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My best friend. Always someone I could talk to. Our moral compass. Larger than life. Those are the words the Tennessee judiciary has used to describe their friend and colleague Judge John Everett Williams, who passed away unexpectedly on September 2 at the age of 68.

Judge Williams was the presiding judge of the Court of Criminal Appeals and his impact, much like his personality, was immeasurable. He took fashion and grooming guidance from one of his heroes, writer Mark Twain. His bow ties, seer sucker suits, and audacious color choices were a sight to behold. But it was not a show. His fashion choices paled in comparison to the heart and soul of the gentleman from Carroll County.

He was larger than life in every way, said Judge Tim Easter of the Court of Criminal Appeals. My wife was with me when I received the call and one of the first things she said was there are probably a hundred people that are going to say today I lost my best friend. I have spoken with people inside and outside the judiciary over the last few days, many have said that he was their best friend. That is just how he made you feel. He was so invested in people, the whole person. Something that drove him was to make sure everyone he knew was a whole, well-balanced person.

Even before he was the presiding judge of the 12-member court, Judge Williams was famous for calling court members just to check in. Not to follow-up on an opinion in process or to discuss a docket, but just to see how they were doing, chat about family, and provide the occasional pep talk.

I have known him as an attorney almost 40 years and we were colleagues on CCA for 22 years until my retirement, retired Judge Tommy Woodall said. We developed a deep, close friendship. He was as close a friend as I have. We talked almost daily about cases, life, a lot of things. I valued his ability to give me advice on all kinds of things personal and professional. He was always someone I could rely on. I feel like my safe haven is gone. I could go to him about anything. I could call him about anything. He is going to be missed by a lot of people.

When Judge Camille McMullen joined the Court of Criminal Appeals in 2008, she was new to the judiciary and the first African-American female to serve on a Tennessee appellate court.

He made sure I was welcomed, including just basic things, even though he was not the presiding judge. He actually showed up in my office in Memphis to make sure things were running smoothly. That is just the type of person he was, Judge McMullen said. His care and concern for me lasted throughout our friendship.

Over the years, the pair developed a close bond.

He was raised at a different time than I was. But, he made it a point to make sure that he connected with my generation, with me as a person who was different from him. To understand and meet me where I was, Judge McMullen said. I have never met anyone like that. He just became very special.

Judge Williams always went out of his way to welcome new members to the court.

He let me know immediately when I joined the CCA that my voice on this court was just as valuable and just as strong as the gray hairs on the court, Judge Easter said. I have tried to pass that message along when a new member comes on this court. The new judges voice is equally as valuable as judges who have been on the court for years. Judge Williams taught me that and I will pass that message along.

As a jurist, Judge Williams authored over 2,000 opinions in his nearly 25 years on the court. CCA judges sit as a panel of three, which means he likely was on the bench for over 6,000 cases. He was especially known as a strong supporter of the Fourth Amendment to the United States constitution.

The Fourth Amendment was his passion, Judge Easter said. He was dedicated to protecting the right of the people to be secure in their persons, and house, against unreasonable searches and seizures.

In a 2015 case when officers entered a private home without a search warrant after knocking and talking despite No Trespassing signs, Judge Williams wrote in his dissent If governments can use a single sign so effectively against citizens, why then can not citizens use a sign equally against governments? Whether the words are used by the government or a citizen, No Trespassing means no trespassing.

Judge McMullen pointed to the writing as a classic.

He was always concerned about how a case would impact people, Judge McMullen said. He had an incredible moral compass. He was the moral compass of our court and was a great person to bounce to discuss ideas. He never tried to push or impose, but he was a great ear when the court faced tough issues.

Also in 2015, he was highlighted in a Washington Post article on footnotes he included in recent cases that stated he believed the court should always use titles when referring to adult witnesses as a show of respect.

On the court, he was known for being respectful, methodical, and educational when expressing an opposing view on an opinion. In 2018, his colleagues elected him presiding judge, the first rural West Tennessee judge to hold the position in more than 25 years.

He was a larger than life individual and it is hard to fathom that he is no longer with us, said Judge Curwood Witt, who is the only current member of CCA to have served longer than Judge Williams. His service as presiding judge has been exemplary. He was well-suited for it. He took the role just before the pandemic hit, which brought about so many unusual and challenging issues. John Everett was up for it and he guided us through it very well. He is already terribly missed.

Over the years, Judge Williams served with almost 20 judges on the Court of Criminal Appeals, including three colleagues who would later serve on the Tennessee Supreme Court Chief Justice Roger Page, Justice Jeff Bivins and former Justice Gary Wade.

We went to rival high schools and the first time I heard his name was when he was running up and down a high school football field, Chief Justice Page said. We were young West Tennessee lawyers together and we joined the judiciary in the same year 1998, when I was elected to the trial bench and he was appointed to the Court of Criminal Appeals. This is a devastating loss for our Judicial Family. He served his community, his state, and the judiciary with endless compassion. Job well done, my friend.

In 1999, The Tennessee Supreme Court established the Tennessee Lawyer Assistance Program, a confidential assistance program for lawyers, judges and law students. Judge Williams was a natural fit for the strenuous task of listening, counseling, intervening, and referring. Touched by the tragic death of two individuals and the emotional and substance misuse of others close to him, he was willing to travel the state and share his regret in not being more proactive in identifying issues and offering assistance. He later served as chairperson for the organization, touching the lives of hundreds of Tennessee judges and attorneys when they were most in need.

In more recent years, Judge Williams relished in the role of doting grandfather. From boating trips to softball tournaments, he was quick to provide his friends with the latest updates and pictures. And, of course, there was magic. He was a longtime member of the International Brotherhood of Magicians, often performing for Carroll County students, colleagues, his granddaughters, and at the occasional judicial conference. He was an excellent storyteller and a self-proclaimed thespian, actively involved in the Dixie Carter Performing Arts and Academic Enrichment Center.

He was a Carroll County native and operated a law firm in the county for 17 years before joining the judiciary at the encouragement of his friend Judge Woodall, who made the transition about two years prior. In his hometown, he was Citizen of the Year; president of the bar association; and president of the Lions Club. If an organization the American Heart Association, the American Cancer Society, the American Red Cross, Habitat for Humanity needed a hand, Judge Williams was willing. He likely made a new friend in the process.

He would remind me that every day is not promised with the special people in your life so make sure you spend time where you need to, Judge McMullen said. He is already missed and he wont be replaced ever. When I last talked to him, he just called to make sure I was OK after a decision came out. He just wanted to make sure I was OK and that was his process. His last words to me were Camille, you are thinking with your head and you need to go ahead and act with your heart.

Information on arrangements can be found here.

To leave a remembrance, please click here.

Originally posted here:
Judiciary Remembers Judge John Everett Williams - Tennessee Administrative Office of the Courts

The Justice Department has now filed a notice of appeal and a motion to partially stay U.S. District Judge Aileen Cannons Monday opinion granting former President Trumps request for a special master to review material seized at Mar-a-Lago and enjoining the use of the material the FBI took in the meantime for investigative purposes.

Judge Cannon has been taking a bit of a beating all week for her decision. The criticism, some of it vituperative, has contained a lot of falsehoods and a considerable dollop of conspiracy theorizing, and it has often ascribed partisan motive for the ruling.

All of which might under normal circumstances tempt our contrarian hearts to try to defend the opinion.

But Cannons opinion actually defies defense. It is an epic mess, one that manages to do violence to a remarkable number of distinct areas of law in an admirable economy of only 24 pages.

The opinion is likely to be short livedand, as such, might normally not be worth significant comment. As the constitutional scholar Charles Black once wrote, while the insignificant error, however palpable, can stand, because the convenience of settlement outweighs the discomfort of error[,] the hugely consequential error cannot stand and does not stand. Whether this opinion will be gone in a week or will take a little longer, it will very likely not stand.

That said, the decision is worth critiquing in depth not just because of its importance to one of the central news stories of the day but also because of the number of its errors, their magnitude, and their capacity for disruption of perhaps the highest-profile national security investigation in American history.

What follows is a brief summary of the four major errors in Cannons opinion.

Error #1: The court has no jurisdiction over this matter.

Judge Cannon describes her jurisdiction in the case as rooted both in the courts equitable jurisdiction and in Rule 41(g) of the Federal Rules of Criminal Procedure. The courts jurisdictional assertion is a bit odd given Trumps statement that he has not yet filed a Rule 41(g) motion, and the standard for relief under that rule is not relevant to the issue of whether the Court should appoint a Special Master.

Cannon acknowledges that the court should exercise such jurisdiction only in exceptional circumstances. And she purports to be following guidance from the U.S. Court of Appeals for the Fifth Circuit from a case called Richey v. Smith. Here is how the court in Richey described the factors that should determine whether a district court should entertain such a motion:

First, and perhaps foremost, is the question whether the motion for return of property accurately alleges that government agents ... in seizing the property displayed a callous disregard for the constitutional rights of the taxpayer. ... Other factors to be considered are: whether the plaintiff has an individual interest in and need for the material whose return he seeks; whether the plaintiff would be irreparably injured by denial of the return of the property; and whether the plaintiff has an adequate remedy at law for theredress of his grievance.

Cannon acknowledges that the first factor does not favor her assertion of jurisdiction concerning a motion Trump denies having filed: With respect to the first factor, the Court agrees with the Government that, at least based on the record to date, there has not been a compelling showing of callous disregard for Plaintiffs constitutional rights. This factor cuts against the exercise of equitable jurisdiction.

It actually does a bit more than that. The Fifth Circuit called this the perhaps foremost factor for a reason. Rule 41(g) states that a person aggrieved by an unlawful search and seizure of property or by the deprivation of property may move for the property's return (emphasis added). It also states that the court must receive evidence on any factual issue necessary to decide the motion. The rule is not a general authority for a district court to supervise an ongoing criminal investigation pre-indictment. It presupposes that there has been or could be some compelling showing of a Fourth Amendment violationthe remedy for which is the return of property seized.

Leave aside for a moment that most of the property seized at Mar-a-Lago does not even belong to Trump. Cannon nowhere in her opinion even alleges, let alone finds, anything that would remotely satisfy the terms of Rule 41(g).

The second Richey factor is doing a lot of work in Cannons analysis. She writes that the government has conceded that the seized materials include medical documents, correspondence related to taxes, and accounting information. ... The Government also has acknowledged that it seized some [p]ersonal effects without evidentiary value and, by its own estimation, upwards of 500 pages of material potentially subject to attorney-client privilege. She thus concludes that [p]laintiff has an interest in and need for at least a portion of it.

Well, no. Not exactly. These numbers certainly show that Trump has a property interest in some portion of the seized materialthough the ratio is fairly low, the government having seized a number of documents in the neighborhood of 13,000 pages. But it doesnt remotely establish need. The government conducts court-authorized searches all the time, in which it seizes peoples property. The mere fact that Trump has a cognizable interest in some of the seized material is not, absent some suggestion of impropriety in the conduct of the search, a basis for court intervention.

Cannons reasoning with respect to the third Richey factor is similarly flawed. She finds that the third factor, irreparable injury, likewise supports the exercise of jurisdiction because Trump is being deprived of potentially significant personal documents. This is because, she reasons, he faces an unquantifiable potential harm by way of improper disclosure of sensitive information to the public, as a result of the Governments retention and potential use of privileged materials in the course of a process that that, thus far, has been closed off to Plaintiff and that has raised at least some concerns as to its efficacy, and from the threat of future prosecution and the serious, often indelible stigma associated therewith. Cannon adds: As a function of Plaintiffs former position as President of the United States, the stigma associated with the subject seizure is in a league of its own.

Note that with the exception of the last sentence, all of these factors apply to a great many subjects of search warrants in perfectly ordinary cases in which the government seizes documents. Equitable jurisdiction is supposed to be exercised in extraordinary circumstances, but it is true in the perfectly ordinary case that the suspect is deprived of potentially significant personal documents, faces some risk of disparaging leaks, is kept blind to the process of privilege review, and faces the stigma of possible future prosecution (though, notably, both the Eighth and the Tenth Circuits have found that a threat of imminent indictment is not sufficient to establish irreparable injury).

Cannon here is describing the run-of-the-mill federal criminal investigations impact on the individual, not anything extraordinary. Which is why that last sentence is doing all the work. The only thing different about this case is that Trump is a former president. The judge might as well say that Trumps status alone is her basis for jurisdiction.

As to the fourth Richey factor, writes Cannon, [p]laintiff has persuasively argued that there is no alternative adequate remedy at law. Trump has actually done no such thingnor is he differently situated in this regard than anyone else whose house, office, car, or golf resort has been the subject of a federal search warrant. In such matters, the normal course of business, absent some reason to believe the search illegal, is to wait until the investigation is done. At that point, either the material gets returned and that is the remedy, or the subject gets indicted and the remedy is a motion to exclude the evidence. Cannon complains that [w]ithout Rule 41(g) Plaintiff would have no legal means of seeking the return of his property for the time being (emphasis added). But why is it so urgent for Trump to get the documents back right now that, alone among criminal suspects, it warrants interrupting an ongoing criminal investigation to speed up his access to material he mostly doesnt own at all but stole from the federal government? The judge does not answer this question.

Cannons Rule 41(g) analysis is particularly objectionable because Trump didnt file a motion under Rule 41(g) at allin fact, he repeatedly argued that a special master was warranted because the special masters oversight would allow him to assess whether to file a Rule 41(g) motion. Trumps complaint, rather, is styled as a motion for judicial oversight and additional relief.

To put the matter simply, Cannons analysis here has turned a rule designed to offer a pre-indictment remedy for Fourth Amendment violations into a vehicle for people who have not yet even been indicted to file collateral challenges that have the capacity to prohibit the government from conducting the very investigation that would otherwise properly result in their indictment.

This brings us to

Error #2: A district court has no authority to block a criminal investigation.

In the wake of the ruling, Fourth Amendment scholar and Lawfare contributing editor Orin Kerr posed the following question: [D]oes a federal court have authority to enjoin executive branchuse of seized materials for investigative purposes?

Judge Cannon did not just order that a special master review the seized material. She went a lot further and determined that a temporary injunction on the Governments use of the seized material for investigative purposesbut not ODNIs national security assessmentis appropriate and equitable to uphold the value of the special master review. This injunction is one of the most striking things about the opinionparticularly as it was not specifically sought by the Trump legal team. (Trumps complaint did seek a protective order under Rule 26(b)(5) and Rule 26(c)(1), but Cannon did not rule on that.)

Cannon begins by disclaiming the need to even conduct an analysis of whether this measure is appropriate, observing that a temporary restraint on use naturally furthers and complements the appointment of a special master and citing two instances in which courts did not discuss Federal Rule of Civil Procedure 65, the rule governing injunctions, when issuing them in similar contexts.

Nonetheless, for the sake of completeness and prudence, she chooses to lay out her Rule 65 analysis anyway. She badly bungles this analysis too. The standard here is well-known. To get an injunction, Trump needs to show (1) a substantial likelihood of success on the merits, (2) that he will suffer an irreparable injury in the absence of relief, (3) that this injury outweighs the damage that granting relief will cause the government, and (4) that the public interest is not adverse to an injunction.

The judge spends exactly one sentence on Trumps likelihood of success on the merits. It reads as follows: As discussed above ... the Court is satisfied that Plaintiff has a likelihood of success on the merits of [his] challenge to the [Privilege Review Team] and its [p]rotocol. The phrase as discussed above refers back to the following passage earlier in the opinion:

[T]he Governments argument assumes that the Privilege Review Teams initial screening for potentially privileged material was sufficient, yet there is evidence from which to call that premise into question here. ... As reflected in the Privilege Review Teams Report, the Investigative Team already has been exposed to potentially privileged material. Without delving into specifics, the Privilege Review Teams Report references at least two instances in which members of the Investigative Team were exposed to material that was then delivered to the Privilege Review Team and, following another review, designated as potentially privileged material. Those instances alone, even if entirely inadvertent, yield questions about the adequacy of the filter review process.

But Rule 41(g), the supposed jurisdictional basis for Cannons opinion, does not authorize a challenge to the [Privilege Review Team] and its [p]rotocol. It authorizes a challenge by a person aggrieved by an unlawful search and seizure of property or by the deprivation of property in order to effectuate the propertys return. And Cannon nowhere even suggests that Trump has a substantial likelihood of success on the merits in establishing that the government has acted improperly in conducting the search or in seizing the material.

Indeed, Trumps briefs do not even purport to establish a likelihood of success on the merits of the point on which Cannon credits them with doing so. Rather, Trump claims that the governments review should be overseen by a special master to preserve the sanctity of executive communications and other privileged materials. They argue that the search warrant might be overbroad or improperly executed (while offering no evidence that either is true), the filter team protocol was procedurally deficient, and the governments team might include FBI agents involved in the Russia defamation matter or other biased personnel from a government that has long treated [Trump] unfairly. They invoke the need for the appearance of fairness given that this matter has captured the attention of the American public. More bizarrely, Trump argues that a special master is necessary to provid[e] defense counsel with information needed to support any Rule 41(g) filing. In other words, the judge has found that Trump has established a likelihood of succeeding on the merits of a claim he believes he cannot make until a special master is appointed to help him decide whether such a claim is worth bringing.

Cannon uses the same reasonchiefly, the risk that the Governments filter review process will not adequately safeguard Plaintiffs privileged and personal materials in terms of exposure to either the Investigative Team or the media to find that Plaintiff has sufficiently established irreparable injurythe second factor in the test for granting an injunction. But this is not an irreparable injury. For one thing, if evidence is ever found to be privileged, it can be suppressed at trialif there ever is a trial. It can be returned. For another thing, a judge does not get to simply announce that there will be leaks and that those leaks will constitute an irreparable injury. There is no record evidence of any material leaking at all. And maybe any leaks, if they do occur, will prove minor and altogether reparable in whatever injury they cause to Trump.

As to the third and fourth prong, which the judge merges in her analysis, Cannon admits that shes treating Trump differently from any other criminal subject: As Plaintiff articulated at the hearing, the investigation and treatment of a former president is of unique interest to the general public, and the country is served best by an orderly process that promotes the interest and perception of fairness. But that reasoning is backward; the standard isnt that a judge should do whatever she thinks is in the public interest, other considerations be damned. The standard is that where a movant has a likelihood of success on the merits and will suffer an irreparable injury absent an injunction, a judge should nevertheless refrain from imposing an injunction that benefits that movant if the injunction would be contrary to the public interest or if the governments countervailing interests outweigh the movants interest in an injunction. Here, the first two factors are entirely missing.

The judge here once again grants Trump more than he sought. Trump asked the court for a protective order enjoining the governments review of the documents until such time as she decides whether to appoint a special master, saying: [I]t is unreasonable to allow the prosecutorial team to review [the documents] without meaningful safeguards because, by Trumps telling, they are all presumptively privileged. A protective order, which is governed by Rule 26, is a fundamentally different mechanism from an injunction, which is governed by Rule 65; the former merely regulates discovery produced by the parties in a civil proceeding, whereas the latter is being used here to reach into a separate criminal proceeding and order the government to stop its work. The protective order Trump asked for would have had a more modest impact than the injunction Cannon granted.

Cannon, as it turns out, grants an injunction against the governments review and use of the material. As Kerr argues: Appointing a special master is very odd here. But the bigger deal is enjoining use of the seized materials that were already searched, for further investigative purposes (whatever that means). He asks: Is indicting Trump use? ... If a federal court lacks power to stop the executive branch from prosecuting a case, can it have power to stop the executive branch from investigating a case to see if a prosecution is appropriate?

To make matters even weirder, Cannon enjoins the government from using the seized materials for criminal investigative purposes pending resolution of the special masters review process but allows it to continue to review and use the materials seized for purposes of intelligence classification and national security assessments. This might seem like a good way of limiting the potential harmful effects on national security of the delays caused by the special master process. But the fact of the matter is that theres no way to cleanly distinguish between these two different functions.

As former FBI counterintelligence agent Pete Strzok notes on Twitter, [T]he seized material provides reasonable inference there still may be classified info in the wild, which would be crucial to the intelligence communitys assessment of the risk posed by the mishandling of the documentsyet now the FBI is enjoined from investigating further. Likewise, before Cannons ruling, former CIA attorney Brian Greer pointed out that, [o]ther than the contents of the documents, the critical element for the intelligence community review is who accessed the documents & under what circumstancesinformation that the FBI now cant look into because of the injunction. Cannons attempt to draw a bright line between the inherently related streams of criminal and counterintelligence work suggests a lack of understanding of how national security investigations function.

Error #3: The ruling is simply incoherent with respect to executive privilege.

Judge Cannon does not just rule that a special master should review the material in question for information covered by attorney-client privilege. She also rules that the special master should review it for executive privilege. Specifically, she finds that even if any assertion of executive privilege by [Trump] ultimately fails in this context, that possibility, even if likely, does not negate a former Presidents ability to raise the privilege as an initial matter.

Her analysis of executive privilege reflects a deep ignorance of the subject. Discussing Cannons ruling on Twitter Spaces, Lawfares Jonathan Shauban expert on executive privilege issuesdescribed the judges reasoning on the subject as expressing a complete misunderstanding of the nature of executive privilege.

Cannon writes that, even as a former president, Trump may still be able to invoke executive privilege under Nixon v. Administrator of General Services, and she points to the Supreme Courts recent ruling in Trump v. Thompson, concerning Trumps efforts to block the Jan. 6 committee from obtaining records despite President Bidens determination not to invoke privilege. Ruling that Trump could not withhold the records, the Court focused its analysis on the nature of Jan. 6, 2021, rather than resolving the question of whether a former presidents assertion of the privilege might ever overcome an incumbent presidents determination. Cannon, however, points to the Courts statement that [t]he questions whether and in what circumstances a former President may obtain a court order preventing disclosure of privileged records from his tenure in office, in the face of a determination by the incumbent President to waive the privilege, are unprecedented and raise serious and substantial concerns.

The first and most fundamental problem here is the judges apparent belief that executive privilege can ever be invoked to prevent documents from being shared within the executive branch itself, given that the privilege is meant to protect internal executive branch conversations from being disclosed outside the branch.

Indeed, the Supreme Court in Nixon v. Administrator of General Services rejected former President Nixons efforts to block documents from being shared with the National Archives in part because Nixons was an assertion of a privilege against the very Executive Branch in whose name the privilege is invoked. Cannon herself notes that Trump v. Thompson, which she cites, concerned information that Trump sought to shield from a different branch of governmentwhich is to say, Congress. As Shaub stated on Lawfares Twitter Spaces conversation, the incumbent president does have the authority to direct how information is or is not shared within the executive branchbut that is the informational management role of the presidency, not the privilege. And, in any event, its the authority of the incumbent president, not a former chief executive.

Second, even if a former president may assert executive privilege over documents notwithstanding an incumbents determination not to do so, and even if he can do so against review by the executive branch itself, it would not follow from this that Trump would be entitled to the return of classified documents illegally held at Mar-a-Lago. Only the incumbent president has the authority to determine what documents are classified and to ensure they are protected accordingly. By contrast, a former president does not even have the right to view such documentslet alone possess themunless the incumbent president chooses to allow it. Remember that this ruling is predicated on Rule 41(g), the remedy for which is the return of material. How could it be the case that a former presidents assertion of executive privilege could not only defeat the incumbent presidents judgment as to executive privilege but also nullify his classification authority and the federal governments ownership of the material and thus require that classified documents be returned to an insecure facility?

A third problem is that executive privilege functions differently when it comes to criminal investigations than in other circumstances. Cannons ruling doesnt address the other Nixon caseU.S. v. Nixon, concerning the Watergate tapes. There, the Supreme Court found that Nixons invocation of executive privilege, while constitutionally grounded, could not overcome Special Prosecutor Leon Jaworskis interest in obtaining the tapes as evidence in a criminal trial. The case concerned a criminal prosecution, rather than the earlier stages of a criminal investigation, but it nevertheless strongly suggests that any invocation of executive privilege by Trumpif one were even possiblewould not be enough to shield materials from an ongoing criminal probe by the Justice Department. Indeed, the Justice Department pointed to U.S. v. Nixon on exactly this point in its response motion to Trumps initial filing, quoting Nixon to argue that the Executive Branch has a demonstrated, specific need for the records at issue, because the recordsand particularly any records marked as classifiedare central to the investigation.

Perhaps Cannon disagrees with the departments reasoning. But given how directly U.S. v. Nixon speaks to the question of evaluating executive privilege claims in the context of a criminal probe, its strange that she doesnt mention the case at all.

Fourth, given how uncertain the law is on matters of executive privilege, its not clear at all how a special master would make the necessary determinations about which documents are privileged or what should happen to them if they are. Special masters in settings like this are typically used to determine issues of attorney-client privilegean area of law in which the rules of the road are pretty well known. A special master confronted with the Mar-a-Lago documents would be hard-pressed to come to a definitive conclusion about which material is privileged under which doctrine and what outcome should flow from what sort of finding. And, as Greer points out, its not even clear that the special master would, as a practical matter, even be able to conduct the inquiries necessary to make a proper determination.

There is, finally, an important factual issue on which Cannon is simply incorrect. She states that Biden has not weighed in on the matter of the Mar-a-Lago records being privileged. The judge writes in a footnote that Plaintiff has not formally asserted executive privilege as to any specific materials, nor has the incumbent President upheld or withdrawn such an assertion. This is wrong. Its true that Trump made only a protective assertion of executive privilege, a means of preserving the ability to formally invoke the privilege in the future. But Cannon is wrong about President Biden.

In a May 10 letter from the National Archives to Trump lawyer Evan Corcoran, Acting Archivist of the United States Debra Steidel Wall informed Corcoran that, according to the White House counsel, President Biden defers to my determination, in consultation with the Assistant Attorney General for the Office of Legal Counsel, regarding whether or not I should uphold Trumps assertion. And Wall says that she has decided not to honor the former Presidents protective claim of privilege, on the grounds that the Executive Branch here is seeking access to records belonging to, and in the custody of, the Federal Government itself. She also notes that, according to the Office of Legal Counsel, protective assertions of privilege have only been made in response to requests for information by Congress, not by the executive itself. The Justice Department entered Walls May 10 letter into the record as an attachment to its lengthy opposition to Trumps request for a special master.

The fact that the incumbent president has in fact determined not to honor Trumps invocation of privilege seems highly relevant to Cannons analysis. It may be that Cannon would not view Bidens decision as dispositive: She quotes Justice Brett Kavanaughs concurrence in Trump v. Thompson reasoning that [a] former President must be able to successfully invoke the Presidential communications privilege for communications that occurred during his Presidency, even if the current President does not support the privilege claim. But because of her factual error, she relieved herself of the burden of laying out her reasoning on this front.

Error #4: Normal people dont get special masters when the FBI executes search warrants against them.

The idea of having a special master review seized material for attorney-client privilege is less controversial than either having one review for executive privilege or having a judge enjoin use of seized documents. It has some precedent, after all, and the standards are at least manageable, meaning that one can infer with reasonable accuracy what the special master would actually do.

Yet its still wrong, though it may be an error with which the government can live. Normal people dont get special masters to review for attorney-client privilege when the FBI executes search warrants against them and seizes their documents. The practice, as the government explained in its brief, is used almost exclusively in cases of searches of lawyer officeswhere one might expect to find documents implicating lots of different clients privileges. Trump cited no contrary case in which a special master had been appointed to review for attorney-client privilege in a search targeted at a non-lawyer. He was asking for special treatment, and, again, he got it.

The error on this point may be harmless. Recall that this seems to be a small universe of pagesaround 500that are potentially subject to attorney-client privilege. To be privileged, a document must reflect communications or work product of Trumps private attorneys or their agents; Trump has no privilege before a federal criminal investigation with White House counsel or other government lawyers. So this work, for a competent special master, would be brief if Judge Cannons order were limited to the attorney-client privilege.

But harmless or not, it is an error for a judge to grant a special master in a case over which she has no jurisdiction in circumstances in which no normal criminal suspect could expect to get an additional layer of review. The action contributes to the growing sense that Trump demands and receives different treatment from the legal system than anyone else gets. And its corrosive for that reason.

To put the matter simply, Judge Cannons opinion is wrong in almost every way it is possible for it to be wrong. How exactly the Justice Department handles the matter involves tactical and strategic considerations related to venue, the specific needs of the investigation, and the broader interests of the federal government. One way or another, however, expect the government to move decisively to erase this opinion from the booksand from the path of the FBI.

More here:
Everything Wrong With Judge Cannon's Ruling - Lawfare

By Olumide Babalola

Privacy is dead, and social media hold the smoking gun. Pete Cashmore, Mashable CEOWhen my wife Ajibike clocked forty in August, we had a stimulating conversation on how one can simultaneously celebrate such remarkable moments on social media and yet realistically control how others access and use ones personal information (pictures, videos etc) publicly shared on such occasions especially on WhatsApp.In a recent article on the nature of WhatsApp as a private or public space, I respectfully submitted that the advent of modern technology has changed the conventional meaning of many words. This also includes the meaning and nuances of privacy as a concept as opposed to its associateds right. At page 9 of my book Privacy and data protection law in Nigeria (2021), I emphasised the difference between privacy and right to privacy by likening them to a situation of egg and chicken where privacy is an object and right to privacy is a legal entitlement to that object. Often times, social media users have been confronted with unpleasant scenarios of privacy paradox where they seek to enforce (right to) privacy over contents they happily and voluntarily post on social media into public domain. In this brief article, I answer a major question associated with this everyday reality arising out of the (mis)use of personal information found on social media in relation to (right to) privacy or its expectation thereof.Do social media users have reasonable expectation of privacy over publicly disclosed/shared personal information?Like privacy itself, the term reasonable expectation of privacy is incapable of generally acceptable definition. With the unprecedentedly intrusive nature of technology, reasonable expectation of digital privacy changes with every update or upgrade of social media apps and platforms. Bruce Schneier, the chief security technology officer of BT a British multinational telecoms company shared same sentiments in his book Schneier on Security. He argues that Even if society still has some small expectation of digital privacy, that will change as these and other technologies become ubiquitous. In short, the problem with a normative expectation of privacy is that it changes with perceived threats, technology and large-scale abuses.In English privacy law, the concept of reasonable expectation of privacy was introduced by Lord Nicholls in Campbell v MGN [2004] 2 AC 457 (21) that: Essentially the touchstone of private life is whether in respect of the disclosed facts, the person in question had a reasonable expectation of privacy. For this purpose, the courts have devised many (I dare say, non-fool proof, subjective and objective) tests and factors to be considered to wit: (a)whether the information can be regarded as private or public (b) whether disclosure of the information would be highly offensive to a reasonable person of ordinary sensibilities (c) attributes of the victim (d) the nature of victims activity intruded or violated (e) the place where the event happened (f) extent, nature and purpose of the intrusion (g) absence of consent and whether it was known or could be inferred (f) effect of intrusion on victim (g) manner of storage or communication or publicity. etc. (See N.A. Moreham, Unpacking the reasonable expectation of privacy test L.Q.R. 2018, 134(Oct), 651-674).For social media, the dynamics are significantly different. While users can claim expectation of privacy over certain information shared with a restricted group of friends, such expectation is not absolute because social media is ordinarily designed for many people to access information shared on such platforms. In United States v. Joshua Meregildo & Others No. 11 Cr. 576(WHP), one of the defendants, Colon, a Facebook user shared messages detailing acts of violence and threatened new violent acts to rival gangs. Although his Facebook account had privacy settings restricting his posts to only friends, during investigation when the police had access to his messages through one of his friends account, Colon challenged the access as a violation of his right to privacy. In resolving the issue, the district court in New York ruled extensively that:A person has a constitutionally protected reasonable expectation of privacy when they have both a subjective expectation of privacy and that expectation is one that society recognizes as reasonable.Generally, people have a reasonable expectation of privacy in the contents of their home computers. But this expectation is not absolute and may be extinguished when a computer user transmits information over the Internet or by e-mail.Facebook and social media generally present novel questions regarding their users expectations of privacy. Facebook users may decide to keep their profiles completely private, share them only with friends or more expansively with friends of friends, or disseminate them to the public at large. Whether the Fourth Amendment precludes the Government from viewing a Facebook users profile absent a showing of probable cause depends,inter alia,on the users privacy settings. When a social media user disseminates his postings and information to the public, they are not protected by the Fourth Amendment. However, postings using more secure privacy settings reflect the users intent to preserve information as private and may be constitutionally protected.On Colons reasonable expectation of privacy, the district judge, Pauley William held further that:Here, Colon maintained a Facebook profile in which he permitted his Facebook friends to view a list of all of his other Facebook friends, as well as messages and photographs that Colon and others posted to Colons profile. The Government viewed Colons Facebook profile through the Facebook account of one of Colons friends who was a cooperating witness. By that means, the Government learned,inter alia,that Colon posted messages regarding prior acts of violence, threatened new violence to rival gang members, and sought to maintain the loyalties of other alleged members of Colons gang. Access to Colons Facebook profile formed the core of the Governments evidence of probable cause supporting its application for the search warrant. Where Facebook privacy settings allow viewership of postings by friends, the Government may access them through a cooperating witness who is a friend without violating the Fourth Amendment.While Colon undoubtedly believed that his Facebook profile would not be shared with law enforcement, he had no justifiable expectation that his friends would keep his profile private.And the wider his circle of friends, the more likely Colons posts would be viewed by someone he never expected to see them. Colons legitimate expectation of privacy ended when he disseminated posts to his friends because those friends were free to use the information however they wantedincluding sharing it with the Government.When Colon posted to his Facebook profile and then shared those posts with his friends, he did so at his peril. Because Colon surrendered his expectation of privacy, the Government did not violate the Fourth Amendment when it accessed Colons Facebook profile through a cooperating witness.From the courts impeccable reasoning, it is logical to conclude that, once a user shares his personal information on social media, even if restricted to a circle of friends, he cannot justify reasonable expectation of privacy especially where he lacks control over his friends use of such information. One must however add here that, there may however be exceptional cases where the facts and circumstances can justify such reasonable expectation of privacy.Mund argues that even where a social media user has reasonable expectation of privacy, such claims will be negated by two exceptions: (a) third party doctrine where a user invests information with a third party (the platform) and then gives consents to be shared with other recipients (other users) and (b) voluntary consent to social media searches. (See Brian Mind Social Media Searches and The Reasonable Expectation of Privacy 19 Yale J. L. & Tech. 238 (2017). Ultimately, it must however be emphasised that social media users would always have reasonable expectation of privacy against the owners/operators of social media platforms especially along the line of published privacy policies/notices on such platforms. Hence, privacy in the context of social media interactions must be distinguished from the notion of secrecy.ConclusionTheoretically, one can(not) share certain personal information and retain control over its use by others to a certain extent. However, especially for personal or household processing of personal data, social media users cannot realistically have reasonable control over the use of publicly available personal information even though in the event of misuse they can be entitled to remedies at law. Technically, there are no straight answers to questions of privacy, every case is determined on its peculiar facts even though the principles keep emerging as technology evolves. Finally, even when a user subjectively expects a measure of privacy on personal contents posted on social media, the factors that determine whether such information remain in the private or public spaces are more objective than dependent on the users expectations alone.

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Privacy In Social Media: Can We Realistically Eat Our Seclusion In Public And Still Keep It Private? - TheNigerialawyer

Regulatory scrutiny of the use and management of cryptocurrency and other digital assets such as utility tokens and non-fungible tokens (NFTs) (collectively, cryptoassets) is rapidly growing on both sides of the Atlantic. With increasing governmental enforcement and private litigation involving cryptoassets, it is vital for individuals and businesses whose activities involve these assets to understand the broad legal framework for enforcement and the types of disputes and legal actions into which they could be drawn. Even if they are not the targets of enforcement actions or parties to legal proceedings, they may have to respond to subpoenas or other court orders. While most of the enforcement actions and litigation to date has involved cryptocurrencies, some have involved NFTs and other types of digital assets.

This article analyzes tools and procedures that enforcement authorities in the U.S. and U.K. may use to seize and forfeit cryptoassets and provides an overview of related regulatory developments in these jurisdictions.

Cryptocurrencies and other digital assets constitute a growing share of global financial assets. As of April 2022, cryptocurrencies were purportedly worth almost $2 trillion, the U.S. Securities and Exchange Commission (SEC) estimated. Despite the recent volatility in cryptocurrency markets and the decline in the value of some cryptocurrencies in May and June of 2022, cryptoassets remain widely held and retain significant value. As of June 2022, cryptocurrencies were still valued at just under $1 trillion, with cryptocurrency prices showing signs of recovery according to reports by Reuters in June 2022 and August 2022. In February 2022, Her Majestys Revenue and Customs (HMRC) estimated that approximately 10% of U.K. adults own or have owned cryptoassets, and 68% of those are likely or very likely to acquire more.

The meteoric rise in the use and management of cryptocurrency in recent years has led to an increase in related crime. According to data provider Chainanalysis, $1.9 billion worth of cryptocurrency was stolen from January 2022 through July 2022, compared to just under $1.2 billion at the same point in 2021. Per the Chainanalysis 2022 midyear report, much of this illicit activity can be attributed to the rise in funds stolen from decentralized finance (DeFi) protocols, with North Korea-affiliated groups alone having stolen an estimated $1 billion of cryptocurrency from DeFi protocols as of July 2022. Fraudsters may deploy a range of strategies, including ransomware attacks, hacks or deception to steal from unsuspecting victims, or use cryptoassets to launder criminal proceeds.

Against this backdrop, both U.S. and U.K. law enforcement agencies have increasingly used the tools at their disposal to combat cryptocurrency-related crime. For example, in February 2022 the U.S. Department of Justice (DOJ) announced the seizure of $3.6 billion worth of bitcoin in connection with the 2016 hack of Bitfinex the largest financial seizure ever.

Similarly, in July 2021, Londons Metropolitan Police seized 180 million of cryptocurrency in connection with suspected money laundering and, more recently, the U.K.s National Crime Agency (NCA) reported that it confiscated around 26.9 million in cryptocurrency assets between April 1, 2021, and March 31, 2022.

In the U.S., cryptoassets have been the focus of much attention by enforcement authorities in recent years. At the federal level, this is mainly the purview of the SEC, DOJ, the Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury.

In February 2022, the DOJ formed the Virtual Asset Exploitation Unit (VAXU) within the Federal Bureau of Investigations (FBI), which is dedicated to blockchain analysis and virtual asset seizure. VAXU is expected to work closely with the DOJs National Cryptocurrency Enforcement Team (NCET), which was launched in October 2021.

In addition, in March 2022, Attorney General Merrick Garland launched a new interagency taskforce dubbed KleptoCapture to hold accountable corrupt Russian oligarchs. The task forces mission explicitly includes targeting the use of cryptocurrency to evade sanctions or launder money, with a focus on asset seizure.

In May 2022, the U.S. District Court for the District of Columbia upheld the DOJs criminal complaint against an unnamed U.S. citizen who allegedly helped customers evade U.S. sanctions by funnelling more than $10 million of bitcoin through a virtual currency exchange from the U.S. to a country that is subject to U.S. comprehensive sanctions. In so doing, the court adopted for the first time the Office of Foreign Assets Controls (OFACs) recent guidance on sanctions compliance obligations, saying that virtual currency is subject to OFACs regulations, and financial services providers to whom U.S. sanctions regulations apply include virtual currency exchanges.1

Overview of Cryptoasset Forfeiture by US Authorities

U.S. authorities have increasingly used asset forfeiture as a tool in crypto-related enforcement proceedings, seizing several billions of dollars of cryptoassets in recent years. For instance, since 2015, the U.S. Internal Revenue Service Criminal Investigation (IRS-CI) has seized over $3.5 billion in cryptocurrency, and, as of December 2021, the U.S. Marshals Service held $919 million in cryptocurrency.

In April 2022, federal prosecutors working with local Florida law enforcement obtained forfeiture of $34 million worth of cryptocurrency tied to illegal dark web marketplace activities. The IRS-CI, Department of Homeland Security (DHS), FBI, U.S. Postal Inspection Service (USPIS) and U.S. Drug Enforcement Agency (DEA) jointly investigated this case.

U.S. prosecutors are expected to pursue increasingly aggressive civil forfeiture actions targeting cryptoassets. In these cases, the government can transfer the funds in question instantaneously, whereas transfers involving fiat currency or personal property can take much longer, making crypto-related forfeiture an appealing mechanism for authorities.

In order to forfeit cryptoassets, U.S. authorities generally first trace the cryptoassets and transactions using publicly available blockchain information and analytics tools to identify relevant information, such as the dates and amounts of transactions and the origination and destination public address(es). If needed, agents can then issue subpoenas to financial institutions, virtual-currency exchanges or other third-party intermediaries to obtain relevant records.

This approach got a boost in 2020, when the U.S. Court of Appeals for the Fifth Circuit held in United States v. Gratkowski that federal agents did not need to first obtain a warrant based on probable cause to subpoena bitcoin records.2 In Gratowski, the federal agents used forensic software to extract suspicious addresses from the bitcoin blockchain and then subpoenaed a virtual currency exchange to trace the customers who had made bitcoin payments to those suspicious addresses.

The court held that a person generally has no legitimate expectation of privacy in information he voluntarily turns over to third parties, treating bitcoin records kept by the exchange in the same way as customer financial records kept by banks in that bank records are not subject to Fourth Amendment protections.3 The court further held that Gratowski did not have a privacy interest in his information on the bitcoin blockchain since that information is available to every bitcoin user, making it possible to determine the identities of the bitcoin address owner by analyzing the blockchain.4

Armed with this data, authorities can establish the assets nexus to criminal activity and its location information that is required to obtain a search warrant authorizing seizure of the asset. Subsequently, authorities may seize the cryptoasset using such a warrant, or through another method that otherwise fulfils the governments obligations under the Fourth Amendment (searches and seizures), such as with the owners consent. Forfeiture proceedings are then required so that the title to the seized assets can be permanently transferred to the government. Cryptoassets can be forfeited via administrative, civil judicial or criminal judicial forfeiture, as discussed below.

U.S. authorities are increasingly working with cryptoasset and blockchain analytics firms to use advanced technologies to uncover illicit activity and identify linked actors, in addition to crime proceeds and other forfeitable assets. Since 2017, federal agencies including the DEA, DHS, IRS, FBI and CFTC have spent millions of dollars on third-party cryptoasset tracing and blockchain analytic tools.5

These technologies have already been put to use at a large scale. For example, in November 2020, using blockchain forensics, the DOJ and IRS identified and retrieved, through a civil forfeiture action, $1 billion worth of illicit bitcoin stolen from Silk Road more than seven years earlier.

More recently, in February 2022, the U.S. District Court for the District of Columbia held that the governments use of reliable blockchain analysis software that traced the flow of stolen digital currency to the investigations targets supported probable cause for a search warrant.6 The court further highlighted that such software was becoming commonplace for law enforcement to track financial crimes, noting that this sort of analysis had demonstrated an unprecedented rate of success when compared to human informants, bolstered by the softwares lack of incentive or capacity to lie.7

This ruling was in accord with the New York State Department of Financial Services April 2022 guidance stating that cryptocurrency firms should use blockchain analytics tools to help mitigate and manage financial risk, and to meet AML and sanctions-related compliance requirements.

U.S. authorities are also working to increase cooperation with foreign authorities to identify and trace cryptoassets that may be subject to forfeiture. For example, on 5 April 2022, the DOJ announced the seizure of Hydra Market, the worlds largest and longest-running darknet market. The Hydra servers and cryptocurrency wallets containing $25 million worth of bitcoin were seized in Germany by the German Federal Criminal Police (the Bundeskriminalamt), in coordination with multiple U.S. agencies, including the DEA, DHS, USPIS, FBI, IRS, DOJs Office of International Affairs, the U.S. Attorneys Office for the District of Columbia and the NCET.

Administrative Forfeiture

Many federal law enforcement agencies are authorized to seize cryptoassets valued at less than or equal to $500,000 at the time of seizure via an administrative forfeiture procedure without judicial approval. The agency involved seizes the asset, provides notice to potential claimants, and processes any claims to the assets. Any timely and legally valid claims are referred to the U.S. Attorneys Office, which must then commence a civil forfeiture action in federal court. In the absence of any such claims, the agency can complete the forfeiture without judicial involvement. Assets with a timely and legally valid claim to them, or those valued at more than $500,000, must be forfeited via a civil or criminal forfeiture action.

The DEA, DHS and USPIS have all successfully seized and obtained legal title to cryptocurrency via administrative forfeiture in the past.8

Criminal Forfeiture

Criminal judicial forfeiture actions are in personam (against the person) actions against a defendant where only property in which the defendant has a true interest may be forfeited. A criminal forfeiture proceeding starts by adding a forfeiture allegation to a charging document and requires that the defendant be convicted of an offense that allows the forfeiture of property. The government must establish by a preponderance of the evidence the requisite connection between the crime of conviction and the asset. Crimes such as those involving money laundering and various types of fraud and counterfeiting allow criminal forfeiture. A separate ancillary proceeding follows to determine any third-party ownership interests in the property that the government seeks to forfeit.

In what is believed to be the largest cryptocurrency fraud ever charged criminally, in November 2021, a district court granted the DOJs request to liquidate $57 million in cryptocurrency seized from Glenn Acaro, the top North American promoter of the cryptocurrency bitconnect. Acaro pled guilty to participating in a conspiracy that defrauded investors of over $2 billion. In the charging document, the DOJ sought criminal forfeiture pursuant to 18 U.S.C. 982(a)(2)(A) and 28 U.S.C. 2461(c) of the fraudulently obtained proceeds in Acaros possession, the majority of which were held in cryptocurrencies, including bitcoin, ethereum, litecoin, dash and several others.9

Civil Judicial Forfeiture

Civil judicial forfeiture actions are in rem court proceedings brought against property that was derived from or used to commit an offense, rather than against a person who committed an offense. Unlike criminal forfeiture, no criminal conviction is required. The government must still prove that the property was linked to criminal activity by a preponderance of the evidence.

This proceeding allows the court to gather everyone with an interest in the property and resolve all the claims to it in one proceeding.

Not only does this procedure require a lower burden of proof; it allows the government to reach more property than criminal forfeiture. This includes property of criminals located outside the U.S., such as terrorists and fugitives. It also permits recovery of assets held by deceased defendants, or where no defendant can be identified since the action is against the asset itself.

The governments notice requirement for in rem forfeiture proceedings can be met if the government attempts to provide actual notice. In United States v. Twenty-Four Cryptocurrency Accounts, for example, it was held that the government provided sufficient notice to the public and to potential claimants of its forfeiture action in rem against cryptocurrency accounts allegedly used in connection with a child pornography website where the government had sent direct notice via certified mail or email to potential claimants who could be identified by currency exchange information; sent notice an additional time when emails or certified letters were returned as undeliverable; and posted a public notice on an official government forfeiture website for 30 consecutive days.10

The IRS and DHS enlisted the help of South Korean law enforcement to seize the servers and related materials, which were located in South Korea. A review of the seized materials revealed bitcoin transactions, which allowed law enforcement to obtain a warrant and seize all 24 related cryptocurrency accounts.11 The court granted the governments motion for default judgment for the forfeiture of all 24 accounts.

In the U.K., regulation of cryptoassets has likewise become a focus for regulators and law enforcement agencies. Under the FCAs scrutiny, crypto-related firms now face a new requirement to register in the U.K., and cryptoasset firms must comply with anti-money laundering (AML) regulations, and are subject to the FCAs enforcement powers. Between January 10, 2020, and October 20, 2020, alone, the FCA opened 39 inquiries into cryptoasset businesses. In March 2022, the FCA announced that, between September 2021 and March 2022, it had opened 300 investigations into unauthorized cryptoasset operators. Echoing the FCAs commitment, the U.K. Serious Fraud Office (SFO) announced in its 2021/22 Business Plan that the growth of cryptocurrency would be one of its key focus areas.

In March 2022, U.K. regulators issued a joint statement signaling that financial sanctions do not differentiate between cryptoassets and other types of assets. The statement made clear that the use of cryptoassets to circumvent economic sanctions is a criminal offense under the Money Laundering Regulations 2017 and regulations made under the Sanctions and Anti-Money Laundering Act 2018. The FCA confirmed that it had written to all registered cryptoasset firms and those holding temporary registration status to highlight the application of sanctions to various entities and individuals.

More recently, the May 2022 Queens Speech outlined a new Economic Crime Bill under which the authorities will gain more tools to halt illicit finance in the U.K., including the power to seize cryptoassets. No implementation timetable has been provided yet.

Criminal Forfeiture

There are a number of tools available to U.K. law enforcement to address cryptoasset-related crime. These include orders to restrain, seize, forfeit and confiscate assets, as well as orders to obtain information about potential wrongdoers.

Law enforcement can secure a restraint order under s41 Proceeds of Crime Act 2002 (POCA) to prohibit a person from dealing with any realisable property held by them, provided that certain conditions are met. This includes, for example, where a criminal investigation or proceedings relating to an offense have started in England and Wales and there are reasonable grounds to suspect that the alleged offender has benefitted from his criminal conduct.

A restraint order freezes assets wherever in the world they are and prevents assets from being moved or dissipated. Given the nature of the order, it is usually obtained without notice to a defendant. Non-compliance with a restraint order is a contempt of court, and in extreme cases, may be treated as perverting the course of justice.

In a mark of flexibility, courts have found cryptocurrency to meet the definition of realisable property for the purposes of POCA. In the recent case of Lavinia Deborah Osbourne v (1) Persons Unknown (2) Ozone Networks Inc. trading as Opensea [2022],12 the High Court recognized NFTs as legal property over which a freezing injunction could be ordered, thereby extending to NFTs the courts previous framing of cryptocurrencies as proprietary assets. The NFTs here were two unique digital artworks, stolen from the claimants digital wallet in January 2022, and traced to two wallets. An urgent freezing order was granted in March 2022, freezing the assets until the end of proceedings. This landmark case confirmed that NFTs should be treated as standalone assets, separate from the underlying pieces that they represent.

English courts have been willing to grant not only restraint and freezing orders relating to cryptoassets, but also confiscation orders where certain conditions are met, namely:

When making a confiscation order, the court must decide whether the defendant has a criminal lifestyle and whether he has benefitted from general or particular criminal conduct.

In R v Teresko [2018],13 the defendant was convicted of drug and money-laundering offenses. In related restraint proceedings, the police were permitted to restrain the defendants cryptoassets and convert seized bitcoin into sterling. The court subsequently made a confiscation order over the defendants bitcoin, worth 975,000.

Similarly, in R v West [2019],14 the defendant was convicted of hacking into company databases, selling the data on the dark web and converting the funds into cryptocurrency. He was ordered to pay a confiscation order that included cryptocurrency valued at 922,978.

Together, these examples reflect that English courts are prepared to use conventional tools in novel contexts in aid of criminal justice.

However, challenges may arise when it comes to enforcement. For example, successful seizure of cryptoassets usually depends on obtaining the owners private key. Prosecutors are likely to have greater success in obtaining a private key where it is held by a bank or crypto exchange on a persons behalf. However, where the key is held by the individual owner, the prosecutor may have to rely on the cooperation of the defendant or further court proceedings.

In Ireland, the so-called Fishing Rod Case15 demonstrated the challenges that can arise in seizing cryptoassets without the private key. A defendant hid the key for his cryptoassets, worth an estimated 45 million, in a fishing box that was thrown away by his landlord while he was in police custody. While the digital wallets were seized by the Irish state, without the secure key, the assets are unobtainable.

Another key challenge is the issue of anonymity. Cryptoassets are attractive for unlawful conduct because they can be held and transferred anonymously. Unless there is proof a defendant is dealing or concealing illegal cryptoassets, the court may find it difficult to make an order. In Teresko, the key for the defendants bitcoin wallet was found during a search of his property, and in West, the defendant was arrested while he was using his computer, allowing the police to access his virtual wallet and provide evidence to the Crown Prosecution Service.

It is not just cryptocurrency that can be seized. On February 13, 2022, Her Majestys Royal Customs (HMRC) used its POCA powers to seize NFTs as part of a 1.4 million VAT fraud investigation that involved around 250 allegedly fake companies. HMRC was the first U.K. agency to seize an NFT. HMRC Deputy Director Economic Crime Nick Sharp said this confiscation case should deter the view that cryptoassets serve to hide money from HMRC.

Civil Asset Recovery Enforcement Actions

Alongside the criminal orders under POCA, U.K. law enforcement also has the power to recover assets in the civil courts on the civil standard (i.e., balance of probabilities) under POCA. A prosecutor can seek a civil recovery order, which provides that specific property is recoverable on the basis that is represents the proceeds of unlawful conduct. In effect, this is a confiscation order without the triggering conviction.

DPP v Briedis and Reskajs [2021]16 is a prime example of this procedure in action. There the Director of Public Prosecutions sought a freezing order under s245A POCA (civil recovery powers) against two respondents covering cash in various currencies, money in bank accounts, personal items and cryptocurrency. The court was satisfied that cryptocurrencies fell within the wide definition of other intangible property under POCA s316(4).

That case referred to the reasoning in AA v Persons Unknown [2019],17 in which the claimant paid a bitcoin ransom to a hacker in exchange for decryption software and, following recovery of the encrypted files, the claimant took steps to recover the ransom. Given that the court in this case was prepared to recognize cryptocurrency as property under POCA provisions related to property freezing orders, it is likely that a civil recovery order could also have been obtained over it.

Going further, if a prosecutor obtained a civil recovery order, it could, in theory, also obtain an Unexplained Wealth Order (UWO) on cryptoassets pursuant to s362A POCA. However, they are unlikely to be the tool of first choice, given that cryptoassets are less readily identifiable than a tangible asset. A UWO application requires a description of the property and the suspected owner, which may be difficult in cryptoasset cases.

The trend toward greater regulation of cryptoassets and more enforcement in cases of wrongdoing is likely to continue as authorities respond to the growth in cryptoasset use. Commenting on the high degree of fraud involving the asset class, SEC Commissioner Hester Peirce said at a conference in May 2022 that the United States has dropped the regulatory ball and has got to get working to target fraud and play a more positive role in cryptocurrency innovation.

To manage cryptoasset-related legal and compliance risk stemming from efforts to seize and forfeit cryptoassets, organizations can take a number of steps including:

Trainee solicitor Clara Rupf contributed to this article.

_________________________

1 In re: Criminal Complaint, No. 1:22-mj-00067, 2022 WL 1573361, at *3 (D.D.C., 2022) (citing U.S. Dept of the Treasury Sanctions Programs Related to Digital Currency Transactions); see also OFAC Enters Into $98,830 Settlement With BitGo, Inc. for Apparent Violations of Multiple Sanctions Programs Related to Digital Currency Transactions, U.S. Department of Treasury (Dec. 30, 2020).

2 United States v. Gratkowski, 964 F.3d 307 (5th Cir. 2020).

3 Id. at 310-11 (citing to United States v. Miller 45 U.S. 435, 439-40 (1976)).

4 Id. at 312.

5 Felix Mollen, Coinbase Secures Another Millionaire Deal With the US Government To Let Them Use Its Blockchain Analytics Software, CryptoPotato (June 8, 2020); Danny Nelson, Coinbase Offers US Feds New Crypto Surveillance Tools, CoinDesk (June 5, 2020); Danny Nelson, Inside Chainalysis Multimillion-Dollar Relationship With the US Government, CoinDesk (Feb. 10, 2020).

6 Matter of Search of Multiple Email Accts. Pursuant to 18 U.S.C. 2703 for Investigation of Violation of 18 U.S.C. 1956, No. 20-SC-3310 (ZMF), 2022 WL 406410 (D.D.C. Feb. 8, 2022).

7 Id. at *13.

8 See, e.g., FOR SALE Approximately 4,041.58424932 bitcoin, U.S. Marshals Service (February 2020 auction); Roger Aitken, U.S. Marshals to Hold Bitcoin Auction for $50 Million Worth of Cryptocurrency, Forbes (January 12, 2018).

9 United States v. Glenn Arcaro, No. 21CR02542-TWR. (S.D. Cal.), Complaint.

10 United States v. Twenty-Four Cryptocurrency Accts., 473 F. Supp. 3d 1 (D.D.C. 2020).

11 Id. at *3-4.

12 The full High Court judgment is yet to be published.

13 R v Teresko (Sergejs) [2018] Crim. L.R. 81.

14 R v West [2019], unreported, 28 September 2019, Southwark Crown Court.

15 DPP v Collins [2020], unreported, February 2020.

16 DPP v Briedis and Reskajs [2021] EWHC 3155 (Admin).

17 AA v Persons Unknown [2019] EWHC 3556.

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Cryptoasset Seizures and Forfeitures: US and UK Enforcement Overview - JD Supra

As a lawyer for the past 40 years, it troubles me the way our freedoms are being slowly eroded by the actions of our government and agencies. The Fourth Amendment was set in place to protect people from the intrusion of government into their homes and lives without some serious oversight by the courts. Before we became independent from British rule, it was common for the agents of the King to storm into homes in search of subjects whose thoughts and actions may have been contrary to the best interests of the Crown. I thought the Constitution and the Bill of Rights solved that problem and gave us back the peace of mind to be free from the troublesome intrusion of law enforcement agents.

Recent events have shown how nave I had become in the comforting words of the Fourth Amendment, and its assurances that I would be free from unreasonable searches and seizures. How dare the FBI raid the home of our former commander in chief on only the affidavit of sworn law enforcement officers and the scrutiny of a federal judge! Does this set a precedent that means anyone who evades taxes, attempts to undermine an election, sexually assaults women, manipulates the value of their assets to reduce taxes, aides and abets the overthrow of our democracy and its election system, and illegally steals top secret documents, will be subject to investigation? Is that what we have become as a country? Who knows what could happen next if this form of police overreach is allowed to exist. Our courts and jails could be flooded with a glut of politicians and their cronies and enablers.

We could suddenly find ourselves in the cross-hairs of a search warrant after having stolen corporate secrets from our employers, or simply embezzled money. Who wants to be under the gun from police just because they keep their drug stash at home instead of in a warehouse. This opens the door to all kinds of unreasonable law enforcement actions for drug searches, espionage, illegal possession of firearms, tax evasion, harboring criminals, exploitation of illegal aliens the list goes on. Personally, I dont want to wake up some day and discover that I could be held accountable for keeping nuclear secrets in my locked gun cabinet. Wake up, America, and stand up for your rights!

Chuck McMurryCarp Lake

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Letter: Could any of us now be subjected to the 4th Amendment and all it entails? - Cheboygan Daily Tribune