I don't have a deep grasp of Civil Forfeiture but it seems like this is unusual considering DPR has not been convicted of anything yet. Is this part of a plea bargin or something similar?
WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk losing value during the pendency of the forfeiture proceedings;
WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government before the conclusion of the forfeiture
proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;
So basically, put the current value of the coins in escrow, instead of the coins themselves, in case they drop in value dramatically over time. Makes sense to me.
Tangent: Does anyone know if it's standard practice for these sorts of arrangements to be made if other goods become part of forfeiture proceedings? (For instance, shares of a volatile mutual fund. Or, to take it out of the financial realm entirely, a truckload of perishable vegetables.)
If the prosecution loses the case, it can be held liable in a civil case to losses the defendant made. So this is just an agreement between both sides to lower that risk and which does change nothing related to the case (so the judge will agree too). I guess, if there are no objections (even from a third party), this makes totally sense for anything else, too.
The Marshals Service manages various types of assets, including real estate, vehicles, commercial businesses, cash, financial instruments, jewelry, art, antiques, collectibles, vessels and aircraft.
The agency uses practices from private industry to ensure that assets are managed and sold in an efficient and cost-effective manner.
So, in other words, only your own biases and preconceived notions.
Edit: I'd be curious to hear the side of you down voters. Do you have a legitimate gripe with the accuracy of what i said, or do you just blindly believe that everything the government does is evil?
So, in other words, only _your_ _own_ biases and preconceived notions.
Edit: I'd be curious to hear the side of you down voters. Do you have a legitimate gripe with the accuracy of what i said, or do you just blindly believe that everything the government does is _for_the_greater_good_?
Your argument is just shallow and not very constructive and having it reversed should make that somewhat apparent.
Personally, the general consensus around these parts is that DPR was brought down with illegal methods by the FBI and then having the actual disclosure being horse shit (aka parallel construction). So yes, blindly trusting that the government is doing anything in good faith around this case is going to be pretty rare.
To recap: Kordless suggested that the sale was forced. EpicEng asked what indicated that it was forced. Sneak replied that "the 'US Marshalls' part" indicated that it was forced. EpicEng correctly noted that this does not strongly indicate that it was forced, and that to assume so based on the fact that the US Marshalls are involved is evidence of bias.
To further recap: EpicEng did not suggest that "everything the government does is for the greater good," nor did EpicEng even say that the sale was not forced — only that we don't have a compelling reason to believe it was.
Since EpicEng is merely asking for rational thought, I don't see how this can possibly be evidence of EpicEng's biases and preconceived notions.
As a side note, your phrasing here suggests that the only alternatives in your mind are "blindly trust the government" and "blindly accuse everyone involved with the government of any wrongdoing possible," which are both irrational positions. We can consider whether the government is doing something wrong without jumping to conclusions as the people EpicEng was replying to seemed to do.
It's nice to know that "the general consensus" is an arbiter of logic and reason now and anyone who does not conform to this opinion is on the other side of a false dichotomy who must be shown the error of their ways.
The IRS will go after him for capital gains tax after the sale. The document makes no mention of a provision for him to pay his taxes due from the proceeds of the sale.
Civil forfeiture is different from criminal forfeiture in that it does _not_ require a guilty verdict. Civil forfeiture is against the _property_, and it puts the burden of proof on the owner of the property to prove that it was obtained legally.
So what happens if he legally obtained these bitcoins, but cannot prove that he did so?
So he basically loses them before he even can prove that they are his or not?
That doesn't seem right, it would make sense that the coins are held in an escrow status until he was proven guilty.. It seems to be a big loophole for the government to just go and steal whatever they want from you, before you've been proven guilty.
> It seems to be a big loophole for the government to just go and steal whatever they want from you, before you've been proven guilty.
Happens all the time. You can be driving along, get pulled over, and the cop claims the money in your wallet is the result of illegal activities (usually drug dealing), and takes it. You can get it back by winning the civil lawsuit that will get filed: "Hazzard County Sheriff's Office vs. $150"
Is this constitutional? Lots of people don't think so, but the cops believe it is.
Most legal activity (though not necessarily all) will involve paperwork and receipts, not least for the purposes of documenting your taxable income.
Civil forfeiture is often (though not always) used to clear up the legal status of assets found abandoned during a criminal investigation, eg if the DEA interrupts a drug bust and the buyers flee, leaving a few hundred thousand in cash behind. You could turn up to such a hearing and assert a legal claim to such assets along with an explanation of why they should not be forfeit, but if the assets are the proceeds of criminal activity then it's not worth it unless you have a truly outstanding cover story because you'd risk arrest or having the testimony at the hearing turn up in your criminal case.
IIRC in this case the feds got the bitcoin wallet information by seizing the Silk Road server, so they have a wholly reasonable presumption that the bitcoins are the assets of the (obviously illegal) drug brokerage business and probably a transaction log to back up this presumption.
Let's be honest: There is zero chance that Ross William Ulbricht obtained those coins legally.
While that may be beside the point, a rousing speech about how asset forfeiture should be changed would resonate more strongly if the subject was someone other than a person who hired people to murder others.
Also, it seems like supreme court justices aren't going to turn against asset forfeiture any time soon, so there's really no way to stop the practice.
EDIT: It's interesting how far people are twisting my words. I made two assertions: One, that there is no way Ulbrict obtained those coins legally, so if you want to reform asset forfeiture, choosing Ulbrict as your mascot would be a tactical mistake. Two, that unless you can convince the supreme court justices to turn against asset forfeiture, the practice will not change.
If you're reading into my words more than those two assertions, you're reading too far.
unless you can convince the supreme court justices to turn against asset forfeiture, the practice will not change
Not true at all. In fact the solution is infuriatingly obvious. Require a warrant for all civil forfeitures. The proponents say it's for taking down assets of cartels (and probably alleged purveyors of black markets like in this case) so warrant is easy to get. This would prevent cops rolling average citizens on routine traffic stops so they can finance margarita machines with "pennies from heaven".
A reform like this should be an easy bi-partisan sell to congress. If they can't do it at the Federal level any pol that campaigned as a libertarian or champion of small government should be pushing for this in state legislatures.
Apparently we're not going to have a rational debate about this topic, which is unfortunate. For example, my comment had nothing to do with whether Ulbrict was convicted. It was strictly about asset forfeiture, which is a completely separate concept from having a trial. But of course a sarcastic one-liner is the most upvoted rebuttal.
Ulbrict is being given due process. He is also being given a fair trial. My observation is simply that there's no logical way he could have earned 50,000 BTC except by being an early miner or by running Silkroad, and apparently he wasn't an early miner.
Why is that important? Because if you're trying to change asset forfeiture, choosing which case to fight and who to defend is extraordinarily important. Let's say that the supreme court decides to reevaluate asset forfeiture, and let's say you've chosen Ulbrict as the case for them to reevaluate. Why give them more reasons to say "Our finding is that asset forfeiture is a legal and valid practice, and should not change"? By choosing Ulbrict, you aren't helping your cause.
A verdict like that will settle the debate of asset forfeiture for decades to come, so why risk such a crucial outcome so whimsically?
Because acting on observations such as yours is directly against the spirit of due process and lawful justice. Even if it's "obvious" he could not have obtained those bitcoins legally, that does not change the fact that the law enforcement should not touch it until the verdict.
I don't know how to make it any clearer, either you understand that having a lawful society requires following the law to the letter even if something is painfully obvious, or you don't.
What a terribly defeatist attitude. Of course it's easiest on the conscience to defend the morally upstanding members of society, but legal practice is (or should be) continuously reevaluated and updated to fit with current societal norms, without respect to savoriness of those whom would benefit in the current situation in question. Asset forfeiture has real and valid uses, and DPR's case may or may not be one of them. But to completely dismiss the discussion of the overreaches of the use of asset forfeiture throughout the US because DPR's case is "easy" seems like a cop out.
Your rationalization appears to boil down to "the status quo is the status quo, so we shouldn't bother trying to change it."
There is zero chance that Ross William Ulbricht obtained those coins legally.
Every single article that comes up about DPR or Silk Road, you post multiple comments prejudging literally every facet of the case. The quote above from you is a perfect example. Suppose for a minute that in addition to running the Silk Road, DPR also had a massive mining operation with multiple ASIC processors. Makes sense, right? His whole business was based on BTC - why in the world wouldn't he participate as a miner?
That is just one way that some or possibly all of the 50,000 coins at issue could have been obtained by DPR legally. Ya know, I hope you never get to find out what it's like to be accused of something because then you'll get to see what it feels like when people like you prejudge your guilt.
I think his point is more that Ulbricht's assets aren't being treated any differently than other suspected-criminals. Asset forfeiture may be bad, but it's not being applied uniquely to Ulbricht. So if you want to change how asset forfeiture works, you should probably pick a more noble champion for the cause.
Asset forfeiture against property is part of civil law and as such is still subject to the concept of a fair trial, even if in practice it often is not. The bar for conviction is lower but the process is still supposed to be considering what is fair. Just because it is civil law does not exempt it from that basic legal principle.
It's a lot less fair when your assets are seized (in general, not just the SR case). In fact, wasn't that part of the whole reason people accept seizure laws?
Technically, the burden is still on the state. However, the burden is much lower. The preponderance of evidence standard is used. That means if "more probable than not" that it was criminal proceeds the government wins.
Civil forfeiture is one of the scariest areas of our legal system. The government essentially files a civil lawsuit against your property, and it then it's on you to get it back (the case titles are actually things like "USA vs. $25,000 US Currency"). This ability has created perverse consequences, such as turning police into nothing more than a band of highway robbers [1]. It's also used in drug cases, like DPR's, because it's far easier to obtain a civil judgment than a criminal one. He could be found not guilty on all counts, and still lose all of the money that this sale generates (he agreed to the sale of the coins in hopes of beating the civil forfeiture that will come later, but he has little chance of that).
from the link, and their all caps treatment preserved:
ON JANUARY 27, 2014, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ENTERED A STIPULATION AND ORDER FOR INTERLOCUTORY SALE OF BITCOINS WHEREIN THE UNITED STATES AND ROSS WILLIAM ULBRICHT AGREED THAT THE UNITED STATES MAY SELL ANY PORTION OR ALL OF THE COMPUTER HARDWARE BITCOINS ON A DATE OR DATES IN A MANNER TO BE DETERMINED BY THE GOVERNMENT.
So, it sounds like he clearly agreed to something, as he is mentioned by name here.
It's amusing to see the url uses "dpr-bitcoins", DPR being the common community abbreviation for Dread Pirate Roberts. I mean, that's what they are, just funny to see the govt refer to him that way.
The "Computer Hardware Bitcoins" term is notable and I wonder to which statute it refers. What actions were taken or crime alleged where it would be important to characterize Bitcoins in this way?
I speculate that Ulbrict needs funds to pay attorneys fees. It may be he stipulated to a portion (or all) of the BTC as his in-exchange for unfreezing the asset and permitting its sale.
> The "Computer Hardware Bitcoins" term is notable and I wonder to which statute it refers.
It doesn't refer to a statute. It is a short form to refer to what is described in long form in the first paragraph of the notice as "THE BITCOINS CONTAINED IN WALLET FILES THAT RESIDED ON CERTAIN COMPUTER HARDWARE BELONGING TO ROSS WILLIAM ULBRICHT". (The same long description, and the explicit linkage of the same short form to that long description, is in the linked Stipulation and Order from the court allowing the sale.)
The stipulation also refers to the reason -- Ulbricht and the Government agreed to the sale to convert the bitcoins into dollars to protect both parties from risk due to volatility; the bitcoins are not being forfeited at this time, the forfeiture action will continue with the proceeds of the sale as the subject property rather than the bitcoins themselves.
It is clearly in Ross's interests to permit the sale. He's not DPR, remember? So these aren't his bitcoins and he therefore doesn't care what happens to them.
Actually, these bitcoins are ones that Ulbricht claims are his, not the (much larger) set of bitcoins that weren't on his personal hardware which were linked to DPR which he did not claim (and which were the subject of an earlier sale.)
Civil asset forfeiture cases in the US, insanely, have a reversed burden of proof and are in re actions against the assets to be seized. When assets are seized by law enforcement, you have to petition for them to be returned and prove that you came by them lawfully. You don't ever need to be convicted of or even charged with a crime in order to have your assets seized.
I don't know anything about how long law enforcement has to wait before selling your assets.
Should be in rem (against a thing) instead of in re (in a matter) in this case. The Latin preposition in can take the accusative case, in which case it means 'into, onto, against' or the ablative case, in which case it means 'in, inside of'.
Civil forfeiture does not require a criminal conviction of the owner of the property. Most importantly, in civil forfeiture it's not the owner who is on trial, it's the property. And unlike criminal law which works on the premise of presumption of innocence and requirements of proof of guilt "beyond reasonable doubt", asset forfeiture works based on civil law and the standard of "preponderance of evidence" (or a >50% probability of guilt).
you don't need to be guilty of anything for being victim of civil forfeiture.. they create a lawsuit against your property and property is considered guilty until proven innocent, unlike people.
Its worth noting that while they have been seized, they have not yet been forfeited -- that action is ongoing. The sale was agreed to secure the value and protect the government and Ulbricht both from price volatility; the forfeiture action will continue against the sale proceeds.
My understanding is this. The government found a bunch of bitcoins on a computer that may or may not have belonged to Ross Ulbricht, so they asked him "Are all these bitcoins yours?". Ross can't say that they are without admitting his guilt, so the government auctions them off.
WHEREAS, on or about December 12, 2013, Ulbricht filed a timely verified claim in this proceeding, asserting an ownership interest in the Computer Hardware Bitcoins
To add to that, Ulbricht voluntarily agreed to this sale:
WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk losing value during the pendency of the forfeiture proceedings;
WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government before the conclusion of the forfeiture proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;
