Topic: [2014-01-31] Forbes - Silk Road Vendor Filing Claim For Seized Bitcoins (Read 2636 times)

Fruit of the poison tree. Silk Road was unlawful from the get-go. The vendor was a part of the mechanism that allowed Silk Road to commit crime and profit. Does not help that vendor sold drug novelty and usage items to users in a drug market where there is a high likelihood they would use them with the other drugs they purchased there. The jump is a baby step.

What they want does not pass the normal rational person test.

This is where it gets interesting. This man was in the UK and his dominant market was the EU.

As far as I know the sale of drug paraphenalia is not prohibited in the UK I'm no lawyer however and his business was registered and fully tax-compliant.

Why would US law apply to this?
Why would the US have grounds to seize assets from a legal UK business just because said business is illegal in the US?

(hypothetically) If the reason for the seizure is that its illegal for a non-us citizen to export these products to the US - even though it's perfectly legal to "export" drugs to the US from certain countries, it is however illegal for the other party to "import" them - then shouldn't the burden of proof be put on the US authorities to prove that all of the $95k were proceeds from exporting goods to the US? I don't think they have the right to just seize the whole lot. Thats like the US seizing my bank accounts and house for exporting a $0.50 packet of rolling papers to the US, they should have to account for the amount that were illegal proceeds.

About the $95k figure, PlutoPete was a mega-seller - in the top 100 on SR by sales volume and he was a seller on SR for many years. The funds were also worth 9x less at the time of seizure as mentioned.

21 U.S.C.
United States Code, 2010 Edition
Title 21 - FOOD AND DRUGS
CHAPTER 13 - DRUG ABUSE PREVENTION AND CONTROL
SUBCHAPTER I - CONTROL AND ENFORCEMENT
Part D - Offenses and Penalties
Sec. 863 - Drug paraphernalia
From the U.S. Government Printing Office, www.gpo.gov

§863. Drug paraphernalia
(a) In general
It is unlawful for any person—
(1) to sell or offer for sale drug paraphernalia;
(2) to use the mails or any other facility of interstate commerce to transport drug paraphernalia; or
(3) to import or export drug paraphernalia.
(b) Penalties
Anyone convicted of an offense under subsection (a) of this section shall be imprisoned for not more than three years and fined under title 18.
(c) Seizure and forfeiture
Any drug paraphernalia involved in any violation of subsection (a) of this section shall be subject to seizure and forfeiture upon the conviction of a person for such violation. Any such paraphernalia shall be delivered to the Administrator of General Services, General Services Administration, who may order such paraphernalia destroyed or may authorize its use for law enforcement or educational purposes by Federal, State, or local authorities.
(d) “Drug paraphernalia” defined
The term “drug paraphernalia” means any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under this subchapter. It includes items primarily intended or designed for use in ingesting, inhaling, or otherwise introducing marijuana,1 cocaine, hashish, hashish oil, PCP, methamphetamine, or amphetamines into the human body, such as—
(1) metal, wooden, acrylic, glass, stone, plastic, or ceramic pipes with or without screens, permanent screens, hashish heads, or punctured metal bowls;
(2) water pipes;
(3) carburetion tubes and devices;
(4) smoking and carburetion masks;
(5) roach clips: meaning objects used to hold burning material, such as a marihuana cigarette, that has become too small or too short to be held in the hand;
(6) miniature spoons with level capacities of one-tenth cubic centimeter or less;
(7) chamber pipes;
( carburetor pipes;
(9) electric pipes;
(10) air-driven pipes;
(11) chillums;
(12) bongs;
(13) ice pipes or chillers;
(14) wired cigarette papers; or
(15) cocaine freebase kits.
(e) Matters considered in determination of what constitutes drug paraphernalia
In determining whether an item constitutes drug paraphernalia, in addition to all other logically relevant factors, the following may be considered:
(1) instructions, oral or written, provided with the item concerning its use;
(2) descriptive materials accompanying the item which explain or depict its use;
(3) national and local advertising concerning its use;
(4) the manner in which the item is displayed for sale;
(5) whether the owner, or anyone in control of the item, is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products;
(6) direct or circumstantial evidence of the ratio of sales of the item(s) to the total sales of the business enterprise;
(7) the existence and scope of legitimate uses of the item in the community; and
( expert testimony concerning its use.
(f) Exemptions
This section shall not apply to—
(1) any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items; or
(2) any item that, in the normal lawful course of business, is imported, exported, transported, or sold through the mail or by any other means, and traditionally intended for use with tobacco products, including any pipe, paper, or accessory.

For those confused by the $95K number.  Pull up a year long Bitcoin chart.  Lookup exchange rate at the time the silk road was closed.   Multiply that by 1000.  It isn't $95K.

On Thursday, Ward began the process of retaining a lawyer to file a claim for what he says were 100 bitcoins–worth around $95,000 at current exchange rates–seized by the FBI in the takedown of the Silk Road online black market for drugs last October. Unlike most of Silk Road’s sellers, Ward says he earned his bitcoins through entirely legal means, offering the same merchandise that he advertises on the public Internet from his head shop Planet Pluto in Devon, England.

All of that means the FBI, who were in communication with the NCA, should have considered Ward’s claim to some of the Silk Road bitcoins, according to Steven L. Kessler, an asset forfeiture lawyer who Ward is in the process of retaining. “The statute requires that if the government of the United States has knowledge of an individual with an asset subject to forfeiture, the owner has to get notice,” says Kessler.