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Another Fallout From the War on Drugs: Asset Seizures

April 8, 2009, 9:40 am

One of the least-discussed but quite important fallouts from the war on drugs has been the incredible power we seem to have handed police authorities to seize assets.  While theoretically, it should be impossible to be fined or punished without being convicted, in fact it is perfectly possible for police to shut down businesses and impose enormous fines without trial through this confiscation authority.   Here is just one recent example that came up this morning:

The FBI on Tuesday defended its raids on at least two data centers in Texas, in which agents carted out equipment and disrupted service to hundreds of businesses.

The raids were part of an investigation prompted by complaints from AT&T and Verizon about unpaid bills allegedly owed by some data center customers, according to court records....

According to the owner of one co-location facility, Crydon Technology, which was raided on March 12, FBI agents seized about 220 servers belonging to him and his customers, as well as routers, switches, cabinets for storing servers and even power strips. Authorities also raided his home, where they seized eight iPods, some belonging to his three children, five XBoxes, a PlayStation3 system and a Wii gaming console, among other equipment. Agents also seized about $200,000 from the owner's business accounts, $1,000 from his teenage daughter's account and more than $10,000 in a personal bank account belonging to the elderly mother of his former comptroller.

FBI agents displayed their usual level of competance when it comes to technology-related matters:

Faulkner says the FBI appears to have assumed that all the servers located at Crydon's address belonged to him, and didn't seem to understand the concept of co-location.

This is over a private billing dispute?  The FBI claims its a much bigger matter - since there was fraud involved as one of the target companies faked some credit references.  Oh, OK, then go right ahead and seize all the family's iPods.

Tags: ,
Category: Crime
  • DKH

    This is deplorable, but I had to at least smirk over the family with 3 kids, 8 iPods, 5 XBoxes, a PS3, and a Wii, "among other equipment." I don't begrudge them their level of consumption, but wow.

    I'm sure the FBI found what it was looking for...in the power strips. Ridiculous.

  • http://space4commerce.blogspot.com Brian

    didn’t seem to understand the concept of co-location.

    I'll bet they did understand. They just didn't care.

    Easier to say 'grab everything' (including power strips for the love o' mike) than to get fussy about who owns what box.

    Or to be more kind, if they differentiate between boxes and who owns what .. and they miss one .. or those dirty hackers slip one over on them .. it's their ass that's grass.

    There isn't an upside to the guys on the scene, and potential downside.

  • Dr. T

    This looks like a quid pro quo: AT&T helps the federal government spy on its customers, and the federal government helps AT&T collect overdue bills.

    You've got to love an FBI that has so little to do that it can spend time and money breaking this guy's chops over problems caused by his customers. I guess there aren't enough terrorists, kidnappers, or federal bank robbers to investigate.

  • Gloobnib

    I saw this story earlier today. I work at one of the midwest's largest co-location providers. I and the rest of our management team are frankly terrified that something like this can happen to us. It is impossible to state how devistating this would be to our organization, as well as to our customers.

    For our facilities alone, we are talking about 50 employees of the co-location company, over 250 local companies who have their entire IT infrastructure at our facilities, representing literally tens of thousands of jobs in our state alone. Something like 80% of all companies that are offline for 5 days or more never recover.... Guess all those employees get added to the unemployment line.

    Even worse, since we are a confederation of 12 data centers across 7 states... the mind boggles at the impact this would have if somehow our entire holding company was targetted like this.

    Just. Plain. WOW.

  • jeff

    Gloobnib,

    I also work at a large co-location provicer (6 datacenters, 300,000+ sq feet), and I've had to deal with a FBI, DEA, and Customs agents and search warrants. In every case, they have only seized the data of the target company, not the other companies in the datacenter. I believe this was an FBI agent that overreached, and I hope he gets fired.

    One thing I noticed from looking at the pictures that accompanied the articles, it looks like there were no cages or cabinets, just open racks on raised floor.

    If they tried that at our largest datacenter, they'd be in for a rude shock. The county court system's data would go off-line.

  • Jim in Alaska

    Asset seizure is also used by fish and game up here. If they decide you violated hunting or fishing regulations, on the spot, before trial, they can seize any equipment they feel you've used to hunt or fish illegally, including the horse (or boat,or plane, or 4 wheeler, etc.) you rode in on.