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`
`Gary S. Lincenberg - SBN 123058
` glincenberg@birdmarella.com
`Naeun Rim - SBN 263558
` nrim@birdmarella.com
`BIRD, MARELLA, BOXER,
`WOLPERT, NESSIM, DROOKS,
`LINCENBERG & RHOW, P.C.
`1875 Century Park East, 23rd Floor
`Los Angeles, California 90067-2561
`Telephone: (310) 201-2100
`Facsimile: (310) 201-2110
`
`Attorneys for Petr Pacas
`
`David W. Wiechert - SBN 94607
`dwiechert@aol.com
`Jessica C. Munk - SBN 238832
`jessica@wmgattorneys.com
`William J. Migler - SBN 318518
`william@wmgattorneys.com
`WIECHERT, MUNK & GOLDSTEIN, PC
`27136 Paseo Espada, Suite B1123
`San Juan Capistrano, California 92675
`Telephone: (949) 361-2822
`
`Attorneys for Jacob Bychak
`
`
`
`
`Randy K. Jones - SBN 141711
`rkjones@mintz.com
`MINTZ, LEVIN, COHN, FERRIS,
`GLOVSKY AND POPEO, P.C.
`3580 Carmel Mountain Road, Suite 300
`San Diego, California 92130
`Telephone: (858) 314-1510
`
`Attorney for Mark Manoogian
`
`
`Whitney Z. Bernstein - SBN 304917
`wbernstein@bmkattorneys.com
`Thomas H. Bienert, Jr. - SBN 135311
`tbienert@bmkattorneys.com
`James Riddet - SBN 39826
`jriddet@bmkattorneys.com
`BIENERT | KATZMAN PC
`903 Calle Amanecer, Suite 350
`San Clemente, California 92673
`Telephone: (949) 369-3700
`
`Attorneys for Mohammed Abdul Qayyum
`
`
`UNITED STATES OF AMERICA,
`
`Plaintiff,
`
`vs.
`
`JACOB BYCHAK, MARK
`MANOOGIAN, MOHAMMED
`ABDUL QAYYUM, AND PETR
`PACAS
`Defendants.
`
`
`
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
` CASE NO. 3:18-cr-04683-GPC
`
`DEFENDANTS’ JOINT MOTION
`TO DISMISS WIRE FRAUD
`COUNTS 2-5 AND TO STRIKE
`WIRE FRAUD ALLEGATIONS IN
`COUNT 1 FOR FAILURE TO
`STATE AN OFFENSE
`
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN SUPPORT
`
`Date: February 20, 2020
`Time: 1:00 PM
`Dept.: 2D
`
`Assigned to Hon. Gonzalo P. Curiel
`
`
`
`
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`TABLE OF CONTENTS
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`I.
`II.
`
`Page
`INTRODUCTION ..................................................................................................... 5
`BACKGROUND ....................................................................................................... 6
`A.
`The Wire Fraud Counts in the Indictment Accuse Defendants of
`Scheming to Acquire Inactive IP Addresses ................................................... 6
`ARIN and the Federal Government Have Publicly Asserted for Years,
`Including in This Case, that IP Addresses Are Not Property ......................... 8
`III. LEGAL STANDARD ............................................................................................. 11
`IV. ARGUMENT ........................................................................................................... 12
`A.
`The Government Has Failed to Plead Wire Fraud As A Matter of Law
`Because IP Addresses Are Not “Property” For Purposes of the Wire
`Fraud Statute .................................................................................................. 12
`Even if the IP Netblocks Are “Property,” the Indictment Does Not
`Allege that Defendants Obtained the IP Netblocks By Means of
`Material Misrepresentations. ......................................................................... 17
`CONCLUSION ........................................................................................................ 21
`
`B.
`
`B.
`
`V.
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`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Carpenter v. United States,
`484 U.S. 19 (1987) .................................................................................................... 5, 12
`Cleveland v. United States,
`531 U.S. 12 (2000) ............................................................................................ 13, 16, 17
`Dowling v. United States,
`473 U.S. 207 (1985) .......................................................................................... 14, 15, 16
`Glob. NAPS, Inc. v. Verizon New England, Inc.,
`No. CV 02-12489-RWZ, 2015 WL 12781223 (D. Mass. Mar. 10, 2015) ................... 16
`Glob. NAPS, Inc. v. Verizon New England, Inc.,
`No. CV 02-12489-RWZ (D. Mass. 2015) .................................................................... 10
`Kremen v. Cohen,
`No. C 98-20718 (N.D. Cal. 2006) ................................................................................ 10
`McNally v. United. States,
`483 U.S. 350 (1987) ......................................................................... 5, 12, 16, 17, 18, 21
`Neder v. United States,
`527 U.S. 1 (1999) .......................................................................................................... 19
`New Hampshire v. Maine,
`532 U.S. 742 (2001) ...................................................................................................... 14
`In re Nortel Networks Corp.,
`Case No. 09-10138 (Bankr. D. Del. 2010) ............................................................. 10, 11
`Pasquantino v. United States,
`544 U.S. 349 (2005) ...................................................................................................... 13
`Skilling v. United States,
`561 U.S. 358 (2010) .......................................................................................... 12, 16, 17
`United States v. Berry,
`638 F.Supp.2d 1163 (N.D. Cal. 2009) .......................................................................... 11
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`United States v. Bruchhausen,
`977 F.2d 464 (9th Cir. 1992) .................................................................................. 19, 20
`United States v. Cecil,
`608 F.2d 1294 (9th Cir. 1979) ...................................................................................... 18
`United States v. Dadanian,
`856 F.2d 1391 (9th Cir. 1988) ........................................................................................ 5
`United States v. Henry,
`29 F.3d 112 (3d Cir.1994) ............................................................................................ 14
`United States v. Jinian,
`725 F.3d 954 (9th Cir. 2013) .......................................................................................... 5
`United States v. Lew,
`875 F.2d 219 (9th Cir. 1989) ...................................................................... 12, 17, 18, 19
`United States v. Riggs,
`739 F. Supp. 414 (N.D. Ill. 1990) ........................................................................... 15, 16
`United States v. Shortt Accountancy Corp.,
`785 F.2d 1448 (9th Cir. 1986) ...................................................................................... 11
`Universal Health Servs., Inc. v. United States,
`136 S. Ct. 1989 (2016) .................................................................................................. 19
`
`
`Statutes
`18 U.S.C. § 1343 ................................................................................................................ 12
`18 U.S.C. § 1346 ............................................................................................................ 5, 12
`18 U.S.C. § 1956(c)(7)(A) ................................................................................................. 17
`18 U.S.C. § 2314 ................................................................................................................ 15
`Other Authorities
`Fed. R. Crim. P. 12....................................................................................................... 11, 18
`Fed. Rule of Evid. 201…………………………………………………………………… 8
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`I.
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`MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`Internet Protocol (“IP”) addresses are not property. That is what the
`Government’s expert John Curran, the Chief Executive Officer of the American Registry
`for Internet Numbers, Ltd. (“ARIN”), swore to this Court. In his declaration in support of
`the Government’s Response in Opposition to the Defendants’ Motion to Dismiss the
`Indictment as Void for Vagueness (“Curran Declaration”), Curran quoted a U.S. Federal
`Communications Commission (“FCC”) publication as stating, “When a registry allocates
`a[n IP] number to an entity, it is giving that entity the ability to use that number; no
`property right is conferred to the recipient.” (Dkt. 107-1 ¶ 14.) The emphasis in the
`quote was added by Curran.
`The Government’s concession that IP addresses are not property requires this Court
`to dismiss all wire fraud counts and strike all wire-fraud-related allegations from the
`Indictment. It is well-established that the wire fraud statute is “limited in scope to the
`protection of property rights.” McNally v. United. States, 483 U.S. 350, 360 (1987)
`(emphasis added), superseded by statute on other grounds, 18 U.S.C. § 1346; see also
`United States v. Dadanian, 856 F.2d 1391, 1392 (9th Cir. 1988).1 The only items that
`Defendants Jacob Bychak, Mark Manoogian, Mohammed Abdul Qayyum, and Petr Pacas
`are accused of having “acquired” in the Indictment are IP addresses. Because IP addresses
`are the only alleged object of Defendants’ alleged wire fraud scheme, if IP addresses are
`not property as the Government itself maintains, the Government has failed to state a wire
`fraud offense.
`Alternatively, even if IP addresses are property, the wire fraud counts must be
`
`
`1 McNally was a case about the mail fraud statute, but the analysis for mail fraud and wire
`fraud are the same. United States v. Jinian, 725 F.3d 954, 960 (9th Cir. 2013) (“the wire
`fraud statute is read in light of the case law on mail fraud”), quoting United States v.
`Manarite, 44 F.3d 1407, 1411 n. 5 (9th Cir. 1995); see also Carpenter v. United States, 484
`U.S. 19, 25 n.6 (1987).
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`dismissed because the Indictment fails to allege that Defendants obtained the IP addresses
`by means of a material misrepresentation. Although the Indictment describes an alleged
`misrepresentation—namely a letter of agency (“LOA”) stating that the original IP address
`holder authorized the Defendants to use the IP addresses—it does not allege that the
`misrepresentation was the means by which Defendants acquired the IP addresses. This
`distinction is critical. Similarly, the Indictment does not allege that the misrepresentation
`was material. To the contrary, in statements to the Court, the Government described the
`lack of materiality when it stated that the recipient of the LOA “did not believe it was his
`job to verify whether or not the LOAs were, in fact, true.” (Hr’g Tr. 21:1-2 (Apr. 30,
`2019).)
`Because these defects in the Indictment are fatal to the wire fraud counts, the Court
`must dismiss Counts 2-5 and strike all language relating to wire fraud in Count 1.
`II. BACKGROUND
`A. The Wire Fraud Counts in the Indictment Accuse Defendants of
`Scheming to Acquire Inactive IP Addresses
`On October 31, 2018, the Government brought felony criminal wire fraud and CAN-
`SPAM Act charges against four employees of a large digital advertising company
`(“Company A”). The premise of the Indictment is that Defendant employees, who were
`responsible for leasing or purchasing IP addresses on behalf of Company A, allegedly
`“acquired” IP addresses for Company A that were in actuality registered to other
`companies. (Indictment ¶ 2.) The dispute at trial will revolve around whether Defendants
`were duped into believing they were legitimately purchasing IP addresses from the
`Government’s cooperating witness Daniel Dye, or whether, as the Government alleges,
`Defendants decided to jeopardize their jobs and reputations (and in the case of
`Mr. Qayyum and Mr. Pacas, their immigration status) by purchasing IP addresses they
`knew to be stolen, even though doing so afforded them no personal benefit or economic
`gain. Defendants deny the Government’s characterization of the events as stated in the
`Indictment, various motion papers, and in oral arguments made to the Court. For the
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`purposes of this motion, however, the Court may assume that the Government’s version of
`the facts are true.
`Defendants are charged in Count 1 with conspiracy to commit wire fraud and
`electronic mail fraud and in Counts 2-5 with substantive wire fraud counts. The substance
`of the wire fraud allegations in the Indictment are as follows:
`Defendants “would identify or pay to identify blocks of Internet Protocol (IP)
`•
`addresses called ‘netblocks’ that were registered to others and appeared to be
`inactive.” (Indictment ¶ 2a; see also ¶ 5.)
`Defendants would then “create and send letters to Internet hosting companies
`fraudulently stating the letter bearer had been authorized by the registrants of
`the inactive IP addresses to use the IP addresses.” (Indictment ¶ 2b; see also
`¶ 6)
`Defendants allegedly “concealed their use of the IP addresses to send ‘spam’
`emails by using business names, post office boxes, and email addresses under
`different names.” (Indictment ¶ 8.)
`In furtherance of the above, Defendants wired $600 to a hosting company in
`Oklahoma through PayPal. (Id.)
`To connect the IP netblocks referenced in the wire fraud counts to the internet,
`Defendants are alleged to have paid a hosting company (“Company H”) $600 to
`“announce” each of the IP netblocks. Put simply, “announcement” is the process of
`notifying internet service providers that the holder of an IP netblock is connecting those IP
`addresses to the internet. As part of the process of “announcement,” certain Defendants
`are alleged to have provided the owner of Company H with a fraudulent letter of agency
`(“LOA”) that was allegedly forged to look like it had been written and signed by a
`representative of the actual holder of the IP netblock.
`The LOA is the central misrepresentation alleged as part of the wire fraud scheme.
`The Government does not contend, however, that Company H believed the LOA was
`authentic or that Company H was necessarily deceived. To the contrary, in the course of
`opposing Defendants’ motion to compel discovery regarding a confidential informant who
`had communications with the owner of Company H (“Mr. H”) about LOAs, the
`Government stated to the Court:
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`[T]he government’s case does not rest, as the defense appears to believe, on
`[Mr. H] testifying that he did not know [the LOAs] were forged. My
`expectation is that [Mr. H] is going to testify that he did not believe it was his
`job to verify whether or not the LOAs were, in fact, true; that his job was to
`collect an LOA and to provide it to an entity known as an upstream provider.
`And that’s because [Mr H] did not have the power or authority to transfer IP
`blocks between registrants.
`(Declaration of Naeun Rim (“Rim Decl.”) ¶ 10, Exh. I, Hr’g Tr. 20-21 (Apr. 30, 2019).)
`B. ARIN and the Federal Government Have Publicly Asserted for Years,
`Including in This Case, that IP Addresses Are Not Property2
`As the Court is aware, ARIN is a non-profit corporation that serves as one of the
`world’s five Regional Internet Registries and has been responsible for the allocation of IP
`addresses in the North America region since 1997. (Dkt. 107-1 (“Curran Decl.”) ¶ 4.)
`While ARIN’s predecessors had also allocated IP netblocks to entities, it was in a very
`informal manner. ARIN, in the other hand, began requiring entities to sign a contract with
`ARIN known as a Registration Service Agreement (“RSA”) before allocating to them a
`new IP netblock. (Dkt. 116-1 (“Lindsey Decl.”) ¶ 7). By signing the RSA, entities
`contractually agree to comply with ARIN’s policies and receive the “exclusive right to be
`the registrant” of the allocated IP netblock.3 (Lindsey Decl. ¶ 23 (quoting ARIN’s 2016
`RSA Template).) Registrants who are not in compliance with these and other policies are
`subject to having their IP addresses revoked and reclaimed by ARIN.4
`Similar to the way a home address allows people to locate a home, an IP address is
`
`
`2 The facts in this subsection are undisputed or are taken from Government filings or
`from materials published by ARIN and government agencies. Defendants ask that the
`Court take judicial notice of these facts pursuant to Federal Rule of Evidence 201(b)(2).
`3 Among other policy requirements, IP registrants must pay ARIN’s annual fees, must
`utilize a minimum percentage of IP addresses within their allocated netblocks, and cannot
`transfer their right to use the IP addresses to a third party without ARIN’s approval. See
`ARIN’s Number Resource Policy Manual Version 2019.2 (“ARIN Policies”), available at
`https://www.arin.net/participate/policy/nrpm/.
`4
`Id. (“Section 12. Resource Review”).
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`what allows devices on the internet to be located and found by other devices on the
`internet. The demand for IP addresses is high because every device connected to the
`internet must be assigned a unique IP address to ensure that data is sent to the intended
`recipient. (Curran Decl. ¶ 10.) Given the limited number of IPv4 addresses, any IPv4
`address that goes unused is considered to be a waste of a finite resource. ARIN has taken
`the position that its policies are designed to prevent this waste and conserve IP space by
`giving ARIN the ability to allocate IP addresses on a needs-based basis, to take back IP
`addresses from registrants who fail to demonstrate continued need and utilization, and to
`place restrictions on registrants’ ability to transfer IP addresses to organizations without
`ARIN’s approval and a newly executed RSA.5
`While it is clear that ARIN’s policies apply to those who signed written RSAs, it is
`not clear whether entities who were allocated IP addresses before ARIN’s creation, known
`as “legacy” addresses, are subject to these policies. Legacy IP address holders (“legacy
`holders”) received IP addresses from ARIN’s predecessors without having to sign a written
`agreement. (Rim Decl. ¶ 6, Exh. E at 2 (“ARIN Article in Business Law Today”).) ARIN
`chose to transfer the information it had about the legacy address allocations into its WhoIs
`database, but there is no law requiring legacy holders to pay ARIN’s fees or comply with
`its policies. Some legacy holders have voluntarily signed a Legacy Registration Service
`Agreement (“LRSA”) with ARIN that subjects them to similar conditions as an RSA. The
`principle benefit of doing so is to be able to keep their WhoIs information up-to-date—
`without an LRSA, a legacy holder cannot make changes or corrections to the WhoIs
`database. (Id. at 5.) There is no legal requirement to sign an LRSA, however, and many
`legacy holders have chosen not to do so, opting instead to leave their WhoIs information
`outdated either because they no longer intend to use the IP addresses or because they
`simply do not want to be restricted by ARIN’s policies. (Id.) It is undisputed in this case
`that all of the IP netblocks referenced in the Indictment were legacy netblocks that were
`
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`5
`Id. (“Section 8. Transfers”).
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`not subject to an LRSA during the timeframe alleged.
`There has been significant debate within the internet community as to whether ARIN
`has any control over legacy holders who choose not to sign an LRSA. (Id. at 3.) Some
`have taken the position that legacy holders effectively “own” their legacy addresses and
`can do whatever they want with them—they can choose to leave them abandoned and
`unused or to sell them to third parties without involving ARIN or complying with ARIN’s
`transfer policies. (Id. at 2.) ARIN has taken the position that all legacy addresses are
`subject to its policies, with or without a contract, and can be revoked by ARIN if out of
`compliance. Importantly, ARIN itself has argued that legacy addresses can only be
`transferred to a third party that has ARIN’s approval and has agreed to sign an RSA. (Id.
`at 3.)
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`To bolster its position, ARIN has repeatedly stated over the years that IP addresses
`are not property:
`Since at least June of 2004, ARIN’s RSA has contained a provision with the
`•
`heading “NO PROPERTY RIGHTS” and has expressly required the registrant
`to agree that IP addresses are “not property (real, personal or intellectual)” and
`that the registrant does “not acquire any property rights” by virtue of being
`allocated the IP address. (Rim Decl. ¶ 3, Exh. B at 3.)
`ARIN’s LRSA has contained near identical language stating IP addresses are
`not property since at least October of 2007. (Rim Decl. ¶ 4, Exh. C (ARIN’s
`2007 LRSA Template.)
`Lawyers for ARIN have published multiple articles in publications such as the
`American Bar Association’s Business Law Today and Bloomberg BNA
`arguing that IP addresses are not property rights and including legal
`justification for that position. (Rim Decl. ¶¶ 6-7, Exhs. E and F.)
`ARIN has intervened in several court cases over the years arguing that IP
`addresses are not property and that legacy holders cannot transfer their IP
`addresses to any third party without ARIN’s approval. See, e.g., Glob. NAPS,
`Inc. v. Verizon New England, Inc., No. CV 02-12489-RWZ (D. Mass. 2015);
`In re Nortel Networks Corp., Case No. 09-10138 (Bankr. D. Del. 2010);
`Kremen v. Cohen, No. C 98-20718 (N.D. Cal. 2006).
`Government agencies have also consistently and publicly supported ARIN’s
`position:
`•
`
`As Curran informed the Court, the FCC stated in a 2010 publication made
`available on its website, “When a registry allocates a number to an entity, it is
`giving that entity the ability to use that number; no property right is conferred
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`to the recipient.” (Rim Decl. ¶ 5, Exh. D at 5 (emphasis added).)6
`In an official statement on December 3, 2012, the National
`Telecommunications and Information Administration embraced ARIN’s
`policies, stating that the United States Government “participates in the
`development of and is supportive of the policies, processes, and procedures
`agreed upon by the Internet technical community through ARIN.” (Rim Decl.
`¶ 8, Exh. G at 2.)
`Canada’s Department of Industry submitted a letter to a bankruptcy court in
`support of ARIN’s motion to intervene in the Nortel case, supra, in which it
`stated, “It is our view that Internet Numbers never became the property of the
`persons who were authorised to use them, nor were they ever free of the
`conditions governing their use. . . While rights to use Internet Numbers are
`legal and enforceable, they do not constitute property.” (Rim Decl. ¶ 9,
`Exh. H at 1-2.)
`
`III. LEGAL STANDARD
`A defendant may move to dismiss charges in an indictment for failure to state an
`offense. See Fed. R. Crim. P. 12(b)(3)(B)(iii). “A pretrial motion is generally ‘capable of
`determination’ before trial if it involves questions of law rather than fact.” United States v.
`Shortt Accountancy Corp., 785 F.2d 1448, 1452 (9th Cir. 1986). “A district court may
`make preliminary findings of fact necessary to decide the questions of law presented by
`pre-trial motions so long as the court’s findings on the motion do not invade the province
`of the ultimate finder of fact.” Id. In particular, where a fact is undisputed, courts may
`rely on that fact in ruling on a pretrial motion to dismiss “without fear of invading the
`province of the jury.” United States v. Berry, 638 F.Supp.2d 1163, 1165 (N.D. Cal. 2009),
`citing United States v. Flores, 404 F.3d 320, 325 (5th Cir. 2005) (“dismissing an
`indictment based on the resolution of a legal question in the presence of undisputed facts is
`authorized by the Federal Rules of Criminal Procedure”).
`
`
`
`6 Cannon, Robert, Potential Impacts on Communications from IPv4 Exhaustion & IPv6
`Transition, FCC Staff Working Paper 3, (Dec. 2010), available at
`https://apps.fcc.gov/edocs_public/attachmatch/DOC-303870A1.pdf.
`
`3630102.3
`Case No. 3:18-cr-04683-GPC
`11
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS WIRE FRAUD COUNTS
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`IV. ARGUMENT
`A. The Government Has Failed to Plead Wire Fraud As A Matter of Law
`Because IP Addresses Are Not “Property” For Purposes of the Wire
`Fraud Statute
`The wire fraud statute prohibits the use of interstate wires to execute “any scheme or
`artifice to defraud, or for obtaining money or property by means of false or fraudulent
`pretenses, representations, or promises.” 18 U.S.C. § 1343. Courts have interpreted this
`language to mean that the intent to obtain money or property from the victim is a required
`element of a mail or wire fraud offense. See, e.g., McNally, 483 U.S. at 360 (reversing
`mail fraud conviction where jury was not required to find that the victim was defrauded of
`money or property); United States v. Lew, 875 F.2d 219, 221 (9th Cir. 1989) (“the intent of
`the scheme must be to obtain money or property.”) It is not sufficient for the defendant
`merely to deceive someone if the object of the deceit was not to obtain property. See id.
`While the word “property” is not defined in the wire fraud statute, the Supreme
`Court has issued several decisions that offer limited guidance. In McNally itself, the Court
`held that the term “property” did not include the intangible right to honest services from
`the government. 483 U.S. at 356.7 In that same term, the Court clarified in Carpenter that
`“property” was not limited to tangible property and could include intangible property
`rights—such as a publication’s right to confidential business information—that “have long
`been recognized as property.” Carpenter v. United States, 484 U.S. 19, 26 (1987) (citing a
`string of Supreme Court cases recognizing confidential business information as property).
`
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`7
`In response to McNally, Congress passed the honest services fraud statute, which
`expressly states that the phrase “scheme or artifice to defraud” includes a scheme to
`deprive another of the intangible right to honest services. See 18 U.S.C. § 1346. The new
`statute did not disturb the central holding of McNally, however, which was that mail fraud
`required a showing of intent to obtain property. Defendants are not charged with honest
`services fraud, nor do the allegations against them meet those elements. See Skilling v.
`United States, 561 U.S. 358, 409 (2010) (honest services fraud limited to schemes
`involving kickbacks or bribes, neither of which are alleged against Defendants here).
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`3630102.3
`Case No. 3:18-cr-04683-GPC
`12
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS WIRE FRAUD COUNTS
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`In Cleveland, the Court considered the mail fraud convictions of defendants who were
`alleged to have defrauded the State of Louisiana by applying for licenses to operate a video
`poker business under their children’s names while concealing from the State the true
`ownership of the business. Cleveland v. United States, 531 U.S. 12, 16-17 (2000). The
`Court reversed the convictions, holding that a business license was not “property” for the
`purposes of the mail fraud statute, at least in the hands of the State. Id. at 26-27. Five
`years later, in Pasquantino, the Court affirmed the wire fraud convictions of defendants
`accused of defrauding Canada of tax revenue by smuggling liquor into the country without
`paying the liquor tax. Pasquantino v. United States, 544 U.S. 349, 354-55 (2005). In
`contrast to the business license at issue in Cleveland, the Court held that Canada’s
`entitlement to tax revenue did constitute “property.” Id. at 355-56.
`In this case, Defendants are not alleged to have used confidential business
`information without their employers’ permission, nor are they alleged to have sought to
`avoid paying a tax—the object of their alleged fraud was to acquire IP addresses.
`(Indictment ¶¶ 2 and 5.) But like other federal agencies before it, the Government in this
`case has adopted ARIN’s position that IP addresses are not property. In the Defendants’
`motion to dismiss the CAN-SPAM counts as void for vagueness, Defendants argued that it
`was reasonable for a person to believe that a legacy IP address with no LRSA on file had
`been “abandoned” and was therefore effectively “unregistered.” (Dkt. 69-1, Mot. at 8.)
`More than two and a half months after the close of briefing on the motion, and without
`seeking leave of Court, the Government then filed the Declaration of John Curran to rebut
`Defendants’ argument. Specifically, Curran stated that because IP addresses were not
`“property,” legacy IP addresses could not be considered “abandoned” or “unregistered”
`simply because there was no LRSA.8 (Curran Decl. ¶¶ 19-23.) Having taken the position
`
`8 Curran incorrectly stated that Defendants were arguing they had “lawfully obtained
`‘unregistered IP addresses’ because they were ‘abandoned.” (Curran Decl. ¶ 23.) To the
`contrary, Defendants were arguing that, because many legacy holders who no longer
`intended to use their I