New Zealand Steps In To Block US Gov't From Stealing All Of Kim Dotcom's Stuff

Back in March, we explained the ridiculous process by which the US government was able to steal millions of dollars from Kim Dotcom. If you want the details, go read that post, but the shorter version is that entirely separate from the various lawsuits involving Dotcom, the US government filed a separate lawsuit against all of Kim Dotcom's stuff (literally). Using the highly questionable process of civil asset forfeiture, the government is able to declare the stuff guilty of a crime, and thus making it ripe for the government to just take and keep. There are, of course, all sorts of questionable things about civil asset forfeiture, but it got even more bizarre in this case. That's because, after Dotcom's lawyers sought to intervene (which is how you block this kind of theft), the government had Dotcom declared a "fugitive" even though they know exactly where he is and he hasn't "run" from anything. Then, as a "fugitive," it was deemed that he did not actually intervene, and thus, the government was granted a "default judgment" (what you usually get when someone doesn't respond at all to a case).

Any judicial system that actually believed in due process would at least wait until the rest of the legal issues played out, including Dotcom's extradition and, if he is extradited, his trial over the criminal charges against him. If he loses all of that, then it seems reasonable to seek to forfeit his assets. But without a trial and conviction, it seems ridiculous to even go through the forfeiture process. And to basically force him to lose by declaring him a "fugitive" is just spitting in the face of due process.

At the end of that last post, however, we noted that the situation wasn't final. Since most of the assets were in New Zealand and Hong Kong, it was possible that he could get those countries to block the US from just taking those assets. And, that's exactly what's happened. A New Zealand court has ruled in Dotcom's favor [pdf], blocking the US from taking his stuff. The key issue: New Zealand takes a very different approach to these issues and (quite reasonably) finds the US process absurd. It starts out by pointing out that the whole "fugitive" designation is ridiculous, and that under New Zealand law, someone in the same situation would not be declared a fugitive:

While I accept that s 57 would permit the court to make a forfeiture order in the absence of a respondent, it does not expressly authorise the court to proceed on an ex parte basis or to decline to receive submissions made on behalf of an absent respondent who wished to be heard

The court also notes that just because Dotcom is fighting extradition in a New Zealand court it does not mean that he is "not amenable to justice" as is required for such a forfeiture of assets.

Further, the court recognizes the due process issue inherent in taking away all of the money from a defendant seeking to defend himself in court:

The application of the fugitive disentitlement doctrine to a person who is exercising a bi-laterally recognised right to defend an eligibility hearing, with the result that he is deprived of the financial means to mount that defence, is to put that person on the horns of a most uncomfortable and (the plaintiffs would say) unconstitutional dilemma.

And thus, after a lengthy discussion delving into many of the details about this, the judge concludes that she will not, in fact, allow the US government to take Dotcom's stuff, because doing so would be a huge burden on someone trying to defend themselves:

It is, I think, self evident from the above discussion that the plaintiffs have a substantial position to preserve and there will be very real consequences if it is not protected, pending final determination of the claim for review. If the provisional view I have formed about the unavailability of post-registration relief is correct, authorising the registration application to proceed now might deprive the plaintiffs of any ability to defend the extradition or to pursue their appeals against the forfeiture order in the United States.

I have little hesitation in concluding that interim relief should therefore be granted. Accordingly there will be a declaration that the Commissioner of Police is to take no further action that is consequent upon the decision by the Deputy Solicitor-General (Criminal) to authorise him to apply to register the foreign forfeiture orders made by Judge O’Grady in the District Court in Virginia on 27 March 2015 until further order of this Court.

This is far from over, as the New Zealand government is likely to appeal as well, but this whole process continues to be a fascinating power play by the US government -- with it repeatedly assuming that everyone will just follow what it wants. And, so far, the New Zealand courts have been ready to push back on the more extreme requests like this one.

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