| In NoKo
Crypto Case Inner City Press Won Unsealing
Griffith Demands Info From US
By Matthew
Russell Lee, Exclusive Patreon
BBC
- Guardian
UK - Honduras
- The
Source
SDNY COURTHOUSE,
October 22 – Virgil Griffith,
charged with violating North
Korea sanctions in connection
with a crypto-currency
conference there, sought to
get the case moved for lack of
venue out of the U.S. District
Court for the Southern
District of New York.
This emerged at a
telephone conference in the
case on May 18. Griffith's
defense lawyer Brian E. Klein
said he is ready to file a
motion on venue as early as
this Friday May 22, based on "ex
parte, in camera"
filings he made with SDNY
Judge P. Kevin Castel.
Inner City Press, which has
covered the case from
Griffith's first appearance in
the SDNY Magistrates Court to
his Christmas holiday legal
moves to get released to home
confinement in Alabama,
immediately sought the
still-sealed documents in this
criminal case, see below.
On July 20,
Klein requested for Griffith
restored access to the
Internet, telling Judge Castel
in letter here
on Patreon that while on leave
from Ethereum another unnamed
company has offered to make
him a consultant, but that
Klein would wants it name
sealed : "While he has been
placed on leave by his former
employer during the pendency
of these charges, he has been
offered one consulting
contract, which can be
submitted to the Court under
seal."
On July 24
Judge Castel held a hearing on
this, which Inner City Press
live tweeted, below.
Now on
October 22 Griffth has filed
motions for information: "Mr.
Griffith’s motion to compel
seeks an Order directing the
government to produce the
following: a. All internal
materials of the Department of
Treasury’s Office of Foreign
Asset Controls (“OFAC”)
regarding or in connection
with Mr. Griffith’s trip to
the Democratic People’s
Republic of Korea’s (“DPRK”);
b. Confirmation of the
identity of an individual
identified by the government
as “Witness-2”; and c.
Materials from OF AC,
Department of Justice ("DOJ"),
Federal Bureau of
Investigation ("FBI"), Central
Intelligence Agency ("CIA"),
and National Security Agency
(''NSA") related to the DPRK's
cryptocurrency capabilities.
Despite good faith efforts,
the parties have reached an
impasse on each of the above
topics that are the subject of
Mr. Griffith's motion to
compel. 4. Mr. Griffith's
motion for a bill of
particulars seeks an Order
directing the government to
produce the following: a. a
specific recitation of the
"services" Mr. Griffith is
alleged to have provided, or
caused to be provided, in
violation of law, including
the alleged services involved,
the identification of others
involved, the manner in which
such services were provided in
violation oflaw, and the
amount and source of each
payment for such alleged
services; b. the identities of
all known co-conspirators; and
c. all relevant acts or events
that occurred in this
District. Despite good faith
efforts, the parties have
reached an impasse on each of
the above topics that are the
subject of Mr. Griffith's
motion for a bill of
particulars." Full letter on
Patreon here.
On July 30, Judge
Castel denied Griffith's venue
motion: "
OPINION AND ORDER as to Virgil
Griffith re: [43] MOTION to
Dismiss for Lack of
Jurisdiction filed by Virgil
Griffith. Defendant Virgil
Griffith is charged with one
count of conspiracy to violate
the International Emergency
Economic Powers Act (IEEPA),
in violation of 50 U.S.C. §
1705. For these reasons,
Griffiths motion to dismiss
the indictment for improper
venueis DENIED. The Clerk is
directed to terminate the
motion (Doc 43). (Signed by
Judge P. Kevin Castel on
7/29/20)(jw)."
Judge
Castel's full order also
states that "the defense will
be free to contest the
government’s evidence
concerning venue and present
its own theory, should it
choose to do so. Subject to
any motions for judgment as a
matter of law, it will be for
the jury to decide whether the
government has established
venue by a preponderance of
the evidence. The Court will
be in the best position to
decide whether the drawing of
an inference of receipt or
access in this District is
reasonable from the totality
of the evidence at trial."
Griffith's lawyer
Keri Axel says now Virgil's
cold wallets have been
secured, it's time to let him
use the Internet. Cites
COVID19 and her own canceled
international vacation.
Griffith's lawyer
says Internet restriction has
wrecked havoc on his ability
to work. "He will be on leave
from Ethereum but has been
offered a consulting contrast"
which she offers to show Judge
Castel in camera - without the
public or press seeing.
Griffith's
lawyer: He does back-end work
on people's servers. His
employers would want their
data protected - so, no
monitoring, it's not
secure. Note: Inner City
Press has covered another
Judge Castel case in which
loosening was denied, here.
AUSA Krouse: The
defendant remains a risk of
flight. The evidence in this
case has grown since we were
before Judge Broderick [Inner
City Press' scoops at turn of
the year.] Judge Castel:
If monitoring of Internet
limited to risk of flight? Or
some other reason?
AUSA
Krouse: He developed a browser
for the Dark Web... The
defendant has sophisticated
knowledge of technology, and a
willingness to use it to help
a rogue regime, North Korea,
with crypto-currency
AUSA Krouse: He
offered to ship a rig to help
North Korea mine
crypto-currency.
Griffith's lawyer: I will jump
in here -- Judge Castel: AUSA
Krouse, are you finished?
AUSA: Yes. Griffith's lawyer:
They never argued danger to
the community
Griffith's
lawyer: He's not accused of
using his computer skills for
harm - he gave a lecture,
that's all. He has a PhD, he
had a research interest in the
Dark Web. It's used for human
rights purposes, to access to
Facebook. He got kicked out of
the TOR project
Griffith's
lawyer: He has cooperated with
law enforcement about the Dark
Web. He helped Ann M. Kempf
(sp). He's never been accused
of doing anything wrong with
his skills.
Griffith's
lawyer: If he were the Doctor
Evil they make him out to be,
he wouldn't use his home
computer to do it. I'm sure
you're aware of a burner
phone, a burner computer, a
public spot, an ISP... He
can't do Zoom calls with
counsel. [Yeah, that's
secure - although another SDNY
proceeding on July 24 took
place on Zoom.]
Griffith's
lawyer: He can't order
PostMates from his phone.
Judge Castel: Here's my
concern. The defendant
represents a danger to the
community. He assisted the
DPRK [North Korea] in learning
how crypto currency works. He
proposed an Ethereum node in
DPRK
Griffith's
lawyer: It's the government's
burden to prove he is a
danger. We don't want to tip
our full hand. We are familiar
with briefing before your
Honor in SEC v Telegram [Inner
City Press covered that as
well, here]
Judge Castel: I
find he is a danger. I have
reviewed the
transcript... Court
reporter: I think we lost the
Court.
Judge Castel: I'm
back. My phone's battery ran
out due to the length of our
proceeding but I have secured
another one. This man has the
ability to respond to detailed
question with knowledge that
poses a danger. Modest
restrictions of Judge
Broderick address that
Judge Castel: The
applicant to modify conditions
is denied. Anything more from
the government? Griffith's
lawyer: Your Honor, I have a
question. Judge Castel: Do you
have an application?
Griffith's lawyer: Can he use
Internet beyond the order? Can
he do searches?
Judge
Castel: There's no confusion
on this - your application
says he can only email with
counsel. That's what I've
ruled on. Klein: I have a
point about the motion
schedule. Do they plan to
supersede? If so, have it be a
month in advance.
Judge
Castel: that's between US and
grand jury. You could argue
for change in schedule. Thank
you, we are adjourned.
The day
above on July 23, Judge Castel
held arguments on venue. Inner
City Press live tweeted it,
below.
And, hours
after the proceeding, AUSA
Ravener submitted a "proposed
Protective Order" to govern
3500 material in the case -
basically, withholding all of
it. We'll have more on this.
Griffith's lawyer
Klein complains that only at
11 pm last night they received
discovery about search warrant
to North Korea's Mission to
the UN - regarding which Inner
City Press won unsealing.
Klein: There is
no IP evidence of this email.
We asked them for a copy of
the email. We are very
concerned about this late
disclosure - Judge Castel:
What's the late disclosure?
Klein: They
sought the content of the
e-mail. [Inner City Press:
what are the provisions for
access to the email account of
a country's UN mission? Also,
Klein's seeming discovery
complaint is really an
argument the March 6, 2019
email was never read in SDNY]
Judge Castel:
Doesn't the government have a
right to put on its evidence
at a trial and ask the jury to
draw an inference? And you can
oppose it? Klein: Your Honor
does not need to wait for a
Rule 29 motion. Judge Castel:
But the indictment alleges
venue.
Klein: Our
replies argues we don't have
to get to a bill of
particulars. Judge Castel:
Let's go back 50 years. Before
e-mail. There may be no proof
that an individual received a
letter. But upon testimony
that a letter was addressed to
NY, jury could find venue
Judge Castel: We'll have to
hear what goes on in the
mission of the DPRK in NY.
[This, Inner City Press wants
to hear. Who will testify?]
Judge Castel:
Isn't that why a trial is
necessary? Klein: E-mail is
different. [Sound a dog
barking, court reporter
complains]
Klein: That
is not my dog. I don't have a
dog, and I didn't adopt one
during the pandemic.... With
mail, there is only one
address. With email, it's out
in the ether - even your
Chambers. It could be accessed
from anywhere. It's like a
phone number.
Judge Castel: Do
you know what the evidence is
the government is going to put
on at trial? Klein: No, I
don't... Why don't you ask
them for it? Our client should
not have to go to trial in a
district in which there is
improper venue, both in terms
of time & cost.
Klein: It
is appropriate for your Honor
to dismiss this indictment at
this time. Judge Castel: Let
me hear from the
government. Crickets.
AUSA
Krause: I was on mute. This is
a fact question for the jury.
The defendant sent an email to
the DPRK mission on March 7,
2019, to get a visa. On April
18, 2019, the DPRK approved
his travel and gave him a
visa.
Krouse: The
DPRK's sole mission in the US
is in New York. We'll make
these arguments to the jury.
This is a fact question. On
the search warrant, we got it
on June 5, 2020. We found the
data didn't contain anything
before Sept 2019. So it
doesn't show anything
Judge Castel: We
don't live in a civil law
country. If a reasonable
inference can be drawn, it's
up to the jury... I think
you're grasping at straws. I'm
not impressed with your
argument. Klein: What's not
the argument I'm trying to
make.
Judge Castel: I
don't think your argument is
consistent with Second Circuit
case law. Klein: Now
I've lost my train of thought.
And maybe it's a train that
should have been lost. The
visa was issued in Beijing,
not in this district.
AUSA
Krouse: He emailed the DPRK
Mission in Manhattan. [As
aside: Inner City Press has
been there, a suite of drab
rooms on 43rd Street, for
surreal press briefings. More
another time.]
Judge Castel:
Emails sent to this address,
two thirds were access from
outside the district. It could
be some in Vermont. AUSA: Even
if an IP address seems to be
outside of NY doesn't mean
that it is. There are ways to
mask it. VPNs. We can have
witnesses.
AUSA Krause: The
staff of the Mission are
limited. [Yes, it is 25
miles from Columbus Circle.
Applies to Syria, too - their
Ambassador was turned down to
travel to Princeton NJ. And UN
staff from Iran gets US
permission to go to the
Hamptons.]
Klein: It
could have been accessed from
North Korea. The IPs are
Virginia, Ireland,
Azerbaijan... and Portland,
Oregon
Klein:
Sure, it may have been the
intention the email come to
New York. But it had to be
received and acted on in the
SDNY. Usually they have a
cooperator to say, I was on 98
St. [But of court NoKo is not
going to cooperate].
Judge Castel: By
your position, there's no way
to prove venue. I'll reserve
judgment. Let's move on to
your bail application. Klein:
I haven't read their response.
[Inner City Press already
reported on it, below]
Bail issue here
deferred...
AUSA Krouse:
Let's talk motion schedule.
They're going to move to
suppress, too. Klein: We're
still trying to figure out how
much more discovery we'll
get. We were thinking
about October. Motion to
dismiss, failure to state a
claim. Judge Castel: Really?
Klein:
Well, insufficient on its
face. Motion to suppress...
like US v. Wei (sp), before
Judge Nathan... Court report:
Who's speaking? Mister
Buckley? Klein: It's Brian
Klein again. We might file a
motion for a bill of
particulars.
Judge Castel: OK
- motions due October 8. And
your reply due November 19.
Time excluded until Nov 19?
AUSA Krouse: We move to
exclude time under the Speedy
Trial Act. Judge Castel: Any
objection? Klein: No.
Judge Castel: This outweighs
the interest of the public.
Judge
Castel.. to a speedy trial.
AUSA Krouse: There will be
some classified information
litigation in this case. CIPA.
We're trying to cooperate with
agencies. A motion will be
filed. Judge Castel:
That seems fine.
AUSA Krause:
We're talking about another
protective order, for 3500
material. Judge Castel:
Anything further? Thank you
for the arguments.
Earlier on July
23 - an hour before the
above-tweeted conference in
the case, the US Attorney
office has opposed, offering
these quotes from the North
Korea conference: "Hello
everyone, I know it’s late in
the day so I’ll try to make
this fun. So the most
important feature of
blockchain is that they are
open. And the DPRK can’t be
kept out no matter what the US
or the UN says. . . .
One of the more interesting
things is that blockchain
allow greater self-reliance in
both banking and contracts. So
you can have contracts without
an authority. . . . So you
heard about with blockchain
the USA can’t stop your
payments. That’s like, that is
step 1, and step 2 is the UN
can’t stop agreements. So if
the DPRK makes agreements with
someone, or if an individual
does, it’s um, you can um you
don’t have to go to a court."
They quote Griffith on text
message: "on October 2, 2019,
the defendant, in a text
exchange with family members,
noted that he might be fired
from his cryptocurrency
company and stated that, if he
was, he might instead “setup a
money laundering company in
North Korea.” We'll have
more on this.
Judge
Castel to his credit the same
day asked each side's counsel
to respond: "The Court has
received an application from
Inner City Press for the
unsealing of certain
applications by the defendant
for the issuance of subpoenas.
The parties shall respond to
the application by May 22,
2020. If there is no
objection, the Court will
order the applications and any
resulting order unsealed."
On May 29,
Judge Castel ruled: "Defendant
is directed to file forthwith
on ECF his ex parte and in
camera applications for
subpoenas pursuant to Federal
Rule of Criminal Procedure 17.
(Signed by Judge P. Kevin
Castel on 5/29/2020) (ap)."
And now
they have been filed: a March
17 letter and affirmation, and
the subpoena itself, for "A
list of any and all IP
addresses associated with the
email address
dprk.un@verizon.net, and any
logs or similar records of
access to the email address
dprk.un@verizon.net, for the
period from November 1, 2018
to October 30, 2019."
Inner City
Press has uploaded the
application, affirmation and
subpoena on Patreon here.
An
aside: the application of
diplomatic immunity and/or the
Vienna convention to this
subpoena, and Verizon's
response to it, remain
UNclear.
On June 1,
Griffith's lawyer filed a
motion to dismiss for lack of
venue, stating that Griffith's
email to the North Korea
Mission in New York, responded
to, might not have been
"received" in New York. Inner
City Press is tweeting the
photo here.
Watch this site.
On
May 28, from Judge Castel
again to his credit, this:
"ORDER as to Virgil Griffith.
The government advises that
the defendant consents to
public disclosure of his ex
parte and in camera
application for a subpoena
pursuant to Federal Rule of
Criminal Procedure 17 (the
Application) but does not
consent to advance disclosure
of the Application to the
government. To enable the
government to intelligently
state its position on public
disclosure, defendant shall
transmit the Application to
the government by 1 p.m.
today, May 28, 2020. The
government shall state whether
it has any objection to public
disclosure by 1 p.m. on May
29, 2020. The Court will
thereafter rule on whether the
Application should be publicly
filed (Signed by Judge P.
Kevin Castel on 5/28/20)(jw)."
Watch this site.
The case is US v.
Griffith, 20-cr-15
(Castel).
***
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