10 FBI Seizure Risks for Internet Business Owners

Imagine a scenario in which one unit in an apartment building is occupied by dangerous criminals, and all the rest by law-abiding citizens. The FBI is hot on the trail of the crooks and has determined that they are in one of the units, but they don’t know which one, so they corral everybody in the complex, to make sure they have captured the bad guys.

This is the type of approach the FBI has used to track cyber-crooks; seizing all the data in a data center, without regard as to the collateral damage they might cause to other users, innocent or not. These seizures can’t be controlled by the bystanders, and privacy that was seen as a benefit may also cause problems. Here are some instances when online neighbors who aren’t good neighbors can play havoc with legitimate users.

  1. Online Poker – In a high-profile case not long ago three on-line poker sites were shut down without notice, and without regard for customers of the service. Money-laundering schemes were what the FBI was tracking, but professional players lost a source of income not easily made-up.
  2. Asset Forfeiture – Particularly in theft and drug-related cases, the FBI has the authority to seize any assets or property that it deems were acquired in connection to illegal activities.
  3. Botnet Ring -  FBI agents acquired warrants to seize computers from an outfit called Coreflood, a botnet ring that had been involved in fraudulent bank wires.
  4. Memorabilia Fraud – FBI investigations into sports and entertainment memorabilia has led to seizure of not-only fake items, but many legitimate articles as well.
  5. 5.     Operation Network Raider – Agents made numerous arrests, and confiscated hundreds of counterfeit computer hardware items manufactured in China.
  6. The “Vacuum Cleaner” System – This is a “full pipe” method of tracking down wrongdoers when individual targeting is ineffective, and allows agents to monitor all users of a network, and to seize all files that were used in that network.
  7. Domain Name Seizure – The FBI has been empowered to seize the domain names of sites that it believes to be engaged in criminal activity, often used to help curtail software fraud, child pornography and illegal gambling.
  8. Pornography – Zealous FBI pursuit of pornographers, particularly child-pornographers, has led to arrests and property seizures. Unfortunately, swept in with the real pornographers were many innocent people who had nothing to do with any criminal activity.
  9. Digital One – Data One is a Swiss based company which operates a data center in Maryland. The FBI was looking for one user that was connected with the data center, but they shut down and confiscated files from all users of the center; the FBI wouldn’t say, specifically, who or what they were looking for, nor did they immediately return anything they had seized. It turned out that the target was a Latvian based operation peddling scareware.
  10. Operation E-Con – An FBI-led program that focuses on cyber-crime, Operation E-Con has led to seizure of equipment, files and records of many criminals, but has also trampled on many innocents who have little-or-no real recourse available to them.

A common theme here is assumed guilt by “association”, even if the association was nothing more than using a system that bad guys also happened to be using.

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