the area. [21]. There are many reasons why Congress and the Executive branches would stay clear of regulation, especially considering the cost of oversight. However, it is concerning that the government is encouraging the adoption of potentially unscrupulous practices.

What is of even greater concern is that the Federal Government may be encouraging more than just frameworks. There is credible evidence to suggest that major payment processors Visa and MasterCard were pressured to deny transaction services to WikiLeaks in the wake of the website’s 2010 leak of military documents. [22]. The denial of service came without formal charges levied against WikiLeaks, and the effect of the blockade temporarily reduced the site’s income by 95%. [23]. There was also recently some suggestion that the Motion Picture Association of America (MPAA) had placed pressure on Senator Patrick Leahy to convince Visa and MasterCard to target specific VPN servers that were allowing users to mask their IP addresses when illegally downloading movies from Megaupload. [24]. The situation is all the more curious considering Megaupload founder Kim Dotcom’s well-known feud with the MPAA. [25].

For now, there are many ways that users and cyberlockers can circumvent a payment blockade. For one, the cyberlockers will continue to earn revenue from the sale of advertising space. In addition, cyberlockers may accept bitcoin and utilize an army of shell companies to conduct transactions. [26]. These both allow users to funnel money into a source that cannot be easily traced to the IP violator. It is not yet clear how payment processors will tackle these issue, and it will be interesting to note what influence, if any, payment processors will bring to the development and proliferation of bitcoin.

I’ll leave readers with a couple of thoughts to consider. First, knowing the inherent risks, pressures, and limitations of payment blockades, should they continue unobstructed or should there be greater oversight of the process? It might help to remember that Congress has recently failed to pass both the highly publicized Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA). Does it change your mind at all to know that PIPA was introduced by Senator Patrick Leahy, and that there may be strong political pressures at play? How far should such a regulatory scheme go? Currently, the Digital Millennium Copyright Act (DMCA) allows for an aggressive takedown process that is comical when IP owners accidentally target themselves [27], but disturbing when the owners incorrectly target innocent fair users. Should that kind of oversight concern voters when considering future legislation?

Second, should we be advocating for greater penalties against payment processors for supporting IP theft? Surly, the credit card companies have made plenty of money from these illegal transactions and a simple search online would have revealed their obvious contributions to IP rights violations. Why then do they deserve a gold star for implementing a blockade instead of a penalty for past offenses? It is possible to sue for contributory and vicarious infringement of copyright and trademark protections. [28]. These four claims were addressed in Perfect 10, Inc. v. Int’l Serv. Ass’n, where Visa was sued for providing processing services to a cyberlocker.

For contributory copyright infringement, the standard is whether the intermediary “induces, causes, or materially contributes to that infringing conduct.” [29]. The standard for knowledge is actual or constructive and must be based on a “specific instance of infringing activity.” [30].  The Court held that because Visa was not essential to the actions of reproducing and distributing the IP, they made no material contribution to the violations.


In the case of contributory trademark infringement, the standard is “intentionally induced an underlying direct infringement or continued to supply either a service or an infringing product to a direct infringer while knowing of the direct infringement.” [31]. Here, the Court held that Visa lacked direct control of the infringing website and could only influence their behavior by limiting service. [32]. By the same reasoning, the Court also rejected the claim for vicarious trademark infringement because Visa lacked actual or apparent partnership with the direct infringer with authority to bind them in transactions. [33].


Finally, the standard for vicarious copyright infringement is whether the intermediary “had, but declined to exercise, the right and ability to control or supervise a direct infringer from whose actions it directly profited.” [34]. Again, the Court found for Visa reasoning that the ability to influence infringement by financially punishing an infringer is different from the ability to supervise and control the infringer. [35].

File sharing comes with a moral divide. On the one hand, it has provided for legitimate and cutting edge applications of online media, opening up the door to research databases, social networks, and cloud computing. While, on the other hand, it has facilitated the illegal pirating and distribution of intellectual property on a global scale. How we respond to the later will largely dictate the freedom and the development of the former. That is why we should keep a close watch on the development of payment blockades, especially if they are given the full support of the Federal Government.







[6] (at paragraphs 4 and 6)

[7]  (at page 1)

[8]  (at page 3)

[9] (at paragraph 3)

[10] (at paragraph 4)

[11]  (at page 10)

[12] (at paragraph 24)

[13] (at page 1526)

[14] (at page 1526)

[15] (at page 1528)

[16] (at page 1550)

[17] (at page 1560)

[18] (Id.)

[19] (See page 1560)

[20] (See page 1553)

[21] (See page 1527)

[22] (See page 1524-25)

[23] (page 1525)





[28] (See page 1531-36)

[29] (page 1531)

[30] (Id.)

[31] (at page 1533)(quoting Perfect 10, Inc. v. Visa Int’l Serv. Ass’n, 494 F.3d 788, 807 (9th Cir. 2007))

[32] (at page 1534)

[33] (at page 1535-36)

[34] (at page 1534)

[35] (at page 1535)


Mortgage Fraud Through the Straw Person Scheme

•September 5, 2016 • 10 Comments

What is real estate? As defined on Investopedia, real estate is property that is comprised of land and the buildings on it. For most people, the American Dream is to own their own piece of real estate which also usually happens to be a person’s most valuable asset. Throughout the years’ people have come up with a variety of ways to misrepresent information to obtain an advantage in the real estate transaction. There are many forms real estate fraud can take; these range from mortgage fraud to the straw-man scheme. Here is a list of several types of real estate fraud that are out there (please keep in mind that this is not an exhaustive list and there are many other forms real estate fraud can present itself in) (5 Okla. J. L. & Tech. 44):

  • Mortgage Fraud: Occurs when a borrower makes a material misrepresentation or omission on a loan application for which a lender relies upon to give out the loan. Had the lender been aware of the actual facts of the surrounding circumstances, the loan would either not have been approved or the borrower would have received a smaller loan amount.
  • Flipping: Flipping homes is not an uncommon practice. There is a fine line between legally flipping homes and doing so illegally. A legal scenario is when a buyer buys a home for what is considered a cheap price. After renovating and/or fixing the home, the buyer then sells the home for a profit. The whole process generally happens within a short time period. The buyer crosses the line from legally to illegally flipping homes when he/she is able to inflate the appraisal price (with the help of a professional) and receives more than what the market value of the home should be.
  • Equity Skimming: This type of fraud occurs when the buyer is able to convince the seller to re-list the home for a higher sales price than initially asked for. In doing so, the buyer is able to obtain a larger mortgage than he/she otherwise would have from a financial institution. After the buyer obtains the loan, he/she pays the seller the amount of the original asking price and the buyer keeps the remainder of the loan.
  • Straw-Man Scheme: Involved with the process to defraud is usually a professional (i.e. a real estate agent or broker, a mortgage broker, and/or a notary). There may be others involved such as the buyer, seller, and the straw person; however, the straw person being used may not actually have any knowledge of the fraud that is about to occur. The straw person is someone that currently has good credit. They are generally a close relative or friend of the buyer who has bad credit. The name and personal information of the straw person is used on all of the documents involved in the transaction. After the loan is secured, the professionals involved and/or the buyer flip the home for a profit. Unfortunately for the straw person, they never see any of the loan proceeds and are left with assumption of the mortgage, their credit may go bad, and they may face criminal charges.
    • This scheme closely resembles “flipping” with a major difference being that a third party is using their personal information to assist a buyer in obtaining the loan to buy a house. From there, the house gets flipped for a profit and the straw person is left to fend for him/herself.

In 1999 the Uniform Electronic Transactions Act (UETA) was passed. Section 7 of this act states that “a record or signature may not be denied legal effect or enforceability solely because it is in electronic form.” This was the first act which allowed the creation of deeds, mortgages, and other documents to be created by electronic means because now, e-signatures were enough to satisfy the signature formality. An electronic signature is considered any identifying electronic sound, symbol, or process that is adopted by the signor with the intent of signing the document that the signature is placed in. UETA was a big step in the push for having transactions occur solely online instead of in person and through paper documents. (5 Okla. J. L. & Tech. 44).

Following the adoption of UETA was the Electronic Signature in Global and National Commerce Act (E-Sign). E-Sign is a federal law that was created with the goal of encouraging those states which have not adopted UETA to adopt it. E-Sign gave legal effect to signatures, contracts, and other transactions that were in electronic form and affected interstate and foreign commerce. Both acts defined and treated “electronic signatures” the same. Their differences were in how the acts responded to the need to correct a mistake in a document and how each act treated consent by the parties. UETA gives the parties the option to either correct or disregard an error in a contract while E-Sign has no provision to allow a party to correct a mistake. For an electronic signature to constitute consent, both acts allow consent to be inferred from the parties’ conduct; however, the intent to consent is a critical element of UETA. In UETA both parties must agree to use electronic forms. (5 Okla. J. L. & Tech. 44).

A major problem with UETA and E-Sign was that neither addressed the issue that a recorder’s office would not record e-documents in the public record. Both acts addressed transactions which were yet to be included in those items which could be recorded. In response to this issue, the Uniform Real Property Electronic Recording Act (URPERA) was passed. This act laid the groundwork for states in creating a uniform system of how to deal with the electronic recording of real estate transactions. (5 Okla. J. L. & Tech. 44).

Before the acts affecting e-recording came to fruition, transactions that were conducted with paper documents could take weeks, even months to be completed. With the aid of computers, such transactions could now take several days, hours, or even minutes. What are the implications of this? More transactions started being conducted via electronic means. Hackers and/or criminals that appropriate a borrower’s identity or commit some form of real estate fraud can get away with committing more fraud in a shorter period of time before someone notices that their identity was stolen or before a professional or institution may notice there has been a misrepresentation on a loan application.

Lets talk about how mortgage fraud fits into the process of e-recording. As defined by §817.545, mortgage fraud occurs when a person knowingly and with the intent to defraud makes or uses and facilitates “any material misstatement, misrepresentation or omission during the mortgage lending process” intending for the mortgage lender to rely on such misstatement, misrepresentation, or omission. The statute also covers circumstances where a person receives any proceeds in connection with the mortgage lending process which the person knew was a result of a violation.

As stated earlier, a straw person may be paid for the permission to use their name and personal information in a transaction. The straw person is usually one who can obtain better loan terms than the intended buyer. A straw person may be aware about what they are agreeing to or, like many unsuspecting Americans, they are enticed by the opportunity to make easy money and do not find out what they have consented to until it is too late.

So how does the mortgage fraud statute fit in with the straw person scheme? There are companies that reach out to people who have good credit in an attempt to get their consent in using their identification and personal information. Those companies will usually pay a person around $5,000 to $10,000 for the ability to use their name and personal information. Unfortunately, many people do not consider the consequences of giving such information when they have the option of receiving what they consider a large sum of money. The information these companies acquire are used in mortgage loan applications, generally with the help of professionals in the real estate market.

The information in the mortgage loan application that uses the straw person’s identity and personal information is a material misrepresentation in which the financial institution relies upon and invokes §817.545. Due to the misrepresentations, the lender is under the misbelief that the straw person will be able to pay back the loan due to his/her good credit, among many other misrepresentations. These misrepresented documents are eventually sent into the recorders’ office to be electronically recorded. The straw person is now liable for the mortgage he/she never intended on securing because their name is attached to the mortgage loan application via an e-signature in which someone merely typed out their name within a document.

If there is a backlog at the recorders’ office, a perpetrator or company can fraudulently continue taking out several mortgages on the same or different properties using the same straw person’s information. This is because a loan has already been secured but since it has yet to be recorded, there is no notice being imparted to other financial institutions and even the person whose identity and personal information is being used.

Before a document may be recorded, the signature and notary formalities must be overcome. Such requirements are put in place to help prevent fraud. But such formalities are not hard to get around. The signature formality can be overcome by inducing a person to sign, whether it be under duress or deceit, or forging the signature either on a paper document or an e-document. It is possible to forge a signature on both a paper document (by physically forging the signature) or on an e-document (by typing out a person’s name in the required field). The notary formality may be overcome by either finding a notary who is willing to be involved in the scheme to defraud or finding an incompetent notary.

In 2014, Lawrence Wright, a Florida resident received a sentence of 75 months in prison and was ordered to pay restitution of over $3.7 million after being charged with identity theft, making a false statement to a financial institution, and other counts. Wright enlisted the help of several straw buyers by promising them that he would make payments on the loans and eventually flip the property and share the profit with them. Wright had the straw buyers use the name of his ex-wife on the loan documents. Hopefully the straw buyers knew what they were doing was illegal because Wright was certainly aware of his actions.

Regardless of which type of fraud a perpetrator is trying to commit, there are steps to help prevent fraud. ALTA (American Land Title Association) has laid out several best policy practices to help ensure companies and firms are doing what they can to prevent fraud in the real estate transaction process and to ensure they will not become a victim of fraud themselves. Several of the policies they laid out are as follows: 1. Establish and maintain current licenses; 2. Adopt and maintain written procedures and controls for Escrow Trust Accounts; 3. Adopt and maintain a written privacy and information security program to protect Non-public Personal Information; and 4. Adopt and maintain written procedures for resolving consumer complaints; among other recommendations.

There are also a plethora of steps that the average American can do in order to prevent becoming the victim of fraud. What are several things you can think of that the average American can do or be on the lookout for to prevent becoming a victim of fraud?

As mentioned within the brief description of what “flipping” is, not all circumstances of flipping a home is illegal. Can you think of an example in which using a straw buyer is legal?

The Silk Road, Hacking, and the 4th Amendment

•November 15, 2015 • 11 Comments

This week I will be talking about the arrest and prosecution of Ross Ulbricht. Ulbricht was convicted for being the Dread Pirate Roberts which was the online persona of the owner and manager of the Silk Road, a black market website. The FBI, through its investigation of The Silk Road, used methods of investigation that could very well have been a violation of Ulbricht’s 4th Amendment rights. The evidence was admitted anyways. In this blog post I will be discussing why that happened and what I think should have been done about it.

You may ask, “Drew, how could evidence that you believe is a Fourth Amendment violation get admitted?” The answer, it’s complicated. The official reason the evidence got in was a technicality. As covered by Andy Greenberg, the Government did not have to prove that they did not violate Ulbricht’s rights because he never claimed to have an ownership interest in the server that was discovered to be hosting the Silk Road. To understand this, you may need a little more background on the story.

The defense team made the strategic decision to deny that Ulbricht was the Dread Pirate Roberts, the persona in charge of the Silk Road.  To achieve this end and to make sure Ulbricht was not open to impeachment on cross examination, the defense team decided to not claim any knowledge much less ownership in the server or electronically stored information held on it.   With this decision, regardless of the strength of the defense’s motion to suppress (and we will get to this next), there was no way to claim a violation of Ulbricht’s rights.

The motion to suppress filed by the defense(the first portion of the file) was very impressive.  They built a very strong case for a violation of Ulbricht’s rights.  It mainly boiled down to an argument that almost all the evidence collected against Ulbricht was fruit of the poisonous tree.  The case that the government presented was based on the server that was previously mentioned found in Iceland.  How exactly did they find this server? It is not exactly clear and, as previously stated, because of defense strategy it did not have to be disclosed.  The server in question would seem to have been impossible to find.  The Silk Road was a website on the darknet and could only be accessed through the TOR browser.  The only payment method accepted on the Silk Road was bitcoin which is a crypto currency that is also supposed to be untraceable. The way that these two emerging technologies were used in tandem should have made the server basically invisible, but the FBI found it and copied all of its file AND used it to infiltrate Ulbricht’s criminal enterprise.

The defense’s argument basically claimed that the FBI hacked the server somehow to collect the evidence that originally pointed to Ulbricht.  They then used that evidence, allegedly illegally obtained, to get new warrants and close in on Ulbricht.  This would seem to be a violation of the Fourth Amendment no matter how you look at it.  Here’s where it gets tricky for me, I do not know what the government could have done to stop the Silk Road.  It is a completely new type of criminality.  It is blatant and operating in the public space, where drugs dealers used to not be able act, and yet it was basically untraceable. The market place allowed for the sale and purchase of weapons of almost any variety, drugs, and even fake government documents including passports, IDs, and Social Security cards. This is definitely a national security threat especially in today’s world with terrorist groups attempting to attack innocent civilians in any place possible. So, while I agree that the government should not be breaking the rules as it appears they did in this investigation, I also do not think that they had any other options in this case.

In their response the government laid out their arguments for a lack of fourth amendment violation. They make interesting arguments for why they do not believe that they violated Ulbricht’s rights Including the fact that they turned the information about the presence of the server over to Iceland and let their own courts settle how to seize the server.  This process would allow them to not have to worry about the violating the Fourth Amendment, but it still begs the question of how they possibly knew of the server in the first place?

Finally, it has recently come out that the FBI may have paid Carnegie Mellon to break the TOR browser encryption.  This would be an interesting end around on the Fourth Amendment again because it would be a private entity breaking the law not the government. As a strong advocate for a free and open internet, I do not know how I feel about this either.  This is especially true when it was not broken only to see criminals, but actually any and every person on the Tor browser.

I clearly do not know what we should do to fix a situation with such blatant almost mocking criminality in the future.  I also do not know if Ulbricht’s conviction will stand.  I currently am leaning towards the feeling that it will be overturned.  Either way I am excited to see what you guys think about this problem and read the solutions you can come up with as well.

Surveillance, Virtual Financial Crimes, Digital Currencies and Privacy

•November 2, 2015 • 20 Comments


This week we will be shifting gears from human trafficking, which crime was virtualized with the help of backpage and begin to discuss the dark web which intersects with and augments much of what we have been discussing over the last couple months. Because a personal matter took me out of school for over a week and I fell behind in my classes, I was unable to enjoy the myriad fun activities around me this weekend. I was so focused on getting caught up in my classes that yesterday I asked my fiancée if I could put out a basket of candy with a sign instead of passing it out while she attended the party I couldn’t make. She approved of this sign which she located for me on pinterest:

Halloween Sign

Little did I know I was beginning a sociology experiment.

We recently installed new security cameras on our property and they come with a handy app for your smartphone, so you can check on your property at any time. We can even hear in real time. Since our camera is right next to the candy basket (but unfortunately too close to see into the basket), I decided to stream the security system on my phone as I continued to draft this blog just 1 flight of stairs above the camera and candy basket. I figured if I kept an eye and ear on the camera it would give me a chance to grab my lawfully acquired assault weapon in case it looked like a ghoul or goblin was going to take over my property. And enjoy the Halloween costumes. I feel like it turned into an episode of “What Would You Do” except I was John Quinones and I never got to catch up with any of the unknowing participants.

I didn’t connect the dots when some teenage boys showed up as some poorly done skeletons and I heard “One. One. One. One. One. One.” but even more times in rapid succession – apparently their interpretation of the sign, as I would learn. I thought it was strange they hovered over the basket for so long. They were oblivious to the camera. The next group of kids helped me out though and let me know it was time to refill the basket when a kid that reminded me of this YouTube personality announced, “Someone dumped your candy basket! I see that camera! Don’t let anybody take advantage of you!” I wish I could have made it down in time to thank him, but I refilled the basket for a second take at this experiment that I was now weirdly invested in. His insight is fortuitous with respect to this blog post.

It was around the height of the trick-or-treating and there was a steady flow of trick or treaters that seemed to really mind the sign, even though the vast majority were oblivious to the camera. The rare exceptions gave me something to chuckle about when one princess said to her partner in crime, “There’s a security camera,” seeming to offer up a friendly reminder just in case the sign wasn’t clear enough. The other girl nervously replied, “I know. That’s why I’m really nervous I took two.” No worries little girl, as long as you don’t dump and run like those foolish skeletons then you saved me a trip downstairs. Eventually the basket ran out again after I heard a parent console their kid that it wasn’t a big deal the basket was empty. I was almost disappointed at how quickly my third and final basket refill went. The traffic died down and there were fewer groups coming by. Soon a Darth Vader or some sort of sci-fi looking creature showed up and looked like he had spent more time on his costume and face paint than a bride getting ready on her wedding day. What appeared to be his young kid (around 4 or five) was waiting for him on the end of the driveway. I was shocked to hear the next group say that there was no candy left. I couldn’t believe the father did something like that in front of or for/on behalf of his kid.

Anyway, I didn’t want to open up my blog with a boring story but I do think the anecdote invites us to start thinking about what level of intrusion into our lives is appropriate and by whom?   Does the government have a compelling interest in surveilling our financial transactions? Should they have a blanket right? What about the companies we do business with? Our insurers? Our employers? Does or should our federal/state constitution protect us? What about privacy in our transactions over the Internet? We are all so individual and our actions, even based on a simple halloween sign, vary wildly.   The overarching theme to me was that while surveillance seemed to make one more cautious, in the end, one will accomplish whatever he sets out to do, be it engage in human trafficking, exploiting children, or driving to chick-fil-a for an ice dream. But I digress…

The dark web is often misconstrued as dominating the deep web, which is that portion of the web that can’t be crawled by Google.   It represents sites that require authentication or passwords to access like our bank accounts and email. This is the overwhelming majority of the deep web. The more nefarious activities that occur on the dark web are different. The dark web is accessed anonymously over what is known as a Tor network, and represents less than .01% of the web!

Further, the dark web isn’t all bad per se. Wikileaks is one such example of the less-dark web. Besides being accessed anonymously, services can also choose to be hosted anonymously on the Tor network. These onion services can only be accessed by using a tor browser. The browser makes anonymous a users browsing and, for those services that are hosted on the tor network, makes anonymous the service.

But just how far does the dark web reach? Not very far, at least since last November, 2014,  when Operation Onymous represented yet another huge takedown of services hosted on the Tor network, or onion sites.

The multinational operation, mainly between the United States Department of Homeland Security’s Immigration and Customs Enforcement Cybercrime Division as well as the European Union’s Europol (E3) Cybercrime Division, shut down 400 tor-hosted services that resulted in the seizure of over $1MM worth of bitcoin, the anonymous digital currency that is believed to facilitate much of the dark web, and its newer off-shoots like Litecoin and Dogecoin.

Bitcoin is largely believed to be what put Silk Road on the map, before its leader, known as Dread Pirate Roberts, was arrested after years of government surveillance.  Drew is going to talk more about the SilkRoad case next week, but for an introduction, Dread Pirate Roberts later became identified as Ross Ulbricht. Ulbricht had some unique ideas about economic theory that culminated from his post-graduate studies. I found this article particularly interesting in explaining Ulbricht’s theory that Ulbricht wished to address the systemic use of threat and force and that prohibition was a root cause of the physical harms that are associated with crimes related to human trafficking, child pornography, and drugs. This coalesces with the NYU law study I have referenced in my comments the preceding two weeks which hypothesizes that addressing coercion and force that leads to so many victims moreso than the underlying crime the victims are participating in does a better job, as a matter of policy, in reducing the coercion and force.

Speaking boldly about his disbelief in prohibition, Ulbricht stated about his creation, “It makes drug buying and selling so smooth that it’s easy to forget what kinds of violent fuckers drug dealers can be. That’s the whole point of Silk Road. It totally takes evil pieces of shit out of the drug equation. Whether they’re vicious drug dealers or bloodthirsty narcotics cops, both sides of that coin suck and end pretty much the same way. Death, despair, madness, prison, etc. Thanks to decentralization and powerful encryption, we’re able to operate in a digital world that is almost free from prohibition and the violence it causes.”

So although it appears the dark web is often criticized as being a breeding ground for weapons, child pornography, and stolen credit card numbers, it seems that Ulbricht’s brainchild was meant to facilitate non-violent drug transaction between an anonymous willing seller and an anonymous willing buyer. I wonder to what extent the result for Ulbricht may have been different if the myriad seemingly less innocuous inventory never became part of silk road?

Like the many world empires that have risen and fallen just like Silk Road, so too have the successors to the dubious marketplaces. After Operation Onymous, which took down Silk Road 2.0 and DPR’s “defcon,” there were few left standing, but as time progressed, the market has seemed to come to a screeching halt. One of the few remaining tor-hosted services was the “Evolution Market,” but it vanished in an exit scam just months before Ulbricht received his life sentence. Over $12MM vanished overnight. The market that was poised to succeed Evolution Market was Agora. But as recently as August, even Agora voluntarily “suspended operations.”  It appears a study released in July exposed a vulnerability in the Tor network that, in theory, could have allowed the government to deanonymize Tor traffic. Apparently fearing some sort of Operation Onymous 2.0, Agora took itself offline before anyone else could. Some speculate that the federal government did not conduct some sort of mass deanonymization effort, but instead just continued to use good old fashioned police detective work.

Irrespective of the means, one thing is for sure: it appears that the dark web has fallen on the darkest of times in recent memory as activity seems to be at an all time low. But, asides from the old fashioned detective work and perhaps some vulnerabilities in the Tor system, what does the federal government have in its arsenal to address these types of virtual crimes?

The Bank Secrecy Act. The Bank Secrecy Act of 2000 (31 USC Sec. 5311-5330) reduces a citizen’s right to privacy concerning banking information. Financial institutions are required by the federal government to monitor customers, maintain records, and report personal financial transactions that “have a high degree of usefulness in criminal, tax, and regulatory investigations and proceedings.” 12 USC Sec. 1951. Suspicious Activity Reports must be filed with Treasury Department’s Financial Crimes Enforcement Network, commonly known as FINCEN. 31 USC 5318(g)(1).

Financial institutions report these things secretly, without the consent or knowledge of its customers. The Reports are available electronically to every United States Prosecuting Attorney, over 59 law enforcement agencies including the FBI and Secret Service. The regulations make clear that these agencies need not suspect an actual crime before accessing a report, nor is a warrant or subpoena necessary.

It is clear then that the government has deputized banks to be its eyes and ears in the financial markets. Our policies ensure that our markets are centralized and all of our transactions go through the banking system. It is easy to see the threat imposed by the advent of Bitcoin et al. They are decentralized and are not transacted through financial institutions, but rather the internet.

Was the government more worried about the underlying transactions on the dark web or more about the fact that the cryptocurrencies made it difficult for them to be in the know? I believe it was the latter, and I think that is was led to FINCEN guidance in 2013 which were regulations designed to apply the Bank Secrecy Act implementing regulations to those using virtual currencies.

It appears the regulations were directed at Mt. Gox which at the time handled 70% of the bitcoin exchanges each day. In the months following the regulations, Mt. Gox’s market share actually ballooned to 90% until the Department of Homeland security swooped in with charges of violating the FINCEN regulations requiring it to register as a money-transmitter. It obtained the required license just shortly before effectively shutting down by halting United States Dollar withdrawals. The official demise came months later when it officially shut down and filed for bankruptcy after being “unable to recover from a significant bitcoin theft” that was equal to 6% of Bictoin in circulation at the time. Call me crazy, and Mt. Gox can call it theft, but it sounds like the kind of illiquidity than only a government or large market maker can effect, if the treasury markets are any indication.

Around the same time FINCEN stepped up efforts to slow the progress of virtual decentralized currencies, the US enacted FATCA which is known as the Foreign Account Tax Compliance Act. It created mandatory reporting requirements of foreign institutions of US account holders. It also required individuals to disclose foreign assets on tax forms, irrespective of whether or not there was income associated with the asset. Seen as a scourge by many with dual citizenship, Americans forever renouncing their citizenship have been on the rise, many because of the onerous requirements under FATCA.

So fellow classmates, what do you think this is all about? Is the government sincerely interested in shutting down the teeny-tiny dark web that is, no pun intended, seemingly on its last leg? Is it part of the United State’s war on drugs? Is it about the US wanting to have unlimited amounts of information about its citizens and their financial activity? Certainly the events of September 11, 2001 and terrorism subsequent to then give the government a very compelling interest in preventing and detecting terrorism, (and protecting against its financing and money-laundering related to terrorism) but just how much privacy must we give up in the interest of security? In Florida there is Constitutional right to privacy written into our constitution. Fla. Const. art. I, Sec. 23. The right has been held to be fundamental and thus requires a compelling state interest to use the least intrusive means to further the interest. Knowing this, States can provide leadership in the privacy arena because of the Constitutional options available. Would recognition of such a right at the federal level have changed the course of investigation into Silk Road and its successors? Or if California had a similar fundamental right? I don’t think it would have changed the investigation, but I do think it would have given Ulbricht unique constitutional arguments that could have changed the outcome of his sentence.

What about States where federally illegal drugs have been legalized and businesses are still effectively oustered from the banking system. Should they be forced to carry bags of cash? Doesn’t digital currency make more sense for these more vulnerable companies? They can’t seem to operate with or without the government, very much begging for federal attention to address the issue.  The fed hasn’t answered the call though and the only progress that has been made on the fed/state dichotomy issue is the Cole memo, issued in 2013 by the US Dept. of Justice. What more can be done to allow states to serve as the laboratories for democracy?

Ben Franklin wrote “They that can give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.” Has the United States struck the correct balance between privacy, security, and liberty? I very much look forward to your comments and our discussion on Wednesday.

Peer-to-Peer File Sharing of Copyrighted Materials

•November 1, 2015 • 11 Comments

I am writing my paper on peer to peer file sharing and how the current and proposed criminal laws are deterring (and failing to deter) future sharing of copyrighted materials. For those who do not know, a peer-to-peer (P2P) network is a network that allows users to search and access files from other end-users computers “peers”. The files will be download by a user directly from the other peers’ hard drives. These P2P networks are usually run through a program or a website, but that program or website does not hold the actual files.

In this blog post I talk about two of the biggest recent take downs of Peer to peer file sharing services, Megaupload and Grooveshark. These two takedowns were rather successful at stopping the copyright infringement that the sites were promoting. In my paper I focus on BitTorrent which presents some different problems then these two services. The kind of search and seizure that happened to these two sites is not very effective in stopping infringing material being shared through the BitTorrent protocol. The reason that Megaupload and Grooveshark were able to be taken down was because their P2P users needed to use Megaupload and Grooveshark’s servers to share files with one another. BitTorrent files called .torrent files cannot be stopped so easily because the P2P network is decentralized. This means the shutting down a website (such as Pirates Bay was), does not stop the files promoted on the site from being shared. Megaupload and Grooveshark have both been shut down but there were and still are many legal wrenches in the United States attempts to do so.

On January 20, 2012, New Zealand authorities raided Kim Dotcom’s mansion as part of the American-led global shutdown of his Hong Kong based file sharing company MegaUpload. Dotcom still faces 13 American criminal charges including: copyright infringement, racketeering, wire fraud, and money laundering. The United States filed a formal extradition request with New Zealand prosecutors to get Dotcom in front of a federal judge in Virginia. The US indictment states that Megaupload does not meet the criteria for safe harbor under the Digital Millennium Copyright Act (DMCA) because they were “willfully infringing copyrights themselves on their systems”. The indictment claims that Megaupload employees knew full well that the site’s main purpose was to distribute infringing content, and they encouraged it. A reason that the US prosecutors believe that the employees knew and encouraged this was because of email that they recovered between employees. The emails explain how Megaupload’s “uploader rewards” program worked. This program gave uploaders cash for uploading DVD quality movies and other files in demand. An email recovered from 2008 from an employee says that, their business is that of “modern day pirates.” The US also claims that the sites “abuse tool”, that could be sued by owners of copyrighted material US prosecutors claim that the site has earned more than $175 mostly through copyright infringement.

Dotcom has still not been extradited in the last three years because his lawyers have been able to continue to have the extradition hearing delayed by challenging the validity of the warrant executed to search his business and estate. It has currently been rescheduled ten times. However, Dotcom and his Co-defendants have lost their most recent bid to delay the extradition hearing scheduled for September 21, 2015. Of course this ruling will be appealed and we will have to see if this date will get pushed back again. Dotcom is currently living in his mansion in New Zealand where he has been out on bail

A major reason that Dotcom has not been extradited yet is because copyright infringement is not an extraditable offense. Of the 13 counts that Dotcom has been charged with, only two, racketeering and money laundering, fall under the extradition treaty between the US and New Zealand.

One of the Defendants in Dotcom’s copyright case, a program developer, was arrested in Virginia in February 2015, after being extradited from the Netherlands. He has pleaded guilty to felony copyright infringement and was sentenced to a year and a day in US federal prison. In his plea agreement, the developer admitted that he was aware that copyright-infringing content was stored on the website. Prosecutors hope to use his admission to help the extradite process with Dotcom.

Grooveshark was another P2P file sharing service that had 35million users at its peak. Grooveshark provided streaming access to a library of millions of songs. Grooveshark had one several lawsuits by The Recording Industry Association of America (RIAA), until in Federal judge in New York, ruled that it infringed on thousands of RIAA copyrights. Grooveshark’s defense had been that it complied with the DMCA’s requirement to respond to takedown notices from copyright holders. A reason for the ruling was because many Grooveshark employees had uploaded a total of 5,977 songs without their label’s permission. Because of this and other lawsuits that Grooveshark was involved in, it shut down in 2015.

Technology advances much faster than government can pass new laws and while the United States is still trying to prosecute Kim Dotcom other P2P methods have already taken over. There are obviously many obstacles in shutting down websites that are based in other countries. I think that the only way for the US to be able to stop the P2P sharing of copyrighted material in the US, the government must make strict criminal laws for the users downloading these copyrighted files. Currently, almost all internet service providers use what is called a six strike policy. This is where groups like the RIAA and MPAA monitor P2P networks and send the IP address of users who share or download copyrighted material to their internet service providers (ISP). The ISP’s then take a series of steps to inform their subscriber they are breaking the law. If subscribers ignore the many warnings the worst ramifications that they will receive is getting their internet throttled. ISP’s will not give up their subscriber’s information unless there is a subpoena or a warrant. I think making a law around this system to criminally punish continued infringers is the best way of stopping it in the US.

Let me know what you guys think!