No. 16-___
IN THE

Supreme Court of the United States
————
FINN BATATO; BRAM VAN DER KOLK; JULIUS
BENCKO; MATHIAS ORTMANN; SVEN ECHTERNACH;
KIM DOTCOM; MONA DOTCOM; MEGAUPLOAD
LIMITED; MEGAPAY LIMITED; VESTOR LIMITED;
MEGAMEDIA LIMITED; MEGASTUFF LIMITED,
(CLAIMANTS)
Petitioners,
AND

ALL ASSETS LISTED IN ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND ASSETS TRACEABLE THERETO
(IN REM DEFENDANTS),
v.
UNITED STATES OF AMERICA,
Respondent.
————
On Petition for a Writ Of Certiorari to the
United States Court Of Appeals
for the Fourth Circuit
————
PETITION FOR A WRIT OF CERTIORARI
IRA P. ROTHKEN
JARED R. SMITH
ROTHKEN LAW FIRM
3 Hamilton Landing
Suite 280
Novato, CA 94949
(415) 924-4250

————
DEREK L. SHAFFER
Counsel of Record
WILLIAM B. BURCK
STEPHEN M. HAUSS
JONATHAN G. COOPER
CAROLYN M. HOMER
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
777 6th St. NW, Suite 1100
Washington, D.C. 20001
(202) 538-8000
derekshaffer@quinnemanuel.com

Counsel for Petitioners Kim Dotcom and Megaupload Limited
April 7, 2017
[Additional Counsel Listed On Inside Cover]
WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002

 MICHAEL S. ELKIN
THOMAS P. LANE
WINSTON & STRAWN LLP
200 Park Avenue
New York, NY 10166
(212) 294-6700

MICHAEL LAFOND
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
555 Twin Dolphin Dr., Fl. 5
Redwood City, CA 94070
(650) 801-5000

STEFFEN N. JOHNSON
CHRISTOPHER E. MILLS
WINSTON & STRAWN LLP
1700 K Street NW
Washington, DC 20006
(202) 282-5000

Counsel for Petitioners Kim
Dotcom and Megaupload
Limited

ROBB C. ADKINS
WINSTON & STRAWN LLP
101 California Street
San Francisco, CA 94111
(415) 591-1000
Counsel for Petitioner
Megaupload Limited

DAVID B. SMITH
DAVID B. SMITH, PLLC
108 N. Alfred Street
Alexandria, VA 22314
(703) 548-8911
Counsel for Petitioners
Julius Bencko and
Sven Echternach
CRAIG C. REILLY
111 Oronoco Street
Alexandria, VA 22314
(703) 549-5354
Counsel for all Petitioners

 i
QUESTIONS PRESENTED
The decision below affirmed civil forfeiture in rem
of foreign assets within the exclusive custody and
control of courts in New Zealand and Hong Kong.
The property owners include foreign nationals who,
after being charged by the United States Government with criminal copyright infringement, stayed in
their home countries and exercised their rights to
contest extradition. At the pleading stage, the district court resolved factual disputes and made credibility determinations to find that these foreign nationals are fugitives who have the intent “to avoid
criminal prosecution” under 28 U.S.C. § 2466, and
therefore should be disentitled from contesting civil
forfeiture. The following questions are presented in
this case:
(1) Can a district court, consistent with Article III
of the U.S. Constitution, exercise in rem jurisdiction
over foreign property that is within the exclusive
custody and control of foreign courts?
(2) Can a district court, consistent with 28 U.S.C.
§ 2466 and due process, resolve factual disputes and
make adverse credibility determinations at the
pleading stage in finding that a claimant is a disentitled fugitive?
(3) Should a foreign national residing abroad be
deemed to have the intent “to avoid criminal prosecution” and be disentitled as a fugitive, consistent
with 28 U.S.C. § 2466 and due process, merely because avoiding criminal prosecution is a reason (not
the sole or primary reason) why the foreign national
has not entered the United States while aware that
he faces criminal prosecution here?

 ii
RULE 29.6 STATEMENT
Megaupload Limited’s parent corporation is Vestor Limited. Megapay Limited’s parent corporations
are Vestor Limited and Megamedia Limited.
Megamedia Limited’s parent corporation is Vestor
Limited. Neither Megastuff Limited nor Vestor Limited has a parent corporation. No publicly held corporation owns 10% or more of any of these companies’ stock.

 iii
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ........................................ i
RULE 29.6 STATEMENT .......................................... ii
PETITION FOR WRIT OF CERTIORARI ................. 1
OPINIONS BELOW .................................................... 1
JURISDICTION .......................................................... 1
CONSTITUTIONAL
AND
STATUTORY
PROVISIONS INVOLVED .............................. 1
STATEMENT OF THE CASE .................................... 2
A. The Criminal Proceedings ................................ 4
B. The Civil Forfeiture Proceedings ..................... 7
C. The Fourth Circuit’s Decision ........................ 10
REASONS FOR GRANTING THE PETITION ....... 12
I. THE FOURTH CIRCUIT’S EXERCISE OF
IN REM JURISDICTION CONFLICTS
WITH THIS COURT’S PRECEDENT AND
FURTHERS A CIRCUIT SPLIT ON THE
FIRST QUESTION PRESENTED ...................... 13
A. The Second Circuit Recognizes That
Article III Does Not Permit In Rem
Jurisdiction Over Property In The
Exclusive Custody and Control of
Foreign Courts ................................................ 14
B. The Fourth Circuit And Three Other
Circuits Have Split With The Second
Circuit ............................................................. 16

 iv
TABLE OF CONTENTS – continued
Page(s)
C. The Fourth Circuit’s Decision Errs And
Conflicts With This Court’s Decisions ........... 17
II. THERE IS A CIRCUIT SPLIT ON THE
SECOND QUESTION PRESENTED AS
TO
WHETHER
FUGITIVE
DISENTITLEMENT
IS
PROPERLY
RESOLVED
BASED
ON
THE
PLEADINGS ALONE .......................................... 19
A. The D.C. And Sixth Circuits Allow
Fugitive Disentitlement Motions To Be
Resolved After the Pleading Stage ................ 20
B. The Second Circuit, As Now Joined By
The Fourth Circuit, Eschews Using
Summary
Judgment
To
Resolve
Fugitive Disentitlement Motions ................... 23
C. The Fourth Circuit’s Decision Breaks
From Sister Circuits By Jettisoning
Established Procedural Safeguards ............... 24
III.THERE IS A THREE-WAY CIRCUIT
SPLIT ON THE THIRD QUESTION
PRESENTED AS TO THE SHOWING OF
INTENT THAT IS PREREQUISITE TO
FUGITIVE DISENTITLEMENT ........................ 28
A. The D.C. And Sixth Circuits Require
Intent To Avoid Prosecution To Be The
Reason A Defendant Does Not Enter
The United States........................................... 29

 v
TABLE OF CONTENTS – continued
Page(s)
B. The Fifth And Ninth Circuits Require
Intent To Avoid Prosecution To Be
Proven By A Totality Of The
Circumstances ................................................ 31
C. The Second Circuit, As Followed By The
Fourth Circuit Below, Requires Intent
To Avoid Prosecution To Be One
Possible Reason A Defendant Has Not
Entered The United States ............................ 32
D. Disentitling Foreign Nationals’ Claims
To Their Foreign Assets Raises Serious
Due-Process Concerns Under This
Court’s Precedent ........................................... 33
CONCLUSION .......................................................... 35
APPENDIX A – Fourth Circuit Majority and
Dissenting Opinions (August 12, 2016) .............. 1a
APPENDIX B – District Court Default
Judgment, Hong Kong Property (April 7,
2015) ................................................................... 57a
APPENDIX C – District Court Default
Judgment, New Zealand Property (March
27, 2015) ............................................................. 61a
APPENDIX D – District Court Default
Opinion (March 25, 2015) .................................. 68a
APPENDIX E – District Court Order Striking
Mona Dotcom’s Claim (March 13, 2015) ........... 89a

 vi
TABLE OF CONTENTS – continued
Page(s)
APPENDIX F – District Court Opinion
Striking Mona Dotcom’s Claim (March 13,
2015) ................................................................... 91a
APPENDIX G – District Court Order Striking
Claims For Fugitive Disentitlement
(February 27, 2015).......................................... 107a
APPENDIX H – District Court Opinion
Striking Claims For Fugitive
Disentitlement (February 27, 2015) ................ 109a
APPENDIX I – Fourth Circuit Order Denying
En Banc Review (November 9, 2016) .............. 152a
APPENDIX J – Constitutional and Statutory
Provisions Involved
U.S. CONST. Art. III § 2 .................................... 154a
28 U.S.C § 1355 ................................................ 155a
28 U.S.C § 2466 ................................................ 157a

 vii
TABLE OF AUTHORITIES
Page(s)
CASES
Blackledge v. Allison,
431 U.S. 63 (1977) ................................................ 26
California Pub. Broad. Forum v. FCC,
752 F.2d 670 (D.C. Cir. 1985) .............................. 25
Chesley v. Union Carbide Corp.,
927 F.2d 60 (2d Cir. 1991) ................................... 14
Chi. & S. Air Lines, Inc. v. Waterman S.S. Corp.,
333 U.S. 103 (1948) .............................................. 14
Collazos v. United States,
368 F.3d 190 (2d Cir. 2004) ........................... 24, 29
Contents of Account No. XXXXXXXX v. United States,
344 F.3d 399 (3d Cir. 2003) ................................. 17
Degen v. United States,
517 U.S. 820 (1996) ...................................... passim
Dotcom v. The Deputy Solicitor-General,
[2015] NZHC 1197 ........................................... 9, 19
Dowling v. United States,
473 U.S. 207 (1985) ................................................ 5
Durukan Am., LLC v. Rain Trading, Inc.,
787 F.3d 1161 (7th Cir. 2015) .............................. 26
Hovey v. Elliott,
67 U.S. 409 (1897) ................................................ 34
Legg v. Chopra,
286 F.3d 286 (6th Cir. 2002) ................................ 27
Leonard v. Texas,
580 U.S. ___ (2017) .............................................. 12
Marshall v. Marshall,
547 U.S. 293 (2006) .............................................. 13
McVeigh v. United States,
78 U.S. (11 Wall.) 259 (1870) ............................... 34

 viii
TABLE OF AUTHORITIES – continued
Page(s)
Nelson v. Adams USA, Inc.,
529 U.S. 460 (2000) .............................................. 20
Ortmann v. United States,
[2017] NZHC 189 ................................................... 7
Polanski v. Condé Nast Publ’ns Ltd.,
[2005] UKHL 10 ................................................... 18
Republic Nat’l. Bank of Miami v. United States,
506 U.S. 80 (1992) ................................................ 17
Sierra Club v. Morton,
405 U.S. 727 (1972) .............................................. 17
Sony Corp. v. Universal City Studios, Inc.,
464 U.S. 417 (1984) ................................................ 5
The Apollon,
22 U.S. 362 (1824) .......................................... 13, 18
United States v. $40,877.59 in U.S. Currency,
32 F.3d 1151(7th Cir. 1994) ........................... 34, 35
United States v. 2005 Pilatus Aircraft, Bearing Tail
No. N679PE,
838 F.3d 662 (5th Cir. 2016) ................................ 32
United States v. $6,976,934.65, Plus Interest Deposited into Royal Bank of Scot. Int’l, Account No.
XXXX-XXXXXXXX, Held in Name of Soulbury Ltd.,
554 F.3d 123 (D.C. Cir. 2009) ...................... passim
United States v. $6,976,934.65, Plus Interest,
520 F. Supp. 2d 188 (D.D.C. 2007) ...................... 22
United States v. $6,976,934.65 Plus Interest,
478 F. Supp. 2d 30 (D.D.C. 2007) ............ 22, 23, 25
United States v. $671,160.00 in U.S. Currency,
730 F.3d 1051 (9th Cir. 2013) ........................ 23, 31

 ix
TABLE OF AUTHORITIES – continued
Page(s)
United States v. All Funds in Account in Banco
Español de Crédito Spain,
295 F.3d 23 (D.C. Cir. 2002) ................................ 17
United States v. All Funds on Deposit in any Accounts
Maintained in Names of Meza or De Castro,
63 F.3d 148 (2d Cir. 1995) ............................. 15, 17
United States v. Any & All Funds,
87 F. Supp. 3d 163 (D.D.C. 2015) ........................ 22
United States v. Approximately $1.67 Million (U.S.),
513 F.3d 991 (9th Cir. 2008) ................................ 16
United States v. Batato,
833 F.3d 413 (4th Cir. 2016) ........................ passim
United States v. Certain Funds
(H.K. and Shanghai Banking Corp.),
96 F.3d 20 (2d Cir. 1996) ..................................... 15
United States v. Federative Republic of Brazil,
748 F.3d 86 (2d Cir. 2014) ................................... 16
United States v. James Daniel Good,
510 U.S. 43 (1993) .......................................... 16, 35
United States v. Raddatz,
447 U.S. 667 (1980) .............................................. 20
United States v. Real Prop. Located at Incline Vill.,
47 F.3d 1511 (9th Cir. 1995) .......................... 25, 27
United States v. Salti,
579 F.3d 656 (6th Cir. 2009) ........................ passim
United States v. Technodyne LLC,
753 F.3d 368 (2d Cir. 2014) ............... 23, 24, 32, 33
Walden v. Fiore,
134 S. Ct. 1115 (2014) .......................................... 35
Williams v. Armroyd,
11 U.S. (7 Cranch) 423 (1813) ....................... 13, 18

 x
TABLE OF AUTHORITIES – continued
Page(s)
Windsor v. McVeigh,
93 U.S. 274 (1876) ................................................ 35
In re Zarnel,
619 F.3d 156 (2d Cir. 2010) ................................. 15
CONSTITUTIONAL PROVISIONS
U.S. CONST. Art. III ........................................... passim
STATUTES AND RULES
17 U.S.C. § 506(a) ........................................................ 5
18 U.S.C. § 921(15) .................................................... 29
28 U.S.C. § 1254(1) ...................................................... 1
28 U.S.C. § 1355 ................................................ passim
28 U.S.C. § 2466 ................................................ passim
Fed. R. Civ. P. 56 ....................................................... 27
Fed. R. Evid. 101 ....................................................... 27
OTHER AUTHORITIES
Anthony
Falzone
&
Jennifer
Granick,
Megaupload.com Indictment Leaves Everyone
Guessing, Parts I–II, DAILY JOURNAL (Mar. 14 &
Apr. 6 2012) ............................................................ 5
Eric Goldman, Comments on the Megaupload Prosecution, TECH. & MKT’G LAW BLOG (Apr. 30, 2012,
9:30 AM), ................................................................ 5
Hong Kong Mutual Legal Assistance in Criminal
Matters Ordinance, Cap. 525 § 28(3) .................. 10
Jennifer Granick, Megaupload: A Lot Less Guilty
Than You Think, STAN. CENTER FOR INTERNET &
SOC’Y (Jan. 26, 2012) .............................................. 5

 xi
TABLE OF AUTHORITIES – continued
Page(s)
John Blevins, Uncertainty as Enforcement Mechanism: The New Expansion of Secondary
Copyright Liability to Internet Platforms,
34 CARDOZO L. REV. 1821 (2013) ........................... 5
Margot Kaminski, Copyright Crime and Punishment:
The First Amendment’s Proportionality Problem,
73 MD. L. REV. 587 (2014) ................................. 5, 6
Martha B. Stolley, Sword or Shield: Due Process and
the Fugitive Disentitlement Doctrine Degen v.
United States, 116 S. Ct. 1777, 87 J. CRIM. L. &
CRIMINOLOGY 751 (1997)...................................... 35

 1
PETITION FOR WRIT OF CERTIORARI
Finn Batato and the other Claimants respectfully
petition for a writ of certiorari to review the judgment of the U.S. Court of Appeals for the Fourth Circuit.
OPINIONS BELOW
The opinion of the Fourth Circuit (1a–56a) is reported at 833 F.3d 413. The order denying rehearing
en banc (152a–153a) is unreported. Appeal arose
from multiple opinions and orders of the U.S. District Court for the Eastern District of Virginia (57a–
151a), one of which is reported at 89 F. Supp. 3d 813,
and the rest of which are unreported.
JURISDICTION
The Fourth Circuit entered judgment on August
12, 2016, and denied a timely petition for rehearing
en banc on November 9, 2016. 1a, 152a. On January
26, 2017, the Chief Justice extended until April 7,
2017, the deadline for petitioning. This Court has
jurisdiction under 28 U.S.C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
The appendix reproduces U.S. CONST. Art. III § 2,
28 U.S.C. § 1355, and 28 U.S.C. § 2466. 154a–157a.

 2
STATEMENT OF THE CASE
This case arises from a civil-forfeiture action related to a separate criminal case, in which the Government indicted a group of foreign defendants (Petitioners here)1 on a novel theory of secondary criminal
copyright liability. Because Petitioners are lawfully
invoking their rights to contest extradition, the Government’s novel theory for prosecuting has yet to be
tested in the criminal case.
More than two years after filing the criminal indictment, the Government filed a separate civil action seeking forfeiture of Petitioners’ foreign assets.
When Petitioners submitted claims to those assets,
the Government successfully moved to strike the
claims at the threshold. According to the decisions
below, Petitioners’ participation in extradition proceedings—and failure to voluntarily leave their
homes, families, and businesses to travel to the
United States—has rendered them “fugitives” who
seek “to avoid . . . prosecution” and who therefore
should be “disentitled” from contesting forfeiture. 28
U.S.C. § 2466(a)(1). Civil forfeiture has been ordered
for this reason alone.
This Court has previously admonished that the
“harsh sanction” of fugitive disentitlement in a civil
forfeiture action is “most severe and so could disserve
the dignitary purposes for which it is invoked,” because it “foreclos[es] consideration of claims on the
merits.” Degen v. United States, 517 U.S. 820, 827–
29 (1996) (unanimously reversing resort to fugitive
Petitioners also include one unindicted person, Mona
Dotcom, the estranged wife of one of the indicted foreigners,
Kim Dotcom.
1

 3
disentitlement under inherent authority). The Court
noted that it “ha[d] held it unconstitutional to use
disentitlement similar to this as punishment for rebellion against the United States,” but left open the
question of “whether enforcement of a disentitlement
rule under proper authority would violate due process.” 517 U.S. at 828 (citations omitted). Nonetheless, a divided panel of the Fourth Circuit affirmed
civil forfeiture based on fugitive disentitlement.
The Fourth Circuit’s panel decision added to one
circuit split by affirming the exercise of in rem jurisdiction over foreign property within the exclusive
custody and control of foreign courts.2 It also compounded two other circuit splits by affirming forfeiture on the ground that the foreigners who own the
property should, at the very threshold (without benefit of any discovery or evidentiary hearing), be
deemed fugitives who are disentitled from defending
their property against civil forfeiture—even while
they are lawfully contesting their extradition to the
United States through the courts in their home countries, pursuant to treaty rights.
If left undisturbed, the Fourth Circuit’s decision
enables the Government to obtain civil forfeiture of
every penny of a foreign citizen’s foreign assets based
on unproven allegations of the most novel, dubious
Although the approximate value of the defendant assets
at the outset of the criminal action was estimated at $75 million
(4a–5a), their current value is more on the order of $40 million.
See 5a, 51a (describing foreign releases for legal fees and living
expenses). The Government has sought to forfeit up to $175
million by alleging that Megaupload had a “reported income in
excess of $175 million.” 4a; 4th Cir. Joint Appendix (“CAJA”) at
24–25, 472.
2

 4
United States crimes. And the Government can do
so without affording a foreign defendant any opportunity to challenge in court whether the foreign assets are traceable to criminal conduct, whether the
Government’s allegations are sufficient to establish
the charged crime, or even whether the charged
“crime” is a crime at all. Civil forfeiture would be a
fait accompli just as soon as the Government moves
to strike a foreign claimant’s initial submission, invokes fugitive disentitlement, and notes that the foreign claimant remains abroad while lawfully contesting extradition. By nonetheless affirming in all
respects, the Fourth Circuit has ratified a worrisome
new playbook for the Government to use against foreign nationals whom it indicts while they are abroad:
any foreign defendant who dares exercise rights to
contest extradition may be deemed a fugitive whose
foreign assets are immediately forfeitable to the
United States. In other words, according to the decision below, foreign defendants must either abandon
their rights to challenge extradition or else forever
forfeit their assets (and, correspondingly, their ability to fund a criminal defense).
A. The Criminal Proceedings
On January 19, 2012, the Government unleashed
against Megaupload Limited, and its associated
businesses and executives, what the Government has
termed one of “the largest criminal copyright cases
ever brought by the United States.” CAJA 1359–61.
Founded in 2005, Megaupload was a popular cloud
storage website that had 66 million registered users
worldwide. See United States v. Kim Dotcom, No.
1:12-CR-3, Superseding Indictment ¶¶ 2–3 (E.D Va.
Feb. 16, 2012) (“Superseding Indictment”). Users up-

 5
loaded files to the site and then obtained personal
links to the files, which they could share with other
users as and if they chose. CAJA 25–26.
The indictment contends that Megaupload encouraged its users to infringe copyrights. CAJA 26;
Superseding Indictment ¶¶ 10–14. It is thus founded on the questionable legal premise that secondary
copyright infringement may be prosecuted as a federal crime. See 117a–118a. Yet the criminal copyright infringement statute, 17 U.S.C. § 506(a), does
not expressly encompass secondary liability. See,
e.g., Sony Corp. v. Universal City Studios, Inc., 464
U.S. 417, 434 (1984) (“The Copyright Act does not
expressly render anyone liable for infringement
committed by another.”); Dowling v. United States,
473 U.S. 207, 228 (1985) (“[T]he deliberation with
which Congress . . . has addressed the problem of
copyright infringement for profit, as well as the precision with which it has chosen to apply criminal
penalties in this area, demonstrates anew the wisdom of leaving it to the legislature to define crime
and prescribe penalties.”).3 Following the January

3
See also, e.g., Jennifer Granick, Megaupload: A Lot
Less Guilty Than You Think, STAN. CENTER FOR INTERNET &
SOC’Y (Jan. 26, 2012), https://goo.gl/uWSISv; Anthony Falzone
& Jennifer Granick, Megaupload.com Indictment Leaves Everyone Guessing, Parts I–II, DAILY JOURNAL (Mar. 14 & Apr. 6
2012), https://goo.gl/cGfqRl; Eric Goldman, Comments on the
Megaupload Prosecution, TECH. & MKT’G LAW BLOG (Apr. 30,
2012, 9:30 AM), https://goo.gl/ZgHXkm; John Blevins, Uncertainty as Enforcement Mechanism: The New Expansion of Secondary Copyright Liability to Internet Platforms, 34 CARDOZO L.
REV. 1821 (2013); Margot Kaminski, Copyright Crime and Punishment: The First Amendment’s Proportionality Problem, 73
MD. L. REV. 587 (2014).

 6
2012 indictment, Megaupload’s website was shut
down and effectively destroyed, and the defendants’
assets were frozen by court orders in New Zealand
and Hong Kong. CAJA 19, 24–25, 35–54.
The indicted defendants include six foreign nationals who were associated with Megaupload and
have uniformly resided and worked abroad. CAJA
19–24. Kim Dotcom is a German and Finnish Citizen who resides in New Zealand; he has never so
much as visited the United States. CAJA 556–557.
Finn Batato and Mathias Ortmann are German citizens who reside in New Zealand; Bram van der Kolk
is a Dutch citizen who resides in New Zealand; Sven
Echternach is a German citizen who resides in Germany; and Julius Bencko is a Slovak citizen who resides in the Slovak Republic. CAJA 558–567. None
has ever been a citizen or permanent resident of the
United States. CAJA 556–567.
After the indictment issued, the four executives
residing in New Zealand—Kim Dotcom, Finn Batato,
Mathias Ortmann, and Bram van der Kolk—were
arrested (then released on bail) by New Zealand authorities. 131a–137a. The Government subsequently requested their extradition. Id. The four New
Zealand executives have been opposing extradition in
accordance with Article IX of New Zealand’s International Extradition Treaty with the United States. Id.
Sven Echternach and Julius Bencko have never been
arrested (137a–142a); Germany and the Slovak Republic do not extradite their citizens to the United
States.
For ease of reference we have shortened all website links in
this Petition with Google’s URL shortener, https://goo.gl.

 7
Five years later, extradition proceedings remain
ongoing in New Zealand. Most recently, on February
20, 2017, a New Zealand intermediate appellate
court ruled that the four executives could be extradited to the United States.4 Further appeals are expected to proceed. Meanwhile, the assets seized in
2012 remain frozen in New Zealand and Hong Kong,
subject to the acknowledged “custody” and “control”
of those nations’ courts. 14a–16a.
B. The Civil Forfeiture Proceedings
The Government did not seek civil forfeiture of
these assets at the time of the indictment. More
than two years later, however, the Government grew
frustrated by the fact that foreign courts were applying foreign law to release funds from the assets to
cover Petitioners’ reasonable living expenses and legal fees. Complaining that judicial orders in New
Zealand and Hong Kong were causing “dissipation”
of assets, the Government in 2014 initiated parallel
civil in rem forfeiture proceedings in the Eastern
District of Virginia. 143a–144a; CAJA 18.
In response to the civil forfeiture complaint, Petitioners timely filed verified claims asserting their interests in the in rem Defendant Assets. CAJA 66–
108. Petitioners then moved to dismiss the Government’s complaint for lack of jurisdiction as well as for
failure to state a valid claim, contending, among other things, that federal courts cannot exercise in rem
jurisdiction in civil forfeiture proceedings concerning
property in the custody of foreign courts, and that
the Government’s allegations established neither a
Ortmann v. United States, [2017] NZHC 189 at paras
[589–593], available at https://goo.gl/lgHyT0.
4

 8
crime nor traceability of the in rem Defendant Assets
to any crime. 110a, 120a–123a.
The Government moved to strike Petitioners’
claims, arguing that the indicted Petitioners were
subject to fugitive disentitlement under the Civil Asset Forfeiture Reform Act of 2000, 28 U.S.C. § 2466.
CAJA 129–144; see also 89a (striking Petitioner Mona Dotcom’s claim for lack of standing). According to
the Government, foreign defendants who assert extradition treaty rights in foreign courts are fugitives
who cannot oppose efforts here to deprive them of
their foreign property. CAJA 131–134. Petitioners
rejoined that applying fugitive disentitlement in
their circumstances would violate their statutory as
well as constitutional rights, not least because they
do not qualify as fugitives under § 2466. CAJA 517–
555.
The district court granted the Government’s motions to strike. 107a–108a. It first ruled that the
civil forfeiture statute, 28 U.S.C. § 1355, supplies in
rem jurisdiction over the property at issue, even
though that property falls within the exclusive custody and control of foreign courts. 120a–123a.
The court then made factual findings and credibility determinations adverse to Petitioners without
discovery or an evidentiary hearing. 124a–151a. Individuals cannot be disentitled as fugitives unless
found to have the requisite intent “to avoid criminal
prosecution.” 28 U.S.C. § 2466. Whether requisite
intent exists entails a fact-bound determination, yet
the district court found it could “make a decision regarding the claimants’ intent based on the record before it.” 127a–128a. The district court likewise drew
adverse inferences against Petitioners. E.g. 142a

 9
(“The most likely meaning to be inferred from his
statement that he was ‘stuck’ in Slovakia is that he
was unable to travel without risking extradition to
the United States.”). And it made adverse credibility
determinations (131a–142a), which the Fourth Circuit affirmed. 37–39a (rejecting Petitioners’ declarations as “self-serving”).
Based on its factual findings and credibility determinations, the district court adjudged all criminal
defendants to be disentitled fugitives (107a–108a);
ruled that Mona Dotcom lacks sufficient ownership
of the New Zealand property to establish standing
(89a–90a); determined the in rem Defendant Assets
to be in default (68a–88a); issued final judgments of
forfeiture (57a–67a); and declined to stay its judgment pending appeal (CAJA 17). Because Petitioners were all deemed ineligible to submit claims, their
property was ordered forfeited without any discovery, evidentiary hearing, or meaningful contestation
of the Government’s case on the merits.
Despite two orders (one each for the New Zealand
and Hong Kong assets) “exclusively” vesting “all
right, title, and interest” in the in rem Defendant Assets to the Government (57a–67a), the New Zealand
and Hong Kong courts have not, to date, enforced the
forfeiture orders.5

A New Zealand court prohibited New Zealand authorities
from applying to register the civil forfeiture judgment absent
further order due, in part, to its concerns over fugitive disentitlement. See Dotcom v. The Deputy Solicitor-General, [2015]
NZHC 1197 at paras [79, 134–135]. The Hong Kong Department of Justice has not applied to register the civil forfeiture
judgment; it is barred from doing so until all appeals in the
5

 10
C. The Fourth Circuit’s Decision
A divided panel of the Fourth Circuit affirmed.
United States v. Batato, 833 F.3d 413 (4th Cir. 2016)
(1a–45a). Starting with jurisdiction, the majority
noted “a potential split in the circuit courts regarding
how to interpret” § 1355. 7a–8a. Traditionally, a
court exercising in rem jurisdiction “must have actual or constructive control of the res when an in rem
forfeiture suit is initiated.” 8a (citations omitted).
The Third, Ninth, and D.C. Circuits have held that
the 1992 amendments to § 1355(b) displaced this
control requirement, whereas the Second Circuit has
held that the control requirement persists. 7a–9a.
(cataloguing the split).
The Fourth Circuit here sided with the Third,
Ninth, and D.C. Circuits, concluding that the district
court did not need control over the property in New
Zealand and Hong Kong before exercising jurisdiction and ordering forfeiture under § 1355. 9a–16a.
In so deciding, the panel majority reasoned that Article III’s prohibition against rendering nonbinding
advisory opinions is inapplicable because this prohibition “addresses itself” only “to maintaining the
separation of powers between the branches of our
own government,” and is not implicated in international cases, even if a foreign court may not be bound
by a judgment of a United States court. 15a.
Satisfied as to jurisdiction, the panel majority affirmed the district court’s rulings striking all of Petitioners’ claims. 45a. It held that due process was
not violated by deeming Petitioners to be disentitled
United States have concluded. See Hong Kong Mutual Legal
Assistance in Criminal Matters Ordinance, Cap. 525 § 28(3).

 11
fugitives under 28 U.S.C. § 2466 and thereby denying them the opportunity to contest the civil forfeiture of their property. 16a–22a. The majority noted
that § 2466 was passed in the wake of this Court’s
decision in Degen, 517 U.S. 820, which held that federal courts lack inherent authority to disentitle fugitives, while “expressly le[aving] open the question” of
whether such disentitlement would be constitutional
under the Due Process Clause if authorized by statute. 23a–24a (citing Degen, 517 U.S. at 828). Presented with the question left open in Degen, the panel
majority
held
that
§ 2466
“predicates
disentitlement on an allowable presumption that a
criminal fugitive lacks a meritorious defense to a related civil forfeiture” and therefore does not violate
due process. 30a.
Next, the panel majority addressed the intent requirement for fugitive disentitlement under § 2466.
31a–35a. The panel majority rejected Petitioners’
argument that the statute applies only to an individual whose “sole or primary reason for being absent
from the United States is evasion,” as the D.C. Circuit and Sixth Circuit have held. Id. Instead, the
panel majority adopted the position of the Second
Circuit and held that the statute “must apply to people with no reason to come to the United States other
than to face charges.” 33a. Thus, per the decision
below, a person can be designated a disentitled fugitive under § 2466, so long as his “specific intent” to
avoid prosecution is one possible reason why he does
not enter the United States, even if the “principal
reason such a person remains outside the United
States will typically be that they live elsewhere.”
33a. Applying this substantive standard, the Fourth
Circuit affirmed the district court’s adverse factual

 12
findings and credibility assessments surrounding
each defendant’s intent to avoid the United States,
which were made based solely on the Government’s
affidavits, without any discovery or evidentiary hearing. 35a–39a.
Judge Floyd dissented, concluding that “Article
III’s prohibition against advisory opinions precludes
the exercise of in rem jurisdiction over a res, including real property, entirely outside of the United
States and beyond the control of the district court.”
46a. In the view of Judge Floyd, therefore, all other
issues were “moot.” 56a.
REASONS FOR GRANTING THE PETITION
This case well warrants certiorari review. The
Courts of Appeals have split over fundamental questions about how to apply the statute governing civil
asset forfeiture, 28 U.S.C. § 1355, particularly in conjunction with the statute governing fugitive disentitlement, 28 U.S.C. § 2466. Since these statutes were
enacted in 1992 and 2000, respectively, this Court
has not had the opportunity to address either one.
Taking the opportunity now may bring needed clarity to the jurisdictional, procedural, and substantive
standards that govern civil forfeiture of foreign property and fugitive disentitlement.
Besides sowing doctrinal disagreement, the instant questions have sparked profound and mounting concerns. As Justice Thomas recently recognized, the entire civil asset forfeiture system, in
which “police can seize property with limited judicial
oversight and retain it for their own use—has led to
egregious and well-chronicled abuses.” Leonard v.
Texas, 580 U.S. ___ (2017) (Thomas, J.) (concurring

 13
in denial of certiorari). The Government’s instant,
successful invocation of fugitive disentitlement to
justify civil forfeiture of tens of millions of dollars in
foreign property based on novel, untested criminal
allegations elevates such concerns to their zenith—
and does so in a posture where international comity
as well as constitutional rights are at stake.
I. THE FOURTH CIRCUIT’S EXERCISE OF IN
REM JURISDICTION CONFLICTS WITH
THIS COURT’S PRECEDENT AND FURTHERS A CIRCUIT SPLIT ON THE FIRST
QUESTION PRESENTED
The Fourth Circuit held below that Article III
permits the exercise of in rem jurisdiction over
foreign property controlled by foreign courts. 11a–
16a. This holding conflicts with the limits this Court
has placed on in rem jurisdiction and with the
position staked out by the Second Circuit. Indeed,
the panel majority acknowledged that there is “a
potential split in the circuit courts” regarding this
issue (7a), and it drew a dissent urging a different
result on precisely this ground (46a).
United States courts have long abided by a “general principle that, when one court is exercising in
rem jurisdiction over a res, a second court will not
assume in rem jurisdiction over the same res.” Marshall v. Marshall, 547 U.S. 293, 311 (2006). When a
res is located abroad and under the control of foreign
courts, those foreign courts have exclusive jurisdiction. See, e.g., The Apollon, 22 U.S. 362, 370–72
(1824) (Story, J.); Williams v. Armroyd, 11 U.S. (7
Cranch) 423, 432 (1813) (Marshall, C.J.).

 14
This jurisdictional limitation effectuates Article
III’s mandate that a federal court not render a
judgment unless it will bind the parties. “This Court
early and wisely determined that it would not give
advisory opinions,” and “[i]t has also been the firm
and unvarying practice of Constitutional Courts to
render no judgments not binding and conclusive on
the parties and none that are subject to later review
or alteration by administrative action.” Chi. & S. Air
Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103,
113–14 (1948) (collecting cases). As Judge Floyd
explained in his dissent below, if a res is in the
control of a foreign court, then an order from a
federal court disposing of the res “cannot bind the
property but, instead, merely advises the foreign
sovereign that does control the property as to how a
United States court believes the rights in the
property should be settled.” 54a. In other words,
“[w]ithout control of the res, the district court’s
decision cannot bind the res and thus constitutes an
advisory opinion prohibited by Article III.” 51a.
A. The Second Circuit Recognizes That Article III Does Not Permit In Rem Jurisdiction Over Property In The Exclusive
Custody and Control of Foreign Courts
In Chesley v. Union Carbide Corp., 927 F.2d 60
(2d Cir. 1991), the Second Circuit expressly held that
the longstanding rule barring United States courts
from “assuming in rem jurisdiction over a res that is
already under the in rem jurisdiction of another
court” is “equally applicable to requested interference by American courts with a res under the jurisdiction of a foreign court.” Id. at 66. Accordingly,
federal jurisdiction could “not be exercised, directly

 15
or indirectly,” over property “in India under the supervision of the Supreme Court of India.” Id. at 67.
The Second Circuit maintained this position after
Congress in 1992 amended the civil asset forfeiture
statute, 28 U.S.C. § 1355. In United States v. All
Funds on Deposit in any Accounts Maintained in
Names of Meza or De Castro (“Meza”), the Second
Circuit explained that, “[a]lthough Congress certainly intended to streamline civil forfeiture proceedings
by amending § 1355, even with respect to property
located in foreign countries, we do not believe that
Congress intended to fundamentally alter wellsettled law regarding in rem jurisdiction.” 63 F.3d
148, 152 (2d Cir. 1995). Thus, notwithstanding the
amendments to § 1355, “in order to initiate a forfeiture proceeding against property located in a foreign
country, the property must be within the actual or
constructive control of the district court in which the
action is commenced.” Id. at 153. In Meza, the Second Circuit determined that Article III’s constructive
control requirement was satisfied because the English res was subject to Britain’s mandatory Mutual
Legal Assistance Treaty obligations with the United
States. Id.6
Subsequently, the Second Circuit addressed the narrow
question whether Section 1355(b)(2) could apply retroactively to
a forfeiture action concerning assets in Hong Kong and held
that it could. See United States v. Certain Funds (H.K. and
Shanghai Banking Corp.), 96 F.3d 20, 24 (2d Cir. 1996). That
opinion did not purport to address Article III, the prior Meza
decision, or whether Hong Kong would in fact comply with a
forfeiture order by effectuating forfeiture of foreign assets. Id.
Notably, a subsequent Second Circuit panel could not possibly
have overruled an earlier panel. E.g. In re Zarnel, 619 F.3d
156, 168 (2d Cir. 2010).
6

 16
Part and parcel of the same principle, the Second
Circuit recently refused to give effect to a Brazilian
judgment ordering the civil forfeiture of assets in
New York. In United States v. Federative Republic of
Brazil, the Second Circuit reiterated that, “for an action to be in rem, the property at issue generally
must itself be located within the jurisdiction of the
ordering court.” 748 F.3d 86, 94–95 (2d Cir. 2014).
Because the bank account at issue was located in
New York, “it is by no means clear that the forfeiture
provision of the Brazilian Judgment can reasonably
be viewed as an in rem award.” Id.
B. The Fourth Circuit And Three Other Circuits Have Split With The Second Circuit
In holding that the requirement of “exclusive custody and control” does not extend to civil forfeitures
of foreign property, the Fourth Circuit broke from
the Second Circuit and sided with the Third, Ninth,
and D.C. Circuits. 6a–16a.
In United States v. Approximately $1.67 Million
(U.S.), the Ninth Circuit recognized that, “[u]nder
the traditional paradigm, ‘the court must have actual
or constructive control over the res when an in rem
forfeiture suit is initiated.’” 513 F.3d 991, 996 (9th
Cir. 2008) (quoting United States v. James Daniel
Good, 510 U.S. 43, 58 (1993)). But the Ninth Circuit
then concluded that the 1992 amendments to § 1355
superseded that traditional paradigm: “The plain
language and legislative history of the 1992 amendments makes clear that Congress intended § 1355 to
lodge jurisdiction in the district courts without reference to constructive or actual control of the res.” Id.
at 998.

 17
In reaching this decision, the Ninth Circuit noted
that it was rejecting the Second Circuit’s analysis in
Meza and instead adopting “the analysis of the D.C.
and Third Circuits,” which in prior decisions had
likewise “declined to follow the Second Circuit’s Meza
decision.” Id. at 997–98 (citing Contents of Account
No. XXXXXXXX v. United States, 344 F.3d 399, 403
(3d Cir. 2003); United States v. All Funds in Account
in Banco Español de Crédito Spain, 295 F.3d 23, 26–
27 (D.C. Cir. 2002)).
In this case, “[t]he district court adopted the majority approach”—i.e., the approach taken by the
Third, Ninth, and D.C. Circuits—and the Fourth
Circuit “affirm[ed] that decision.” 8a. In so doing,
the Fourth Circuit contributed to a longstanding circuit split about the requirements for in rem jurisdiction, one that this Court should now resolve.
C. The Fourth Circuit’s Decision Errs And
Conflicts With This Court’s Decisions
The premise underlying the decisions by the D.C.,
Third, Fourth, and Ninth Circuits is that § 1355 obviates the need for a federal court to have custody or
control over a res before exercising in rem jurisdiction. The enactment of § 1355, however, cannot
change the constitutional maxim that “Congress may
not confer jurisdiction on Art. III federal courts to
render advisory opinions.” Sierra Club v. Morton,
405 U.S. 727, 732 n.3 (1972). Because Article III requires that a “court must have actual or constructive
control of the res when an in rem forfeiture suit is
initiated,” Republic Nat’l. Bank of Miami v. United
States, 506 U.S. 80, 87 (1992), a foreign court’s exclusive control over a res precludes concurrent assertion

 18
of jurisdiction here. See, e.g., The Apollon, 22 U.S. at
370–72; Williams, 11 U.S. at 432.
That is why Judge Floyd correctly dissented in
the Fourth Circuit opinion below. 46a. “The defendant in this action—the res—is outside of the United
States and beyond the control of the district court.
Absent control, no order of the district court can be
binding on the res.” 50a. Because “the res in this
case is subject to the control of the courts of New
Zealand and Hong Kong,” those courts “with the authority vested in them by their own sovereigns, remain free to revise, overturn, or refuse recognition to
the judgment of the district court.” Id.
It is undisputed that the res in this case falls entirely within the custody and control of courts in New
Zealand and Hong Kong. See 8a–16a, 29a, 122a. Indeed, the impetus for civil forfeiture was the Government’s concerns that New Zealand and Hong
Kong courts have been using their control to dissipate the assets at issue, contrary to the Government’s wishes. See, e.g., 5a, 29a, 143a–144a.7 What
is more, foreign compliance with the forfeiture judgment is especially unlikely because the judgment
rests on fugitive disentitlement, a doctrine that “has
no place” in Commonwealth law. Polanski v. Condé
Nast Publ’ns Ltd., [2005] United Kingdom House of
Lords (“UKHL”) 10 at ¶ 26 (“Such harshness has no
place in our law . . . [o]ur law knows no principle of
fugitive
disentitlement.”),
available
at
https://goo.gl/S6Xr9y. Predictably, a New Zealand
See also CAJA 130 (“[A] delay in this case could jeopardize forfeiture of the assets if foreign governments proceed to
release the currently restrained assets despite the United
States’ requests to continue restraint”).
7

 19
court has declined to permit enforcement of the civilforfeiture judgment at this time precisely because
Petitioners have presented a “substantial position”
that civil forfeiture, as premised on fugitive disentitlement, “has been obtained in circumstances that
the New Zealand courts would consider would
amount to a breach of natural justice.” Dotcom v.
The Deputy Solicitor-General, [2015] New Zealand
High Court (“NZHC”) 1197 at paras. [76–79, 83,
104(d), 134], available at https://goo.gl/USz0YW.
Thus, if the Fourth Circuit had correctly applied
the control standard required by Article III, this case
would be dismissed for lack of jurisdiction.8 This
Court should grant certiorari to resolve disagreement among the circuits and restore the jurisdictional limits Article III imposes on in rem actions concerning civil forfeiture of property in foreign
countries.
II. THERE IS A CIRCUIT SPLIT ON THE SECOND QUESTION PRESENTED AS TO
WHETHER FUGITIVE DISENTITLEMENT
IS PROPERLY RESOLVED BASED ON THE
PLEADINGS ALONE
The Fourth Circuit’s opinion has deepened a vexing split among the circuits over the procedures that
should attend determinations of fugitive disentitlement in connection with civil forfeiture. By resolving
disputed issues of fact concerning Petitioners’ status
as disentitled fugitives under 28 U.S.C. § 2466 at the
pleading stage—rather than at summary judgment
Accordingly, if the Claimants prevail on this jurisdictional issue, then, as Judge Floyd observed in dissent below, the
other questions would be “moot.” 56a.
8

 20
or after an evidentiary hearing—the Fourth Circuit
has taken the approach of the Second Circuit, which
has held that fugitive status under § 2466 must be
resolved at the pleading stage. In opposition are the
D.C. and Sixth Circuits, which call for such determinations to be made at summary judgment or after an
evidentiary hearing.
By resolving outcome-determinative factual and
credibility disputes based on pleadings alone, without affording any discovery or evidentiary hearing,
the approach taken in this case compounds dueprocess problems. Cf. Nelson v. Adams USA, Inc.,
529 U.S. 460, 465 (2000) (“[D]ue process does not
countenance such swift passage from pleading to
judgment in the pleader’s favor[.]”); United States v.
Raddatz, 447 U.S. 667 at 681 n.7 (1980) (To “reject a
magistrate’s proposed findings on credibility when
those findings are dispositive and substitute the
judge’s own appraisal,” “without seeing and hearing
the witness or witnesses whose credibility is in question could well give rise to serious [due process]
questions.”); see infra III.D.
A. The D.C. And Sixth Circuits Allow Fugitive Disentitlement Motions To Be Resolved After the Pleading Stage
In the D.C. and Sixth Circuits, courts treat a motion to strike on fugitive disentitlement grounds as a
summary-judgment motion. They do so on the theory that determining whether a claimant is a disentitled fugitive is a fact-bound inquiry that requires de-

 21
termining, among other things, whether the claimant
has intent “to avoid criminal prosecution,” § 2466.9
For example, in United States v. Salti, the Sixth
Circuit reversed and remanded a district court’s decision to strike at the pleading stage a claim in a civil-forfeiture proceeding by a person who was deemed
a disentitled fugitive under § 2466. 579 F.3d 656
(6th Cir. 2009). The Sixth Circuit there emphasized
that the district court’s error was procedural: it had
“improperly and prematurely weigh[ed] evidence to
resolve a ‘factual dispute regarding [the claimant’s]
intent to avoid criminal prosecution.’” Id. at 666.
Although the district court might have reached the
same outcome “at a subsequent stage” of the proceedings—namely, at summary judgment or after an evidentiary hearing—it was error for it to resolve such
disputed factual issues at the pleadings stage. Id.
Similarly, the D.C. Circuit reversed and remanded after a district court had resolved at summary
judgment a fugitive-disentitlement motion notwithstanding a genuine dispute of material fact over
whether the alleged fugitive had the requisite intent
to be disentitled under § 2466. United States v.
$6,976,934.65, Plus Interest Deposited into Royal
Bank of Scot. Int’l, Account No. XXXX-XXXXXXXX,
Held in Name of Soulbury Ltd. (“Soulbury”), 554
F.3d 123 (D.C. Cir. 2009). In Soulbury, the Government had originally moved to strike the alleged fugitive’s claim at the pleadings stage, but the district
court, recognizing that it would be improper to resolve disputed factual issues at the pleading stage,
The next Question Presented goes to the substantive
standard governing this intent element.
9

 22
converted the Government’s motion to one for summary judgment, 478 F. Supp. 3d 30, 45–46 (D.D.C.
2007), and then ultimately granted summary judgment to the Government, 520 F. Supp. 2d 188
(D.D.C. 2007). In reversing this judgment on appeal,
the D.C. Circuit indicated that, insomuch as there
was a “factual dispute regarding [the claimant’s] intent to avoid criminal prosecution,” the presence of
this “genuine issue of material fact” rendered it inappropriate to grant summary judgment. 554 F.3d
at 133.
True to the D.C. Circuit’s instruction, the U.S.
District Court for the District of Columbia just recently refused to disentitle a different set of claimants in a posture indistinguishable from that of these
Claimants. In United States v. Any & All Funds, 87
F. Supp. 3d 163, 168 (D.D.C. 2015), the court explained that disentitlement was improper where
“[the claimant] is a Thai native who has never lived
in the United States and was outside the country
when the indictment was issued.” In so ruling, that
court rejected the Government’s argument that “the
fugitive disentitlement doctrine applies to Siriwan
because she moved to specially appear in the criminal case, contested extradition, and has moved to
stay this case.” Id. Compare 37a. (affirming disentitlement because “Finn Batato and Mathias Ortmann made statements in declarations that they
were ‘actively contesting the legal basis on which the
United States has issued the indictment.’”).
Thus, both the D.C. Circuit and Sixth Circuit apply settled summary-judgment standards to motions
to strike on fugitive-disentitlement grounds. In
those circuits, genuine disputes of material fact can-

 23
not be resolved either at the pleading stage, Salti,
579 F.3d at 666, or at the summary-judgment stage,
Soulbury, 554 F.3d at 133.10 When there are factual
disputes—say, about an alleged fugitive’s intent—a
motion to strike is treated as a motion for summary
judgment, which carries with it normal rights to discovery and an evidentiary hearing, as appropriate.
See Salti, 579 F.3d at 666 n.10 (approving of Soulbury, 478 F. Supp. 3d at 45–46). Summary judgment
will then be granted only if there are no genuine issues of material fact. See Soulbury, 554 F.3d at 133.
B. The Second Circuit, As Now Joined By
The Fourth Circuit, Eschews Using
Summary Judgment To Resolve Fugitive
Disentitlement Motions
By contrast, the Second Circuit has expressly rejected the approach of the D.C. Circuit and the Sixth
Circuit, explaining that “[w]e are not persuaded [by
Soulbury and Salti] that adherence to summary
judgment standards in a § 2466 proceeding is appropriate.” United States v. Technodyne LLC, 753 F.3d
368, 381 (2d Cir. 2014). The Second Circuit reached
its position by relying on language in § 2466 which
provides that a “judicial officer” is authorized to disentitle a fugitive “upon a finding” that the factual
conditions for disentitlement are satisfied. Id. (quoting § 2466(a)). The Second Circuit concluded that
“determinations as to disentitlement are not to be
made under the standards governing summary
If there are no factual issues, then, as the Ninth Circuit
has held, a motion to strike on fugitive-disentitlement grounds
can be resolved at the pleading stage. United States v.
$671,160.00 in U.S. Currency, 730 F.3d 1051, 1059 (9th Cir.
2013).
10

 24
judgment” and that a district court could decide fugitive disentitlement on an early motion to strike,
making “the requisite findings of fact,” including
truthfulness assessments, without “a trial with live
witnesses.” Id. at 381-82.
The Fourth Circuit has now taken the same approach as the Second Circuit by resolving at the
pleading stage disputed issues of fact. Indeed, the
Fourth Circuit here rejected all of Petitioners’ challenges to the procedure employed by the district
court, simply stating that “courts regularly impose
procedural requirements that will control when and
how a party may be heard.” According to the decision below, fugitive disentitlement operates to obviate summary-judgment proceedings; the only way
claimants might “have secured a hearing on their
forfeiture claim” would be “by entering the United
States.” 26a (citing Collazos v. United States, 368
F.3d 190, 203 (2d Cir. 2004)).
This Court should dispel existing confusion and
disagreement among the lower courts by resolving
the extent to which summary-judgment procedures
and standards apply to fugitive-disentitlement motions in civil-forfeiture proceedings.
C. The Fourth Circuit’s Decision Breaks
From Sister Circuits By Jettisoning Established Procedural Safeguards
The Fourth Circuit’s approach in this case denies
vital procedural safeguards to persons contesting civil forfeitures and exacerbates disparity between the
circuits.
Discovery. Civil claimants should be entitled to
discovery when seeking to prove they are not fugi-

 25
tives. Intent must often be inferred from other evidence—including observations of third parties and
documents that may be in parties’ possession. See
generally, California Pub. Broad. Forum v. FCC, 752
F.2d 670, 679 (D.C. Cir. 1985). Indeed, the Government relied here on third-party testimony as to the
Petitioners’ alleged intent. See 39a, 142a (“Bencko
told a third party that . . .”). Nonetheless, the district court refused to permit Petitioners any discovery whatsoever—refusing even to permit so much as
a deposition of the witness it relied on for disentitlement. 128a (“The claimants argue that discovery is
required on two issues, the possibility of government
overreach and the issue of the claimants’ intent. The
court disagrees.”).
The availability of discovery in the context of fugitive disentitlement has occasioned further split.
Specifically, the Ninth, Sixth, and the district court
in the D.C. Circuit would all have permitted Petitioners to take discovery in order to gather evidence
demonstrating they lacked the requisite intent to be
fugitives. See United States v. Real Prop. Located at
Incline Vill., 47 F.3d 1511, 1520 (9th Cir. 1995) (finding disentitlement proper only after “the district
court’s February order reopening discovery and making all documents available”), rev’d on other grounds
by Degen, 517 U.S. 820; Soulbury, 478 F. Supp. 2d at
44 (“The Court will convert the [G]overnment’s motion to one for partial summary judgment, and will
order limited discovery.”); Salti, 579 F.3d at 666 n.
10.
If Petitioners had access to civil discovery here (as
they would if the civil-forfeiture proceeding had been
initiated in the D.C. or Sixth Circuits), they would

 26
have been able to depose the third parties whose testimony the Government submitted in support of disentitlement. The denial of such discovery here prejudiced Petitioners and effectively disabled them from
properly contesting the Government’s allegations regarding their intent to avoid prosecution.
Evidentiary Hearings. A civil litigant accused
of being a fugitive should be permitted to submit affidavit testimony on his own behalf without such testimony being disregarded as “self-serving.” See 38a.
Courts have long recognized that “a determination of
credibility cannot be made on the basis of an affidavit. That is, a judge cannot take two affidavits which
swear to opposite things and say, ‘I find one of the
affidavits more credible than the other, and therefore
I shall accept it as true.’” Durukan Am., LLC v. Rain
Trading, Inc., 787 F.3d 1161, 1164 (7th Cir. 2015);
see also Blackledge v. Allison, 431 U.S. 63, 82, (1977)
(“When the issue is one of credibility, resolution on
the basis of affidavits can rarely be conclusive[.]”).
Instead, when faced with warring affidavits, a district court is expected to hold an evidentiary hearing.
Durukan Am., 787 F.3d at 1164.
Nonetheless, the Eastern District of Virginia and
Fourth Circuit in this case made credibility determinations favoring the Government’s affidavits over
Petitioners’ proffered affidavits without the benefit of
an evidentiary hearing. 26a–30a; 131a–142a. The
Fourth Circuit did not explain why it has disregarded the longstanding rule against crediting one dueling affidavit over another and making credibility determinations based on papers alone.
This split, too, grows from basic disagreement
over whether summary-judgment standards govern

 27
disentitlement. In the Sixth and D.C. Circuits, unlike the Fourth Circuit, dueling affidavits present
factual disputes that are to be resolved following a
hearing on the merits. E.g. Salti, 579 F.3d at 666.
Use of Inadmissible Evidence. A civil claimant should not be denied any claim to property based
upon unexamined, unauthenticated hearsay. The
Federal Rules of Evidence generally “apply to proceedings in United States courts[.]” Fed. R. Evid.
101; Accord Legg v. Chopra, 286 F.3d 286, 290 (6th
Cir. 2002). At summary judgment, a motion must be
supported by “facts that would be admissible in evidence[.]” Fed. R. Civ. P. 56. Indeed, courts have excluded evidence from fugitive disentitlement proceedings specifically because it was “hearsay.” E.g.,
Incline Vill., 47 F.3d at 1516.
Nonetheless, the district court disentitled Petitioners, and the Fourth Circuit affirmed, based on
rank double hearsay. E.g., 39a, 142a (“Bencko told a
third party that . . .”). Notably, the district court appeared to consider inadmissible evidence only when
it went against the Claimants. In their briefing, the
Claimants specifically raised the possibility of government overreach and requested discovery into the
issue, but the district court found that mere allegations were not enough to justify discovery. 128a
(“The allegations of government overreach are insufficient to warrant discovery.”). The district court did
not explain why Claimants’ submissions outside of
personal knowledge were mere “allegations,” while
the Government’s double-hearsay declarations
amounted to competent evidence. The Government’s
hearsay evidence would not have been admissible
outside of the Second and Fourth Circuits.

 28
Adverse Inferences. Disentitlement of the Petitioners below depended on adverse inferences drawn
from statements submitted on the papers. E.g. 142a
(“The most likely meaning to be inferred from his
statement that he was ‘stuck’ in Slovakia is that he
was unable to travel without risking extradition to
the United States.”); 35a–39a.
Those circuits that apply summary-judgment
rules, however, would require that all inferences be
drawn in claimants’ favor. E.g., Salti, 579 F.3d at
666 n. 10; Soulbury, 554 F.3d at 132. By drawing inferences against these Claimants without permitting
live testimony, the Fourth Circuit has further deviated from summary-judgment standards as well as
from the D.C. and Sixth Circuits.
III. THERE IS A THREE-WAY CIRCUIT SPLIT
ON THE THIRD QUESTION PRESENTED
AS TO THE SHOWING OF INTENT THAT
IS PREREQUISITE TO FUGITIVE DISENTITLEMENT
Lifelong foreigners are not, by any fair measure,
“fugitives” merely because they lawfully contest extradition. The opinion of the Fourth Circuit nonetheless reads the fugitive disentitlement statute, 28
U.S.C. § 2466, as calling for the contrary conclusion.
30a–35a. By equating persons who are absent with
those who abscond, it has compounded what was already a pronounced three-way circuit split and has
joined the Second Circuit in lowering the substantive
bar for fugitive disentitlement below where two other
clusters of circuits have set it—below the Fifth and
Ninth Circuits, which apply a “totality of the circumstances” test to assessing fugitive intent, and even
further below the D.C. Circuit and Sixth Circuit,

 29
which ask whether avoidance of prosecution is “the”
reason why criminal defendants are abroad.
Traditionally, “fugitives” were individuals who
fled a jurisdiction to avoid criminal prosecution or
sanctions and then eschewed lawful process. E.g., 18
U.S.C. § 921(15) (“The term ‘fugitive from justice’
means any person who has fled from any State to
avoid prosecution for a crime . . .”). Common law did
not treat as “fugitives” people who had never previously entered the United States. See Collazos, 368
F.3d at 198–201. Section 2466(a)(1)(B) adopts a variation on that definition, permitting a district court
to deem a person a fugitive who, “in order to avoid
criminal prosecution,” “declines to enter or reenter
the United States to submit to its jurisdiction.” This
Court has not addressed this statute in the 17 years
since its enactment. Meanwhile, circuits have fractured over the substantive standard that determines
whether claimants in fact have the requisite intent
“to avoid criminal prosecution,” and demands of due
process have been left up in the air.
A. The D.C. And Sixth Circuits Require Intent To Avoid Prosecution To Be The
Reason A Defendant Does Not Enter The
United States
In analyzing the text of § 2466(a)(1)(B), the D.C.
Circuit has held that the Government must prove
“that avoiding prosecution is the reason [an alleged
fugitive] has failed to enter the United States.”
Soulbury, 554 F.3d at 132 (emphasis in original).
“Mere notice or knowledge of an outstanding warrant, coupled with a refusal to enter the United
States, does not satisfy the statute.” Id. In Soulbury, the claimant was a criminal defendant who had

 30
voluntarily left the United States years before his
indictment, renounced his United States citizenship,
and settled in Antigua (a country without an extradition treaty). Id. at 131–32. Even though the claimant had acknowledged the criminal charges in a television appearance, the D.C. Circuit concluded that
the Government “has not satisfied its burden on
summary judgment to show that [the defendant] remains outside the United States in order to avoid the
pending criminal charges.” Id. Simply put, he was
not a fugitive.
The Sixth Circuit thereafter adopted the D.C.
Circuit’s rule, requiring the Government to prove
“that avoiding prosecution is the reason [the individual] has failed to enter the United States.” Salti, 579
F.3d at 664 (6th Cir. 2009) (quoting Soulbury, 554
F.3d at 132) (emphasis in Soulbury and retained in
Salti). Applying this standard, the Sixth Circuit
held in Salti that the district court had erred in ruling that a claimant was a fugitive under § 2466 because there was evidence indicating that the claimant may have had another reason for not entering
the United States besides avoiding prosecution—
specifically, a medical condition that impeded his
ability to travel. Id. at 665–66.
Under the test espoused by the D.C. Circuit and
Sixth Circuit, Petitioners in this case are not fugitives. They have bountiful reasons other than avoiding prosecution to remain in their foreign home
countries: they have lived and worked abroad their
entire lives, as they attested in sworn affidavits
submitted to the district court. CAJA 556–567. Petitioners are not individuals who fled the United
States—nor, for that matter, are they individuals

 31
who routinely traveled to the United States and then
ceased doing so in order to avoid prosecution. Instead, they are individuals who are doing nothing
more than continuing to live their normal lives at
home, in the communities where they live and work,
among their friends, family, loved ones, and prized
possessions. Just like the claimants in Soulbury and
Salti, Petitioners’ failure to leave their homelands to
travel to the United States for the sake of confronting a criminal prosecution should not be equated
with an “intent to avoid prosecution” for purposes of
§ 2466.
B. The Fifth And Ninth Circuits Require Intent To Avoid Prosecution To Be Proven
By A Totality Of The Circumstances
The Ninth Circuit has acknowledged the D.C.
Circuit’s approach to § 2466, but adopted a somewhat more lenient “totality of the circumstances”
standard. In United States v. $671,160.00 in U.S.
Currency, the Ninth Circuit found a claimant to be a
fugitive under § 2466 given the “totality of the circumstances.” 730 F.3d at 1056. Specifically, the
claimant had changed his travel patterns—he had
engaged in “extensive travel to California prior to the
issuance of the pending criminal charge,” but ceased
visiting after the criminal charges issued. That
change, coupled with statements that he remained in
Canada because the criminal matter “ma[d]e[] it impossible for him to return to the United States,” sufficed to establish fugitive status under the totality-ofthe-circumstances test. Id. at 1057.
Last year, the Fifth Circuit adopted the Ninth
Circuit’s totality-of-the-circumstances approach. In
United States v. 2005 Pilatus Aircraft, Bearing Tail

 32
No. N679PE, the Fifth Circuit approved fugitive disentitlement of a defendant who suddenly avoided
any travel following his criminal indictment, after
previously taking more than 100 trips to the United
States. 838 F.3d 662, 664 (5th Cir. 2016). “[A] totality of the circumstances showed that Zarate deliberately remained away from the United States to avoid
criminal prosecution.” Id.
Under a “totality of the circumstances” test, too,
Petitioners would not have been adjudged fugitives.
Petitioners neither have a history of previous extensive travel to the United States nor have changed
their behavior in any identified respect. Rather, Petitioners are remaining precisely where they have
long been—in their home countries, abroad, where
they live, work, and have families.
C. The Second Circuit, As Followed By The
Fourth Circuit Below, Requires Intent To
Avoid Prosecution To Be One Possible
Reason A Defendant Has Not Entered
The United States
The Second Circuit broke from the D.C. Circuit’s
articulation of fugitive intent in 2014. “To the extent
that the D.C. Circuit’s opinion in [Soulbury] was intended to mean that when a claimant declines to enter or reenter the United States the [G]overnment is
required to prove that avoidance of criminal prosecution is his sole purpose, we respectfully disagree.”
Technodyne, 753 F.3d at 384–85. At the same time,
the Second Circuit did not adopt the totality-of-thecircumstances test that is the law of the Fifth and
Ninth Circuits. Instead, the Second Circuit ruled
that the correct standard is “specific intent” to avoid
prosecution. Id. The Second Circuit explained that

 33
“a specific intent need not be the actor’s sole, or even
primary, purpose.” Id. Individuals can be deemed
fugitives under § 2466 in the Second Circuit so long
as “any of their motivations for declining to reenter
the United States was avoidance of criminal prosecution.” Id. at 386 (emphasis added).
In this case, the Fourth Circuit purported to
harmonize the various tests but ultimately adopted
the Second Circuit’s “specific intent” standard: “Because the plain language of the statute, the legislative intent, and the weight of persuasive authority
all favor doing so, we adopt a specific intent standard
for § 2466 and affirm the district court.” 35a.
The Fourth Circuit’s decision further cements the
three-way split between (1) the sole intent approach
in the D.C. and Sixth Circuits, (2) the totality-of-thecircumstances approach in the Fifth and Ninth Circuits, and (3) the “specific intent” approach in the
Second and now the Fourth Circuits. This deep division—with multiple circuits aligned with each of the
three factions—will not go away on its own. The
time is ripe for this Court to resolve the fractured
state of the law and announce a uniform intent
standard for fugitive status under § 2466.
D. Disentitling Foreign Nationals’ Claims To
Their Foreign Assets Raises Serious DueProcess Concerns Under This Court’s
Precedent
By treating knowledge of the indictment combined with decision to remain abroad as adequate
warrant for fugitive disentitlement, the Fourth Circuit has opened the door to disentitlement based on
bare, untested allegations by the Government. No-

 34
tably, even a special appearance through counsel in
any civil forfeiture action, e.g., to contest jurisdiction,
would render any foreign defendant a defaulting fugitive. Mere appearance to advance a claim will afford conclusive proof that the criminal defendant has
knowledge of the indictment while remaining abroad.
Treating that alone as basis for disentitlement raises
serious due-process concerns.
In United States v. $40,877.59 in U.S. Currency,
the Seventh Circuit ruled that fugitive disentitlement in civil-forfeiture actions flatly violates due
process. 32 F.3d 1151, 1157 (7th Cir. 1994). That
decision has never been reversed. In it, the Seventh
Circuit recognized this Court’s teaching that, “notwithstanding an individual’s status, where he is vulnerable to being sued, he has the right to defend
himself in the action brought against him.” Id. at
1153. “[T]o deny a person the right to defend himself
or his property as punishment for contempt is a violation of due process.” Id. at 1154 (citing Hovey v.
Elliott, 167 U.S. 409, 413–14 (1897)). In applying
that doctrine to fugitives, the Seventh Circuit relied
on McVeigh v. United States, 78 U.S. (11 Wall.) 259
(1870), which held that an alien enemy had the right
to defend his property in a civil forfeiture.
$40,877.59, 32 F.3d 1151 at 1153. Later, when this
Court in Degen rejected the “harsh sanction” of disentitlement pursuant to a court’s inherent authority,
it did so in part to avoid the constitutional dueprocess question otherwise posed. 517 U.S. at 828.
Commentators have likewise noted the dueprocess problem that arises in the instant circumstances: “with artful pleading, the [G]overnment
could confiscate all of a fugitive’s property . . . all on

 35
mere allegation.” Martha B. Stolley, Sword or
Shield: Due Process and the Fugitive Disentitlement
Doctrine Degen v. United States, 116 S. Ct. 1777
(1996), 87 J. CRIM. L. & CRIMINOLOGY 751, 772 (1997)
(drawing upon Windsor v. McVeigh, 93 U.S. 274, 279
(1876); $40,877.59, 32 F.3d at 1155; James Daniel
Good, 510 U.S. at 55).
Due-process considerations loom large in this context. In granting certiorari to review the Fourth Circuit’s specific-intent standard, the Court may ensure
that § 2466 is interpreted consistent with constitutional imperatives. See also Walden v. Fiore, 134 S.
Ct. 1115, 1121 (2014) (“The Due Process Clause of
the Fourteenth Amendment constrains a State’s authority to bind a nonresident defendant to a judgment of its courts.”).
CONCLUSION
In sum, this case poses questions that have divided the lower courts and carry important implications
for federal jurisdiction, constitutional law, statutory
interpretation, civil procedure, and international relations. At the same time, it affords this Court an
opportunity to address concerns about civil forfeiture
in an especially worrisome posture that invites
abuse—where the Government is using untested
criminal charges to seek forfeiture of foreign assets
claimed by foreign nationals who have never resided
in the United States. Granting certiorari in this case
may enable this Court to bring clarity and uniformity to the law applied across lower courts, and to have
say over when and how fugitive disentitlement may
be properly invoked when criminal prosecutions and
civil forfeiture intersect and extend overseas.

 36
The petition should be granted.
Respectfully submitted,
IRA P. ROTHKEN
JARED R. SMITH
ROTHKEN LAW FIRM
3 Hamilton Landing
Suite 280
Novato, CA 94949
(415) 924-4250
Counsel for Petitioners
Kim Dotcom and
Megaupload Limited

DEREK L. SHAFFER
Counsel of Record
derekshaffer
@quinnemanuel.com
WILLIAM B. BURCK
STEPHEN M. HAUSS
JONATHAN G. COOPER
CAROLYN M. HOMER
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
777 6th St. NW, Suite 1100
Washington, D.C. 20001
(202) 538-8000

MICHAEL S. ELKIN
THOMAS P. LANE
WINSTON & STRAWN LLP MICHAEL LAFOND
200 Park Avenue
QUINN EMANUEL URQUHART
New York, NY 10166
& SULLIVAN, LLP
(212) 294-6700
555 Twin Dolphin Dr., Fl. 5
Redwood City, CA 94070
STEFFEN N. JOHNSON
(650) 801-5000
CHRISTOPHER E. MILLS
WINSTON & STRAWN LLP Counsel for Petitioners
1700 K Street NW
Kim Dotcom and
Washington, DC 20006
Megaupload Limited
(202) 282-5000
CRAIG C. REILLY
Counsel for Petitioners
111 Oronoco Street
Kim Dotcom and
Megaupload Limited Alexandria, VA 22314
(703) 549-5354
Counsel for all Petitioners

 37
ROBB C. ADKINS
WINSTON & STRAWN LLP
101 California Street
San Francisco, CA 94111
(415) 591-1000

DAVID B. SMITH
DAVID B. SMITH, PLLC
108 N. Alfred Street
Alexandria, VA 22314
(703) 548-8911

Counsel for Petitioner
Megaupload Limited

Counsel for Petitioners
Julius Bencko and
Sven Echternach
April 7, 2017

 APPENDIX

1a
APPENDIX A
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
______________________
No. 15-1360
______________________
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
FINN BATATO; BRAM VAN DER KOLK; JULIUS
BENCKO; MATHIAS ORTMANN; SVEN
ECHTERNACH; KIM DOTCOM; MEGAUPLOAD
LIMITED; MEGAPAY LIMITED; VESTOR
LIMITED; MEGAMEDIA LIMITED; MEGASTUFF
LIMITED; MONA DOTCOM,
Claimants – Appellants,
and
ALL ASSETS LISTED IN ATTACHMENT A, AND
ALL INTEREST, BENEFITS, AND ASSETS
TRACEABLE THERETO, in Rem,
Defendant.
------------------------CATO INSTITUTE; INSTITUTE FOR JUSTICE;
NATIONAL ASSOCIATION OF CRIMINAL
DEFENSE LAWYERS,
Amici Supporting Appellants.

 2a
______________________
Appeal from the United States District Court for the
Eastern District of Virginia, at Alexandria. Liam
O’Grady, District Judge. (1:14-cv-00969-LO-MSN)
______________________
Argued: March 22, 2016
Decided: August 12, 2016
______________________
Before GREGORY, Chief Judge, and DUNCAN and
FLOYD, Circuit Judges.
______________________
Affirmed by published opinion. Chief Judge Gregory
wrote the majority opinion, in which Judge Duncan
joined. Judge Floyd wrote a dissenting opinion.
______________________
ARGUED:
Michael S. Elkin, WINSTON &
STRAWN LLP, New York, New York, for Appellants.
Jay V. Prabhu, OFFICE OF THE UNITED STATES
ATTORNEY, Alexandria, Virginia, for Appellee. ON
BRIEF: Craig C. Reilly, Alexandria, Virginia, for
Appellants; Robb C. Adkins, San Francisco,
California, Steffen N. Johnson, Christopher E. Mills,
WINSTON & STRAWN LLP, Washington, D.C., for
Appellant Megaupload Limited; David B. Smith,
SMITH & ZIMMERMAN, PLLC, Alexandria,
Virginia, for Appellants Julius Bencko and Sven
Echternach; Ira P. Rothken, Jared R.
Smith,
ROTHKEN LAW FIRM, Novato, California, William
A. Burck, Derek L. Shaffer, Stephen M. Hauss,
QUINN EMANUEL URQUHART & SULLIVAN,

 3a
Washington, D.C., for Appellants Kim Dotcom and
Megaupload Limited. Dana J. Boente, United States
Attorney, G. Wingate Grant, Assistant United States
Attorney, Karen L. Taylor, Assistant United States
Attorney, Jasmine H. Yoon, Assistant United States
Attorney, Allison B. Ickovic, Special Assistant United
States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Alexandria, Virginia; Ryan K.
Dickey, Brian L. Levine, Senior Counsel, Computer
Crime & Intellectual Property Section, UNITED
STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee. Darpana Sheth, INSTITUTE
FOR JUSTICE, Arlington, Virginia, Thomas K.
Maher,
NORTH
CAROLINA
OFFICE
OF
INDIGENT DEFENSE SERVICES, Durham, North
Carolina, Ilya Shapiro, CATO INSTITUTE,
Washington, D.C., for Amici Cato Institute, Institute
for Justice, and National Association of Criminal
Defense Lawyers.
______________________

 4a
GREGORY, Chief Judge:
The claimants in this case appeal from the
district court’s entry of default judgment for the
government in a civil forfeiture action against funds
deposited in the claimants’ names in banks in New
Zealand and Hong Kong. Default judgment was
entered after the government successfully moved to
disentitle the claimants from defending their claims
to the defendant property under the federal fugitive
disentitlement statute, 28 U.S.C. § 2466.
The
claimants appeal the judgment on several grounds,
most prominent among them that the district court
lacked jurisdiction over the defendant property
because it resides in foreign countries, that fugitive
disentitlement violates constitutional due process,
and that disentitlement in this case was improper
because the claimants are not fugitives from the law.
Finding these arguments unpersuasive, we affirm
the district court.
I.
On January 5, 2012, a grand jury returned an
indictment against many of the claimants in this
action, charging them with criminal copyright
infringement and money laundering “with estimated
harm to copyright holders well in excess of
$500,000,000 and reported income in excess of
$175,000,000.” Gov’t Br. 4. The claimants’ alleged
copyright infringement scheme, dubbed the “Mega
Conspiracy,” used public websites to facilitate the
illegal reproduction and distribution of copyrighted
movies, software, television programs, and music.
The government estimates that the alleged criminal

 5a
conduct has caused billions of dollars in harm to the
copyright holders.
Following the indictment, the district court issued
restraining orders for assets in New Zealand and
Hong Kong where most of the remaining identified
proceeds resided. The High Court in Hong Kong
responded almost immediately by issuing a
restraining order against approximately $60 million
in assets, while New Zealand first arrested several of
the now-claimants, released them on bail, and then
several months later, in April, registered restraining
orders on $15 million in assets. New Zealand also
scheduled extradition hearings for August 2012, but
these hearings have been continued at least eight
times at the claimants’ request.
The New Zealand restraining orders could only
remain registered for two years, after which they
could be extended for up to one year. Recognizing
that the restraints would run out on April 18, 2014,
or if extended on April 18, 2015, the United States
filed this civil forfeiture action against forty-eight
assets restrained pursuant to the criminal
indictment in the district court on July 29, 2014.
Although restraining orders froze the assets in the
lead up to this action, the New Zealand courts have
routinely released funds to claimants for living and
legal expenses. Some of these have been very
substantial, including millions in legal fees for Kim
Dotcom, and $170,000 per month for living expenses
for the same claimant.
Most of the claimants in this case filed their
claims together on August 28, and Mona Dotcom
filed a spousal claim on September 1, 2014. The

 6a
claimants also filed a joint waiver of notice. The
government subsequently moved to strike all the
claimants’ claims pursuant to 28 U.S.C. § 2466, the
federal fugitive disentitlement statute. On February
27, 2015, the district court granted the motion to
strike, having allowed claimants to appear and
present arguments on the motion but not on the
merits of the case. The government then moved for
default judgment, which the district court granted on
March 25, 2015, issuing forfeiture orders for the
assets in New Zealand and Hong Kong. United
States v. All Assets Listed in Attachment A, 89 F.
Supp. 3d 813 (E.D. Va. 2015).
Claimants timely noted this appeal.
II.
The claimants’ first challenge to the district court
judgment contests that court’s in rem jurisdiction
over assets in foreign countries. The claimants make
essentially several arguments which we will address
in turn: first, the statute cited by the district court
as establishing its jurisdiction speaks to venue
rather than jurisdiction; second, that if that statute
is jurisdictional, the case must still be justiciable,
meaning the district court must have sufficient
control over the res to render a binding opinion
effecting title; and finally, that jurisdiction was
improper because the district court did not have
sufficient minimum contacts with the defendant
property.

 7a
A.
The district court asserted in rem jurisdiction
pursuant to 28 U.S.C. § 1355(b)(2).1 There is a
potential split in the circuit courts regarding how to
For convenience, the relevant portions of § 1355 are
reproduced here:
1

(a) The district courts shall have original jurisdiction,
exclusive of the courts of the States, of any action or proceeding
for the recovery or enforcement of any fine, penalty, or
forfeiture, pecuniary or otherwise, incurred under any Act of
Congress, except matters within the jurisdiction of the Court of
International Trade under section 1582 of this title.
(b) (1)
brought in--

A forfeiture action or proceeding may be

(A) the district court for the district in which any of
the acts or omissions giving rise to the forfeiture
occurred, or
(B) any other district where venue for the forfeiture
action or proceeding is specifically provided for in
section 1395 of this title or any other statute.
(2)
Whenever property subject to forfeiture under
the laws of the United States is located in a foreign country,
or has been detained or seized pursuant to legal process or
competent authority of a foreign government, an action or
proceeding for forfeiture may be brought as provided in
paragraph (1), or in the United States District court for the
District of Columbia.
***
(d) Any court with jurisdiction over a forfeiture action
pursuant to subsection (b) may issue and cause to be served in
any other district such process as may be required to bring
before the court the property that is the subject of the forfeiture
action.

 8a
interpret subsection (b): the Second Circuit has held
that it merely makes venue proper in certain courts,
while the Third, Ninth, and D.C. Circuits have held
that it establishes jurisdiction in those courts.2 The
district court adopted the majority approach, and we
affirm that decision.
“Under the traditional paradigm, ‘the court must
have actual or constructive control over the res when
an in rem forfeiture suit is initiated.’” United States
v. Approximately $1.67 Million, 513 F.3d 991, 996
(9th Cir. 2008) (quoting United States v. James
Daniel Good Real Prop., 510 U.S. 43, 58 (1993)). The
question is whether § 1355—particularly the 1992
amendments which added subsections (b) and (d),
authorizing district courts to issue process against
property outside their districts—effectively dispenses
with this traditional requirement. In the only circuit
opinion to so hold, the Second Circuit said it does not
do so with respect to property outside the United
2
There is only a “potential” split because the Second
Circuit may have reversed itself following its decision in United
States v. All Funds on Deposit in Any Accounts Maintained in
Names of Meza or De Castro, 63 F.3d 148 (2d Cir. 1995). As the
district court noted, a year after Meza the Second Circuit
described § 1355(b) as an amendment “to provide district courts
with in rem jurisdiction over a res located in a foreign country.”
United States v. Certain Funds Contained in Account Numbers
600-306211-006, 600-306211-011 & 600-306211-014 Located at
Hong Kong & Shanghai Banking Corp., 96 F.3d 20, 22 (2d Cir.
1996). This language appears to at least abrogate Meza in the
Second Circuit. If so, adopting the reasoning in Meza here
would actually create a split between this Court and the
Second, Third, Ninth, and D.C. Circuits.

 9a
States. United States v. All Funds on Deposit in Any
Accounts Maintained in Names of Meza or De
Castro, 63 F.3d 148, 152 (2d Cir. 1995). The Meza
court read § 1355(b) to make venue proper in cases
involving foreign property where the district court
had control over that property. Id. at 151 (“Section
1355(b) addresses venue in forfeiture actions . . . .”).
While subsection (d) establishes legal control over
property located outside the court’s jurisdiction but
inside the United States, the Meza court held that a
showing of control was still required for property
outside the United States. Id. at 152.
This interpretation fails a closer textual analysis
and runs contrary to the legislative history of the
1992 amendments. By its own terms, § 1355(d) only
applies to “[a]ny court with jurisdiction over a
forfeiture action pursuant to subsection (b).”
§ 1355(d) (emphasis added). The plain meaning of
§ 1355(d), therefore, renders the Meza court’s finding
that “[s]ection 1355(b) addresses venue” impossible—
courts may acquire jurisdiction by operation of the
provision. Although it would be clearer still for
§ 1355(b) to explicitly state its own jurisdictional
nature, rather than merely saying that a “forfeiture
action or proceeding may be brought in” those
district courts it describes, the plain meaning of that
language in the context of the entire statute is
unmistakable.
The Meza court’s interpretation, urged by the
claimants here, also runs contrary to the legislative
history of the 1992 amendments.
When the
amendments were introduced in the Money
Laundering Improvements Act, Senator D’Amato

 10a
included an explanatory statement indicating that
subsection (b) was intended to provide the federal
district courts with jurisdiction over foreign property:
Subsection (b)(2) addresses a problem
that arises whenever property subject to
forfeiture under the laws of the United
States is located in a foreign country.
As mentioned, under current law, it is
probably no longer necessary to base in
rem jurisdiction on the location of the
property if there have been sufficient
contacts with the district in which the
suit is filed.
See United States v.
$10,000 in U.S. Currency[, 860 F.2d
1511 (9th Cir. 1988)].
No statute,
however, says this, and the issue has to
be repeatedly litigated whenever a
foreign government is willing to give
effect to a forfeiture order issued by a
United States court and turn over
seized property to the United States if
only the United States is able to obtain
such an order.
Subsection (b)(2) resolves this problem
by providing for jurisdiction over such
property in the United States District
Court for the District of Columbia, in
the district court for the district in
which any of the acts giving rise to the
forfeiture occurred, or in any other
district where venue would be
appropriate under a venue-for-forfeiture
statute.

 11a
137 Cong. Rec. S16640-01 (Nov. 13, 1992) (statement
of Sen. D’Amato). The Meza court acknowledged, but
did not analyze, this evidence of legislative history,
which clearly weighs in favor of affirming the district
court’s interpretation of § 1355.
Because the plain meaning of the statutory text
and the legislative history both support finding that
28 U.S.C. § 1355(b) is jurisdictional, we affirm the
district court’s holding to that effect. The district
court was also correct to find that jurisdiction would
lie if any of the acts resulting in the forfeiture action
occurred within its jurisdiction. The court noted that
the civil complaint and the related criminal
indictment allege that there was a conspiracy
between the indicted parties and that they used
“over 525 servers located within the Eastern District
of Virginia.” All Assets Listed in Attachment A, 89
F. Supp. 3d at 823 (footnote omitted).
The
government furthermore contends, and the
claimants do not deny, that the cost of using those
servers ran into the “tens of millions of dollars over a
period of years.” Gov’t Br. 18. This easily satisfies
the relatively low standard set forth in § 1355, and so
we affirm the district court’s finding that it had
jurisdiction under the statute.
B.
The claimants next argue that the district court’s
forfeiture order amounts to a nonbinding advisory
opinion because foreign sovereigns must honor that
order for it to have any effect on title to the res. The
argument
rests
on
two
overlapping
but
distinguishable premises. The first is that principles
of admiralty law which usually predicate in rem

 12a
jurisdiction on the court’s control of the res apply
equally to this case. This argument relies principally
on our decisions in R.M.S. Titanic, Inc. v. Haver, 171
F.3d 943 (4th Cir. 1999) [hereinafter Titanic I], and
R.M.S. Titanic, Inc. v. The Wrecked & Abandoned
Vessel, 435 F.3d 521 (4th Cir. 2006) [hereinafter
Titanic II]. The claimants’ second premise is that
Article III of the U.S. Constitution will not tolerate
courts asserting in rem jurisdiction without
“exclusive custody and control” of the res because
such courts cannot “adjudicate rights . . . binding
against the world,” see Titanic I, 171 F.3d at 964, but
are instead limited to rendering advisory opinions
“subject to revision” by other governments, see
Nashville, C. & St. L. Ry v. Wallace, 288 U.S. 249,
261-62 (1933).
This is essentially the same “lack-of-control”
attack claimants launched against § 1355 as just
discussed, but they attempt to reframe the argument
as addressing more fundamental issues.
i.
The claimants’ first argument fails because it
confuses principles of admiralty law for principles of
constitutional law. Both Titanic I and Titanic II
describe
jurisdictional
principles
governing
admiralty courts and the law of the sea. The two
crucial distinctions between these cases and the one
before us are (1) that the Titanic cases based
jurisdiction on the common law of admiralty whereas
this case relies on § 1355, and (2) the Titanic cases
involved a salvage and so no court could assert
jurisdiction through exclusive control of the res, but
here the res resides in two sovereign nations that are

 13a
cooperating with federal authorities from
country regarding the assets in question.

this

The claimants fail to acknowledge the most
glaring problem with their reliance on Titanic I and
Titanic II: the cases speak explicitly in terms of the
jurisdictional limits of admiralty courts pursuant to
“the common law of the seas.” Titanic I, 171 F.3d at
960-61 (“Thus, when we say today that a case in
admiralty is governed by the general maritime law,
we speak through our own national sovereignty and
thereby recognize and acquiesce in the time-honored
principles of the common law of the seas.”).
“Maritime law . . . provides an established
network of rules and distinctions that are practically
suited to the necessities of the sea,” United States v.
W.M. Webb, Inc., 397 U.S. 179, 191 (1970), and as
one of our sister circuits has noted, “The general
statute governing forfeiture actions states that
‘[u]nless otherwise provided by Act of Congress . . . in
cases of seizures on land the forfeiture may be
enforced by a proceeding in libel which shall conform
as near as may be to proceedings in admiralty,’”
United States v. All Funds in Account Nos.
747.034/278, 747.009/278, & 747.714/278 in Banco
Espanol de Credito, Spain, 295 F.3d 23, 26 (D.C. Cir.
2002) (quoting 28 U.S.C. § 2461(b)). But of course,
there is another statute—§ 1355—guiding the action
here, and we have just described how that statute
confers jurisdiction on the district court. Thus,
absent the amendments to § 1355, there might be
“little doubt that traditional rules of in rem
jurisdiction developed under admiralty law would
apply,” id., but as things stand there can be no doubt

 14a
that § 1355 must prevail. As such, the cooperation
(or lack thereof) of foreign nations in enforcing any of
the district court’s orders “determines only the
effectiveness of the forfeiture orders of the district
courts, not their jurisdiction to issue those orders.”
Id. at 27.
Finally, on this point, we note that admiralty
cases involving salvages on the high seas (like the
Titanic cases) necessarily involve difficult questions
of previously owned property lost in shared
international waters where no nation has
sovereignty. Our opinion in Titanic I was crafted “to
ensure that the conclusion that no nation has
sovereignty through the assertion of exclusive
judicial action over international waters does not
leave the high seas without enforceable law.” 171
F.3d at 968. These questions are not at issue here
and there is no need to plumb their depths as the
claimants invite us to do. Instead, we turn to the
question of justiciability which involves related
issues of control.
ii.
The claimants here argue that the district court is
without jurisdiction because, without control of the
res, it can only advise the courts of New Zealand and
Hong Kong rather than disposing of the issues
presented.
It is among “the oldest and most
consistent thread[s] in the federal law of
justiciability . . . that the federal courts will not give
advisory opinions,” Flast v. Cohen, 392 U.S. 83, 96
(1968) (quotations omitted), and there are numerous
cases holding that judicial decisions may not be
rendered if they would be subject to revision by

 15a
another branch of government, e.g., Chicago & S.
Airlines Co., 333 U.S. 103, 113-14 (1948). But this
principle addresses itself to maintaining the
separation of powers between the branches of our
own government, not to concerns of sovereignty or
international comity.
See Courtney J. Linn,
International Asset Forfeiture and the Constitution:
The Limits of Forfeiture Jurisdiction over Foreign
Assets Under 28 U.S.C. § 1355(b)(2), 31 Am. J. Crim.
L. 251, 297-98 (2004) (collecting numerous cases, all
addressing only revision by other branches of the
United States government).
For a court to hear a case “it must be ‘likely,’ as
opposed to merely ‘speculative,’ that the injury will
be redressed by a favorable decision.” Lujan v. Defs.
of Wildlife, 504 U.S. 555, 561 (1992) (quotations
omitted). We need to not wade into the potentially
thorny issues raised by claimants because this case
meets the test articulated in Lujan—the foreign
sovereigns have cooperatively detained the res by
issuing orders restraining the defendant property
pursuant to this litigation. By showing that the res
was placed in custody in New Zealand and Hong
Kong based on the district court’s order, JA 468-69,
the government has demonstrated that it is likely,
rather than speculative, that these courts will honor
a forfeiture order from the United States. While the
claimants repeatedly point to foreign court releases
of restrained funds, these simply do not prove that
an order of forfeiture is unlikely to be honored.
The district court, also in reliance on the
cooperation of Hong Kong and New Zealand,
concluded its opinion would not be advisory and that

 16a
the court is capable of redressing the issue.
affirm that decision.

We

C.
The claimants next seek to challenge the district
court’s assertion of jurisdiction under the Due
Process Clause of the Fifth Amendment. They argue
that, regardless of any statute passed by Congress, a
federal court cannot assert jurisdiction unless it is
established that the defendant meets the “minimum
contacts” test articulated by International Shoe v.
State of Washington, Office of Unemployment
Compensation & Placement, 326 U.S. 310 (1945) and
its progeny, citing Harrods Ltd. v. Sixty Internet
Domain Names, 302 F.3d 214, 224 (4th Cir. 2002).
The district court held that the statute’s requirement
that this kind of in rem action be brought in “the
district court for the district in which any of the acts
or omissions giving rise to the forfeiture occurred,”
§ 1355(b)(1)(A), “serve[d] much the same function as
the minimum contacts test” and therefore analyzed
only that question. J.A. 1963 n.10. While we
disagree with the district court’s analytical approach,
its conclusion that the facts supporting statutory
jurisdiction also establish sufficient contacts to meet
due process, in this case, is affirmed.
While Congress has substantial power to set the
jurisdiction of the federal courts, the Due Process
Clause limits that power. The exact contours of that
limitation are not entirely clear. In Shaffer v.
Heitner, 433 U.S. 186 (1977), the Supreme Court
held “that all assertions of state-court jurisdiction
must be evaluated according to the standards set
forth in International Shoe and its progeny.” 433

 17a
U.S. at 212. The Court’s insight was that “the
relationship among the defendant, the forum, and
the litigation, rather than the mutually exclusive
sovereignty of the States on which the rules of
Pennoyer [v. Neff, 95 U.S. 714 (1878)] rest, [had
become] the central concern of the inquiry into
personal jurisdiction,” and that similar concerns
should govern in rem jurisdiction. Id. at 204. The
Court rejected the narrow theory that in rem actions
were strictly actions against property, concluding
that “in order to justify an exercise of jurisdiction in
rem, the basis for jurisdiction must be sufficient to
justify exercising jurisdiction over the interests of
persons in a thing.” Id. at 207 (quotation marks
omitted). Thus the appeal of applying the minimum
contacts test in in rem cases.
The Court’s decision in Shaffer, however, emerged
from a case that might be viewed as the inverse of
what § 1355(b) contemplates: the property at issue
was stock in a Delaware corporation that was, by
virtue of state law, legally sited in the state of
Delaware, while the owners of that stock had no
other ties to the state. The Court determined that,
despite the property being legally located in the
state, the owners of that stock had insufficient
contacts with Delaware for courts there to invoke
quasi in rem jurisdiction over the underlying
shareholder’s derivative suit. Id. at 213. But
§ 1355(b)
contemplates
something
completely
different—a federal district court asserting in rem
jurisdiction over property (which, in contrast to
Shaffer, is central to the forfeiture action) located
outside the forum.

 18a
Given that Shaffer provides only limited guidance
as to how to proceed in this case, we assume without
deciding that a traditional, state-based minimum
contacts approach is appropriate in this case3, as
posited by the claimants. Applying that test we find
that the contacts are sufficient and due process is not
violated by the district court’s assertion of
jurisdiction.

3
“Because the United States is a distinct sovereign, a
defendant may in principle be subject to the jurisdiction of the
courts of the United States but not of any particular State.
This is consistent with the premises and unique genius of our
Constitution.” J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S.
873, 884 (2011). Given this principle, and based on the
interplay between Federal Rules of Civil Procedure 4(k)(1)(C)
and 4(k)(2), it has been held elsewhere that statutes expanding
a district court’s jurisdiction to the entire country may
transform the minimum contacts test into a “national contacts”
test. See Graduate Mgmt. Admission Council v. Raju, 241 F.
Supp. 2d 589, 597 (E.D. Va. 2003) (“Rule 4(k)(2) was added in
1993 to deal with a gap in federal personal jurisdiction law in
situations where a defendant does not reside in the United
States, and lacks contacts with a single state sufficient to
justify personal jurisdiction, but has enough contacts with the
United States as a whole to satisfy the due process
requirements.”); see also Sec. Inv’r Prot. Corp. v. Vigman, 764
F.2d 1309, 1315 (9th Cir. 1985); F.T.C. v. Jim Walter Corp., 651
F.2d 251, 256 (5th Cir. 1981); cf. ESAB Grp., Inc. v. Zurich Ins.
PLC, 685 F.3d 376, 391 n.8 (4th Cir. 2012) (declining to assess
nationwide contacts pursuant to Rule 4(k)(2) because state
long-arm statute authorized jurisdiction). It may therefore be
possible for such a test to substitute in in rem actions like this
one. Finding no need to rely on this test, however, we decline to
express an opinion on the matter.

 19a
As in other cases we have decided in which
websites and web transactions have been the
asserted basis for jurisdiction, we will analyze the
minimum contacts question by applying the factors
commonly used for determining specific personal
jurisdiction: “(1) the extent to which the defendant
has purposefully availed itself of the privilege of
conducting activities in the state; (2) whether the
plaintiffs’ claims arise out of those activities directed
at the state; and (3) whether the exercise of personal
jurisdiction would be constitutionally ‘reasonable.’”
Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs.,
Inc., 334 F.3d 390, 397 (4th Cir. 2003).
As already mentioned, both the forfeiture
complaint and the criminal indictment allege that
525 servers located within the Eastern District of
Virginia were used in furtherance of the Mega
Conspiracy. All Assets Listed in Attachment A, 89 F.
Supp. 3d at 823. The government further alleges,
and the claimants do not dispute, that these servers
were “operated and closely controlled” by the
claimants “at a cost of tens of millions of dollars over
a period of years.” Gov’t Br. 18. We find that such
contacts are sufficient to show the claimants
“purposefully availed [themselves] of the privilege of
conducting activities in the state.” See Carefirst, 334
F.3d at 397.
The claimants argue, however, that “this Court
has repeatedly dismissed ‘as “de minimis” the level of
contact created by the connection between an out-ofstate defendant and a web server located within a
forum.’” Appellants’ Br. 17-18 (quoting Carefirst, 334
F.3d at 402). Besides not being a binding rule of

 20a
general applicability, the particular facts of this case
warrant a different outcome than otherwise might be
true. The quote they rely on is an unfortunate
paraphrasing in our Carefirst opinion of a discussion
contained in a footnote of another case, Christian
Science Board of Directors of First Church of Christ,
Scientist v. Nolan, 259 F.3d 209 (4th Cir. 2001). In
Nolan we went to some lengths to note that we were
not deciding the effect an in-forum server might have
on jurisdiction as the case did not present those
facts—the server involved was operated in
California, not the forum state of North Carolina. Id.
at 217 n.9. The Carefirst opinion therefore fails to
adequately capture the impact of Nolan. Carefirst
also does not purport to state a rule of general
application, nor could it given that the reference is
contained in dicta—Carefirst, like Nolan, did not
involve an in-forum web server and so the Court had
no opportunity to address the effect such a server
might have on the jurisdictional question. Carefirst,
334 F.3d at 402 (“NetImpact merely facilitated the
purchase of CPC’s domain names and rented CPC
space on its servers—which in fact were located not
in [the forum state of] Maryland, but in
Massachusetts.”).
More to the point, this case does not involve a
single server that happened to reside in the forum
state.
It involves hundreds of servers, closely
controlled by the claimants, representing an
investment of tens of millions of dollars. Moreover,
whereas Carefirst and Nolan involved conspiracies in
which a website was used to fraudulently solicit
contributions from individuals, the type of conspiracy
alleged in this case makes the servers a much more

 21a
integral aspect of the crime. The alleged Mega
Conspiracy was a file-sharing scheme in which
copyrighted files were illegally transferred to users
around the world through the servers located in
Ashburn, Virginia. The volume of data involved,
while not disclosed in briefs to this Court, would
necessarily have been orders of magnitude greater
than that involved in Carefirst and Nolan. In those
cases the defendants were alleged to be using the
Internet to commit a traditional sort of fraud, and we
decided the more important activity was “creating
and updating the . . . website.” See Nolan, 259 F.3d
at 217 n.9. Here, the servers themselves held and
allowed the transfer of the copyrighted material—
they were the central conduit by which the
conspiracy was conducted.
The location of a
substantial number of the servers in Virginia is
clearly enough to demonstrate purposeful availment.
The second factor, whether the plaintiffs’ claims
arise out of those activities directed at the state, is
easily met: the forfeiture action before this Court
arises from the alleged illegal transfer of files
conducted using the servers located in Virginia.
The third factor, constitutional reasonableness, is
also
met.
To
determine
constitutional
reasonableness, we look at “the burden on the
defendant, the forum State’s interest in adjudicating
the dispute, the plaintiff’s interest in obtaining
convenient and effective relief, the interstate judicial
system’s interest in obtaining the most efficient
resolution of controversies, and the shared interest of
the several States in furthering fundamental
substantive social policies.” Burger King Corp. v.

 22a
Rudzewicz, 471 U.S. 462, 477 (1985) (quoting WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286,
292 (1980)) (internal quotation marks omitted). This
factor is largely used to police for exploitation of
jurisdictional rules and ensure that defending a suit
is not “so gravely difficult and inconvenient that a
party unfairly is at a severe disadvantage in
comparison to his opponent.” Id. at 478 (quoting The
Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 18
(1972)) (internal quotation marks omitted). The
claimants do not argue that Virginia is any less
convenient than any other available forum, and we
perceive no evidence that the government filed where
it did for any untoward purpose.
III.
The district court ordered the claimants
disentitled from defending claims to the defendant
property pursuant to the Civil Asset Forfeiture
Reform Act of 2000 (“CAFRA”), 28 U.S.C. § 2466.
The effect of the order was to prevent the claimants
from using the U.S. courts to defend their claims to
the property.
The claimants argue that this
application of 28 U.S.C. § 2466 violates the Due
Process Clause of the Fifth Amendment by stripping
them of their right to be heard. The claimants
present arguments closely tracking those rejected by
the Second Circuit in Collazos v. United States, 368
F.3d 190, 202-05 (2d Cir. 2004). The district court
effectively adopted the reasoning of that case,
holding that the claimants had waived the due
process rights they claimed were violated by
operation of § 2466. All Assets Listed in Attachment

 23a
A, 89 F. Supp. 3d at 832 n.21. We now affirm the
district court’s decision.
A.
Fugitive disentitlement began as a judicial
doctrine allowing appellate courts to dismiss appeals
from criminal fugitives who failed to surrender to
authorities, holding that such failure “disentitles the
defendant to call upon the resources of the Court for
determination of his claims.” See Molinaro v. New
Jersey, 396 U.S. 365, 365-66 (1970). Prior to 1996,
the courts of appeals were split on the question of
whether fugitive disentitlement would also “allow a
court in a civil forfeiture suit to enter judgment
against a claimant because he is a fugitive from, or
otherwise is resisting, a related criminal
prosecution.” Degen v. United States, 517 U.S. 820,
823 (1996) (citing as examples United States v. Eng,
951 F.2d 461 (2d Cir. 1991) (extending fugitive
disentitlement to civil forfeiture); United States v.
$40,877.59 in U.S. Currency, 32 F.3d 1151 (7th Cir.
1994) (declining to extend fugitive disentitlement to
civil forfeiture); and United States v. $83,320 in U.S.
Currency, 682 F.2d 573 (6th Cir. 1982) (same)).
In 1996, the U.S. Supreme Court struck a federal
district court’s use of disentitlement to strike a civil
forfeiture claimant’s defense on the grounds that he
was a fugitive evading related criminal charges. Id.
at 828. The Court was clearly conflicted over the
interests presented by the disentitled party, the
government seeking forfeiture, and the district court
itself. It noted that “[t]he need to redress the
indignity visited upon the District Court by Degen’s
absence from the criminal proceeding, and the need

 24a
to deter flight from criminal prosecution by Degen
and others” were both “substantial” interests. Id. It
also “acknowledge[d] disquiet at the spectacle of a
criminal defendant reposing in Switzerland, beyond
the reach of our criminal courts, while at the same
time mailing papers to the court in a related civil
action and expecting them to be honored.” Id. On
the other hand, the Court was even more concerned
that “too free a recourse to rules” such as
disentitlement that “foreclose[e] consideration of
claims on the merits” might “disserve the dignitary
purposes for which [they are] invoked,” eroding
respect for the courts. Id. It concluded that “[a]
court’s inherent power is limited by the necessity
giving rise to its exercise” and that “[t]here was no
necessity to justify the rule of disentitlement in
[that] case.” Id. at 829.
In the course of that opinion, the Supreme Court
acknowledged that the answer might be different if
civil disentitlement were authorized by statute. Id.
at 828. The Court expressly left open the question of
such a statute’s constitutionality. Id. It was against
this backdrop that CAFRA was enacted by Congress,
and this appeal presents this Court with its first
opportunity to pass upon that open question.
B.
The claimants argue that the district court was
not constitutionally authorized to disentitle them
from defending their property claims against the
government’s forfeiture action, regardless of any
statute passed by Congress. They argue that “[t]he
fundamental requirement of due process is the
opportunity to be heard,” Doolin Sec. Sav. Bank, FSB

 25a
v. FDIC, 53 F.3d 1395, 1402 (4th Cir. 1995)
(quotations omitted), that disentitlement violates
this precept, and that Degen confirms their position.
To begin, much of Degen’s reasoning declaring
judicial disentitlement unconstitutional centered on
balance-of-powers concerns eliminated by the
congressional authorization manifest in § 2466. The
Degen Court noted that “[p]rinciples of deference
counsel restraint in resorting to inherent power,” 517
U.S. at 820 (emphasis added), and that “[t]he extent
of [inherent judicial] powers must be delimited with
care, for there is a danger of overreaching when one
branch of the Government, without benefit of
cooperation or correction from the others, undertakes
to define its own authority,” id. at 823. It went on to
expressly convey that were Congress or the
Executive involved, the analysis would differ: “In
many instances the inherent powers of the courts
may be controlled or overridden by statute or rule.”
Id. We believe this is one such instance.
But more to the point, the claimants’ argument
fails primarily because § 2466 does not eliminate
“the opportunity to be heard.” Id. (emphasis added).
The guarantees of due process do not mean that “the
defendant in every civil case [must] actually have a
hearing on the merits.” Boddie v. Connecticut, 401
U.S. 371, 378 (1971). “What the Constitution does
require is an opportunity . . . granted at a
meaningful time and in a meaningful manner, for a
hearing appropriate to the nature of the case.” Id.
(internal quotations omitted); see also James Daniel
Good, 510 U.S. at 48 (“Our precedents establish the
general rule that individuals must receive notice and

 26a
an opportunity to be heard before the Government
deprives them of property.”). A party’s failure to
take advantage of that opportunity waives the right
it secures. See Boddie, 401 U.S. at 378-79.
The government points out that courts regularly
impose procedural requirements that will control
when and how a party may be heard, including
requiring that an appearance be made in court. See
id. (“A State, can, for example, enter a default
judgment against a defendant who, after adequate
notice, fails to make a timely appearance . . . .”). As
was true of the claimant in Collazos, the claimants
here “could have secured a hearing on [their]
forfeiture claim any time . . . simply by entering the
United States.” 368 F.3d at 203. They declined to do
so.
While the claimants correctly respond that § 2466
is no mere procedural requirement, their argument
actually
underscores
the
justification
for
disentitlement pursuant to statute.
Whereas
entering default judgment against a party for failure
to meet a nonsubstantive requirement might produce
the same result as in Degen, the refusal to face
criminal charges that would determine whether or
not the claimants came by the property at issue
illegally supports a presumption that the property
was, indeed, so obtained. Id. at 203-04. The very
logic of fugitive disentitlement is that refusal to face
and defend against charges, particularly in criminal
court where procedural rights and the presumption
of innocence favor the defendant, is “but an
admission of the want of merit in the asserted
defense.” See Hammond Packing Co. v. Arkansas,

 27a
212 U.S. 322, 351 (1909). And the Supreme Court
has long approved the power of the legislature to
authorize dismissal on the creation of such a
presumption. Id.
The distinction is made clearer by reviewing one
of two nineteenth-century cases on which the
claimants unsuccessfully rely, Hovey v. Elliott, 167
U.S. 409 (1897).4 In that case the trial court used
disentitlement as a punishment:
it held the
defendants in contempt for failure to deposit funds in
the court registry pursuant to its order, and it
punished them by striking their answer and entering
default judgment against them. Id. at 411-12. The
Supreme Court reversed, noting as axiomatic that
courts must pursue and render justice rather than
acting arbitrarily and becoming “instrument[s] of
wrong and oppression.” Id. at 413-14.
But
in
Hammond
Packing
the
Court
distinguished the situation in Hovey from one where
a party creates an adverse presumption against
itself. 212 U.S. at 349-50. The Court held that in
the latter an answer may rightly be stricken and
4
The claimants also rely on McVeigh v. United States, 78
U.S. 259 (1870), but that case is simply inapposite. It involved
the government’s seizure of property from a former Confederate
officer whose claim and answer were struck because, the trial
court held, he was an enemy alien and could not seek relief in
federal court. 78 U.S. at 261. But “while Mr. McVeigh could
not undo his past support for the Confederacy in order to obtain
a hearing on his confiscation claim,” Collazos, 368 F.3d at 203,
claimants here have had every opportunity to come into court
and be heard.

 28a
default judgment entered because it is not an
arbitrary punishment but the inevitable result of
that presumption. Id. at 350-51 (“The proceeding
here taken may therefore find its sanction in the
undoubted right of the lawmaking power to create a
presumption of fact as to the bad faith and untruth
of an answer to be gotten from the suppression or
failure to produce the proof ordered, when such proof
concerned the rightful decision of the cause.”). In
such a case, “the sanction is nothing more than the
invocation of a legal presumption, or what is the
same thing, the finding of a constructive waiver.”
Ins. Corp. of Ir. v. Compagnie des Bauxites de
Guinee, 456 U.S. 694, 706 (1982).
We make two final notes in support of our
decision. First, there can be no doubt that the
claimants’ waiver was knowing. Section 2466 leaves
the application of disentitlement to the court’s
discretion, see § 2466(a) (using “may” instead of
“shall”), and in this case, the claimants were given a
full opportunity to resist its application. Given their
lengthy, and apparently expensive, intransigence
with regard to the underlying controversy, it cannot
be argued that they were unaware of the statute’s
consequences and therefore unable to waive. Cf.
United States v. Eng, 951 F.2d 461, 466 (2d Cir.
1991), abrogated by Degen, 517 U.S. 820 (“The
doctrine operates as a waiver by a fugitive of his due
process
rights
in
related
civil
forfeiture
proceedings.”).
Second, we are not certain that Degen cast as
wide a net as the claimants argue. In that decision,
the Supreme Court concluded that “[t]here was no

 29a
necessity to justify the rule of disentitlement in this
case,” 517 U.S. at 829 (emphasis added), and we
have interpreted the opinion to mean only that
courts acting on inherent authority “[can]not rely on
the fugitive from justice doctrine to dismiss a civil
forfeiture action merely ‘because [the party] is a
fugitive from, or otherwise is resisting, a related
criminal prosecution,’” Jaffe v. Accredited Sur. &
Cas. Co., 294 F.3d 584, 596 (4th Cir. 2002) (emphasis
added) (quoting Degen, 517 U.S. at 823). These
opinions appear to leave open the possibility that
different circumstances could more readily justify
disentitlement, statutory or otherwise.
In this case, the claimants readily concede that
the property at issue is being spent rapidly, despite
numerous orders attempting to restrain it. The
government can therefore show a need, in this case,
to use more extreme measures. Cf. James Daniel
Good, 510 U.S. at 62 (holding that to show “exigent
circumstances” sufficient to justify seizure of real
property without notice or hearing the government
must “show that less restrictive measures—i.e., a lis
pendens, restraining order, or bond—would not
suffice to protect the Government’s interests in
preventing the sale, destruction, or continued
unlawful use of the real property”). And the facts
here are distinguishable from those in Degen, most
notably in that the property is located outside the
United States, complicating jurisdiction and the
district court’s ability to resolve these important
issues. We have no need to re-open the debate on
judicial disentitlement at this time. But these
differences help demonstrate that notions of due
process are not so rigid that they cannot be adapted

 30a
in light of a party’s clear intent to use procedural
guarantees to avoid substantial justice.
As § 2466 predicates disentitlement on an
allowable presumption that a criminal fugitive lacks
a meritorious defense to a related civil forfeiture, we
find it does not violate the Due Process Clause of the
Fifth Amendment and affirm the district court’s
decision.
IV.
Having established the constitutionality of
§ 2466, we now proceed to review its application in
this case. The claimants principally challenge the
district court’s finding that each of them is a fugitive
from law as defined by the statute. We address two 5
of their arguments: first, that § 2466 defines a
fugitive as a person whose “sole” or “principal”
reason for remaining outside the United States is to
avoid criminal prosecution, and so the district court
erred in adopting a lower “specific intent” standard;
and second, that even if § 2466 only requires specific
intent, the government has failed to prove the
claimants intended to avoid the United States at all.
Finding none of their arguments persuasive, we
affirm the decision of the district court.

5
The claimants also argue that the district court abused
its discretion in deciding to disentitle them, but its brief on this
point merely repeats arguments made elsewhere and we see no
reason to repeat ourselves in response.

 31a
A.
The intent standard established by § 2466 is an
issue of first impression in this Court. We review
questions of statutory interpretation de novo. United
States v. Ide, 624 F.3d 666, 668 (4th Cir. 2010).
A person is a fugitive subject to disentitlement if
he or she,
(1)
after notice or knowledge of the fact
that a warrant or process has been issued for
his apprehension, in order to avoid criminal
prosecution-(A)
purposely leaves the jurisdiction
of the United States;
(B)
declines to enter or reenter the
United States to submit to its
jurisdiction; or
(C)
otherwise evades the jurisdiction
of the court in which a criminal case is
pending against the person; and
(2)
is not confined or held in custody in any
other jurisdiction for commission of criminal
conduct in that jurisdiction.
§ 2466(a). The dispute here is over the meaning of
“in order to avoid criminal prosecution,” which the
claimants argue requires a showing that the
individual’s sole or primary reason for being absent
from the United States is evasion. The district court,
however, followed the reasoning of the Second and
Ninth Circuits in holding that this phrase only
requires a showing of specific intent. All Assets
Listed in Attachment A, 89 F. Supp. 3d at 826 (citing

 32a
United States v. Technodyne LLC, 753 F.3d 368,
383¬84 (2d Cir. 2014); United States v. $671,160.00
in U.S. Currency, 730 F.3d 1051, 1056 n.2 (9th Cir.
2013)).
“The starting point for any issue of statutory
interpretation . . . is the language of the statute
itself.” United States v. Bly, 510 F.3d 453, 460 (4th
Cir. 2007). We have previously held that “a natural
reading” of the words “in order to obstruct justice” in
the U.S. Sentencing Guidelines meant that the
conduct it modifies must have been committed “with
the specific intent” to obstruct justice. United States
v. Blount, 364 F.3d 173, 178 (4th Cir. 2004), vacated
on other grounds, Blount v. United States, 543 U.S.
1105 (2005).
In other words, “so long as the
defendant had the specific purpose of obstructing
justice” the intent requirement is met. Id.; cf.
Specific Intent, Black’s Law Dictionary (10th ed.
2014) (defining the term to mean “[t]he intent to
accomplish the precise criminal act that one is later
charged with”).
Congressional intent also favors a specific intent
requirement. The claimants’ desired interpretation
relies on words that are not in the statute: had
Congress wanted to make § 2466 apply only where
avoiding prosecution was the “sole” or “principal”
reason for a person’s absence from the United States,
adding those modifiers to the statute would
accomplish the goal easily.
Further, Congress clearly anticipated § 2466
would apply to individuals with no reason to come to
the United States other than to defend against
criminal charges. As the Second Circuit noted in

 33a
Collazos, “Subpart B also applies to persons who,
qualifying in all four other respects for
disentitlement, decline to ‘enter’ the United States’
jurisdiction.” 368 F.3d at 199. Because the subpart
explicitly applies to both those refusing to “enter”
and those refusing to “re-enter,” § 2466(a)(1)(B), the
court reasoned the former category could only be
those who have never before entered the United
States. Id. at 199-200 (finding the statute applies to
persons who “may have never set foot within the
territorial jurisdiction of the United States, know
that warrants are outstanding for them and, as a
result, refuse to enter the country” (emphasis
added)). Such individuals will often be foreign
nationals with no ties to the United States other
than their alleged criminal conduct and the
indictment describing it.
Because the statute must apply to people with no
reason to come to the United States other than to
face charges, a “sole” or “principal” purpose test
cannot stand. The principal reason such a person
remains outside the United States will typically be
that they live elsewhere. A criminal indictment
gives such a person a reason to make the journey,
and the statute is aimed at those who resist
nevertheless.
Finally, we note that this decision is consistent
with the precedent in our sister circuits who have
addressed the question. The Second and Ninth
Circuits have explicitly adopted a specific intent
standard for § 2466. See Technodyne, 753 F.3d at
384 (quoting $671,160.00, 730 F.3d at 1056 n.2, in
adopting a specific intent standard). And while

 34a
claimants argue that the D.C. and Sixth Circuits
have adopted a stricter standard, we interpret their
decisions to be consistent with ours and those of the
Second and Ninth Circuits.
In United States v. $6,976,934.65, Plus Interest
Deposited into Royal Bank of Scotland International,
Account No. 2029-56141070, Held in Name of
Soulbury Ltd., 554 F.3d 123 (D.C. Cir. 2009), the
court held that “the district court erred in concluding
that the statute does not require the government to
show that avoiding prosecution is the reason Scott
has failed to enter the United States.” 554 F.3d at
132. The claimants argue that the court’s emphasis
placed on the word “the” shows it was adopting a
“sole” purpose standard. There are two problems
with this interpretation. First, placing emphasis on
“the” could simply demonstrate that the court was
equating the intent standard with but-for causation.
In other words, it is at least as likely that the
Soulbury court meant that the government must
show the claimant would enter the country and face
prosecution if he did not specifically wish to avoid
prosecution. Second, in Soulbury the government’s
only mens rea evidence was a television interview
demonstrating the claimant’s awareness of a
warrant for his arrest in the United States. Id. at
129-30. This evidence was insufficient to show
conclusively that avoiding prosecution was even a
reason that the claimant remained outside the
United States, and neither the district court nor the
government had actually attempted to show intent,
believing the requirement was met by showing mere
“notice or knowledge.” Id. at 132. The most that can
be taken from the Soulbury decision, then, is that the

 35a
intent standard in § 2466 is more than knowledge.
But the claimants are simply incorrect to assert that
the opinion weighed in on the distinction between
specific intent and sole intent at issue here—it did
not.
The Sixth Circuit’s opinion in United States v.
Salti, 579 F.3d 656 (6th Cir. 2009), is similarly not in
conflict with our own.
That decision reversed
disentitlement where the district court had found the
claimant’s poor health “irrelevant as a matter of law”
on the question of intent. Id. at 665. The court said,
“If Al Ammouri is indeed too sick to travel, such that
his illness is what prevents him from returning to
the United States, the Government has not shown as
a matter of law that Al Ammouri’s being in Jordan,
and not the United States, is ‘in order to avoid
criminal prosecution.’”
Id. at 665-66 (emphasis
added). The court left open the possibility, however,
that while poor health might be a reason for his
absence, the government might still prove that
avoiding prosecution motivated his absence, making
him a fugitive subject to disentitlement, and so
remanded the case for further proceedings. Id. at
666.
Because the plain language of the statute, the
legislative intent, and the weight of persuasive
authority all favor doing so, we adopt a specific
intent standard for § 2466 and affirm the district
court.
B.
The claimants’ next contention is that the district
court’s findings of intent with respect to each of them

 36a
were erroneous. We review these findings for clear
error, for while determining whether claimants are
fugitives is a legal determination that would be
reviewed de novo, Collazos, 368 F.3d at 195, the
issue of claimants’ intent is a factual predicate to the
legal question, Anderson v. Bessemer City, 470 U.S.
564, 573-74 (1985) (holding that “[b]ecause a finding
of intentional discrimination is a finding of fact,” the
standard of review is “clearly erroneous”).
The claimants’ principal argument is that the
district court impermissibly relied on the fact that
each of them is fighting extradition in finding
specific intent. But the district court did not rely
solely on this evidence—it merely considered it as a
relevant part of a holistic analysis. And the weight
of persuasive authority on this question clearly
favors finding opposition to extradition relevant to
the inquiry.
E.g., Soulbury, 554 F.3d at 132
(“Likewise, under the third prong, Scott’s
renunciation of his U.S. citizenship is insufficient
without some evidence that he took this action to
avoid extradition.” (emphasis added)); United States
v. $1,231,349.68 in Funds, 227 F. Supp. 2d 130, 133
(D.D.C. 2002) (finding that the claimant was
“continuing to avoid prosecution by opposing
extradition” and that this conduct represented
“precisely the type of situation that Congress
intended to address when it enacted the Civil Asset
Forfeiture Reform Act of 2000”); see also United
States v. Real Prop. Commonly Known as 2526 155th
Place SE, No. C07-359Z, 2009 WL 667473, at *1
(W.D. Wash. Mar. 12, 2009); United States v. All
Funds on Deposit at Citigroup Smith Barney
Account No. 600-00338, 617 F. Supp. 2d 103

 37a
(E.D.N.Y. 2007).
The claimants are unable to
respond to the government’s logical conclusion that a
“three-year, multi-million-dollar quest to oppose
coming to the United States is most surely relevant
to their intent.”
Moreover, the district court did not rely solely on
the claimants’ resistance to extradition. Instead, it
reviewed each claimant and noted additional
evidence of an intent to avoid prosecution. For
example, Kim Dotcom posted a message to Twitter
stating “HEY DOJ, we will go to the U.S. No need for
extradition.
We want bail, funds unfrozen for
lawyers & living expenses.” All Assets Listed in
Attachment A, 89 F. Supp. 3d at 827. The court
rightly found this and other public statements to
strongly suggest Dotcom was resisting extradition to
posture for criminal proceedings, using the ability to
avoid prosecution as leverage. Finn Batato and
Mathias Ortmann made statements in declarations
that they were “actively contesting the legal basis on
which the United States has issued the indictment.”
Id. The court found that this, combined with their
opposition to extradition and statements that they
would remain in New Zealand sufficient to show an
intent to avoid prosecution. Other claimants were
shown to have made statements that they were
avoiding international travel to reduce their risk of
extradition and the prospect of prosecution. Id. at
829.
The claimants’ argument that they have
legitimate reasons to remain where they are, such as
jobs, businesses, and families does not disprove that
avoiding prosecution is the reason they refuse to

 38a
come to the United States. As we have already
rejected their argument for a “sole intent” standard,
the existence of additional reasons to remain in one’s
home country are utterly unpersuasive because they
do not contradict the evidence relied upon by the
district court. In fact, their argument demonstrates
another reason to reject that very high standard—
almost any claimant could defeat disentitlement by
merely asserting a self-serving reason to remain
outside the United States. Under the claimants’
preferred standard, the statute might easily be
rendered a nullity.
Finally, we address the evidence of intent for two
particular claimants who do not face extradition in
their home countries. Claimant Sven Echternach
argues that his “absence from Germany could lead to
a default judgment, or potentially even a German
arrest warrant in proceedings related to [the U.S.
charges],” and that this is his reason for remaining
there.
Appellants’ Br. 35 (internal quotations
omitted). This assertion, however, is based on the
testimony of Echternach’s own attorney, and the
district
court
spent
considerable
energy
demonstrating that the scenario he described was
highly doubtful, particularly because his trouble with
German authorities is based on the crimes he is
charged with in the United States. Id. at 829-31.
The court noted that the attorney whose advice
Echternach is following “has all but admitted that
his advice is predicated on his desire, as a criminal
defense attorney, to keep his client from traveling to
a country where he will be arrested.” Id. at 831.
Moreover, the court found that Echternach
specifically fled to his home country, stating that he

 39a
refuses to leave (despite wishing to travel
internationally) because Germany does not extradite
its nationals. Id. at 830.
Claimants also argue there is no evidence Julius
Bencko returned to his home country of Slovakia,
being driven across Europe from Portugal by a
Portuguese national, to avoid prosecution.
But
Bencko told a third party that “he was ‘stuck here in
this post commie state . . . the sooner the USA will do
some steps the soner [sic] they will let me go.’” Id. at
831 (quoting Bencko declaration). Bencko told this
person that he would prefer not to travel outside the
country but could if necessary and stated that he
faced a fifty-five-year sentence in the United States.
The district court did not abuse its discretion in
finding these statements taken together showed
intent to avoid prosecution.
V.
The claimants make two arguments regarding the
effect of international law on the application of
§ 2466, which we now address. Both are questions of
law which we review de novo. See United States v.
Al-Hamdi, 356 F.3d 564, 569 (4th Cir. 2004).
First, they argue that disentitling New Zealand
residents violates the Charming Betsy canon of
interpretation which requires courts to interpret
federal statutes “consistent with our obligations
under international law,” Kofa v. INS, 60 F.3d 1084,
1090 (4th Cir. 1995) (citing Murray v. The Charming
Schooner Betsy, 6 U.S. 64, 118 (1804)), because it is
inconsistent with the United Nations Convention
Against Transnational Organized Crime (“UNTOC”).

 40a
The relevant portion of UNTOC says,
Any
person
whom
[extradition]
proceedings are being carried out in
connection with any of the offences to
which this article applies shall be
guaranteed fair treatment at all stages
of the proceedings, including enjoyment
of all the rights and guarantees
provided by the domestic law of the
State Party in the territory of which
that person is present.
UNTOC, art. 16, ¶ 13, Dec. 12, 2000, 2255 U.N.T.S.
209. The claimants argue that disentitlement
prevents them from exercising their rights under
New Zealand law and thereby violates the
multinational treaty to which both the United States
and New Zealand are parties.
None of the claimants’ rather conclusory
arguments made to this Court respond to the district
court’s ruling on this issue. It held that there was
nothing inconsistent about allowing the claimants to
pursue their rights in New Zealand courts,
meanwhile subjecting them to default judgment in
civil proceedings in the United States which they
refused to defend: “That the exercise of their rights
in new Zealand may cause disadvantages for the
claimants with respect to litigation occurring in
America does not mean they are being treated
unfairly or that they are denied their enjoyment of
rights in New Zealand.”
All Assets Listed in
Attachment A, 89 F. Supp. 3d at 833 (emphasis
added).

 41a
The claimants only answer is to misconstrue a
New
Zealand
court
opinion
as
declaring
disentitlement unconstitutional.
The opinion to
which they refer was only deciding a motion to strike
a request that their government’s enforcement of
restraining orders on funds (issued in response to
orders from the United States district court) be made
reviewable. JA 2199-200. The case did not hold
American disentitlement unconstitutional or in
violation of UNTOC, and the claimants’ selective
quoting of a passage noting the “the plaintiffs would
say” that the lack of reviewability would be
unconstitutional is, obviously, not persuasive.
Compare Appellants’ Br. 37, with JA 2200.
The claimants also argue that claimant
Echternach cannot be disentitled pursuant to § 2466
because the Mutual Legal Assistance Treaty between
Germany and the United States (“U.S.-German
MLAT”) prohibits “any penalty” or “coercive
measure” for failure to answer a summons. See The
German Mutual Legal Assistance Treaty, Ger.-U.S.,
Oct. 18, 2009, T.I.A.S. No. 09-1018 [hereinafter
MLAT]. The U.S.-German MLAT was signed in 2003
and ratified in 2007, years after § 2466 was enacted
in 2000.
As such, claimants argue that the
Supremacy Clause dictates that the treaty trumps
the statute. See Vorhees v. Fischer & Krecke, 697
F.2d 574, 575-76 (4th Cir. 1983).
The district court expressed “serious doubts that
this treaty bars application of the fugitive
disentitlement statute against all [foreign nationals]
who maintain fugitive status in Germany.” All
Assets Listed in Attachment A, 89 F. Supp. 3d at

 42a
833. The district court’s doubts were well founded.
As its title suggests, the U.S.-German MLAT adopts
a framework for making international evidentiary
and witness requests between the two countries. It
is not concerned with criminal extradition between
the United States and Germany. The treaty covers,
for example, “transferring persons in custody for
testimony or other purposes,” MLAT, Art. 1(2)5., so
if the claimants were arguing that Echternach was
being disentitled for refusal to testify it might be on
stronger ground respecting the relevance of the
treaty. But because the U.S.-German MLAT does
not restrict how the United States may act towards a
criminal fugitive, there is no need to construe § 2466
consistent with its provisions, and the Charming
Betsy canon is inapplicable. We therefore affirm the
district court’s decision.
VI.
The claimants’ final argument is that the district
court erred in striking the marital claims to the
defendant property asserted by Mona Dotcom, the
estranged wife of claimant Kim Dotcom. The court
recognized Mrs. Dotcom’s possessory interest in two
assets—a vehicle and the house in which she
resides—but struck her claims to fifty percent of
marital property affected by this litigation,
concluding she lacked standing.
The claimants
argue this was error because Mrs. Dotcom only needs
to show a “colorable interest” in the property (based
on New Zealand property law) to establish Article III

 43a
standing, and she has done so.6
Both parties
acknowledge that the New Zealand Property
(Relationships) Act (1976) (“PRA”) is controlling on
the question of Mrs. Dotcom’s alleged interest.
To summarize, Mrs. Dotcom’s argument is that
she and her husband are estranged, that New
Zealand law gives her the right to assert a claim to
the marital property and creates a presumption that
she is entitled to half, and that New Zealand law also
recognizes this status as establishing an actual
interest in that property. The argument is no
different from that rejected by the district court.
Article III standing requires a plaintiff to show
“an injury in fact—an invasion of a legally protected
interest which is (a) concrete and particularized and
(b) actual or imminent, not conjectural or
hypothetical.” Lujan, 504 U.S. at 561. As the
district court found after a thorough analysis of New
Zealand property law, Mrs. Dotcom has failed to
articulate such an injury because she has not
asserted a nonhypothetical legal interest in the
property.
Instead, she is arguing that the
6
The Fourth Circuit uses a higher “dominion and control”
test to determine Article III standing in criminal forfeiture
cases. In re Bryson, 406 F.3d 284, 291 (4th Cir. 2005). We have
used the same test an unpublished civil forfeiture case, United
States v. 1077 Kittrell Street, 1991 WL 227792, at *1-2 (4th Cir.
Nov. 7, 1991) (unpublished), and several of our district courts
appear to have done the same, e.g., United States v.
$104,250.00 in U.S. Currency, 947 F. Supp. 2d 560, 562 (D. Md.
2013). We need not resolve this issue because the district court
correctly found Mrs. Dotcom did not even meet the lower of the
two standards.

 44a
presumption of a fifty-percent share and the right to
state a claim for division of the marital property
establishes a “legally protected interest” in the
property that is undermined by the disentitlement of
her husband. It does not.
Actual legal interests under the PRA vest “only in
the event of a future Court order or compromise”
between the married parties. Comm’r of Police v.
Hayward (unreported) High Court, Auckland, CIV
2011-404-002371, 10 June 2013, Venning J, at para
103 (N.Z.) (“Hayward I”). While the New Zealand
Criminal Proceeds Recovery Act (2009) (“CPRA”),
which controls asset forfeiture, statutorily defines an
“interest” as including “a right to claim,” Hayward v.
Comm’r of Police [2014] NZCA 625 at para [33]
White J for the Court (N.Z.) (“Hayward II”), it is the
Article III definition of interest which controls
standing. That is, New Zealand law determines the
extent of Mrs. Dotcom’s interest in the property, and
Article III determines whether that interest is
sufficient to create standing. The district court
rightly concluded that a right to state a claim “does
not rise to the level of a legal or equitable interest
sufficient to satisfy Article III.” JA 1995 (citing
United States v. Schifferli, 895 F.2d 987, 989 n.* (4th
Cir. 1990))
The district court concluded, rightly, that because
the Dotcoms had neither adjudicated their rights to
the marital property nor reached a binding
settlement, Mrs. Dotcom had no actual interest in
the property and had therefore failed to even “allege
that she owns the property.” Id. The claimants’
argument to the contrary is built upon two major

 45a
errors. First, they argue that a New Zealand court
declared that Mrs. Dotcom had an existing interest
in the property, but failed to mention that the
opinion was explicitly nonprecedential and that it
recognized an interest in a claim, not an interest in
property. See JA 1994-96. Second, the claimants
misrepresent the holding in Hayward II, implying
that it reversed Hayward I and broadened the
definition of a marital property interest to include
hypothetical claims to such property. It did not—it
very clearly distinguished the two statutes.
Finding the district court’s reasoning persuasive,
we affirm the decision to strike Mrs. Dotcom’s claims
for lack of standing.
VII.
For the foregoing reasons, the district court
opinion is affirmed in full.
AFFIRMED

 46a
FLOYD, Circuit Judge, dissenting:
The majority concludes that a district court may
properly enter a forfeiture order against property
entirely outside of the United States after barring
foreign Claimants--who are also entirely outside of
the United States--from defending the government’s
forfeiture claim. I respectfully dissent because I
conclude Article III’s prohibition against advisory
opinions precludes the exercise of in rem jurisdiction
over a res, including real property, entirely outside of
the United States and beyond the control of the
district court.
I.
I agree with the majority that 28 U.S.C. § 1355 is
a jurisdictional statute.
In enacting § 1355,
Congress intended to fundamentally alter the law
regarding in rem jurisdiction. But see United States
v. All Funds on Deposit in Any Accounts Maintained
in Names of Meza or De Castro, 63 F.3d 148, 152 (2d
Cir. 1995) (reaching the opposite conclusion, i.e., that
§ 1355 is a venue statute, not a jurisdictional one).
Congress hoped to abolish the traditional
requirement of in rem jurisdiction that a court have
actual or constructive control over the res. Compare
28 U.S.C. § 2461(b) (providing that “[u]nless
otherwise provided by Act of Congress . . . in cases of
seizures on land the forfeiture may be enforced by a
proceeding by libel which shall conform as near as
may be to proceedings in admiralty”11), with 28
U.S.C. § 1355(a), (b)(2) (providing district courts
1 Admiralty law indisputably requires control of the res as
a prerequisite to the exercise of jurisdiction.

 47a
“original jurisdiction” over forfeiture actions
concerning property “located in a foreign country”).
A congressional grant of jurisdiction to the courts
remains, however, subject to constitutional
constraints on the federal judicial power.
My
objection to the ruling of the district court, and to the
holding of the majority, is not grounded in an
objection to its claim of jurisdiction over the res
pursuant to Congress’s grant of that jurisdiction, but
is rather grounded in justiciability concerns arising
from Article III.2
“The jurisdiction of federal courts is defined and
limited by Article III of the Constitution.” Flast v.
Cohen, 392 U.S. 83, 94 (1968). Article III limits
federal courts to deciding “cases” and “controversies.”
See U.S. Const. art. III, § 2. These two words “have
an iceberg quality, containing beneath their surface
simplicity submerged complexities which go to the
very heart of our constitutional form of government.”
Flast, 392 U.S. at 94. Courts developed concepts of
justiciability to express the limitations placed upon

2 None of the circuits to apply § 1355(b)(2) and cited by the
majority considered challenges to the exercise of in rem
jurisdiction based on Article III.
The D.C. Circuit
acknowledged that application of § 1355(b)(2) must conform
with the Constitution, but declined any justiciability analysis
because no claimant raised constitutional objections. United
States v. All Funds in Account Nos. 747.034/278, 747.009/278,
& 747.714/278 in Banco Espanol de Credito, Spain, 295 F.3d 23,
27 (D.C. Cir. 2002) (“Unless the Constitution commands
otherwise—and the claimant has raised no constitutional
objections at all—the statute must be enforced.”).

 48a
federal courts by Article III’s case or controversy
requirement. See id. at 95.
As one commentator cited by the majority notes,
cases brought pursuant to § 1355(b)(2) implicate two
distinct but related constitutional justiciability
requirements--bindingness and redressability. See
Courtney J. Linn, International Asset Forfeiture
and the Constitution: The Limits of Forfeiture
Jurisdiction Over Foreign Assets Under 28 U.S.C.
§ 1355(b)(2), 31 Am. J. Crim. L. 251, 297–99 (2004).
In my view, bindingness presents the most serious
problem here.3
3
This is not to say that I am convinced by the majority’s
treatment of the redressability issue, ante, at 15-16. Lujan v.
Defenders of Wildlife requires that it be “likely” and not
“merely speculative” that an injury will be redressed by a
favorable decision of the court. 504 U.S. 555, 561 (1992)
(quotation marks omitted). Both the district court and the
majority concluded that the actions by the New Zealand and
Hong Kong courts to restrain the defendant res render it
probable that those courts will enforce a judgment of forfeiture.
Perhaps.
I note, however, New Zealand’s repeated
disbursement of large amounts of the restrained assets even
after the issuance of the forfeiture judgment, the revocation
(and subsequent reimposition) of the restraining order by a
Hong Kong court, J.A. 738-39, and an order by a New Zealand
court enjoining the registration of the U.S. forfeiture judgment,
J.A. 2220.

Further--although this question may safely be left for
another day--it seems to me that if a foreign sovereign were to
refuse to cooperate, the probability that a § 1355 forfeiture
judgment would redress the government’s injury might slip
from “likely” to “speculative.” Such a refusal to cooperate by a
foreign sovereign may deprive the government of standing to
pursue the forfeiture action.

 49a
II.
The opinions of federal courts must be final and
binding on the parties. “‘[T]he oldest and most
consistent thread in the federal law of justiciability is
that the federal courts will not give advisory
opinions.’” Flast, 392 U.S. at 96 (quotation omitted).
Article III courts cannot render decisions subject to
revision by another branch of government. See, e.g.,
Chi. & S. Air Lines v. Waterman S. S. Corp., 333
U.S. 103, 113 (1948) (“Judgments, within the powers
vested in courts by the Judiciary Article of the
Constitution, may not lawfully be revised,
overturned or refused faith and credit by another
Department of Government.”); Hayburn’s Case, 2
Dall. 409, 410 n* (1792) (opinion of Wilson and Blair,
JJ., and Peters, D.J.) (“[R]evision and control” of
Article III judgments is “radically inconsistent with
the independence of that judicial power which is
vested in the courts”).
The advisory opinion prohibition is founded on
the principle that federal courts may only issue
judgments that are binding and conclusive on the
parties.
See Waterman, 333 U.S. at 113-14;
Nashville, C. & St. L. Ry. v. Wallace, 288 U.S. 249,
261–62 (1933) (explaining that a case was justiciable
when it sought a “definitive adjudication” of a
disputed right that would not be “subject to revision
by some other and more authoritative agency”);
Gordon v. United States, 69 U.S. 561, 561 (1864)
(noting that the Constitution forbids federal courts
from expressing opinions on a case “where its

 50a
judgment would not be final and conclusive upon the
rights of the parties”).4 The revision of a court’s
judgment by “some other and more authoritative
agency” renders the judgment an advisory opinion
prohibited by Article III. See Wallace, 288 U.S. at
262.
The majority side-steps this concern by cabining
it to the separation of powers context. One of the
basic tenets of what constitutes a “case or
controversy” cannot be elided so. The defendant in
this action--the res--is outside of the United States
and beyond the control of the district court. Absent
control, no order of the district court can be binding
on the res because the fate of the res is ultimately
not in the hands of the district court. Instead, the
res in this case is subject to the control of the courts
of New Zealand and Hong Kong. The district court’s
forfeiture order therefore merely advises the courts
of a foreign sovereign that (in the district court’s
view under the laws of the United States) the United
States should have title to the res. Those courts, of
course, with control of the res and with the authority
vested in them by their own sovereigns, remain free
to revise, overturn, or refuse recognition to the
judgment of the district court. The decision of the
4
The Supreme Court has similar concerns with regard to
in rem jurisdiction, observing that when a defendant ship
leaves a port and the plaintiff no longer has a res from which to
collect, courts may find the judgment to be “useless” and not
adjudicate the case based on a “traditional, theoretical concern[]
of jurisdiction: enforceability of judgments.” Republic Nat’l
Bank of Miami v. United States, 506 U.S. 80, 87 (1992).

 51a
district court regarding title in the res is thus subject
to a “more authoritative agency” outside of the
Article III hierarchy. Without control of the res, the
district court’s decision cannot bind the res and thus
constitutes an advisory opinion prohibited by Article
III.
The risk of revision to the district court’s
judgment is no mere hypothetical.
As the
government notes, “[d]espite the registration of the
restraints, the New Zealand courts released” over $5
million for legal fees and living expenses. Gov’t’s Br.
7. Additionally, even after receiving the “final”
forfeiture order from the district court, New Zealand
courts granted Dotcom monthly releases of $135,000
for living expenses. Id. at n.5. In fact, the district
court recognized that the foreign courts “may or may
not” register its order and that “New Zealand courts
may continue to litigate the issue of whether the
assets will be forfeited.” J.A. 1982. The government
also concedes that “even with a valid forfeiture order,
the fugitive’s property may suffer no adverse effect.”
Gov’t’s Br. 20 n.13. In an in rem action, the district
court cannot issue a judgment binding the res absent
control of the res.
Where, as here, a foreign
sovereign controls the res because the res is located
abroad, any in rem forfeiture order by a district court
constitutes advice to the foreign sovereign regarding
how it should vest title to the res.
III.
Our own precedent recognizes the Article III
limits of in rem jurisdiction. We explored the
interplay at length in our Titanic decisions. R.M.S.
Titanic, Inc. v. Haver, 171 F.3d 943 (4th Cir. 1999)

 52a
(Titanic I); R.M.S. Titanic, Inc. v. The Wrecked &
Abandoned Vessel, 435 F.3d 521 (4th Cir. 2006)
(Titanic II). The Titanic cases involved disputes
concerning the law of salvage as it applied to the
wreck of the British passenger liner R.M.S. Titanic,
which sank in the North Atlantic Ocean in 1912. As
the majority notes, ante, at 12-14, the cases arose in
admiralty and applied maritime law, and I readily
accept that § 1355 attempts to divorce the in rem
actions it authorizes from the traditional in rem
principles of admiralty law. However, I part ways
with the majority because I read the Titanic cases to
contain principles both of admiralty law and of
constitutional law.
What makes in rem actions problematic from an
Article III standpoint is that “judgments in them
operate against anyone in the world claiming against
that property.” Titanic I, 171 F.3d at 957. Without
control of the property, the judgment cannot “operate
against anyone in the world” claiming interest in the
defendant property. Id. “Only if the court has
exclusive custody and control over the property does
it have jurisdiction over the property so as to be able
to adjudicate rights in it that are binding against the
world.” Id. at 964 (emphasis added). When, as here,
the res is not in the court’s possession, “the court
may not adjudicate rights to the res and effectively
bind others who may have possession. Consequently,
a court could not exercise in rem jurisdiction, as
traditionally understood, so as to vest rights in
property outside of its territory . . . .” Id. (citation
omitted). “In rem jurisdiction, which depends on
sovereignty over property, cannot be given effect to
property beyond a nation’s boundaries of

 53a
sovereignty.” Id. at 966. Simply put, the res in this
case is beyond the United States’ sovereign territory
and our courts cannot--absent control of the res-declare rights in it that are binding against the
world.
Our decision in Titanic I emphasizes the
importance of sovereignty--and control--for in rem
actions. In Titanic I, we found the exercise of in rem
jurisdiction proper because the court had
constructive control over the wreck because it had a
portion of the wreck in its control. The main body of
the wreck itself was located in international waters,
i.e., beyond the sovereign limits of any nation. Thus,
although “the exclusiveness of any [in rem] order
could legitimately be questioned by any other court
in admiralty,” we concluded that the court could,
nonetheless, exercise an “‘imperfect’ or ‘inchoate’ in
rem jurisdiction which falls short of giving the court
sovereignty over the wreck.” Id. at 967.
As Titanic II makes clear, the court’s exercise of
power in Titanic I was possible only because the
wreck was outside the territorial limits of another
sovereign. In Titanic II we announced the limits of
constructive in rem jurisdiction grounded in the
boundaries imposed upon courts by territorial
sovereignty. We held that a court cannot exercise in
rem or constructive in rem jurisdiction over property
within the sovereign limits of other nations. Titanic
II, 435 F.3d at 530. We held that a party “cannot
come to a court in the United States and simply
assert that the court should declare rights against
the world as to property located in a foreign country.”

 54a
Id. That is precisely what the government attempts
to do in this case.
The majority is correct that the Titanic cases
applied the traditional, admiralty-based law of in
rem jurisdiction and is also correct that § 1355
attempted to alter that traditional law. What the
majority fails to recognize, however, is that the
traditional limits of in rem jurisdiction are also
commanded by the Constitution’s requirement that
judgments by Article III courts be binding on the
parties. Needless to say, this requirement cannot be
waived by statute. Because the res is a party and
because the judgment purports to adjudicate rights
in the res binding against the whole world, control of
the res is the sine qua non of in rem actions. Absent
control, the court’s judgment cannot bind the
property but, instead, merely advises the foreign
sovereign that does control the property as to how a
United States court believes the rights in the
property should be settled.
The possible cooperation of the foreign sovereign
is irrelevant, contrary to the weight the district court
and the majority place on that variable. Unlike the
question of redressability, which is indeed a matter
of probabilities, the requirement that a judgment be
binding and conclusive on the parties is absolute.
Consider the circumstances of Waterman, which
articulated bindingness as an essential requirement
of Article III’s judicial power. In Waterman, the
court of appeals determined that it had jurisdiction
to review an order of the Civil Aeronautics Board
awarding an overseas air route. 333 U.S. at 104-05.
By statute, such orders were subject to presidential

 55a
approval and the order in question had been
approved by the President. Id. at 110-11. The court
of appeals determined that even after it reviewed the
Board’s order, its review would remain subject to the
approval or disapproval of the President. Id. at 113.
The Supreme Court held the judgment of the court of
appeals to be advisory: “Judgments, within the
powers vested in courts by the Judiciary Article of
the Constitution, may not lawfully be revised,
overturned or refused faith and credit by another
Department of Government.” Id. I see no valid
reason why a court should be prohibited from giving
advisory opinions to domestic branches of
government and yet be permitted to issue advisory
opinions to foreign sovereigns.
The Supreme Court has never given any
indication that the bindingness concerns in
Waterman could be cured by a court’s determination
that the other entity was “likely” to follow its
decision. While a judgment may in fact have a
higher chance of eventually being binding on the
parties where the foreign sovereign has acted
cooperatively, the U.S. judgment remains “subject to
later review or alteration by [foreign] administrative
action” and its bindingness remains--impermissibly-a question of probabilities.5 See id. at 114.
5 It may be possible for the government to make a showing
before the district court that the foreign sovereign would be
compelled, by its own law, to give binding effect to a civil
forfeiture judgment by a U.S. court. However, the government
has made no such showing in this case sufficient to assuage
Article III concerns.

 56a
IV.
The district court in this case did not have control
of the res.
The res is controlled by foreign
sovereigns--New
Zealand
and
Hong
Kong.
Therefore, the district court could not in my view
issue an order as to the res which would be binding
against the world.
Foundational Article III
principles preclude the court from entering a
forfeiture order against the res in this case. I would
reverse the district court on this basis and deem the
other issues presented by this appeal moot.

 57a
APPENDIX B
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
)
UNITED STATES OF AMERICA,

)

Plaintiff,

)
) Civil No. 1:14-cv-969

-v-

)
) Hon. Liam O’Grady

ALL ASSETS LISTED IN
ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND
ASSETS TRACEABLE THERETO,

)

Defendants in rem.

)

)
)

AMENDED ORDER OF FORFEITURE
AS TO ASSETS IN HONG KONG
WHEREAS, the Plaintiff filed a motion for
default judgment, pursuant to Fed.R.Civ.P. 55(b)(2),
and for an order of forfeiture as to certain assets in
Hong Kong (Dkt. #96), pursuant to 18 U.S.C.
§ 981(a)(1)(C);1
The forfeiture is based on 18 U.S.C. § 981(a)(1)(C), which
authorizes forfeiture of property that is derived from proceeds
traceable to any offense constituting specified unlawful activity.
Section 1956(c)(7)(D) of Title 18, United States Code, defines
“specified unlawful activity” and includes a violation of 18
1

 58a
AND WHEREAS, this Court ruled in an opinion
of March 25, 2015, (Dkt. #101) that the government’s
motions for default judgment are granted.
Now deeming it proper so to do, IT IS ORDERED,
ADJUDICATED and DECREED THAT:
1. The following property is forfeited to the
United States pursuant to 18 U.S.C. § 981(a)(1)(C),
and all right, title, and interest of the former owners
is now vested exclusively in the United States of
America:
BANK ACCOUNTS
All assets held in account number 7881380320, in
the name of Megaupload Limited, at
DBS Bank (Hong Kong) Limited in Hong Kong,
and all interest, benefits, or assets traceable
thereto;
All assets held in account number 59378921, in
the name of Kim Tim Jim Vestor, at Citibank
(Hong Kong) Limited, and all interest, benefits, or
assets traceable thereto;
All assets held in account number 59378948, in
the name of Kim Tim Jim Vestor, at Citibank
(Hong Kong) Limited, and all interest, benefits, or
assets traceable thereto;
All assets held in account number 23749938, in
the name of Kim Tim Jim Vestor, at Citibank
U.S.C. § 2319. Section 2319 sets forth the penalties for a
violation of 17 U.S.C. § 506(a)(1) which criminalizes copyright
infringement.

 59a
(Hong Kong) Limited, and all interest, benefits, or
assets traceable thereto.
All assets held in account number 7883024440, in
the name of Megapay Limited, at DBS Bank
(Hong Kong) Limited in Hong Kong, and all
interest, benefits, or assets traceable thereto;
All assets held in account number 7881226160, in
the name of Vestor Limited, at DBS Bank (Hong
Kong) Limited in Hong Kong, and all interest,
benefits, or assets traceable thereto;
All assets held in account number 3520894, in the
name of Megamedia Limited, at DBS Vickers
(Hong Kong) Limited in Hong Kong, and all
interest, benefits, or assets traceable thereto;
All assets held in account number 813010204833,
in the name of Mathias Ortmann, at The
Hongkong and Shanghai Banking Corporation
Limited (HSBC) in Hong Kong, and all interest,
benefits, or assets traceable thereto;
All assets held in account number 083643403833,
in the name of Bram van der Kolk, at The
Hongkong and Shanghai Banking Corporation
Limited (HSBC) in Hong Kong, and all interest,
benefits, or assets traceable thereto;
All assets held in account number 491538187833,
in the name of Echternach, Sven Hendrik Michael
Thies at The Hongkong and Shanghai Banking
Corporation Limited (HSBC) in Hong Kong, and
all interest, benefits, or assets traceable thereto;
All assets held in account number 083643379833,
in the name of Julius Bencko, at The Hongkong

 60a
and Shanghai Banking Corporation Limited
(HSBC) in Hong Kong, and all interest, benefits,
or assets traceable thereto;
All assets held in account number 503584435833,
in the name of Batato, Finn Habib at The
Hongkong and Shanghai Banking Corporation
Limited (HSBC) in Hong Kong, and all interest,
benefits, or assets traceable thereto;
All assets held in account number 954520008434,
in the name of Mathias Ortmann, at Industrial
and Commercial Bank of China (Asia) Limited
(ICBC) in Hong Kong, and all interest, benefits,
or assets traceable thereto.
2. The Attorney General or a designee shall seize
and dispose of the defendant property in accordance
with the law.
Alexandria, Virginia
Date: April 7 , 2015.
/s/ Log
Liam O’Grady
United States District Judge

 61a
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
)
UNITED STATES OF AMERICA,

)

Plaintiff,

)
) Civil No. 1:14-cv-969

-v-

)
) Hon. Liam O’Grady

ALL ASSETS LISTED IN
ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND
ASSETS TRACEABLE THERETO,

)

Defendants in rem.

)

)
)

ORDER OF FORFEITURE
AS TO ASSETS IN NEW ZEALAND
WHEREAS, the Plaintiff filed a motion for
default judgment, pursuant to Fed.R.Civ.P. 55(b)(2),
and for an order of forfeiture as to certain assets in
New Zealand (Dkt. #97), pursuant to 18 U.S.C.
§§ 981(a)(1)(C) and 985;1
The forfeiture is based on 18 U.S.C. § 981(a)(I)(C), which
authorizes forfeiture of property that is derived from proceeds
traceable to any offense constituting specified unlawful activity.
Section I956(c)(7)(D) of Title 18, United States Code, defines
“specified unlawful activity” and includes a violation of 18
1

 62a
AND WHEREAS, this Court ruled in an opinion
of March 25, 2015, (Dkt. #101) that the government’s
motions for default judgment are granted.
Now deeming it proper so to do, IT IS ORDERED,
ADJUDICATED and DECREED THAT:
1. The following property is forfeited to the
United States pursuant to 18 U.S.C. §§ 981(a)(1)(C)
and 985 and all right, title, and interest of the former
owners is now vested exclusively in the United
States of America:
BANK ACCOUNTS
All
assets
held
in
account
number
123107006652100, in the name of Kim Tim Jim
Vestor, at ASB Bank Limited in New Zealand,
and all interest, benefits, or assets traceable
thereto;
All
assets
held
in
account
number
011839015545900, in the name of Megastuff
Limited, at ANZ National Bank Limited in New
Zealand, and all interest, benefits, or assets
traceable thereto;
All
assets
held
in
account
number
3029340126642088, in the name of Bram van der
Kolk, at The Hongkong and Shanghai Banking
Corporation Limited (HSBC) in New Zealand, and
all interest, benefits, or assets traceable thereto;
U.S.C. § 2319. Section 2319 sets forth the penalties for a
violation of 17 U.S.C. § 506(a)((1) which criminalizes copyright
infringement.

 63a
All
assets
held
in
account
number
020192009920004, in the name of Cleaver
Richards Limited Trust Account for Megastuff
Limited, at Bank of New Zealand (BNZ), and all
interest, benefits, or assets traceable thereto;
All
assets
held
in
account
number
0301040943847002, in the name of Simpson
Grierson Trust Account holder Kim Dotcom, at
Westpac Banking Corporation in New Zealand,
and all interest, benefits, or assets traceable
thereto;
FINANCIAL INSTRUMENT
All assets held in holder number 14824385, in the
name of Kim Dotcom, at Computershare Investor
Services Limited, and all interest, benefits, or
assets traceable thereto;
REAL PROPERTY
The property at 50 The Prom, Coatesville,
Auckland 0793, New Zealand, being all that
parcel of land on Certificate of Title number
341889, and all interest, benefits, or assets
traceable thereto;
VEHICLES
2009 Calcite White Mercedes Benz E500 Coupe,
VIN
WDD2073722F019582, and including
License Plate “FEG690”, and all interest,
benefits, or assets traceable thereto;
2005 Silver Mercedes Benz CLK DTM, VIN
WDB2093422F165517, and including License
Plate “GOOD”, and all interest, benefits, or assets
traceable thereto;

 64a
2010 Black Mini Cooper S Coupe, VIN
WMWZG3200TZ03648, and including License
Plate “1-, and all interest, benefits, or assets
traceable thereto;
2010 Black Mini Cooper S Coupe, VIN
WMWZG3200TZ03651, and including License
Plate “V”, and all interest, benefits, or assets
traceable thereto;
2010 Mercedes Benz ML63 AMG, VIN
WDC1641772A542449, and including License
Plate “GUILTY”, and all interest, benefits, or
assets traceable thereto;
2011
Black
Toyota
Hilux,
VIN
MROFZ29G001599926, and including License
Plate “FSN455”, and all interest, benefits, or
assets traceable thereto;
2010 Black Mercedes Benz CL63 AMG, VIN
WDD2163742A026653, and including License
Plate “HACKER”, and all interest, benefits, or
assets traceable thereto;
Victor Conti Dutch Angel — Bike, NZ ID#
546420, and all interest, benefits, or assets
traceable thereto;
2004 Silver Mercedes Benz CLK DTM AMG 5.5L
Kompressor, VIN WDB2093422F166073, and
including License Plate “EVIL”, and all interest,
benefits, or assets traceable thereto;
2010 Black Mercedes Benz AMG, VIN
WDD2120772A103834, and including License
Plate “STONED”, and all interest, benefits, or
assets traceable thereto;

 65a
2009 Black Mercedes Benz ML63 AMG, VIN
WDC1641772A486965, and including License
Plate “MAFIA”, and all interest, benefits, or
assets traceable thereto;
1957 Black Cadillac El Dorado, VIN 5770137596,
and all interest, benefits, or assets traceable
thereto;
1959 Pink Cadillac Series 62 Convertible, VIN
59F115669, and all interest, benefits, or assets
traceable thereto;
2010 Black Mercedes Benz S65 AMG, VIN
WDD2211792A324354, and including License
Plate “CEO”, and all interest, benefits, or assets
traceable thereto;
2010 Black Mercedes Benz CL65 AMG, VIN
WDD2163792A025130, and including License
Plate “KIMCOM”, and all interest, benefits, or
assets traceable thereto;
2008 Black Rolls Royce Phantom Coupe, VIN
SCA2D68098UH07049, and including License
Plate “GOD”, and all interest, benefits, or assets
traceable thereto;
2011 Black Mercedes Benz G55 AMG, VIN
WDB4632702X193395, and including License
Plate “POLICE”, and all interest, benefits, or
assets traceable thereto;
2011
Mercedes
Benz
G55
AMG,
VIN
WDB4632702X191902, and including License
Plate “GDS672”, and all interest, benefits, or
assets traceable thereto;

 66a
2005 Silver Mercedes Benz A170, VIN
WDD1690322J184595, and including License
Plate “FUR252”, and all interest, benefits, or
assets traceable thereto; and
2005 Silver Mercedes Benz ML500, VIN
WDC1641752A026107, and including License
Plate “DFF816”, and all interest, benefits, or
assets traceable thereto.
2004 Silver Mercedes Benz CLK DTM Cabriolet,
VIN WDB2094421T067269, and all interest,
benefits, or assets traceable thereto;
MISCELLANEOUS
Four 2010 Sea-Doo GTX Jet Skis, VINS
YDV03103E010,
YDV00375L910,
YDV00385L910, & YDV03091E010, and all
interest, benefits, or assets traceable thereto;
Sharp 108" LCD Display Television, and all
interest, benefits, or assets traceable thereto;
Three Samsung 820DXN 82” LCD Televisions,
and all interest, benefits, or assets traceable
thereto;
Devon Works LLC, Tread 141 Time Piece, and all
interest, benefits, or assets traceable thereto; and
In High Spirits by Olaf Mueller Photographs from
the Cat Street Gallery, and all interest. benefits,
or assets traceable thereto,
2. The Attorney General or a designee shall seize
and dispose of the defendant property in accordance
with the law.
Alexandria, Virginia

 67a

Date: March 2_7, 2015.
Log
Liam O?Grady
United States District Judge

 

68a
APPENDIX D
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
)
UNITED STATES OF AMERICA,

)

Plaintiff,

)
) Civil No. 1:14-cv-969

-v-

)
) Hon. Liam O’Grady

ALL ASSETS LISTED IN
ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND
ASSETS TRACEABLE THERETO,

)

Defendants in rem.

)

)
)

MEMORANDUM OPINION
This matter is before the court on plaintiff’s
motions for default judgment and forfeiture. (Dkt.
Nos. 85, 96, 97). The government filed a verified
complaint for civil forfeiture in rem on July 29, 2014
seeking forfeiture of the assets listed in Attachment
A to the complaint. (Dkt. No. 1). The subject
property is located in Hong Kong and New Zealand
and was seized pursuant to restraining orders issued

 69a
by this court and registered in foreign courts.1 On
August 28, 2014, claims to the assets were filed by
Finn Batato (“Batato”); Julius Bencko (“Bencko”);
Kim
Dotcom
(“Dotcom”);
Sven
Echternach
(“Echternach”); Bram van der Kolk (“van der Kolk”);
Mathias Ortmann (“Ortmann”); and Megaupload
Limited, Megapay Limited, Megamedia Limited,
Megastuff Limited, and Vestor Limited (“the
corporate claimants”). (Dkt. Nos. 3-9). By order
dated February 27, 2015, this court granted the
government’s motion to strike those claims pursuant
to the fugitive disentitlement statute, 28 U.S.C.
§ 2466. (Dkt. No. 82).
Mona Dotcom, the estranged wife of Kim Dotcom,
also filed a verified claim to certain of the assets
listed in attachment A on September 1, 2014. (Dkt.
No. 14). On December 30, 2014, the government
moved to strike Mona’s claim to the assets on the
ground that she lacked standing. On March 13,
2015, this court granted the motion in part, finding
that Mona lacked standing to challenge the forfeiture
of the assets listed in attachment A with the
exception of two items of property.2 The government
has excluded these two items of property from its
renewed motions for default judgment.

The full factual background of this case is discussed in
the court’s Memorandum Opinion dated February 27, 2015.
(Dkt. No. 81).
1

2 The court found that Mona does have standing to contest
forfeiture of Vehicle 14 and Property 2 as identified in the
Memorandum Opinion.

 70a
On October 10, 2014, all of the claimants filed a
motion to dismiss and or stay the government’s
forfeiture action. (Dkt. No. 19). This motion has
been denied as to the disentitled fugitive claimants,
and as to Mona with respect to all property in
attachment A except Vehicle 14 and Property 2.
I. STANDARD OF REVIEW
Rule 55 of the Federal Rules of Civil Procedure
and Rule G of the Supplemental Rules for Admiralty
or Maritime Claims and Asset Forfeiture Actions are
applicable to this civil forfeiture action. See United
States v. $85,000 in U.S. Currency, No. 10-371, 2011
WL 1063295, at *1 (D. Md. Mar. 21, 2011).
Supplemental Rule G(4)(a) provides that a judgment
of forfeiture “may be entered only if the government
has published notice of the action within a
reasonable time after filing the complaint or at a
time the court orders.” Supp. R. G(4)(a)(i). The
notice must describe the property with reasonable
particularity and state the time to file a claim and to
answer. Supp. R. G(4)(a)(ii). The notice may be
posted “on an official internet government forfeiture
site for at least 30 consecutive days.” Supp. R.G.
(4)(a)(iii) (B). If the criteria for notice are met, as
they are here, the entry of default judgment is a
matter committed to the discretion of the trial court.
See Int’l Painters & Allied Trades Indus. Pension
Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56, 57
(D.D.C. 2008) (citation omitted); SEC v. Lawbaugh,
359 F. Supp. 2d 418, 421 (D. Md. 2005) (citing Dow v.
Jones, 232 F. Supp. 2d 491, 494 (D. Md. 2002)).
Federal Rule of Civil Procedure 55 permits the
court to grant a motion for default judgment where

 71a
the well-pled allegations of the complaint establish
plaintiffs entitlement to relief, and where a
defendant has failed to plead or defend as provided
by the rules. See Music City Music v. Alfa Foods,
Ltd, 616 F. Supp. 1001, 1002 (E.D. Va.1985); Fed. R.
Civ. P. 55. In the civil forfeiture context, default
judgment is permitted where no potential claimant
has filed a response to the complaint. See United
States v. All Funds on Deposit in Four Swiss Bank
Accounts…and All Proceeds Traceable Thereto, No.
1:11-cv-118, 2011 WL 7102568, at *2 (E.D. Va. Oct.
26, 2011) (Report and Recommendation) (citations
omitted).
A defendant in default, and a claimant who fails
to assert a claim in rem, is deemed to have admitted
all of the plaintiffs well-pled allegations of fact,
which then form the basis for judgment in the
plaintiffs favor. See Ryan v. Homecomings Fin.
Network, 253 F.3d 778, 780 (4th Cir. 2001) (citation
omitted). See also Partington v. Am. Int’l Specialty
Lines Ins. Co., 443 F.3d 334, 341 (4th Cir. 2006)
(stating that default has effect of admitting factual
allegations in complaint); Fed. R. Civ. P. 8(b)(6) (“An
allegation—other than one relating to the amount of
damages—is admitted if a responsive pleading is
required and the allegation is not denied”). “It
remains, however, for the court to determine
whether these unchallenged factual allegations
constitute a legitimate cause of action.” See United
States v. One 2003 Mercedes Benz CL500, No. 113571, 2013 WL 3713903, at *4 (D. Md. Oct. 3, 2013)
(quoting Agora Fin., LLC v. Samler, 725 F. Supp. 2d
491, 494 (D. Md. 2010)).

 72a
Civil
forfeiture
complaints
must
“state
sufficiently detailed facts to support a reasonable
belief that the government will be able to meet its
burden of proof at trial.” Supp. R. G(2)(f). At trial,
the government is required to prove by a
preponderance of the evidence that the defendant
property is subject to forfeiture. 18 U.S.C. § 983(c).
Accordingly, the government must state sufficient
facts to support a reasonable belief that it will be
able to prove forfeitability by a preponderance of the
evidence. See United States v. 2003 Mercedes Benz
CL500, No. 11-3571, 2013 WL 5530325, at *2 n.4
(stating that the government was not required to
establish the forfeitability by a preponderance of the
evidence to seek a default judgment. Rather the
government had state sufficient facts to support a
reasonable belief that it would be able “to prove
forfeitability at trial by a preponderance of the
evidence) (emphasis in original).
II. DISCUSSION
The government’s first claim for relief in the
forfeiture complaint seeks forfeiture under 18 U.S.C.
§ 981(a)(1)(C).3
Pursuant to § 981(a)(1)(C), the
3
The complaint also alleges that the assets are subject to
forfeiture pursuant to § 981(a)(1)(C) and 18 U.S.C. § 2323
because the assets are traceable to violations of 18 U.S.C.
§ 2319; and pursuant to § 981(a)(1)(A) as property traceable to
or involved in a money laundering offense in violation of 18
U.S.C. §§ 1956 and 1957. It is unnecessary to consider these
arguments because the court finds that the complaint
sufficiently alleges grounds for forfeiture based on the
conspiracy.

 73a
government may obtain a decree for forfeiture of
property that “constitutes or is derived from proceeds
traceable to…any offense constituting ‘specified
unlawful activity’ (as defined in section 1956(c)(7) of
this title), or a conspiracy to commit such offense.”
18 U.S.C. § 981(a)(1)(C).
Section 1956(c)(7)(D)
defines “specified unlawful activity” as, among
numerous other offenses, a violation of 18 U.S.C.
§ 2319. 18 U.S.C. § 1956(c)(7)(D). Section 2319 sets
forth the penalties for a violation of 17 U.S.C.
§ 506(a)(1), which criminalizes infringement of a
copyright (A) for commercial advantage or private
financial gain; (B) by reproducing or distributing
infringing copies of copyrighted works with a value of
over $1,000 in any 180-day period; or (C) by
distributing a work being prepared for commercial
distribution if the person knew or should have
known that the work was intended for commercial
distribution. 17 U.S.C. § 506(a)(1).
In order to establish a conspiracy under 18 U.S.C.
§ 371, the government must show “(1) an agreement
between two or more people to commit a crime, and
(2) an overt act in furtherance of the conspiracy.”
United States v. Jackson, No. 13-cr-129, 2013 WL
3197069, slip op. at *5 (E.D. Va. June 20, 2013)
(citing United States v. Ellis, 121 F.3d 908, 922 (4th
Cir. 1997). The forfeiture complaint alleges that
from at least September 2005 until about January
20, 2012, disentitled claimants Dotcom, Batato,
Bencko, Echternach, Ortmann, van der Kolk,
Megaupload
Limited,
and
Vestor
Limited
participated in a conspiracy to commit criminal

 74a
copyright infringement in the Eastern District of
Virginia and elsewhere.4 Complaint at ¶ 17. This
court has already considered the sufficiency of the
conspiracy allegations in the context of subject
matter jurisdiction. See Mem. Op. at 5-9 (Dkt. No.
81).
However, in determining subject matter
jurisdiction, the court did not specifically examine
the question of whether there are sufficient
allegations to support the inference that there is a
“substantial connection” between the assets and the
alleged criminal activity. See United States v. 2003
Mercedes Benz CL500b, 2013 WL 3713903 at *4;
United States v. All Funds on Deposit in Four Swiss
Bank Accounts…, 2011 WL 7102568, at *3 (E.D. Va.
Oct. 26, 2011) (citing United States v. $3,000 in Cash,
906 F. Supp. 1061, 1065 (E.D. Va. 1995)). See also 18
U.S.C. § 983(c)(3). The court will now make that

4 Dotcom served as Chief Executive Officer of Megaupload
Limited and later “Chief Innovation Officer” of the company.
He was allegedly the head of the conspiracy. Megaupload
Limited was the registered owner of Megaupload.com and
Megaclick.com. Vestor Limited was the sole shareholder of the
parent companies that owned Megavideo.com and other Mega
websites. Allegedly, Batato was the Chief Marketing and Sales
Officer for the Mega businesses; Bencko was the Graphic
Director; Echternach was the Head of Business Development;
Ortmann was the Chief Technical Officer; and van der Kolk
was the “Programmer-in-Charge.”
Complaint, ¶117-15.
Additionally, another individual named Andrus Nomm was
indicted. He was Head of the Development Software Division
for Megaupload Limited and he pled guilty to conspiracy to
commit copyright infringement on February 13, 2015. Case No.
1:12-cr-003.

 75a
determination in assessing the government’s motion
for default judgment.
In cases involving “unlawful activities,” such as
those allegedly pursued by the conspirators, the civil
forfeiture statute provides that “proceeds” means
“property of any kind obtained directly or indirectly,
as the result of the commission of the offense giving
rise to forfeiture, and any property traceable thereto,
and is not limited to the net gain or profit realized
from the offense.” 18 U.S.C. § 981(a)(2)(A). The
statute thus broadly treats as “proceeds,” in this
case, any “property” that was “obtained directly or
indirectly[ ] as the result of the commission” of the
alleged
conspiracy
to
commit
copyright
5
infringement.
Property constitutes forfeitable
proceeds if it would not have been received “but for”
the occurrence of the illegal activities giving rise to
the forfeiture. See United States v. Farkas, 474
F. App’x 349, 359-360 (4th Cir. 2012) (affirming
district court’s judgment that proceeds would not
5
Section 981(a)(2)(B) provides another definition of
proceeds: “In cases involving lawful goods or lawful services
that are sold or provided in an illegal manner, the term
‘proceeds’ means the amount of money acquired through the
illegal transactions resulting in the forfeiture, less the direct
costs incurred in providing the goods or services. The claimant
shall have the burden of proof with respect to the issue of direct
costs.” 981(a)(2XB). Even if this definition applied, the
claimants would have the burden to prove costs. “If the
claimant fails to prove direct costs, the government can forfeit
the entire amount.” United States v. Sum of $70,990,605, 4 F.
Supp. 3d 189, 208 (D.D.C. 2014) (citation omitted). Here, there
are no claimants to the property at issue as discussed above.

 76a
have been received but for fraud). See also United
States v. Ivanchukov, 405 F. Supp. 2d 708, 712-13
(E.D. Va. 2005) (adopting a “but for” nexus test for
illegal proceeds under the criminal forfeiture statute
and noting the test’s use in several other circuits);
United States v. Nicolo, 597 F. Supp. 2d 342, 346
(W.D.N.Y. 2009) (holding that under § 981(a)(2)(A),
“proceeds are property that a person would not have
but for the criminal offense” (internal quotation
marks, citation, and alteration omitted)).
The Conspiracy Allegations
The forfeiture complaint alleges that every time
an Internet user uploaded a file, including infringing
files, to the Megaupload website, the site reproduced
the file on at least one computer server controlled by
the Mega Conspiracy and provided the uploading
user with a uniform resource locator (“URL”) link
allowing anyone with the link to download the file.
Complaint, ¶ 18. Files uploaded by non-premium
users were deleted if the files were not downloaded
within a certain time frame.
Superseding
6
Indictment (“Indictment”), ¶ 7. In other words, only
relatively popular files uploaded by non-premium
users could remain on the website. By contrast,
when a popular file was uploaded by any type of user
(premium or non-premium), that file remained on
Mega-controlled computers and was available for
distribution by anyone who could locate an active
link to the file. Id. When an Internet user clicked on
6
The complaint incorporates by reference the allegations
in the superseding indictment. Complaint at ¶ 16.

 77a
a Megaupload.com link, the user was typically
brought to a download page for the file. Id. at ¶ 9.
The download page contained advertisements
provided by Mega and encouraged users to purchase
premium subscriptions to the website. Id. at 11$ 910. Videos could be viewed on Megavideo.com,
owned by the Mega Conspiracy.
The complaint identifies premium subscriptions
and online advertising as the conspiracy’s two
primary sources of revenue. Indictment at ¶ 4. The
government’s theory is that the conspiracy was
designed to attract viewers who wished to view
infringing content through the links provided by the
Mega websites. Premium subscriptions to the Mega
websites allowed Internet users to receive payments
for uploading and advertising popular content, view
videos with fewer wait and download times, upload
and download videos with few, if any limitations, and
watch movie-length videos without interruptions.
Complaint
at
¶ 38.
Subscriptions
to
Megaupload.com
could
be
purchased
for
approximately a few dollars per day or as much as
$260 for a lifetime.
Indictment at ¶ 4.
The
complaint states that the conspiracy made over $150
million in subscription fees collected from premium
users. Id.
One of the key limitations on non-premium users
was that they could only watch 72 minutes of video
at a time on Megavideo.com. Indictment at ¶ 18. In
order to watch videos for a duration exceeding 72
minutes, non-premium users were required to wait a
certain amount of time. Since motion pictures are
typically longer than 72 minutes, this model created

 78a
an incentive for viewers interested in watching films
on the Megavideo site to become premium users.
Users interested in viewing multiple episodes of
television shows would also have an incentive to pay
for a premium subscription. Other limitations on
non-premium users included increased time to
download content and at times the inability to
download files over a certain size. Indictment at
¶ 10; Complaint at ¶ 38.
According to the government, viewers watching
non-infringing videos would have little reason to
purchase premium subscriptions. For example, the
indictment references an email from a non-premium
user that Dotcom forwarded to Ortmann and
Echternach. The email stated that the customer
needed to “find a new hobby because watching
pirated material via [M]egavideo is now over-rated
and ruined because of this video bandwidth limit.”
Indictment at ¶ 73iii. The limitations on access of
non-premium members to the content available on
the Mega sites would not have been particularly
relevant to Internet users who wished only to view
non-infringing content.
By contrast, users who
wanted to access copyrighted material would have a
strong incentive to either upgrade to premium
membership or discontinue using the Mega websites.
The other source of revenue for the conspiracy
was advertising fees. Before any video could be
viewed on Megavideo.com, users had to first view an
advertisement. Indictment at ¶ 19. Originally, the
Mega sites contracted with other companies to
provide advertising. Eventually, a website called
“Megaclick.com” was established to set up

 79a
advertising campaigns for all the Mega sites. Id.
The government estimates that the conspiracy
received over $25 million in online advertising
revenues. Id. at ¶ 4.
The
indictment
lists
numerous
specific
copyrighted materials that could be accessed from
Mega website links.7 The government has also
presented communications in which the conspirators
requested links to particular copyrighted materials.
For example, Bencko sent an email asking van der
Kolk to find links “again” to the copyrighted
television show “The Sopranos.”
Indictment at
¶ 73gg. Bencko also sent van der Kolk an email
requesting Megaupload links to the copyrighted
series “Seinfeld”. Id. at ¶ 73kk. The indictment also
contains communications from users of the Mega
websites to the conspirators referencing links to
infringing files. On or about November 23, 2008,
Dotcom received an email from a user complaining
about the quality of videos that he or she was trying
to watch of the copyrighted series “Dexter.” Id. at
¶ 73jjj. The user had evidently accessed the Mega
link from a referrer site. Dotcom forwarded the
email to Ortmann, saying that they needed to solve
the quality issue “asap” given that Dotcom had seen
complaints about their video quality on many online
forums.
Id.
On November 15, 2010, Batato
forwarded an email from a customer to Ortmann.
The email stated that the user had just paid for
7 See, e.g., Indictment at ¶¶ 73r, s, u, nn, bbb, ddd, eee, fff,
jjj, kkk, uuu, hhhh, jjjj, nnnn, tttt, vvvv, xxxx, aaaaa, ccccc, nth,
kkkkk, mmmmm, rrrrr, sssss.

 80a
Mega’s services and requested assistance in
accessing episodes of a copyrighted television show,
“Robin Hood.” Id. at ¶ 731111. The user asked for
his or her payment to be canceled if the issue could
not be resolved. On August 11, 2011, Dotcom
forwarded an email to Ortmann from a user who
stated that he or she used to pay a monthly fee for
Mega’s services to watch television shows such as
“Trueblood” and “Battlestar Gallactica.”
Id. at
¶ 73nm. The user wrote, “I don’t mind your services
be[ing] bogged down from time to time. I don’t mind
paying, but [I] need to get something for the service
[I] pay for.” Id.
The conspirators also allegedly took affirmative
steps to conceal their illegal activity. They excluded
infringing files from the “Top 100” list, which
purported to list the most frequently downloaded
files on Megaupload.com.
Complaint at ¶ 32.
According to the government, an accurate list would
have consisted almost entirely of infringing content,
so the conspirators “carefully curated” the list to
make the site look more legitimate.
Id. The
government alleges that van der Kolk instructed an
employee via email that the Top 100 list should
contain only non-copyrighted files. Indictment at
¶ 73bbbb. He further instructed the employee to
create fake accounts on the Megaupload and
Megavideo sites to upload the files, making it appear
that these files were uploaded by users rather than
members of the conspiracy. Id.
The government alleges that the Mega
Conspiracy intentionally relied on thousands of third
party “linking” or “referrer” websites in order to

 81a
conceal the scope of the infringement conspiracy. Id.
at ¶ 11. The referrer sites contained user-generated
postings of links to files stored on Mega’s servers.
Although the conspiracy did not operate the third
party websites, the links were created by the Mega
websites and the files were stored on Mega’s servers.
The links directed users to Mega download pages to
view the requested files. Further, the conspirators
sometimes instructed customers to visit referrer sites
to access Mega-created links to infringing content.
Id. at ¶ 14. For example, in January 2010, Batato
responded to a user email asking where to find links
to full movies. He told the user to go to Mega’s
“referrer sites…Where are the movie and series
links.
You cannot find them by searching on
[Megavideo] directly. That would cause us a lot of
trouble ;-).” Id. at ¶ 73dddd.
Additionally, the content available from
Megaupload.com was not publicly searchable on the
website, although the members of the conspiracy
could search for the Mega-created links on their
websites and the files stored on their servers. Id. at
¶ 15. The content on the Megavideo site purported
to allow users to search for files. However, the
government alleges that the conspirators developed
software to automatically mark all videos longer
than 10 minutes—which would include virtually all
commercial movies and television shows—as
“private” to ensure that the videos would not be
searchable or publically displayed on the front pages
of Megavideo. Complaint at ¶ 33. These videos
could only be located by members of the public
through referrer sites.

 82a
The PayPal Account
The conspirators allegedly used a PayPal, Inc.
account to receive payments for premium
subscriptions and to make payments for operating
expenses. The PayPal account allegedly received “in
excess of $110,000,000 from subscribers and other
persons associated with Mega Conspiracy.”
Indictment at ¶ 42. Users could also pay for access
to the Megaupload website through a company called
Moneybookers, which operates a similar online
payment system to PayPal.
Operating expenses paid out of the PayPal
account included payments to Carpathia Hosting, a
company that operated many of the servers used by
the Mega websites, and rewards payments to
uploaders of popular content. Id. The government
alleges that the Mega Conspiracy paid over $65
million “to hosting providers around the world for
computer leasing, hosting, bandwidth, and support
services.” Id. at ¶ 73f. Under the Uploader Rewards
program, the conspirators paid certain users who
uploaded popular files. See, e.g., Indictment at
¶¶ 73g, pp, qq, ppp, qqq, www, xxx. Rewards
payments allegedly occurred from September 2005
until July 2011. An email from van der Kolk to
Ortmann indicates that the conspirators were aware
that they paid users who uploaded “copyrighted” and
“illegal” files. Indictment at ¶ 73y. Between 2010
and 2011, PayPal sent Megaupload over 145
takedown notices referencing over 3,400 infringing
links containing materials that had been downloaded
nearly 800,000 times. Complaint at ¶ 41. Ortmann
allegedly assured Paypal that the infringing files had

 83a
been removed or deleted and that 220 of the 330
registered users who uploaded the files had been
blocked from the Mega websites.
Id.
The
government claims that in reality, none of the
infringing files were deleted, and as of January 19,
2012, the day before the conspirators were arrested,
only about 18 of those 220 registered users had
actually been blocked from the Mega websites. Id.
Further, when copyright holders complained that
the Mega sites were infringing their material, the
conspirators allegedly responded with false
representations that the files had been removed and
the users uploading the infringing material had been
blocked. Indictment at ¶¶ 73ff, hh, ii. In actuality,
the conspirators only removed particular links to the
files. Complaint at ¶¶ 26-29. The actual infringing
files remained on the Mega-controlled servers and
could be accessed from other links. The conspirators
also allegedly falsely represented to copyright
holders that the Mega Abuse tool would allow owners
of copyrighted material to directly delete files
immediately. Indictment at ¶¶ 73ss, xx. Dotcom
also instructed his co-conspirators not to delete links
“reported in batches of thousands from insignificant”
copyright holders, as that caused the Mega websites
to lose “significant revenue.” Indictment at ¶ 73nnn.
He further instructed others not to delete “thousands
of links” from a single source “unless it comes from a
major organization in the US [sic].” Id. at ¶ 73ooo.
The PayPal account directly received the proceeds
of the alleged conspiracy. Given that the account
received payments from premium subscription users
and advertising revenues, the government has

 84a
provided sufficient allegations at this stage that the
funds in the PayPal account would not have been
received but for the conspiracy to commit copyright
infringement. The government reasons that users
primarily chose to pay for premium subscriptions in
order to view infringing content. Although the
complaint concedes that it was “theoretically
possible” that some users purchased premium
subscriptions in order to view only non-infringing
content, the government argues that there was little
incentive for such users to purchase premium
subscriptions given the Mega business model.
Complaint at ¶ 39. Noninfringing materials, such as
user-created home videos, were unlikely to be longer
than 72 minutes in length.
Moreover, the
government offers evidence that the conspirators did
not seek out non-infringing viewers for financial
gain. For example, van der Kolk allegedly told
Ortmann that “ ‘legit users’ were not a source of
revenue to the Mega Conspiracy, stating ‘that’s not
what we make $ with :).’” Id. Van der Kolk also
allegedly told Ortmann that “more than 90%” of the
Mega Conspiracy’s “profit” was derived from
“infringing files.” Id. On November 21, 2009,
Ortmann told van der Kolk that Megavideo’s public
videos “could not possibly have generated any
significant payments.” Id.
The government has alleged sufficient facts to
support a reasonable belief that the Mega websites
were designed to distribute, reproduce, and facilitate
access to copyrighted materials. With respect to
advertising revenues, the popularity of the infringing
content enabled the conspiracy to generate fees from
advertisers. Since the most popular content on

 85a
Megaupload.com was allegedly copyright-infringing
material, the advertising fees likely would not have
been received but for the conspiracy to commit
infringement.
With respect to the premium
subscription fees, it is likely that the fees were
overwhelmingly and perhaps only paid by customers
viewing infringing content.
At this point, the
government need only allege enough facts to support
a reasonable belief that it will be able to show at trial
by a preponderance of the evidence that the money in
the PayPal account would not have been received but
for the alleged conspiracy to commit copyright
infringement and the acts committed in furtherance
of that conspiracy. The court finds that this burden
has been met. Next, the court will analyze the
traceability of the assets in attachment A to the
PayPal account. Because the government seeks the
forfeiture of a large number of assets, certain of the
assets are more fully identified in the Attachment to
the Memorandum Opinion.
Bank Accounts
The government seeks the forfeiture of 18 bank
accounts. The DBS 0320 account allegedly was a
“funnel account” that received all the proceeds of the
conspiracy and transferred those proceeds to other
accounts in Hong Kong, New Zealand, and
elsewhere. See Complaint, 44. From August 2007 to
January 2012, the DBS 0320 account received 1,403
deposits totaling HKD 1,260,508,432.01 from the
PayPal account. Complaint at ¶ 45. The DBS 0320
account also received transfers of $280,000 U.S.
dollars and 3,980,311 Euro from the Moneybookers
account. Id. at ¶ 46.

 86a
Bank accounts 1-12 and 16-17, identified in the
attachment to this opinion, all received transfers
from the DBS 0320 account. Account 13 received
transfers from Account 9, which in turn received
transfers from the DBS 0320 account. Accounts 1415 received transfers from the DBS 0320 account and
Account 4, which also received transfers from the
DBS 0320 account.
Because these accounts are traceable to the
PayPal account, the court finds that there are
sufficient allegations to support the forfeitability of
the funds in these accounts as proceeds of the
conspiracy to commit copyright infringement.
Financial Instrument
The government seeks the forfeiture of one
financial instrument. The Computershare account
held in the name of Kim Dotcom holds government
bonds with a face value of 10 million NZD,
generating 6% interest annually and set to mature
on or about April 15, 2015. Id. at ¶ 71. On
November 10, 2010, 70 million HKD was transferred
from Bank Account 1 to the ANZ 1200 account.8 Five
days later, 10,639,321.02 NZD was transferred from
the ANZ 1200 account to the Computershare account
for the purchase of the bonds. Id. at 71-72. Bank
Account 1 contains funds constituting proceeds of the
conspiracy, as discussed above. Because the funds
used to purchase the bonds are traceable to the
conspiracy, the court finds that there are sufficient
8
The government does not seek the forfeiture of the ANZ
1200 account.

 87a
allegations to support the forfeitability of this
financial instrument as proceeds of or property
traceable to the conspiracy.
Real Property
The government seeks the forfeiture of the real
property located at 5G the Prom, Coatesville, which
is owned by Kim Dotcom.
This property was
purchased on or about November 19, 2011, together
with a neighboring parcel, for a total of 4,333,000
NZD using funds from Bank Account 15. Id. at
¶ 76a.
Because Bank Account 15 constitutes
proceeds of the conspiracy as discussed above, this
real property is also subject to forfeiture as property
traceable to the conspiracy.
Vehicles
The government seeks the forfeiture of multiple
vehicles purchased with funds from the above-listed
bank accounts. Vehicles 1-8 were purchased using
funds from Bank Account 14. Vehicles 9-16 were
purchased using funds from Account 16. Vehicles
17-18 were purchased using funds from Account 17.
All of these vehicles are thus forfeitable as property
traceable to the alleged conspiracy.
The government also seeks the forfeiture of two
vehicles that are not explicitly traced to any of the
above-listed bank accounts. Both vehicles were
purchased in May 2011 by van der Kolk, who
allegedly had no other income during that time
period. These vehicles are also forfeitable because
the government’s allegations raise the plausible
inference that the money used to purchase the

 88a
vehicle is traceable to van der Kolk’s role in the
conspiracy.
Miscellaneous
The government seeks the forfeiture of various
miscellaneous items of property traceable to the
bank accounts discussed above. Four jet skis were
purchased using funds from Account 14. Two sharp
108” LCD TV screens, three Samsung 82” LCD TVs,
one Devon works time piece, and an artwork were
purchased using funds from the DBS 0320 account.
These items are therefore forfeitable as property
traceable to the proceeds of the conspiracy.
III. CONCLUSION
For
the
reasons
discussed
above,
the
government’s motions for default judgment are
GRANTED.
The defendant assets are hereby
forfeited to the United States.
Date: March 25, 2015
Alexandria, Virginia
/s/ Log
Liam O’Grady
United States District Judge

 89a
APPENDIX E
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
)
UNITED STATES OF AMERICA,

)

Plaintiff,

)
) Civil No. 1:14-cv-969

-v-

)
) Hon. Liam O’Grady

ALL ASSETS LISTED IN
ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND
ASSETS TRACEABLE THERETO,

)

Defendants in rem.

)

)
)

ORDER
Before the court is the government’s motion to
strike the verified claim of Mona Dotcom ("Mona")
for lack of standing. (Dkt. No. 60). Mona opposed the
motion, and the government replied. (Dkt. Nos. 7375). The court heard oral argument on January 30,
2015. For the reasons set forth in the accompanying
Memorandum Opinion, it is hereby ORDERED that
the motion to strike (Dkt. No. 60) is GRANTED and
DENIED in part. The court therefore strikes Mona's
verified claim, (Dkt. No. 14), except as to her claims
to Vehicle 14 and Property 2. Accordingly, since she

 90a
lacks standing to contest the forfeiture of the assets
listed in Attachment A other than Vehicle 14 and
Property 2, her motion to dismiss the forfeiture
complaint (Dkt. No. 19) is DENIED with respect to
all of the property in Attachment A except Vehicle 14
and Property 2.
Date: March 13, 2015
Alexandria, Virginia
/s/ Log
Liam O’Grady
United States District Judge

 91a
APPENDIX F
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
)
UNITED STATES OF AMERICA,

)

Plaintiff,

)
) Civil No. 1:14-cv-969

-v-

)
) Hon. Liam O’Grady

ALL ASSETS LISTED IN
ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND
ASSETS TRACEABLE THERETO,

)

Defendants in rem.

)

)
)

MEMORANDUM OPINION
Before the court is the government’s motion to
strike the verified claim of Mona Dotcom (“Mona”).
(Dkt. No. 60). The government filed a verified
complaint for civil forfeiture in rem on July 29, 2014
seeking forfeiture of the assets listed in Attachment
A to the complaint. (Dkt. No. 1). Mona Dotcom filed
a verified claim to certain of the assets listed in
Attachment A on September 1, 2014.1 (Dkt. No. 14).
On August 28, 2014, claims to the assets were filed by
Finn Batato; Julius Bencko; Kim Dotcom; Sven Echternach;
1

 92a
On October 10, 2014, she and the other claimants
filed a motion to dismiss and or stay the
government’s forfeiture action. (Dkt. No. 19).2 On
December 30, 2014, the government moved to strike
Mona’s claim to the assets on the ground that she
lacks standing. (Dkt. No. 60). Mona opposed the
motion, and the government replied. (Dkt. Nos. 7375). The court heard oral argument on January 30,
2015.
I. BACKGROUND
The full factual background of this case is
discussed in the court’s Memorandum Opinion dated
February 27, 2015. (Dkt. No. 81). Relevant to this
motion, Mona Dotcom is the wife of Kim Dotcom
(“Kim”)3 and she resides in New Zealand. Kim
Dotcom and his alleged co-conspirators have been
indicted in this district for conspiracy to commit
copyright infringement, money laundering, and other
offenses. In this civil forfeiture in rem action, the
government seeks the forfeiture of assets that are
Bram van der Kolk; Mathias Ortmann; and Megaupload
Limited, Megapay Limited, Megamedia Limited, Megastuff
Limited, and Vestor Limited. (Dkt. Nos. 3-9). By order dated
February 27, 2015, this court granted the government’s motion
to strike and dismissed the claims of those claimants pursuant
to the fugitive disentitlement statute, 28 U.S.C. § 2466, (Dkt.
No. 82).
This motion has been denied as to the Fugitive
claimants, but remains pending as to Mona.
2

3
Mona and Kim Dotcom are currently married, but she
has represented to the court that she and Kim are separated
and will be divorcing.

 93a
traceable to the alleged crimes. This court has
disentitled Kim Dotcom and his alleged coconspirators pursuant to the fugitive disentitlement
doctrine. In her verified claim to the assets, Mona
asserts a 50% marital interest in certain assets
identified in Attachment A belonging to Kim.
II. MOTION TO STRIKE
The government contends that Mona Dotcom
lacks standing to contest the forfeiture. Specifically,
the government argues that: (1) under the New
Zealand Property (Relationships) Act 1976 (N.2.)
(“PRA”), Mona’s interest is not quantifiable until
there has been adjudication of her marital property
rights; (2) it is not likely that Mona will be able to
prove the affirmative defense of being an “innocent
owner;” (3) Mona has already received transfers from
Kim’s assets sufficient to satisfy her marital interest;
(4) her claim of de facto marriage is flawed: and (5)
if forfeiture is ordered by this court, she may
challenge the forfeiture in New Zealand.4
A. Standard of Review
Rule G of the Supplemental Rules for Admiralty
or Maritime Claims and Asset Forfeiture Actions is
applicable
to
this
civil
forfeiture
action.
Supplemental Rule G(8)(c) allows the government to
move to strike a claim for lack of standing. In the
4
Because this matter is before the court on a motion for
judgment on the pleadings, the court declines to address the
government’s arguments concerning merits issues (such as the
“innocent owner” defense) that are not relevant at this stage of
the proceedings.

 94a
civil forfeiture context, the government’s motion to
strike “may be presented as a motion for judgment
on the pleadings or as a motion to determine after a
hearing or by summary judgment whether the
claimant can carry the burden of establishing
standing by a preponderance of the evidence.” Supp.
R. G(8)(c)(ii)(B), Here, the government has moved for
judgment on the pleadings.
When the government moves for judgment on the
pleadings in a forfeiture proceeding, the claim of
ownership will be scrutinized in a manner consistent
with the principles of Fed. R. Civ. P. 12(c). The 2006
Advisory Committee Notes to Supplemental Rule
G(8)(c)(ii)(B) provide guidance: “If a claim fails on its
face to show facts that support claim standing, the
claim can be dismissed by judgment on the
pleadings.”
In adjudicating a motion for judgment on the
pleadings under Rule 12(c), the court should apply
the same standard as when evaluating a motion to
dismiss under Rule 12(b)(6). See Burbach Broad. Co.
of Delaware v. Elkins Radio Corp., 278 F.3d 401, 406
(4th Cir. 2002); Edwards v. City of Goldsboro, 178
F.3d 231, 243 (4th Cir. 1999). “A motion to dismiss
under Rule 12(b)(6) tests the sufficiency of a [claim];
importantly, it does not resolve contests surrounding
the facts, the merits of a claim, or the applicability of
defenses.” Republican Party of North Carolina v.
Martin, 980 F.2d 943, 952 (4th Cir. 1992). In
deciding a Rule 12(b)(6) motion, a district court “
‘must accept as true all of the factual allegations
contained in the [claim]’ and ‘draw all reasonable
inferences in favor of the [claimant].’ ” Kensington

 95a
Volunteer Fire Dep’t, Inc. v. Montgomery Cnty., 684
F.3d 462, 467 (4th Cir. 2012) (quoting E.I. du Pont de
Nemours & Co. v. Kolon Indus., 637 F.3d 435. 440
(4th Cir. 2011)). A court must grant a motion under
Fed. R. Civ. P. 12(c) if it appears beyond a doubt that
the non-moving party can prove no set of facts to
support her claim. See Bruce v. Riddle, 631 F.2d
272, 273-274 (4th Cir. 1980); see also United States v.
328 Pounds More or Less, of Wild Am. Ginseng, 347
F. Supp. 2d 241, 244 (W.D.N.C. 2004).
B. Statutory Standing
Civil forfeiture claimants have the burden of
establishing Article III and statutory standing. See,
e.g., United States v. $50,000 in U.S. Currency,
No. 13-2754, 2014 WL 2575767, *2 (D. Md. June 6,
2014); United States v. $7,000 in U.S. Currency, 583
F. Supp. 2d 725, 728-729 (M.D.N.C. 2008). To
establish statutory standing, the claimant must
comply with Rule G(5) of the Supplemental Rules for
Admiralty or Maritime Claims and Asset Forfeiture
Actions and 18 U.S.C. § 983(a)(4)(A).
Section
983(a)(4)(A) provides that when the government files
a complaint for forfeiture of property, “any person
claiming an interest in the seized property may file a
claim asserting such person’s interest in the property
in the manner set forth in the Supplemental Rules
for Certain Admiralty and Maritime Claims, except
that such claim” must be timely. Supplemental Rule
G(5)(a) provides that a claim must: (1) “identify the
specific property claimed;” (2) “identify the claimant
and state [her] interest in the property;” (3) “be
signed by the claimant under penalty of perjury;”
and (4) “be served on the government.” Supp. R.

 96a
G(5)(a). Courts generally require strict compliance
with Rule G(5), but the Court may depart from it “in
appropriate circumstances.” United States v. 328
Pounds More or Less, of Wild Am. Ginseng, 347 F.
Supp. 2d 241, 248 (W.D.N.C. 2004) (quoting United
Stales v. Amiel, 995 F.2d 367, 371 (2d Cir. 1993)).
C. Article III Standing
In contrast to statutory standing, the
requirements for Article III standing cannot be
excused at the discretion of the district court judge.
“In order to contest a forfeiture, a claimant first must
demonstrate a sufficient interest in the property to
give [her] Article III standing; otherwise there is no
case or controversy, in the constitutional sense,
capable of adjudication in the federal courts.” United
States v. Real Property Described in Deeds Recorded
at Book/Page 839/846…Henderson Cnty. Registry
and Ins. Proceeds, 962 F. Supp. 734, 736-737
(W.D.N.C. 1997) (internal citations and quotation
marks omitted). Standing must be supported at each
stage of the litigation. See Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992).
To establish standing under Article III, a
claimant “must allege a ‘distinct and palpable injury
to [herself]’ that is the direct result of the ‘putatively
illegal conduct of the adverse party,’ and ‘likely to be
redressed by the requested relief.’ “ United States v.
Cambio Exacto, 166 F.3d 522, 527 (2d Cir. 1999)
(internal citations omitted). In order to do so, the
“claimant must have a colorable ownership,
possessory or security interest in at least a portion of
the defendant property.” United States v. $41,320 in
U.S. Currency, No. 12-1449, 2014 WL 6698426, *2

 97a
(D. Md. Nov. 25, 2014) (quoting United States v.
Munson, Nos. 08-2065, 08-2159, 08-4326, 477
F. App’x 57, 62 (4th Cir. Apr. 17, 2012) (internal
quotation marks omitted). “Courts generally do not
deny standing to a claimant who is either the
colorable owner of the property or who has any
colorable possessory interest in it.” United States v.
$7,000 in U.S. Currency, 583 F. Supp. 2d 725, 729
(M.D.N.C. 2008) (internal quotation marks omitted).
D. Discussion
There is a split of authority regarding the proper
showing of standing at the pleading stage in the civil
forfeiture context. Some courts have held that a
simple claim of ownership is sufficient. See, e.g.,
United States v. $196,969 U.S. Currency, 719 F.3d
644, 646 (7th Cir. 2(113) (only a “bald assertion” of
ownership is required). Other courts, including
district courts within the Fourth Circuit, have
required more than a “bald assertion of ownership.”
See, e.g., United Slates v. $18,690 in U.S. Currency,
5:13-cv-026, 2014 WL 1379914, slip op. at *3
(W.D.V.A. Apr. 8, 2014) (granting government’s
motion to strike where claimant made only a “bare
assertion of ownership” and therefore lacked
standing); United Slates v. $104,250 in U.S.
Currency, 947 F. Supp. 2d 560, 562-63 (D. Md. 2013)
(granting government’s motion to strike where the
amended claim was “little better than a bald
assertion of ownership”); United Slates v. $7,000 in
U.S. Currency, 583 F. Supp. 2d 725, 728-34
(M.D.N.C. 2008) (granting government’s motion to
dismiss claim for lack of standing); United States v.
328 Pounds More or Less, of Wild Am. Ginseng, 347

 98a
F. Supp. 2d 241, 245-248 (W.D.N.C. 2004) (denying
in part government’s motion for judgment on the
pleadings where certain claimants had provided
more than a mere assertion of ownership); United
States v. Real Prop. Located at 5201 Woodlake Drive,
895 F. Supp. 791, 794-795 (M.D.N.C. 1995) (granting
government’s motion to dismiss the claims for lack of
standing).
Courts that have required evidence of an
ownership interest have generally held that a
claimant must state the source of the property and
how she came into possession of it. See, e.g., United
Slates v. $104,250, 947 F. Supp. 2d at 565 (granting
government’s motion to strike where claim stated
only that money seized in airport was proceeds of an
investment in the entertainment industry and
proceeds of claimant’s mother’s estate). In United
States v. $7,000, the court noted that “[i]n applying
the second test, courts ‘generally look to dominion
and control, such as possession, title, and financial
stake, as evidence of an ownership interest.’ United
States v. $7,000, 583 F. Supp. 2d at 729 (citation
omitted). The court found that “the Fourth Circuit
would almost assuredly apply the ‘dominion and
control’ test, which it has applied in an unpublished
civil forfeiture opinion and in the criminal forfeiture
context.” Id. (citing United States v. One Lot or
Parcel of Ground Known as 1077 Kiltrell St., No. 907259, 1991 WL 227792, *2 (4th Cir. Nov. 7, 1991)
(“Hare legal title, standing alone, is insufficient to
confer standing upon a claimant”); In re Bryson, 406
F.3d 284, 291 (4th Cir. 2005); United States v.
Morgan, 224 F.3d 339, 343 (4th Cir. 2000)).

 99a
1. Marital Interest
In her claim, Mona identifies her interest in each
of the assets as a “50% marital interest…as the
spouse of the owner, Kim Dotcom.”5 See Verified
Claim of Mona Dotcom.
Her response to the
government’s special interrogatories and her
opposition memorandum shows that her “marital
interest” is premised on New Zealand law,6
particularly the distribution scheme of the New
Zealand Property (Relationships) Act 1976 (N.Z.)
(“PRA”). See Mem. in Opp’n, 14; Mona Dotcom’s
Response to Special Interrogatories 3-5 (stating that
she has a marital interest in the assets pursuant to
the PRA).
Under Section 11 of the PRA, there is a
presumption that property classified as “relationship
property” under the Act will be divided equally. “The
PRA was enacted for the purpose of introducing an
equal sharing relationship property regime based on
recognition of contributions to the marriage or
There is one exception. With respect to a vehicle
identified as “Vehicle 2” in her claim, Mona originally claimed
that in addition to a “50% marital interest,” she had paid for
the purchase of that vehicle. See Verified Claim of Mona
Dotcom, 4. However, in her opposition brief, she withdraws the
purchase claim and asserts only her marital interest in the
vehicle. See Mem. in Opp’n, 20.
5

6 “…[I]t is appropriate to refer to state law in determining
the nature of the property interest involved in a forfeiture
proceeding.” United States v. $3,000 in Cash, 906 F. Supp.
1061, 1065 (E.D. Va. 1995) (internal quotation marks omitted).
Here, the relevant property law is the law of New Zealand.

 100a
partnership rather than of contributions to specific
items of property.” Hayward v. Commissioner of
Police [2014] NZCA 625 at para [17] White J for the
Court (N.Z.) (“Hayward IT’). In Hayward, the New
Zealand High Court7 favorably quoted scholarship
stating that the relationship property regime created
by the PRA “crystallises only in the event of a future
Court order or compromise. Until then, the statutory
relationship property regime has no immediate effect
on the conventional proprietary interests of the
parties in law and equity.” Commissioner of Police v.
Hayward (unreported) High Court, Auckland, CIV
2011-404-002371, 10 June 2013, Venning 1, at para
103 (N.Z.) (“Hayward I”).
In the appeal from
Hayward I, the New Zealand Court of Appeal held
that the term “interest” under the New Zealand
Criminal Proceeds (Recovery) Act 2009 (N.Z.)
(“CPRA”) “means not only a legal or equitable estate
or interest in the property but also extends to a right,
power or privilege in connection with the property.”
Hayward II at para [23] (N.Z.). See also CPRA 5(1)
(N.Z.). The Hayward II Court stated that under the
CPRA’s broader definition of “interest,” the ability of
a spouse to make a claim under the PRA for division
of property or a declaration as to the status or
ownership of property is one of the rights in
7
The New Zealand High Court has original and appellate
jurisdiction over criminal and civil matters; the Court of Appeal
is New Zealand’s intermediate appellate court, hearing appeals
from the High Court and other courts; the Supreme Court is
New Zealand’s final court of appeal. See Courts, MINISTRY OF
JUSTICE, http://www.justice.govt.nz./courts (last visited Mar. 11,
2015).

 101a
connection with the property. See Hayward II at
para [26] (N.Z.). In other words, a person’s right to
state a claim under the PRA, regardless of whether
they have done so, constitutes an “interest” under
the CPRA.
Mona argues that the language of a New Zealand
court in a judgment on the Dotcoms’ application for
release of restrained assets demonstrates that she
currently has a marital interest in the property. In
the order, the New Zealand High Court stated that
“Mrs. Dotcom has an interest in Mr. Dotcom’s
restrained
property
under
the
Property
(Relationships) Act 1976. This is not in dispute.”
Commissioner of Police v. Kim Dotcom (unreported)
High Court, Auckland. CIV 2012-404-33, 29 August
2012, Potter J, al para 73 (N.Z.), The High Court
further stated that “Mrs. Dotcom is entitled…to
apply for further orders from the Court, she being a
person with an interest in the restrained property.”
Id. at para 76 (N.Z.). Although the High Court
referred to the interest as one under the PRA, it is
apparent that the court meant that Mona’s right to
apply for relief pursuant to the PRA granted her an
“interest” under the CPRA.8
Further, Mona’s expert, a New Zealand barrister and
solicitor, stated in his affidavit that the High Court has already
recognized a “clear interest in the property governed by the
CPRA regime.” Aff. of Aaron James Lloyd, ¶ 16(a). Although
Lloyd argued that there is a presumption under NZ law that
Mona will be entitled to 50% of the relationship property, he did
not attempt to argue that the High Court’s judgment
constituted an adjudication of Mona’s marital property interests
under the PRA. See id. at ¶¶ 41-51.
8

 102a
The government argues that Mona lacks standing
to contest the forfeiture of property belonging to her
husband because her marital property rights have
not yet vested under the relevant New Zealand
statutes and her claimed interest is therefore too
speculative. As support, the government cites a
number of cases in which courts dismissed the claims
of individuals who asserted an interest in a spouse’s
property, on the basis that the claimants lacked
standing under the applicable state laws absent
litigation of their marital property rights.
See
United States v. Schifferli, 898 F.2d 987, 989 n.* (4th
Cir. 1990) (affirming district court’s grant of
summary judgment where wife lacked standing to
contest the forfeiture of her husband’s property
under South Carolina law because a right in “marital
property” did not vest until the commencement of
marital litigation and no such litigation had begun);
United States v. 9844 S. Titan Court, Unit 9…,75
F.3d 1470, 1478-1479 (10th Cir. 1996); United States
v. Premises Known as 717 S. Woodward St. …, 2 F.3d
529, 535-536 (3d Cir. 1993); United States v.
Kermali, No. 6:13-cr-150, 2014 WL 6601004, *2-3
(M.D. Fl. Nov. 12, 2014). See also United States v.
998 Cotton St. …, No. 1:11-cv-356, 2013 WL 1192821,
*6-9 (M.D.N.C. Mar. 22, 2013).
Taking the facts in Mona’s claim as true and
making reasonable inferences in her favor, the court
finds that Mona presently possesses a “right, power
or privilege in connection with the property”
pursuant to the CPRA. However, this broadlydefined “interest” does not rise to the level of a legal
or equitable interest sufficient to satisfy Article III
standing at this time. The problem with Mona’s

 103a
claim is not that she merely offers a bare assertion of
ownership. Rather, her claim is deficient because
she does not actually allege that she owns the
property. Mona’s counsel admitted at oral argument
that she has not sought a final adjudication of her
marital property rights, nor has she reached a
settlement agreement with Kim Dotcom. Because
her claim asserts only a marital interest that has not
yet ripened, Mona’s claim fails to state facts
supporting a reasonable inference that she currently
has a legal or equitable interest in the property even
under a standard requiring only a bare assertion of
ownership.
2. Possessory Interest in Certain Property
A claimant need not allege an ownership interest
to meet threshold Article III standing. See, e.g.,
United Suites v. $119,030 in U.S. Currency, 955 F.
Supp. 2d 569 (W.D. Va. 2013) (“Article III’s standing
requirement is…satisfied because an owner or
possessor of property that has been seized necessarily
suffers an injury that can be redressed at least in
part by the return of the seized property”) (emphasis
added) (citation and internal quotation marks
omitted).
With respect to two particular items of property,
Mona argues that her claim is alternatively premised
on a lawful possessory interest9 rather than a
Although Mona does not actually state her claim of a
possessory interest in these two items of property within the
four corners of her verified claim, the court will credit the
arguments in her opposition memorandum. The government
9

 104a
marital interest. See Mem. in Opp’n, 19-20. She
states that she is in possession of and exercises
dominion and control over the vehicle listed in her
claim as “Vehicle 14”10 and the real property
identified as “Property 2.”11 She resides in the home
identified as Property 2 and Vehicle 14 was released
to her pursuant to an order of the New Zealand High
Court.
See Order for Registration of Foreign
Restraining Orders, Schedule 3, ¶ 1.3.3 (releasing
vehicle to Mona). Mona has thus alleged sufficient
facts in her opposition to support a reasonable
inference that she is in lawful possession of Vehicle
14 and Property 2. As a lawful possessor, she will
suffer an imminent injury if the properties are
forfeited. Accordingly, Mona has standing to contest
the forfeiture of those two items of property.

does not dispute these assertions, and there is independent
evidence of her possession of these two properties.
Vehicle 14 is identified in Attachment A to the
government’s forfeiture complaint as “2010 Black Toyota
Vellfire V6, VIN 7ATOH65MX11041670, and including License
Plate “WOW”, and all interest, benefits, or assets traceable
thereto.” See Attachment A, ¶ 39.
10

11
Property 2 is identified in Attachment A to the
government’s forfeiture complaint as “The property at 51-1 The
Prom, Coatesville, Auckland 0793,New Zealand, being all that
parcel of land on Certificate of Title number 341890 on Deposit
Plan 385357, and all interest, benefits, or assets traceable
thereto.” See Attachment A,T21, injury if the properties are
forfeited. Accordingly, Mona has standing to contest the
forfeiture of those two items of property.

 105a
With respect to a vehicle identified in her claim
as Vehicle 15,12 Mona argues in opposition that this
vehicle is her separate property under the PRA
because it was a gift to her. See Mem. in Opp’n, 20;
Aff. of Mona Dotcom, ¶¶ 33-34.
However, her
verified claim makes no mention of this “interest in
separate property,” and unlike Property 14 and
Vehicle 2, there is no independent evidence before
the court that this vehicle was a gift. Accordingly,
the court will not construe her verified claim as
embracing this allegation of a separate interest in
Vehicle 15.
III. CONCLUSION
For the foregoing reasons, the court finds that
Mona Dotcom currently lacks Article III standing to
contest the forfeiture on the basis of a marital
interest in property belonging to Kim Dotcom.
However, Mona has standing based on a possessory
interest in Vehicle 14 and Property 2. Accordingly, it
is hereby ORDERED that the motion to strike (Dkt.
No. 60) is GRANTED and DENIED in part. The
court therefore strikes Mona’s verified claim, (Dkt.
No. 14), except as to her claims to Vehicle 14 and
Property 2. An appropriate order will issue.

12
Vehicle 15 is identified in Attachment A to the
government’s forfeiture complaint as “2011 Mercedes Benz
G55AMG, VIN WDB4632702X191902, and including License
Plate “GDS672”, and all interest, benefits, or assets traceable
thereto,” See Attachment A, ¶ 40.

 106a

Date: March 13 2015
Alexandria, Virginia

Log
Liam O?Grady
United States District Judge

 

 

107a
APPENDIX G
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
)
UNITED STATES OF AMERICA,

)

Plaintiff,

)
) Civil No. 1:14-cv-969

-v-

)
) Hon. Liam O’Grady

ALL ASSETS LISTED IN
ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND
ASSETS TRACEABLE THERETO,

)

Defendants in rem.

)

)
)

ORDER
For the reasons set forth in the accompanying
Memorandum Opinion, the court hereby ORDERS
that the government’s motion to strike (Dkt. No. 39)
is GRANTED and all claimants are disentitled from
litigating the civil forfeiture complaint pursuant to
28 U.S.C. § 2466. Accordingly, the court hereby
strikes and dismisses the claims of Finn Batato;
Julius Bencko; Kim Dotcom; Sven Echternach; Bram
van der Kolk; Mathias Ortmann; and Megaupload
Limited, Megapay Limited, Magamedia Limited,
Megastuff Limited, and Vestor Limited. (Dkt. Nos.

 108a
3-9).
Because the court has disentitled the
claimants, the court also strikes and denies their
motion to dismiss the forfeiture complaint or in the
alternative stay the forfeiture action. (Dkt. No. 19.)1
Date: February 27, 2015
Alexandria, Virginia
/s/ Log
Liam O’Grady
United States District Judge

1 The motion to dismiss and/or stay the forfeiture action is
not dismissed with respect to Mona Dotcom, a claimant who is
also a party to that motion. The court has not yet ruled on the
government’s motion to strike Mona Dotcom’s claim. (Dkt. No.
60).

 109a
APPENDIX H
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
)
UNITED STATES OF AMERICA, )
Plaintiff,

)
) Civil No. 1:14-cv-969

-v-

)
) Hon. Liam O’Grady

ALL ASSETS LISTED IN
ATTACHMENT A, AND ALL
INTEREST, BENEFITS, AND
ASSETS TRACEABLE
THERETO,
Defendants in rem.

)
)
)
)
)

MEMORANDUM OPINION
Before the Court is the government’s motion to
strike the claims of Finn Batato (“Batato”); Julius
Bencko (“Bencko”); Kim Dotcom (“Dotcom”); Sven
Echternach (“Echternach”); Bram van der Kolk (“van
der Kolk”); Mathias Ortmann (“Ortmann”); and
Megaupload Limited, Megapay Limited, Megamedia
Limited, Megastuff Limited, and Vestor Limited
(“the corporate claimants”). See Mot. to Strike, 1. In
this civil in rem action, the United States seeks
forfeiture of the assets listed in Attachment A to the

 110a
complaint. All of the assets identified in Attachment
A are located either in Hong Kong or New Zealand.
The government filed a verified complaint for
forfeiture in rem on July 29, 2014. (Dkt. No. 1). On
August 28, 2014, claims to the assets were filed by
Batato, Bencko, Dotcom, Echternach, van der Kolk,
Ortmann, and the corporate claimants. (Dkt. Nos. 39). On October 10, 2014, the claimants filed a motion
to dismiss the forfeiture complaint or in the
alternative stay the forfeiture action. (Dkt. No. 19).
The government then filed a motion to set a briefing
schedule, asking the court to consider the
government’s motion to strike before ruling on the
motion to dismiss. (Dkt. No. 31). The court granted
the government’s request.
(Dkt. No. 32).
On
November 18, 2014, the government moved to strike
the claims of the claimants. (Dkt. No. 39).2 The
claimants opposed the motion and the government
replied. (Dkt. Nos. 45, 46, 48, 66, 67).
I. BACKGROUND
On January 5, 2012, indictments were entered in
this district against Batato, Bencko, Dotcom,
Echternach, van der Kolk, Ortmann, Megaupload
Limited, and Vestor Limited.3 See Complaint, ¶ 16.
2
The government originally filed its motion to strike on
November 17, (Dkt. No. 37), but was asked by the Clerk’s Office
to refile the motion due to an error involving a signature on the
original document.

An additional individual, Andrus Nomm, was named in
the indictment and the civil forfeiture complaint.
See
Complaint, ¶ 14; Indictment, ¶ 1; Superseding Indictment, ¶ 37.
Nomm was arrested on February 9, 2015 and pled guilty to
3

 111a
The indictment charged the defendants with
multiple crimes, including conspiracy to commit
racketeering in violation of 18 U.S.C. § 1962(d);
criminal copyright infringement in violation of 17
U.S.C. § 506 and 18 U.S.C. § 2319; conspiracy to
commit copyright infringement in violation of 18
U.S.C. § 371; aiding and abetting of copyright
infringement in violation of 18 U.S.C. § 2; and
conspiracy to commit money laundering in violation
of 18 U.S.C. § 1956(h). On February 16, 2012, a
superseding indictment was returned, adding wire
fraud charges under 18 U.S.C. § 1343.
See
Superseding Indictment.
In summary, the
government alleges that the indicted defendants
operated a scheme known as the “Mega Conspiracy,”
an international criminal conspiracy to profit from
criminal copyright infringement and launder the
proceeds. See Complaint, ¶ 2. The government
asserts that the assets listed in Attachment A
constitute proceeds of the conspiracy and are thus
subject to forfeiture. Id. at ¶ 3.
On January 13, 2012, the New Zealand Ministry
of Foreign Affairs and Trade received requests from
the United States seeking the provisional arrest of
the individual defendants in the criminal action for
conspiracy to commit copyright infringement on February 13,
2015. He agreed to forfeit any assets obtained through the
conspiracy to which he had an interest. Nomm was sentenced
to one year and one day in the penitentiary and no fine. To
date, he is the only one of the defendants in the criminal action
to have been arrested by U.S. authorities. Case No. 1:12-cr00003.

 112a
the purpose of extraditing them to the United States.
See Affirmation of Bethany Ellen Madden, ¶ 2. On
or about January 20, 2012, New Zealand authorities
arrested Batato, Dotcom, Ortmann, and van der
Kolk. See Declaration of FBI Special Agent Rodney
J. Hays. They were released on conditions of bail.
Bencko remains in Slovakia, his country of
citizenship. Echternach is also in his country of
citizenship, Germany.
On April 18, 2012, the New Zealand High Court4
registered in New Zealand two restraining orders
issued by this court, subject to conditions including
monthly living allowance payments for Dotcom, his
wife, and van der Kolk. See Order for Registration of
Foreign Restraining Orders. The restraining orders
were to expire on April 18, 2014. The New Zealand
Court of Appeal issued a ruling extending the
registration of the U.S. restraining orders to April
18, 2015. The evidence before this Court indicates
that New Zealand law does not provide for further
extension of the restraining orders.

4
The New Zealand High Court has original and appellate
jurisdiction over criminal and civil matters; the Court of Appeal
is New Zealand’s intermediate appellate court, hearing appeals
from the High Court and other lower courts; the Supreme Court
is New Zealand’s final court of appeal. See Courts, Ministry Of
Justice, http://www.justice.govt.nz/courts (last visited Feb. 12,
2015).

 113a
II. SUBJECT MATTER JURISDICTION
A. Legal Standard
The claimants assert that this court lacks subject
matter jurisdiction over the civil forfeiture complaint
because the government has failed to allege
violations of federal statutes.5 Rule 12(b) of the
Federal Rules of Civil Procedure and Rule G of the
Supplemental Rules for Admiralty or Maritime
Claims and Asset Forfeiture Actions are applicable
to this civil forfeiture in rem action. Rule G(8)(b)
authorizes a claimant to move to dismiss a forfeiture
complaint pursuant to Rule 12(b). A motion made
pursuant to Fed. R. Civ. P. 12(b)(1) challenges the
court’s jurisdiction over the subject matter of the
case. Generally, the plaintiff bears the burden to
establish and preserve jurisdiction. See Kerns v.
United States, 585 F.3d 187, 194 (4th Cir. 2009); see
also Richmond, Fredericksburg & Potomac R.R. Co.
v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
5
The claimants argue that because they have challenged
subject matter jurisdiction, the court must decide their motion
to dismiss before deciding the fugitive disentitlement issue.
The Court agrees that “subject matter jurisdiction, when
questioned, [must] be decided before any other matter.” United
States v. Wilson, 699 F.3d 789, 793 (4th Cir. 2012). However,
subject matter jurisdiction may also be considered sua sponse.
The court need not decide the claimants’ motion to dismiss the
complaint, which raises issues that go to the merits of the
action, in order to resolve the jurisdictional questions.
Disentitlement is a threshold issue that the court will resolve
before reaching the merits of the case. See United States v.
S6,976,934.65 Plus Interest, 486 F. Supp. 2d 37, 38 (D.D.C.
2007).

 114a
Subject matter jurisdiction over civil asset
forfeiture actions is governed by 28 U.S.C. § 13456
and 28 U.S.C. § 1355(a). Section 1355(a) provides
that “[t]he district courts shall have original
jurisdiction…of any action or proceeding for the
recovery or enforcement of any fine, penalty, or
forfeiture, pecuniary or otherwise, incurred under
any Act of Congress.” 28 U.S.C. § 1355(a) (emphasis
added); United States v. Wilson, 699 F.3d 789, 795
(4th Cir. 2012), cert. denied, 133 S. Ct. 2401 (2013)
(holding that a procedural deadline for filing a civil
forfeiture complaint in the Civil Asset Forfeiture
Reform Act of 2000 is non-jurisdictional).
In United States v. $6,190 in U.S. Currency, 581
F.3d 881 (9th Cir. 2009), the Ninth Circuit
considered a challenge to subject matter jurisdiction
in a civil forfeiture case:
Jurisdiction over civil forfeiture actions
brought under 28 U.S.C. § 1355 is not
premised on a federal indictment, but
rather on a violation of an Act of
Congress. See 28 U.S.C. § 1355(a); see
also United States v. One Assortment of
89 Firearms, 465 U.S. 354, 361-63, 104
S. Ct. 1099, 79 L. Ed. 2d 361 (1984)
(holding that a claimant’s assets were
subject to forfeiture even though
6
28 U.S.C. § 1345 provides that “the district courts shall
have original jurisdiction of all civil actions, suits or
proceedings commenced by the United States.” 28 U.S.C. §
1345.

 115a
claimant was acquitted on federal
criminal charges). To bring a civil
forfeiture proceeding under § 1355, the
government is required only to show
probable cause that the assets in
question are traceable to a violation of
an Act of Congress. See [United States
v.J $493,850.00 in U.S. Currency, 518
F.3d [1159], [] 1167-69 (holding that the
Civil Asset Forfeiture Reform Act of
2000 did not alter the probable cause
requirement).
$6,190 in U.S. Currency, 581 F.3d at 885 (emphasis
added).
Courts within the Fourth Circuit have used a
synonymous
“reasonable
belief”
pleading
requirement in examining motions to dismiss
forfeiture complaints pursuant to Fed. R. Civ. P.
12(b)(6). A motion to dismiss pursuant to this rule
tests the sufficiency of a complaint. See, e.g., United
States v. $15,860 in U.S. Currency, 962 F. Supp. 2d
835, 838 (D. Md. 2013) (“For the government to meet
the pleading requirements [of Fed. R. Civ. P.
12(b)(6)], it must state sufficient facts to support a
reasonable belief based on the totality of the
circumstances that the defendant property is linked
to drug trafficking and, thus, subject to forfeiture”)
(citing United States v. Mondragon, 313 F.3d 862,
866-67 (4th Cir. 2002)). The $15,860 court noted
that its analysis would not change if it were to use
the “probable cause” standard applied by the Ninth
Circuit. Id. at 840 n.6.

 116a
B. Subject Matter Jurisdiction is Satisfied
The forfeiture complaint alleges that the named
assets are subject to forfeiture pursuant to 18 U.S.C.
§ 981 and 18 U.S.C. § 2323, because the assets are
traceable to copyright infringement, conspiracy to
commit copyright infringement, and money
laundering offenses.7
18 U.S.C. § 981(a)(1)(A)
provides for forfeiture of property traceable to
violations of 18 U.S.C. §§ 1956 and 1957. Section
1956(a)(1) prohibits the use of the proceeds of an
unlawful activity where a person knows the illegal
nature of the proceeds and conducts or attempts to
conduct a financial transaction with the intent to
promote carrying out a “specified unlawful activity”
or with the knowledge that the transaction is
“designed in whole or in part” to conceal the “nature,
the location, the source, the ownership, or the control
of the proceeds of specified unlawful activity.” 18
U.S.C. § 1956(a)(1). Section 1956(a)(2) prohibits the
transmission of such illegal funds into or out of the
United States.
18 U.S.C. § 1957(a) prohibits
engaging in a “monetary transaction in criminally
derived property of a value greater than $10,000.”
18 U.S.C. § 1957(a).
Section 1956(h) provides criminal liability for
conspiracy to commit offenses described in §§ 1956 or
1957. Section 981 subjects to forfeiture any property
traceable to “any offense constituting ‘specified
7
The forfeiture complaint also incorporates by reference
the allegations contained in the superseding indictment. See
Complaint, ¶ 16.

 117a
unlawful activity’ (as defined in section 1956(c)(7) of
this title), or a conspiracy to commit such offense.”
18 U.S.C. § 981(a)(1)(C). Section 1956(c)(7)(D) lists a
number of offenses that constitute “specified
unlawful activity,” including offenses relating to
copyright infringement under 18 U.S.C. § 2319. 18
U.S.C. § 1956(c)(7)(D).
Section 2319 sets forth the penalties for a
violation of 17 U.S.C. § 506(a)(1), which criminalizes
infringement of a copyright (A) for commercial
advantage or private financial gain; (B) by
reproducing or distributing infringing copies of
copyrighted works with a value of over $1,000 in any
180-day period; or (C) by distributing a work being
prepared for commercial distribution if the person
knew or should have known that the work was
intended for commercial distribution.
17 U.S.C.
§ 506(a)(1). Section 506(b) provides that forfeiture
under the statute shall be governed by 18 U.S.C.
§ 2323.
17 U.S.C. § 506(b).
Section 2323(a)(1)
subjects to forfeiture any property used or intended
to be used to commit an offense under § 506 or any
proceeds obtained “directly or indirectly” from an
offense prohibited by § 506. 18 U.S.C. § 2323 (a)(1).
The claimants argue that the government has not
properly alleged a violation of any federal statute to
support jurisdiction under § 1355. Specifically, they
argue that the government has not adequately
alleged criminal copyright infringement because the
complaint only references acts of “secondary”
infringement, rather than direct infringement. This
argument refers to the government’s allegations
concerning the Mega business model, which involved

 118a
the
claimants’
alleged
encouragement
and
facilitation of infringement by others. See, e.g.,
Complaint, 20. The claimants argue that they
cannot possibly be held criminally liable for acts that
contributed to or facilitated infringement. Even
assuming, arguendo, that only acts of contributory
infringement are alleged in the forfeiture complaint,
this argument ignores the complaint’s allegations
that the claimants engaged in a conspiracy to commit
copyright infringement.
Section 981(a)(1)(C)
authorizes civil forfeiture of property traceable to,
among
numerous
other
offenses,
copyright
infringement or conspiracy to commit copyright
infringement.
In order to establish a conspiracy under 18 U.S.C.
§ 371, the government must show “(1) an agreement
between two or more people to commit a crime, and
(2) an overt act in furtherance of the conspiracy.”
United States v. Jackson, No. 13-cr-129, 2013 WL
3197069, slip op. at *5 (E.D. Va. June 20, 2013)
(citing United States v. Ellis, 121 F.3d 908, 922 (4th
Cir. 1997). The forfeiture complaint has alleged that
each of the individual claimants participated in a
conspiracy to commit copyright infringement in the
Eastern District of Virginia and elsewhere.
Numerous alleged communications of the claimants
have been presented, indicating that they had an
agreement to engage in a business involving the
Mega websites.
According to the complaint, every time an
Internet user uploaded an infringing file to the
Megaupload website, Mega reproduced the file on at
least one computer server it controlled and provided

 119a
the uploading user with a uniform resource locator
(“URL”) link allowing anyone with the link to
download the file.
See Complaint, ¶ 18.
The
conspirators also allegedly provided monetary
payments to the top uploaders of infringing content
in order to encourage Internet users to upload
infringing files onto the Mega sites. Id. at ¶ 20. In
furtherance of the conspiracy, the claimants
allegedly developed software to identify the most
popular files uploaded to their sites, almost all of
which were infringing, and to automatically
reproduce those files to Mega’s faster servers
operated by Cogent Communications in Washington,
D.C. Id. at ¶ 23. The government has alleged that
the conspirators knew that these files were
infringing copyrights, as evidenced by their exclusion
of infringing files from the “Top 100” list. The “Top
100” list purported to list the most frequently
downloaded files on Megaupload.
Id. at ¶ 32.
According to the government, an accurate list would
have consisted almost entirely of infringing content,
so the claimants “carefully curated” the list to make
the site look more legitimate. Id. Additionally, the
claimants regularly told copyright holders, including
many U.S.-based organizations, that they would
remove infringing content, when in actuality they
only removed particular links to the files. Id. at 2629. The actual infringing files remained on the
Mega-controlled servers and could be accessed from
other links. The indictment alleges that some of the
communications to copyright holders were sent from
computer servers located in the Eastern District of
Virginia. See Superseding Indictment, ¶ 73.

 120a
Thus, the factual allegations in the complaint and
the superseding indictment show that there was an
agreement among the claimants to engage in the
alleged Mega Conspiracy, and at least some overt
acts in furtherance of the conspiracy occurred within
this judicial district. The complaint states that the
assets in question are largely traceable to funds
received by a PayPal, Inc. account that was used by
the Mega Conspiracy to receive subscription
payments from users who viewed the infringing
videos on the Mega websites. See Complaint, 11 4045. This court is therefore satisfied that there are
sufficient factual allegations to support either
probable cause or a reasonable belief that the assets
listed in Attachment A are traceable to a conspiracy
to commit copyright infringement. Accordingly, this
court has subject matter jurisdiction over the civil
forfeiture complaint.8
III. IN REM JURISDICTION
A. Legal Standard
The claimants argue that in rem jurisdiction is
lacking because the property is located in foreign
countries. As the government notes, 28 U.S.C.
8
Having found that there is subject matter jurisdiction
over the forfeiture complaint, the court declines to consider
additional arguments by the claimants relating to the
extraterritorial application of the criminal copyright statute, 17
U.S.C. § 506. The court also declines to examine whether
forfeiture is supported by every charge listed in the superseding
indictment. It is unnecessary to resolve those questions in
order to determine that the court has subject matter
jurisdiction over the forfeiture complaint.

 121a
§ 1355(b)(2) provides that “[w]henever property
subject to forfeiture under the laws of the United
States is located in a foreign country, or has been
detained or seized pursuant to legal process or
competent authority of a foreign government, an
action or proceeding for forfeiture may be brought” in
the district where any of the acts or omissions giving
rise to the forfeiture occurred.
28 U.S.C.
§ 1355(b)(2).
Several federal appellate courts have held that
§ 1355(b)(2) provides for in rem jurisdiction over
property subject to forfeiture that is located in
another country. See United States v. Approximately
1.67 Million in Cash, 513 F.3d 991, 998 (9th Cir.
2008) (“The plain language and legislative history of
the 1992 amendments makes clear that Congress
intended § 1355 to lodge jurisdiction in the district
courts without reference to constructive or actual
control of the res”); Contents of Account Number
03001288 v. United States, 344 F.3d 399, 403-405 (3d
Cir. 2003) (holding that the district court had
jurisdiction “solely based on § 1355(b)(2)” to order the
forfeiture of assets located in the United Arab
Emirates); United States v. All Funds in Account
Nos. 747.034/278, 747.009/278, & 747.714/278, 295
F.3d 23, 27 (D.C. Cir. 2002) (“Congress intended the
District Court for the District of Columbia, among
others, to have jurisdiction to order the forfeiture of
property located in foreign countries,” unless the

 122a
“Constitution commands otherwise”). The reasoning
of these circuits is persuasive.9
B. The Jurisdictional Requirements of
§ 1355(b) are Satisfied
All of the property listed in Attachment A is
located either in Hong Kong or New Zealand. The
assets have been restrained pursuant to the legal
processes of those countries at the request of the
United States government. This forfeiture action
thus concerns property located in foreign countries
and detained pursuant to the legal processes of those
countries. The forfeiture complaint and superseding
indictment contain allegations that the conspiracy
utilized over 525 servers located within the Eastern
District of Virginia,10 and received payments from
within this district and elsewhere to a PayPal
account. See Superseding Indictment, ¶¶ 39, 42.
The claimants allegedly reproduced and stored
infringing files on these servers and caused
The Second Circuit had taken a different approach and
applied the traditional rules of admiralty to forfeiture actions,
requiring that there be constructive or actual control over the
res in order for the district court to exercise in rem jurisdiction.
See United States v. All Funds on Deposit... in Names of Meza
or de Castro, 63 F.3d 148, 152-153 (2d Cir. 1995). But a year
later, that court held that the amendments to § 1355 “provide
district courts with in rem jurisdiction over a res located in a
foreign country.” United States v. Certain Funds Contained in
Account Numbers...Located at the Hong Kong and Shanghai
Banking Corp., 96 F.3d 20, 22 (2d Cir. 1996).
9

10
The servers were operated by Carpathia Hosting and
located in Ashburn, Virginia, which is within the Eastern
District of Virginia. See Superseding Indictment, ¶ 39.

 123a
communications to be sent from servers in Virginia
indicating that infringing files had been removed.
See Superseding Indictment, ¶ 73. Therefore, the
court finds that alleged acts in furtherance of the
conspiracy to commit copyright infringement
occurred within this judicial district. The alleged
acts in furtherance of the conspiracy constitute acts
giving rise to the forfeiture claim. Accordingly, there
are minimum contacts between this jurisdiction and
the defendant assets,11 and this court has in rem
jurisdiction over the assets listed in Attachment A
pursuant to § 1355(b).

11
The claimants argue that there are insufficient
minimum contacts between the assets and this forum.
Ordinarily, the Due Process Clause requires that there be
sufficient minimum contacts between a defendant (here, the
assets) and the forum in order for a federal court to exercise
jurisdiction. See Harrods Ltd. v. Sixty Internet Domain Names,
302 F.3d 214, 224 (4th Cir. 2002) (citing Intl Shoe Co. v.
Washington, 326 U.S. 310, 316, (1945)). Section 1355(b)(2) only
allows a forfeiture action concerning property located in a
foreign country to be brought in a district court where any of
the acts giving rise to the forfeiture occurred. Thus, § 1355’s
requirement that some act giving rise to the forfeiture must
occur within the judicial district exercising jurisdiction serves
much the same function as the minimum contacts test. The
claimants also argue that the court should require a heightened
level of contacts because the suit involves foreign corporations.
See Opp. at 8. However, none of the corporations are
defendants in this civil in rem action. Rather, the court is
exercising in rem jurisdiction over the assets listed in
Attachment A.

 124a
IV. THE FUGITIVE DISENTITLEMENT
DOCTRINE
A. Statutory Prerequisites of § 2466
The fugitive disentitlement doctrine developed
under the common law as a method to dismiss direct
appeals from criminal defendants who were fugitives
at the time of their appeal. See, e.g., United States v.
Al-Kurdi, 332 F. App’x 151, 152 (4th Cir. 2009)
(invoking common law fugitive disentitlement
doctrine to dismiss appeal of criminal defendant who
was a fugitive during the pendency of his appeal).
See also Collazos v. United States, 368 F.3d 190, 197
(2d. Cir. 2004) (discussing cases invoking the
common law fugitive disentitlement doctrine). In
Degen v. United States, 517 U.S. 820 (1996), the
Supreme Court declined to extend the common law
doctrine to allow courts to disentitle fugitive
claimants in civil forfeiture actions.
In 2000, Congress comprehensively overhauled
the civil asset forfeiture laws and specifically granted
federal courts the authority to order disentitlement
in civil forfeiture cases in the Civil Asset Forfeiture
Reform Act (“CAFRA”). See 28 U.S.C. § 2466. That
statute was designed to prevent the unseemly
“spectacle” recognized in Degen of a “criminal
defendant who, facing both incarceration and
forfeiture for his misdeeds, attempts to invoke from a
safe distance only so much of a United States court’s
jurisdiction as might secure him the return of alleged
criminal proceeds while carefully shielding himself
from the possibility of a penal sanction.” United
States v. Technodyne, 753 F.3d 368, 377 (2d Cir.
2014) (quoting Collazos, 368 F.3d at 200).

 125a
Section 2466 provides:
(a) A judicial officer may disallow a person
from using the resources of the courts of the
United States in furtherance of a claim in any
related civil forfeiture action or a claim in
third party proceedings in any related
criminal forfeiture action upon a finding that
such person—
(1) after notice or knowledge of the fact
that a warrant or process has been issued
for his apprehension, in order to avoid
criminal prosecution—
(A) purposely leaves the jurisdiction of
the United States;
(B) declines to enter or reenter the
United States to submit to its
jurisdiction; or
(C) otherwise evades the jurisdiction of
the court in which a criminal case is
pending against the person; and
(2) is not confined or held in custody in any
other jurisdiction for commission of
criminal conduct in that jurisdiction.
(b) Subsection (a) may be applied to a claim
filed by a corporation if any majority
shareholder, or individual filing the claim on
behalf of the corporation is a person to whom
subsection (a) applies.
At common law, courts generally did not consider
as “fugitives” persons who had never previously
entered the United States. See Collazos, 368 F.3d at

 126a
198-201. Subpart A obviously applies to traditional
common law fugitives, persons who allegedly
committed crimes while in the United States and
who, upon learning that their arrest was sought,
purposely fled the country.
§ 2466(a)(1)(A).
Similarly, the “reenter” provision of subpart B
extends disentitlement authority over another class
of persons traditionally recognized as fugitives,
persons who allegedly committed crimes while in the
United States, but who were outside the country
when they learned that their arrests were sought
and who then refused to return to the United States
in order to avoid prosecution.
§ 2466(a)(1)(B).
However, subpart B also applies to persons who
decline to “enter” the United States. Id. The plain
meaning of this language is that a person who has
never entered the United States but who declines to
enter in order to avoid criminal prosecution may be a
fugitive pursuant to § 2466. See Collazos, 368 F.3d
at 198-201; United States v. $6,100,000 on Deposit,
No. 07-cv-4430, 2009 WL 1809992, *4 (S.D.N.Y.
2009) (disentitling a claimant who had never been to
the United States pursuant to § 2466).
Further, subpart C applies to persons who
“otherwise evade[]” the jurisdiction of a United
States court in which a criminal case is pending
against them. 28 U.S.C. § 2466(a)(1)(C). “Evasion is
an expansive concept” not limited to the deliberate
flight referenced in § 2466(a)(1)(A) or the refusal to
enter or reenter identified in § 2466(a)(1)(B).
Collazos, 368 F.3d at 200 (internal quotation marks
omitted). “Nothing in subpart (C) indicates that a
person must have been within the jurisdiction of the

 127a
court at the time the crime was committed in order
thereafter to evade jurisdiction.” Id.
Claimants argue that the government cannot
raise the fugitive disentitlement doctrine on a motion
to strike. Numerous courts, however, have granted
motions to strike the claims of a person determined
to be a fugitive.12 The Court is persuaded by their
reasoning and finds that fugitive disentitlement can
be ordered where the government has moved to
strike the claim of an alleged fugitive. See United
States v. $6,976,934.65 Plus Interest, 478 F. Supp. 2d
30, 38 (D.D.C. 2007) (holding that a motion pursuant
to § 2466 is “properly treated as one to dismiss the

12
See, e.g., United States v. Assorted Money Orders
Totaling $138,400, No. 07-13330, 2010 WL 1438901, *2 (E.D.
Mich. Apr. 9, 2010) (granting government’s motion to strike
claim pursuant to fugitive disentitlement doctrine); United
States v. Vehicle 1995 Great Dane, No. 98-40285, 2010 WL
1417841, *2 (E.D. Mich. Apr. 5, 2010) (granting government’s
motion to strike claim pursuant to fugitive disentitlement
doctrine); United States v. $1,474,770 in U.S. Currency, 538 F.
Supp. 2d 1298, 1302 (S.D. Cal. 2008) (granting government’s
motion to strike claim pursuant to fugitive disentitlement
doctrine); United States v. $1,278,795, No. Civ-L-03-87, 2006
WL 870364, *2 (S.D. Tex. Mar. 30, 2006) (treating motion to
strike claim pursuant to fugitive disentitlement doctrine as
motion to dismiss and dismissing the fugitive’s claim, as well as
granting summary judgment on the merits); United States v.
One 1988 Chevrolet Cheyenne Half-Ton Pickup Truck, 357 F.
Supp. 2d 1321, 1333 (S.D. Ala. 2005) (granting government’s
motion to strike claim pursuant to fugitive disentitlement
doctrine); United States v. $1,231,349.68 in Funds, 227 F. Supp.
2d 130, 133 (D.D.C. 2002) (granting government’s motion to
strike claim pursuant to fugitive disentitlement doctrine).

 128a
claim, on which the Court may consider matters
outside the pleadings”).13
B. Intent
The Fourth Circuit has not yet considered fugitive
disentitlement pursuant to § 2466. Circuits that
have weighed in have held that the statute’s plain
language identifies five prerequisites that must be
met before a court may exercise its discretion to
disentitle a claimant:
(1) a warrant or similar process must
have been issued in a criminal case for
the claimant’s apprehension; (2) the
claimant must have had notice or
knowledge of the warrant; (3) the
criminal case must be related to the
forfeiture action; (4) the claimant must
not be confined or otherwise held in
custody in another jurisdiction; and (5)
the claimant must have deliberately
avoided prosecution by (A) purposefully
13
The claimants argue that discovery is required on two
issues, the possibility of government overreach and the issue of
the claimants’ intent. The court disagrees. The allegations of
government overreach are insufficient to warrant discovery.
The court also finds that it is able to make a decision regarding
the claimants’ intent based on the record before it. Moreover, it
is unclear how discovery could help the claimants present
evidence of their own intent. See United Slates v. $671,160 in
U.S. Currency, 730 F.3d 1051, 1059 (9th Cir. 2013)
(“[Claimant’s] reasons for remaining in Canada lie exclusively
in [his] mind and cannot be uncovered by requesting
information from third parties”).

 129a
leaving the United States, (B) declining
to enter or reenter the United States, or
(C) otherwise evading the jurisdiction of
a court in the United States in which a
criminal case is pending against the
claimant.
Collazos, 368 F.3d at 198. See also Technodyne, 753
F.3d at 378 (2d Cir. 2014); United States v. $671,160
in U.S. Currency, 730 F.3d 1051, 1055-1056 (9th Cir.
2013); United States v. $6,976,934.65, Plus Interest,
554 F.3d 123, 128 (D.C. Cir. 2009); United States v.
$6,190 in U.S. Currency, 581 F.3d 881, 886 (9th Cir.
2009); United States v. Salti, 579 F.3d 656, 663 (6th
Cir. 2009).
The parties primarily dispute the intent element,
so the court will focus on that element first. Section
2466 does not specify the requisite showing of intent
necessary to satisfy the fifth element of the test
identified by the circuit courts. The statute provides
that the alleged fugitive must have acted “in order to
avoid criminal prosecution.” § 2466(a)(1). Some
courts have held that “[m]ere notice or knowledge of
an outstanding warrant, coupled with a refusal to
enter the United States, does not satisfy the statute.”
United States v. Bohn, No. 02-20165, 2011 WL
4708799, *9 (W.D. Tenn. June 27, 2011) (finding
insufficient evidence of intent where claimant was in
Vanuatu long before he was charged and no other
evidence showed that he remained there in order to
avoid prosecution in the United States) (quoting
United States v. $6,976,934.65, Plus Interest, 554

 130a
F.3d at 132);14 see also United States v. Salti, 579
F.3d at 664. Other courts have emphasized that the
intent of the alleged fugitive may be analyzed under
the “totality of the circumstances.” Technodyne, 753
F.3d at 378; Collazos, 368 F.3d at 201(finding that
the totality of the circumstances indicated that the
claimant made a conscious choice not to “enter or
reenter the United States” to face criminal
prosecution).
At least two circuits have explicitly held that a
desire to avoid prosecution need not be the sole
reason for the claimant’s refusal to enter the United
States. See Technodyne, 753 F.3d at 383-384 (2d Cir.
2014) (finding that the government was required to
prove that the claimants remained outside of the
United States with the “specific intent to avoid
criminal prosecution,” but refusing to “equate
specific intent with sole, principal, or dominant
intent”); $671,160 in U.S. Currency, 730 F.3d at 1056
n.2 (9th Cir. 2013) (“[Claimant’s] desire to evade
criminal prosecution need not be the sole motivating
factor causing him to remain abroad, to the exclusion
of all others”). Accordingly, the court finds that
14
The claimants argue that the D.C. Circuit’s holding in
$6,976,934.65 requires the government to show that intent to
avoid prosecution is the sole motivating factor behind a
claimant’s decision to remain outside of the United States. See
$6,976,934.65, 554 F.3d at 132 (D.C. Cir. 2009) (finding that
avoiding prosecution must be “the reason” the claimant refused
to enter the United States) (emphasis in original). This court is
persuaded by the decision of the Second Circuit in Technodyne,
which rejected such an interpretation of the D.C. Circuit’s
opinion. Technodyne, 753 F.3d at 384.

 131a
while the government must show that the claimants
possess a specific intent to avoid criminal
prosecution, that intent need not be the sole reason
the claimants declined to enter the United States.
None of the claimants dispute that they are
aware of their indictments in this district. It is also
beyond dispute that the criminal case is related to
the forfeiture action. The assets sought in the civil
forfeiture action are alleged to be proceeds of and
property traceable to offenses charged in the
superseding indictment. Further, the assets are
subject to restraining orders issued by this court and
registered in foreign courts in connection with the
criminal action. None of the claimants are confined
or otherwise held in custody in another jurisdiction.
The claimants in this action dispute only the intent
element. In short, they argue that the evidence
before the court does not establish that they
deliberately sought to avoid prosecution. For the
reasons discussed below, the court finds that each
claimant has deliberately declined to enter the
United States in order to avoid criminal prosecution
in this country.
Kim Dotcom15
Dotcom is a dual citizen of Germany and Finland,
and he has never lived in or visited the United
States. He is currently residing in New Zealand.
Dotcom stated in his declaration that he learned of
the indictment on January 20, 2012, when he was
15 Kim Dotcom has been known by other names, including
“Kim Schmitz” and “Kim Tim Jim Vestor.” See Complaint, ¶ 7.

 132a
arrested in New Zealand pursuant to a request by
United States authorities. See Decl. of Kim Dotcom,
¶ 3. The evidence before this court indicates that he
has been released on bail since February, 2012. See
Reserved Judgment of J. Dawson (granting bail to
Dotcom). Dotcom has stated that he is not permitted
to leave New Zealand, but it is apparent that he is
only being held pursuant to the United States
government’s request for his extradition.
See
Dotcom’s Response to Special Interrogatory No. 7.
He cannot dispute that he is free at any time to
submit to U.S. jurisdiction. See 479 Tamarind Drive,
No. 98-cv-2279, 2005 WL 2649001 at *3 (S.D.N.Y.
Oct. 14, 2005) (disentitling claimant who argued that
he was bound by conditions of bond not to leave
Canada where the evidence showed that he was
arrested in Canada pursuant to an extradition
request); $1,231,349.68 in Funds, 227 F. Supp. 2d at
130, 133 (D.D.C. 2002) (finding that claimant’s arrest
in Spain pursuant to extradition request was not
custody or confinement for purposes of § 2466(a)(2)).
The record presents significant evidence that
Dotcom has declined to enter the United States in
order to avoid criminal prosecution. Dotcom stated
that since his arrest, he has been “actively contesting
the legal basis on which the United States has issued
the indictment and [has] sought to enforce” his
rights. See Decl. of Kim Dotcom, ¶ 5. On July 10,
2012, Dotcom sent a public message from his Twitter
account stating, “Hey DOJ, we will go to the U.S. No
need for extradition. We want bail, funds unfrozen
for lawyers & living expenses.” See Govt. Ex. B to
Attach. 1. An article dated July 11, 2012 stated that
Dotcom “said he would willingly go to the US [sic] if

 133a
he and his co-defendants were given a guarantee of a
fair trial, money to pay for a defence [sic] and funds
to support themselves and their families.” See Govt.
Ex. E to Attach. 1. In the article, Dotcom is quoted
as saying that the government would not agree
“because they can’t win this case and they know that
already.” Id. (internal quotation marks omitted).
On June 5, 2014, Dotcom posted a Twitter
message offering five million U.S. dollars to anyone
with “anything to leak about the Megaupload case”
that could result in his victory. See Govt. Ex. B to
Attach. 1. Three days later, he posted a link to an
article about his offer. Articles about Dotcom’s offer
reported that he was looking for information
regarding unlawful or corrupt conduct by the United
States government, the New Zealand government,
spy agencies, law enforcement, and the motion
picture industry in connection to his case. See Govt.
Exhibits C, D to Attach. 1. Dotcom has not disputed
that he has sought favorable conditions in connection
with submitting to the jurisdiction of the United
States. Indeed, in his response to the government’s
special interrogatories, Dotcom stated that his
attorneys conveyed to the government that he would
be willing to voluntarily come to the United States to
stand trial, provided that the government agreed
that he would be free on bail and have a portion of
his seized assets released to fund living expenses and
defense attorneys. See Dotcom’s Response to Special
Interrogatory No. 6. He indicated that it was his
understanding that the government had rejected his
offer.
Thus, he has corroborated the evidence
presented by the government.

 134a
Dotcom’s response to the government’s argument
that he is deliberately avoiding prosecution is that he
has never been to the United States. He asserts that
he remains in New Zealand because that has been
his place of residence since before he learned of the
indictment, his family owns a home in that country
and rents a neighboring home, and he intends to
continue to live and work there. See Decl. of Kim
Dotcom, ¶ 10. His work in New Zealand includes
Internet entrepreneurship and founding a political
party.
As demonstrated, Dotcom need not have
previously visited the United States in order to meet
the prerequisites of § 2466. The statute is satisfied
where the government shows that the claimant is on
notice of the criminal charges against him and
refuses to “enter or reenter” the country with the
intent to avoid criminal prosecution. Because the
court assesses intent under the totality of the
circumstances, it is certainly relevant that Dotcom
has never been to the United States and that he has
lived in New Zealand since 2011, where he resides
with his family. This tends to show that he has
other reasons for remaining in New Zealand besides
avoiding criminal prosecution.
However, the
existence of other motivations does not preclude a
finding that he also has a specific intent to avoid
criminal prosecution. Dotcom’s statements, made
publicly and conveyed by his attorneys to the
government, indicate that he is only willing to face
prosecution in this country on his own terms. See
Technodyne, 753 F.3d at 386 (2d Cir. 2014) (“The
district court was easily entitled to view those
[requests for bail], evincing the [claimants’] desire to

 135a
face prosecution only on their own terms, as a
hallmark indicator that at least one reason the
[claimants] declined to return in the absence of an
opportunity for bail was to avoid prosecution”).
Dotcom has indicated through his statements that he
wishes to defend against the government’s criminal
charges and litigate his rights in the forfeiture
action. If it is truly his intent to do so, then he may
submit to the jurisdiction of the United States. See
1,231,349.68 in Funds, 227 F. Supp. 2d at 133
(stating that if the claimant truly intended to fight
the charges as he stated, then he had a clear option
to return to the United States).
The Corporate Claimants
Subsection b of § 2466 provides that a corporate
claimant may be disentitled “if any majority
shareholder, or individual filing the claim on behalf
of the corporation is a person” for whom the
statutory prerequisites are met. 28 U.S.C. § 2466(b).
Kim Dotcom is the individual who filed the claims on
behalf of Megaupload Limited, Megamedia Limited,
Megapay Limited, Megastuff Limited, and Vestor
Limited. See Verified Claim of Kim Dotcom on
Behalf of the Corporate Claimants. There is also
evidence that Dotcom is a majority shareholder of
the corporate claimants.
Because the statutory
prerequisites have been satisfied with respect to
Dotcom, the corporate claimants are also subject to
disentitlement pursuant to § 2466(b).
Finn Batato and Mathias Ortmann
Finn Batato and Mathias Ortmann stated in their
declarations that they learned of the indictments

 136a
against them when they were arrested on January
20, 2012 at Kim Dotcom’s home. See Decl. of Finn
Batato at ¶ 3; Decl. of Mathias Ortmann, ¶ 3. Batato
and Ortmann remain in New Zealand subject to
conditions of bail related to ongoing extradition
proceedings. Both Batato and Ortmann are citizens
of Germany. Neither has been a permanent resident
of the United States.
Batato stated in his
declaration that since learning of the indictment, he
has “been actively contesting the legal basis on which
the United States has issued the indictment and
[has] sought to enforce [his] legal rights.” See Decl.
of Finn Batato, ¶ 5. Ortmann made the same
statement in his declaration. See Decl. of Mathias
Ortmann, ¶ 5. Batato and Ortmann have each
indicated that they plan to continue to live and work
in New Zealand, where they are opposing
extradition.16 Their statements indicate that they
wish to avoid prosecution in the United States by
remaining in New Zealand. Batato and Ortmann are
thus attempting to avoid criminal prosecution in the
United States, while at the same time asserting their
rights to litigate the criminal and civil forfeiture
actions. It is apparent from the totality of the
circumstances that Batato and Ortmann are refusing
to enter the United States in order to avoid criminal
prosecution.

16
Claimants argue that opposition to extradition is
relevant only to the issue of whether a claimant is on notice of
the criminal charges. The court disagrees, as intent is analyzed
under the totality of the circumstances.

 137a
Bram van der Kolk
Bram van der Kolk stated in his declaration that
he became aware of the indictment when he was
arrested at his home on January 20, 2012.17 See
Decl. of Bram van der Kolk, ¶ 3. Since learning of
the indictment, he has “been actively contesting the
legal basis on which the United States has issued the
indictment and [has] sought to enforce [his] legal
rights.”
Id. at ¶ 5.
He is a citizen of the
Netherlands, and he stated that he has never resided
in the United States. He has previously visited the
United States for about five days in October 2009.
Id. at ¶ 8. Van der Kolk is obviously opposing
extradition, and he has admitted that he intends to
remain in New Zealand while he contests the
government’s criminal action and civil actions. Like
Batato and Ortmann, he is thus avoiding criminal
prosecution in the United States while attempting to
litigate the civil forfeiture action. It is apparent from
the totality of the circumstances that van der Kolk is
refusing to enter the United States in order to avoid
criminal prosecution.
Sven Echternach
Sven Echternach is a citizen and resident of
Germany. He has remained in Germany since late
January 2012.
Echternach has never been a
permanent resident of the United States. On or
about January 22, 2012, German authorities notified
17
Dotcom, Batato, and Ortmann were arrested at
Dotcom’s residence. Van der Kolk was arrested separately in
New Zealand.

 138a
the United States government that Echternach had
arrived in Germany from Manila, Philippines via the
Frankfurt airport. See Declaration of FBI Special
Agent Rodney J. Hays, ¶ 28. The United States
government submitted a request to interview
Echternach in Germany about his involvement in
activities relating to the Megaupload business.18
Echternach indicated that he would exercise his
right not to give evidence if summoned for an
interview.
On March 16, 2012, Echternach stated in a
conversation with a third party that he hoped to talk
to a lawyer soon in order to understand his defense
strategy. Id. at ¶ 29. On May 17, 2013, Echternach
stated that he was still not traveling, but he hoped
that he would be able to travel again in a few
months.
According to the government, he has
expressed hope in other conversations that the
charges in the United States would be dismissed
pursuant to motions of his counsel. Id.
Echternach has also stated that his counsel in
Germany advised him that he must remain in that
country to participate in the investigations occurring
there. See Decl. of Echternach, ¶ 6. His Germanylicensed attorney, Klaus G. Walter, submitted an
affidavit stating that he believed it was “more than
likely that, should Mr. Echternach travel to the
United States at the moment, he would be arrested
and not be allowed to leave the United States and
18
Germany generally does not extradite its citizens to the
United States.

 139a
return to Germany in a timely manner.” See Decl. of
Klaus G.
Walter, ¶ 5.
Walter stated that
Echternach is under investigation for three different
proceedings, two of which result directly from
requests of United States authorities and one of
which
results
“indirectly”
from
the
U.S.
investigations. Id. at 113-4. However, Echternach’s
own declaration stated only that he is “subject to
criminal investigations in Germany based on the
same allegations that have been made by the United
States government in the criminal case and this civil
forfeiture case.” See Decl. of Sven Echternach, 116.
He stated further that he has been advised not to
travel to the United States so that he will be
available to participate in the “proceedings in
Germany that were instituted at the request of the
United States government.” Id. Walter opined that
if Echternach were unavailable to participate in the
German investigative proceedings, his absence could
lead to “additional disadvantages” and could “even
result in a German arrest warrant.” See Decl. of
Klaus G. Walter, ¶ 8. Alternatively, Echternach
could apparently face a default judgment in the
German proceedings.
These allegations fall short of supporting an
argument that Echternach is in custody or
confinement in Germany. In United States v. All
Funds on Deposit at…Account No. 600-00338, 617 F.
Supp. 2d 103, 124-125 (E.D.N.Y. 2007), the court
held that the claimant was not in custody such that
he could not return to the United States to face the
criminal charges against him, where he was free on
bond in Namibia pending resolution of an extradition
proceeding. Similarly, in $1,231,349.68 in Funds,

 140a
227 F. Supp. 2d at 133 (D.D.C. 2002), the court held
that the claimant’s arrest in Spain did not constitute
custody where he was arrested for conduct that
related “specifically to the alleged criminal conduct
for which he was indicted” in the United States. See
also Collazos, 368 F.3d at 201 (holding that “nothing
in the record indicate[d] that Ms. Collazos was ever
confined, incarcerated, or otherwise unable to travel
to the United States of her own volition in the
months
before
the
district
court
ordered
disentitlement”). Although Echternach is not subject
to extradition, the investigations occurring in
Germany are evidently related to requests made by
the United States government. Echternach is not
incarcerated in Germany or subject to any courtordered travel restrictions, nor is there any evidence
other than Walter’s opinion that he may not leave
the country.
Echternach has emphasized that by remaining in
Germany, he is choosing to live in his home country.
That the claimant returned to his country of
citizenship from the Philippines does not preclude a
finding of disentitlement. See United States v.
$671,160 in U.S. Currency, 730 F.3d 1051, 1056 (9th
Cir. 2013) (affirming disentitlement of a claimant
who returned to his home country). Echternach’s
reliance on his lawyer’s advice evinces his intent to
avoid prosecution in this country. Walter has all but
admitted that his advice is predicated on his desire,
as a criminal defense attorney, to keep his client
from traveling to a country where he will be
arrested.
Echternach and Walter have thus
conceded that at least one of Echternach’s reasons
for refusing to enter the United States is a desire to

 141a
avoid criminal prosecution here in favor of
participating in the investigations occurring in
Germany.
Echternach’s statements in 2013
regarding his hope that he would be able to travel
again in a few months further support the conclusion
that he has remained in Germany in order to avoid
extradition to the United States.
Under these
circumstances, the court finds that Echternach is
declining to enter the United States in order avoid
criminal prosecution.
Julius Bencko
Julius Bencko is a citizen and resident of
Slovakia.19
He has never been a citizen or
permanent resident of the United States. In his
declaration, Bencko stated that after learning of his
indictment while traveling in Portugal, he “returned
to the Slovak Republic, where [he has] remained.”
See Decl. of Julius Bencko, ¶ 4. In January of 2012,
Bencko was traveling through Spain and/or Portugal
with a Portuguese national identified in the record
as J.G. J.G. told Portuguese authorities that he
drove Bencko across Europe and dropped him off at a
train station in Bratislava, Slovakia.
See
Declaration of FBI Special Agent Rodney J. Hays,
¶ 20. J.G. stated that Bencko’s intent was to take
the train from Bratislava to the Slovakian town
where he was born. Id.
There is no evidence that Bencko was subject to
custody or confinement in Slovakia or otherwise
19
Slovakia generally does not extradite its citizens to the
United States.

 142a
unable to leave that country. In a March 2, 2012
conversation, Bencko told a third party that he was
“stuck here in this post commie state…the sooner the
USA will do some steps the soner [sic] they will let
me go.” Id. at ¶ 23. The most likely meaning to be
inferred from his statement that he was “stuck” in
Slovakia is that he was unable to travel without
risking extradition to the United States.
On or about March 28, 2012, he told a third party
that he would be able to come to Bratislava if
needed, but that he would rather not travel. Id. at
¶ 25. In the same conversation, he indicated that he
was facing a 55-year sentence in America. On or
about April 5, 2012, Bencko told a third party that he
could get his brother and another individual to pick
the third party up from Vienna, but he “cannot
(better not) cross the border” himself. Id. at ¶ 26.
The third party responded that he or she did not
want Bencko to “cross border and risk [sic],” and
Bencko replied that he would not. Id. Viewing the
totality of the circumstances, it appears that Bencko
is deliberately refusing to travel outside of Slovakia
in order to avoid the risk of extradition to the United
States. He is thus declining to enter the United
States in order to avoid criminal prosecution, while
simultaneously attempting to assert a civil claim in
the forfeiture action.
V. DISCRETIONARY ANALYSIS
Although the statutory prerequisites of 28 U.S.C.
§ 2466 have been met for each of the claimants, the
court should also consider whether there are reasons

 143a
not to exercise its discretion to disentitle a fugitive.20
Section 2466 does not enumerate any factors for
courts to consider in analyzing whether to exercise
their discretion. Courts that have engaged in a
discretionary analysis have generally found that
disentitlement should be applied. See, e.g., United
States v. $6,100,000 on Deposit, No. 07-cv-4430, 2009
WL 1809992, *5 (S.D.N.Y. June 24, 2009) (finding
that appellate proceedings of claimant’s co-defendant
and the fact that the claimant’s ex-wife had also filed
a claim to the restrained assets did not weigh
against application of fugitive disentitlement);
United States v. $1,474,770 in U.S. Currency, 538 F.
Supp. 2d 1298, 1302 (S.D. Cal. 2008); United States
v. All Funds on Deposit at…Account No. 600-00338,
617 F. Supp. 2d 103, 125-128 (E.D.N.Y. 2007); United
States v. One 1988 Chevrolet Cheyenne Half-Ton
Pickup Truck, 357 F. Supp. 2d 1321, 1328-1333
(S.D. Ala. 2005).
The instant case presents facts of first
impression.
The
government
seeks
the
disentitlement of five corporate claimants and six
individuals. Further, all of the assets identified in
the forfeiture complaint are located in New Zealand
and Hong Kong.21 The government has argued that
it will suffer significant prejudice if the claimants are
Section 2466 provides that a “judicial officer may
disallow a person from using the resources of the courts of the
United States.” 28 U.S.C. § 2466 (emphasis added).
20

21
The government indicated during oral argument that
there are assets located in other countries as well, but those
assets are not the subject of this litigation.

 144a
not disentitled, due to dissipation of the assets
occurring in these countries.
In New Zealand,
Dotcom and van der Kolk have been able to
successfully apply for release of funds from the
restrained assets for living expenses and attorneys
fees. The government represents that millions of
dollars have been dissipated in Hong Kong and New
Zealand pursuant to court orders in both countries.
The court understands the government’s concern,
however, the assets at issue are located within the
jurisdiction and control of courts in New Zealand and
Hong Kong, and release of the assets has occurred
pursuant to the legal processes of those nations.
Treaties
The claimants argue that application of § 2466
would violate the Supremacy Clause of the United
States Constitution, due to the existence of treaties
that were enacted after § 2466.22 The two treaties
The claimants also raise a number of other
constitutional arguments, asserting that disentitlement would
violate their Seventh Amendment right to jury trial, the Eighth
Amendment ban on excessive fines, and the Due Process
Clause.
The court rejects all of these arguments.
The
claimants are welcome to exercise the right to a trial in the civil
forfeiture action, but they must submit to United States
jurisdiction in order to do so. The court similarly rejects the
argument that disentitlement and a subsequent order of
forfeiture would violate the Eighth Amendment. See United
States v. All Funds on Deposit at...Account No. 600-00338, 617
F. Supp. 2d at 130 (E.D.N.Y. 2007) (holding that fugitive
claimant “waived his rights to press his Excessive Fines claim”
“by failing to appear to face the criminal charges against him”).
Finally, due process is not violated by imposition of the fugitive
disentitlement doctrine. See Collazos, 368 F.3d at 205 (“In sum,
22

 145a
they point to are the United Nations Convention
Against
Transnational
Organized
Crime
(“UNCTOC”), a multi-nation treaty to which the
United States and New Zealand are parties; and the
Mutual Legal Assistance Treaty (“MLAT”) between
the United States and Germany.
UNCTOC Article 16, ¶ 13 provides that:
Any
person
regarding
whom
[extradition] proceedings are being
carried out in connection with any of the
offences to which this article applies
shall be guaranteed fair treatment at all
stages of the proceedings, including
enjoyment of all the rights and
guarantees provided by the domestic
law of the State Party in the territory of
which that person is present.
United Nations Convention Against Transnational
Organized Crime, art. 16, ¶ 13, Dec. 12, 2000, 2255
U.N.T.S. 209.
According to the claimants, this provision means
that the claimants currently residing in New
Zealand (Dotcom, Batato, Ortmann, and van der
Kolk) are entitled to take advantage of New Zealand
because statutory disentitlement is itself preceded by notice
and hearing [sic], and because such disentitlement does not
impose a punishment but rather creates an adverse
presumption that a claimant can defeat by entering an
appearance in a related criminal case, we hold that 28 U.S.C. §
2466 does not violate due process by depriving a forfeiture
claimant of property without a hearing”).

 146a
laws that guarantee a domestic right to challenge
property seizures. As support for this domestic
property right, the claimants point to a law review
article discussing litigation in the New Zealand
courts regarding the legality of the search of
Dotcom’s home and the disclosure of evidence in the
extradition proceedings.
The claimants may be entitled to litigate in New
Zealand while they remain in that country, but
nothing in this provision states that disentitlement
cannot be ordered separately against a claimant who
evades the jurisdiction of the United States. That
the exercise of their rights in New Zealand may
cause disadvantages for the claimants with respect
to litigation occurring in America does not mean that
they are being treated unfairly or that they are
denied their enjoyment of rights in New Zealand.
The court cannot conclude on the record before it
that application of § 2466 would be unconstitutional.
The court does not find a conflict between the statute
and the treaty, and the Supremacy Clause is
therefore not offended. See Whitney v. Robertson,
124 U.S. 190, 194 (1888) (stating that when a treaty
and a statute “relate to the same subject, the courts
will always endeavor to construe them so as to give
effect to both, if that can be done without violating
the language of either”).
Echternach argues that the Mutual Legal
Assistance Treaty (“MLAT”) between the United
States and Germany trumps the disentitlement
statute and therefore he cannot constitutionally be
disentitled. Specifically, he references Article 4, ¶ 4
of the MLAT, which provides that:

 147a
A person who is not a national or
resident of the [country requesting
extradition] and who does not answer a
summons to appear in the [country
requesting extradition] served pursuant
to a request shall not by reason thereof
be liable to any penalty or be subjected
to any coercive measures.
Mutual Legal Assistance Treaty, art. 4, ¶ 4, U.S.Ger., Oct. 13, 2003, T.I.A.S. 09-1018.
The court entertains serious doubts that this treaty
bars application of the fugitive disentitlement
statute against all individuals who are not nationals
or residents of the United States and who maintain
fugitive status in Germany. Moreover, fugitive
disentitlement is not necessarily a penalty or
coercive measure. In analyzing whether § 2466
violates due process, the Collazos court found that
disentitlement pursuant to § 2466 is not a punitive
deprivation of the right to be heard. Instead, the
statute:
establishes a presumption that a person
who refuses to produce himself in
connection with criminal charges
relating to the civil forfeiture has no
meritorious defense against the latter
action. Because a person can defeat
that presumption by appearing in the
criminal case, a deliberate choice not to
do so constitutes a knowing waiver of
the hearing otherwise available by law.
Collazos v. United States, 368 F.3d at 205-206.

 148a
Following the reasoning of Collazos, the court finds
that disentitlement is not a penalty or coercive
measure such that it would conflict with the MLAT
in the event the treaty is applicable to the present
action.
Judicial Oversight of the Assets
The claimants urge the court to consider in its
discretionary analysis the fact that New Zealand
courts continue to litigate important issues related to
forfeiture of the assets. The court certainly considers
as relevant the significant oversight by the New
Zealand courts over the assets located in that
country. Although the restraining order related to
the criminal charges will expire in April, the parties
indicated during oral argument that there are
multiple civil actions being litigated in New Zealand
against the claimants by various members of the
motion picture industry.
It is the court’s
understanding that the New Zealand assets
restrained in connection with the criminal action will
remain under restraints pursuant to orders issued in
those civil actions. It appears therefore that the
assets held in New Zealand are subject to significant
oversight by the New Zealand courts due to the civil
litigation occurring there.
This court accords great respect to courts in New
Zealand and Hong Kong and does not wish to
interfere with litigation occurring in either country.
Importantly, the court does not believe that an order
of disentitlement will unduly interfere with the
litigation in New Zealand. After the claimants are
disentitled, the government may seek a default
judgment in this action. If this court grants a

 149a
default judgment and orders forfeiture, that would
not be the end of the matter. Because the assets are
located in New Zealand, the government would have
to present that order to the New Zealand courts,
which may or may not choose to register an order of
forfeiture issued by this court. The New Zealand
Criminal Proceeds (Recovery) Act of 2009 (“CPRA”)
provides the procedure for registration of foreign
forfeiture orders in New Zealand. Section 148 of that
Act provides that:
A person who claims an interest in
property sought to be forfeited under a
foreign forfeiture order registered in
New Zealand may, before the date that
is 6 months from the date on which the
foreign forfeiture order is registered,
apply to the High Court for an order if
the person is a person to whom section
143(2)(a), (b), or (c) applies.
CPRA 2009 (NZ).
Section 143(2) provides that Section 148 is applicable
if a person:
(a)in a case where the foreign forfeiture
order was made without a hearing in a
court in the foreign country where it
was made, was given no opportunity to
make representations to the person or
body that made the foreign forfeiture
order;
(b)in a case where the foreign forfeiture
order was made at a hearing of a court
in the foreign country where it was

 150a
made, was not served with any notice
of, and did not appear at, the hearing
held in the court;
(c)in any other case, obtains the leave of
the court to make the application.
CPRA 2009 (NZ).
If this court after disentitling the claimants were to
ultimately order a default judgment of forfeiture, the
New Zealand courts may continue to litigate the
issue of whether the assets will be forfeited. Thus,
this court believes that disentitlement of the
claimants in the United States will not unduly
interfere with litigation occurring in New Zealand.
There is some evidence that the Hong Kong
courts are also adjudicating issues concerning the
restraint of the assets, primarily bank accounts
located in Hong Kong. However, there is no evidence
before this court that civil actions have been filed in
Hong Kong against the claimants such that the Hong
Kong courts are exercising jurisdiction over the
assets to a comparable extent to the New Zealand
courts. On this record, the court cannot conclude
that disentitlement of the claimants would interfere
with litigation occurring in Hong Kong.
VI. CONCLUSION
For the foregoing reasons, the court hereby
ORDERS that the government’s motion to strike
(Dkt. No. 39) is GRANTED and all claimants are
disentitled from litigating the civil forfeiture
complaint
pursuant
to
28
U.S.C.
§ 2466.
Accordingly, the court hereby strikes and dismisses

 151a
the claims of Finn Batato; Julius Bencko; Kim
Dotcom; Sven Echternach; Bram van der Kolk;
Mathias Ortmann; and Megaupload Limited,
Megapay Limited, Megamedia Limited, Megastuff
Limited, and Vestor Limited.
(Dkt. Nos. 3-9).
Because the court has disentitled the claimants, the
court also strikes and denies their motion to dismiss
the forfeiture complaint or in the alternative stay the
forfeiture action. (Dkt. No. 19).23
Date: February 27, 2015
Alexandria, Virginia
/s/ Log
Liam O’Grady
United States District Judge

23 The motion to dismiss and/or stay the forfeiture action is
not dismissed with respect to Mona Dotcom, a claimant who is
also a party to that motion. The court has not yet ruled on the
government’s motion to strike Mona Dotcom’s claim. (Dkt. No.
60).

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APPENDIX I
FILED: November 9, 2016
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
______________________
No. 15-1360
(1:14-cv-00969-LO-MSN)
______________________
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
FINN BATATO; BRAM VAN DER KOLK; JULIUS
BENCKO; MATHIAS ORTMANN; SVEN
ECHTERNACH; KIM DOTCOM; MEGAUPLOAD
LIMITED; MEGAPAY LIMITED; VESTOR
LIMTED; MEGAMEDIA LIMTED; MEGASTUFF
LIMITED; MONA DOTCOM
Claimants - Appellants
and
ALL ASSETS LISTED IN ATTACHMENT A, AND
ALL INTEREST, BENEFITS, AND ASSETS
TRACEABLE THERETO, in Rem
Defendant
-----------------------------CATO INSTITUTE; INSTITUTE FOR JUSTICE;
NATIONAL ASSOCIATION OF CRIMINAL
DEFENSE LAWYERS
Amici Supporting Appellant

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______________________
ORDER
______________________
The court denies the petition for rehearing and
rehearing en banc. No judge requested a poll under
Fed. R. App. P. 35 on the petition for rehearing en
banc.
Entered at the direction of the panel: Chief Judge
Gregory, Judge Duncan, and Judge Floyd.
For the Court
/s/ Patricia S. Connor, Clerk

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APPENDIX J
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
U.S. CONST. art. III § 2
“The judicial power shall extend to all cases, in
law and equity, arising under this Constitution, the
laws of the United States, and treaties made, or
which shall be made, under their authority;--to all
cases affecting ambassadors, other public ministers
and consuls;--to all cases of admiralty and maritime
jurisdiction;--to controversies to which the United
States shall be a party;--to controversies between two
or more states;--between a state and citizens of
another state;--between citizens of different states;-between citizens of the same state claiming lands
under grants of different states, and between a state,
or the citizens thereof, and foreign states, citizens or
subjects.”
In all cases affecting ambassadors, other public
ministers and consuls, and those in which a state
shall be party, the Supreme Court shall have original
jurisdiction. In all the other cases before mentioned,
the Supreme Court shall have appellate jurisdiction,
both as to law and fact, with such exceptions, and
under such regulations as the Congress shall make.
The trial of all crimes, except in cases of
impeachment, shall be by jury; and such trial shall
be held in the state where the said crimes shall have
been committed; but when not committed within any
state, the trial shall be at such place or places as the
Congress may by law have directed.

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28 U.S.C § 1355 – Fine, penalty or forfeiture
(a) The district courts shall have original
jurisdiction, exclusive of the courts of the States, of
any action or proceeding for the recovery or
enforcement of any fine, penalty, or forfeiture,
pecuniary or otherwise, incurred under any Act of
Congress, except matters within the jurisdiction of
the Court of International Trade under section 1582
of this title.
(b)(1) A forfeiture action or proceeding may be
brought in—
(A) the district court for the district in which
any of the acts or omissions giving rise to the
forfeiture occurred, or
(B) any other district where venue for the
forfeiture action or proceeding is specifically
provided for in section 1395 of this title or any
other statute.
(2) Whenever property subject to forfeiture under
the laws of the United States is located in a foreign
country, or has been detained or seized pursuant to
legal process or competent authority of a foreign
government, an action or proceeding for forfeiture
may be brought as provided in paragraph (1), or in
the United States District [C]ourt for the District of
Columbia.
(c) In any case in which a final order disposing of
property in a civil forfeiture action or proceeding is
appealed, removal of the property by the prevailing
party shall not deprive the court of jurisdiction. Upon
motion of the appealing party, the district court or
the court of appeals shall issue any order necessary

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to preserve the right of the appealing party to the
full value of the property at issue, including a stay of
the judgment of the district court pending appeal or
requiring the prevailing party to post an appeal
bond.
(d) Any court with jurisdiction over a forfeiture
action pursuant to subsection (b) may issue and
cause to be served in any other district such process
as may be required to bring before the court the
property that is the subject of the forfeiture action.

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28 U.S.C § 2466 – Fugitive disentitlement
(a) A judicial officer may disallow a person from
using the resources of the courts of the United States
in furtherance of a claim in any related civil
forfeiture action or a claim in third party proceedings
in any related criminal forfeiture action upon a
finding that such person—
(1) after notice or knowledge of the fact that a
warrant or process has been issued for his
apprehension, in order to avoid criminal
prosecution—
(A) purposely leaves the jurisdiction of the
United States;
(B) declines to enter or reenter the United
States to submit to its jurisdiction; or
(C) otherwise evades the jurisdiction of the
court in which a criminal case is pending
against the person; and
(2) is not confined or held in custody in any
other jurisdiction for commission of criminal
conduct in that jurisdiction.
(b) Subsection
by a corporation
individual filing
corporation is a
applies.

(a) may be applied to a claim filed
if any majority shareholder, or
the claim on behalf of the
person to whom subsection (a)