Megaupload Assets Can be Frozen even if Case Dismissed Says US Gov

Megaupload doesn’t have a US address and federal rules of criminal proceedings do not have any way whereby a notice can be served to a corporation with no US address. For this specific reason, it has come to light that Judge Liam O’Grady is currently looking at a request to dismiss the indictment against Megaupload. The judge hasn’t giving an ruling but, it has come to light that at a hearing in Alexandria, VA, both attorneys in the case were grilled by him notes arstechnica.

Megaupload’s attorney said that the company is a Hong Kong corporation and has no presence in the US and he further argued that Megaupload be subject to criminal laws of Hong Kong, but not the United States. “It’s never had a US address”, said the attorney.

The US government on the other hand is of the viewpoint that there are ways to sidestep the mailing requirement in several ways. The government could either wait for Kim Dotcom’s extradition to mail the notice at the prison he is kept or just send in the notice of indictment to Carpathia Hosting, a Virginia company that leased hundreds of servers to the cyberlocker site. Another way was to send in a notice to Megaupload’s HK address based on Mutual Legal Assistance Treaty.

The Judge seems skeptical about government’s arguments and noted that the “plain language” of the law required sending notice to the company’s address in the United States.

“You don’t have a location in the United States to mail it to,” the judge said. “It’s never had an address” in the United States.

Megauploads’ argument against above points is that the US gov hasn’t produced a single example which actually satisfies any rules that govern criminal proceedings. Most of the precedents produced by the government were in civil cases, which are completely different rules. Involving the service provider that leased servers is very different and it’s a relationship shared between Megaupload and Carpathia.

According to the US government it can keep the legal battle with Megaupload in a limbo as “None of the cases impose a time limit on service”. This gives an indication that the government is possible wanting to leave the indictment hanging and keep its assets frozen, indefinitely. The government also believes that the assets have been accumulated because of criminal activity and that as the prosecution against founder Kim Dotcom will still be pending beyond dismissal of Megaupload’s indictment, if the judge gives such a ruling.