Government: we can freeze Mega assets even if case is dismissed

The United States government said today that even if the indictment of the Megaupload corporation is dismissed, it can continue its indefinite freeze on the corporation's assets while it awaits the extradition of founder Kim Dotcom and his associates.

Judge Liam O'Grady is weighing a request to dismiss the indictment against Megaupload because (in Megaupload's view) the federal rules of criminal procedure provide no way to serve notice on corporations with no US address. At a hearing in Alexandria, VA, he grilled both attorneys in the case but did not issue a ruling.

O'Grady speculated, with evident sarcasm, that Congress intended to allow foreign corporations like Megaupload to "be able to violate our laws indiscriminately from an island in the South Pacific."

But Megaupload's attorney insisted that this may not be too far from the truth. Megaupload, they said, is a Hong Kong corporation with no presence in the United States. He argued it was perfectly reasonable for Megaupload to be subject to the criminal laws of Hong Kong, but not the United States.

"It's never had a US address"

For its part, the government suggested that it could sidestep the mailing requirement in one of several ways. For example, it could wait for Kim Dotcom to be extradited to the United States and then mail notice to him, as Megaupload's representative, at his address in prison. Or, they suggested, the government could send notice of the indictment to Carpathia Hosting, a Virginia company that has leased hundreds of servers to the locker site.

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