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RICO Suit Filed Against Skype Founders

Posted by ScuttleMonkey on Sun Mar 26, 2006 12:08 PM
from the jealous-of-success dept.
Government The Courts Software News
Stitch_Surfs writes "Defendant Skype Technologies S A, Niklas Zennstrom, Janus Friis, Kazaa, Bluemoon Ou and a slew of others have been named in a Rico Suit Filed by StreamCast Networks, of Houston, Texas. StreamCast is the company credited with the development of the Peer to Peer Technology called Morpheus. From the little information the courts have released, StreamCast is claiming that the group engaged in corrupt business practices."
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[+] News: Digital Media Winners and Losers of 2006 36 comments
An anonymous reader writes "MP3 Newswire released its annual list of winners and losers in digital media for 2006. Winners include Azureus, the Pirate Bay, and YouTube. The losers list includes Streamcast, Captain Copyright (and his sidekick Lieutenant Lame), and the Online Guitar Archive. At the bottom of the post are links to past year's winners and losers lists."
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RICO Suit Filed Against Skype Founders 50 Comments More /

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  • So that's what RICO [wikipedia.org] stands for...
    • Can a private company file a RICO suit ? I thought that was a Govt charge ?

    • Can RICO Act be used against the RIAA? (Score:2, Funny)

      by Anonymous Coward
      Racketeer Influenced and Corrupt Organization

      Wow! I didn't know that.

      Can't this Act be used against the RIAA? Protection rackets seem to be exactly what RICO is about.
    • Just be glad it isn't some bizzare PR backronym like the PATRIOT ACT. How about "America Protected Proactively Like Eagles Protecting Innocent Eaglets" Act, or APPLE PIE for short.

      I bet congress would pass it without debate, just like they did for an obviously virtuous bill like the PATRIOT act. Whats the matter, are you against PATRIOTs, man?! What about APPLE PIE?!?!

      I swear, law and military op names have been getting more and more riduculous for years.

      • Re:Racketeer Influenced and Corrupt Organization (Score:4, Insightful)

        by Thing 1 (178996) on Sunday March 26 2006, @05:51PM (#14999632) Journal
        I swear, law and military op names have been getting more and more riduculous for years.

        Ridiculous to the informed, yes. Unfortunately, however, rather functional on the uninformed. Thus, their use. Which saddens me; third-world countries keep their populace uneducated because it helps the leaders defraud them.

        Holy shit, is that what the "No Child Left Behind" unfunded mandate was all about? Give props to education, but no financial support for it--so it looks like the government is doing something good, whereas they're really dumbing us down to be the next soldiers or oil field workers?

  • Talk about the pot calling the kettle black.
    • It has been said that in the field of UFOlogy, of all things, that they eat their own young. A strange reference, from a strange field. But what does it mean?

      In this context, it means that in that field, when someone becomes something of a celebrity, for one reason or another, many, if not all of the other celebs and bloggers, etc. in the field have a tendency to gang up on the new comer. If someone is succesful, the others sabotage him as they can. Flame wars and other forms of infighting are routine. The

  • RICO is scary (Score:5, Funny)

    by tehpwn (896928) on Sunday March 26 2006, @12:15PM (#14998362)
    It's quite scary that a group named Racketeer Influenced and Corrupt Organization is allowed to fill suit against honest companies!

  • Pacer (Score:5, Insightful)

    by Tester (591) <tester@testDEBIANer.ca minus distro> on Sunday March 26 2006, @12:20PM (#14998381) Homepage
    Can anyone with a Pacer account get the complaint full text ?

    • Re:Pacer (Score:5, Insightful)

      by evil agent (918566) on Sunday March 26 2006, @01:11PM (#14998568)
      Good question. And here's another one:

      Can we please stop linking to these damn blogs. Especially ones that are nearly devoid of any useful info.

      • RICO in a nutshell (Score:4, Informative)

        by aws910 (671068) on Sunday March 26 2006, @02:21PM (#14998895)
        Here's your better link. From info in TFA and here [ricoact.com], it looks like Streamcast is alleging that Skype(and others) did one(or more) of many things:

        a. use an enterprise to launder money generated by a pattern of racketeering activity

        b. a victim business owner cannot make payments to a loan shark; upon default, the loan shark says: "you're either going to die or you're going to give me your business." Given the threat to this life, the victim transfers control of his business to the loan shark. Usually, the victim business owner remains the owner on paper but the loan shark controls the business and receives all income from the business. Thus, the loan shark has acquired and maintained interest or control over an enterprise (i.e. the business) through a pattern of racketeering (i.e., loan sharking and extortion).

        c. [Streamcast] has been injured by reason of the defendants' investment of the proceeds of racketeering activity / (1) a defendant person[Skype] (2) was employed by or associated with an enterprise (3) that engaged in or affected interstate commerce and that (4) the defendant person operated or managed the enterprise (5) through a pattern (6) of racketeering activity, and (7) the plaintiff[Streamcast] was injured in its business or property by reason of the pattern of racketeering activity.

  • Query... (Score:4, Interesting)

    by Illbay (700081) on Sunday March 26 2006, @12:36PM (#14998439) Journal
    Is it possible that SteamCast is a surrogate for a larger organization or consortium?

    • Re:Query... (Score:2, Funny)

      by Anonymous Coward
      Is it possible that SteamCast is a surrogate for a larger organization or consortium?

      Yes. That is possible.

  • No way (Score:4, Insightful)

    by wkitchen (581276) on Sunday March 26 2006, @12:37PM (#14998443)
    From the little information the courts have released, StreamCast is claiming that the group engaged in corrupt business practices.
    No way. The good folks at Skype would never engage in corrupt business practices [slashdot.org]

    • Re:No way (Score:3, Interesting)

      by MBCook (132727)
      I read a great piece on that whole debacle. I think it was in Forbes.

      They made that software Intel only when it didn't need to be. This was found out (much to no-one's surprise) and they looked terrible.

      But did it have to be that way?

      The article posited it this way. They should have made that same software, but only bundled it with Intel computers. They wouldn't offer it for download. Other people would find it and put it up for download and it would be discovered that the limit was there and it worked j

      • The idea of reading a great piece on anything in Forbes leaves me a bit suspicious. That could just be because they keep letting Dan Lyons write for them.

        http://wiki.vowe.org/DanLyons [vowe.org]

        • I subscribe to Forbes. It is a fantastic magazine. The writing is insightful and well written (targeted at an adult, not a 7th grade reading level). It's often very interesting, informative, and has quickly become my favorite magazine.

          Every magazine seems to have someone odd working there. Don't judge the magazine based on one opinion columnist.

          • Re:that's hard to believe. (Score:4, Interesting)

            by Karma Farmer (595141) on Sunday March 26 2006, @02:11PM (#14998852)
            I stopped reading it after the old man died and it turned into a mouthpiece for Steve's celebration of unearned wealth.

            If it's been turned around again into a real magazine, that would be wonderful. It would have been a shame to see a great magazine run into the ground by a giant douchebag like Steve Forbes.

  • RICO use and abuse (Score:5, Informative)

    by Anonymous Coward on Sunday March 26 2006, @12:43PM (#14998462)
    RICO was ostensibly passed to help prosecutors go after mobsters. Mafia organizations were set up so that the guys running them could avoid personal responsibility for the corrupt actiosn of the organization itself, so prosectutors ended up always going after low-level guys, which wasn't right and wasn't productive. So they got RICO which would let them bust the top guys, even if the top guys were not directly involved in the corruption. Prosecutors would just have to show that the organization itself is corrupt.

    But now RICO gets used and abused for many other things. It is used to go after political groups (anti-abortion groups is one case I'm aware of). In this case it sounds like it is being used in a business dispute.

    I swear, if Congress keeps on passing laws that inadvertently (or otherwise) lets law enforcement get involved in what are civil business disputes, this country will be ruined. I was talking with an attorney a while ago who said that these days anyone who is a business leader should have a crim. def. attorney retained or available. There's no way law enforcement can help achieve a fair resolution of a business dispute by getting involved in it.

    ------------
    Contact management, calendar mangement, multiple timezones, sales automation [contempo.biz]

    • Well said! (Score:4, Interesting)

      by bobalu (1921) on Sunday March 26 2006, @12:58PM (#14998521)
      Exactly right, it was originally intended to recover $$$ salted away in mob compounds on Long Island.

      Now they'll use it against kids opening a lemonade stand if they feel like it.

    • Re:RICO use and abuse - Or Not (Score:5, Informative)

      by Nom du Keyboard (633989) on Sunday March 26 2006, @01:06PM (#14998551)
      It is used to go after political groups (anti-abortion groups is one case I'm aware of).

      I'm not sure that qualifies as abuse of the act. An organized group of people (Operation Rescue) attempting to extort legal businesses (abortion clinics) into either changing or closing entirely through threats (see what is on some of their websites), intimidation (in-your-face confrontations directly in front of clinics), and violence (bombings and beatings tacitly accepted as part of the struggle), simply because their view isn't your view (First Amendment issue of everyone, including clinics have rights to free speech and association and freedom from religion)...

      Yeah, IANAL, but I'd call that a valid RICO case.

      • I'm not sure that qualifies as abuse of the act. An organized group of people (Operation Rescue) attempting to extort legal businesses (abortion clinics) into either changing or closing entirely through threats (see what is on some of their websites), intimidation (in-your-face confrontations directly in front of clinics), and violence (bombings and beatings tacitly accepted as part of the struggle), simply because their view isn't your view (First Amendment issue of everyone, including clinics have rights
      • I'm not sure finding people guilty by whom they choose to associate with is legal.

        Last time I checked, it unconstitutional to prohibit people from peacably assembling.

        With this RICO act, you could be procecuted simply by showing up at a meeting and being seen by an FBI agent who is now allowed to monitor the proceedings without a warrant (also unconstitutional).

        Isn't it funny how these things compound? The government makes booze illegal, a black market forms, then they have to make further laws to combat th
      • I'm not sure that qualifies as abuse of the act. An organized group of people (Operation Rescue) attempting to extort legal businesses (abortion clinics) into either changing or closing entirely through threats (see what is on some of their websites), intimidation (in-your-face confrontations directly in front of clinics), and violence (bombings and beatings tacitly accepted as part of the struggle)

        A good way to determine if your argument is logically sound is to replace the subject with something you per

        • good way to determine if your argument is logically sound is to replace the subject with something you personally feel differently about. Let's try that, switching anti-abortion with, say, environmentalism:

          Guess what? You're wrong!

          If Greenpeace is supporting ELF (Earth Liberation Front, a designated terrorist group), or their illegal tactics, with money, or even silence where they know of the lawbreakers, send them to jail!

          If PETA is funding the ALF (Animal Liberation Front, also a terrorist group),

          • To add to this, RICO is designed to go after organizations that have IRS filings, be they corporate or NPO. So the users of Slashdot would not constitute a RICO act, because we are merely a loose affiliation of (possible) confederates. And since Slashdot site owners are pretty much hands-off on any sort of endorsements of activity on the site, they will never be charged with RICO for encouraging piracy or civil disobedience or what have you.

            If the PETA officially sanctioned or condoned civil disobedience (o
    • But now RICO gets used and abused for many other things. It is used to go after political groups (anti-abortion groups is one case I'm aware of). In this case it sounds like it is being used in a business dispute.

      I swear, if Congress keeps on passing laws that inadvertently (or otherwise) lets law enforcement get involved in what are civil business disputes, this country will be ruined.

      So you think bombing and the shooting of people who work in abortion clinics are just civil business disputes? Encoura

    • > If...this country will be ruined.

      You keep using that subjunctive mood. I do not think it means what you think it does. That horse already left the barn.
      • It certainly doesn't mean what you think it means, since that sentence doesn't use a subjunctive verb. If you want to play grammar nazi, you could insist that the statement is semanticly subjunctive, and that it's a grammatical error not to use a subjunctive verb (if congress continues -> if congress were to continue). Except that's absurdly unidiomatic, like most grammar nazi rules.

        High school English technicalities aside, the author is simply making a statement about the future consequence of current

    • RICO used against people who aren't the mafia? I am shocked, shocked! Next you'll be telling me that they use the PATRIOT act against people who aren't terrorists!
      • Do they have to be gangsters to be a mafia? In this day and age, with the 'practices' of corporations and such, I'd well imagine quite a few companies count as Mafia. For an Example - Cricket Communications. (Yanno, those 'leave your home phone in your pocket' guys that give you unlimited local and text mesaging that sucks.) They're charging you five dollars to walk into their stores/authorized service dealers to pay your bill with CASH. That's a disadvantage of 'no service contracts.' Basically, they're tr
    • I was talking with an attorney a while ago who said that these days anyone who is a business leader should have a crim. def. attorney retained or available.
      a lawyer that thinks that everyone should have a lawyer. does this guy have a name or can we just call him John Q Lawyer?

  • Rico? (Score:3, Funny)

    by sootman (158191) on Sunday March 26 2006, @01:03PM (#14998542) Journal
    Suave!
  • This is interesting. Also listed as defendants are other companies that seem to have nothing to do with each other, ie Kazaa, Brilliant Digital Entertainment, etc. Anyone?
  • What is it now? Still pretty much a branding of Gnucleus, or something else? Do they really not have spyware? And I liked them better when they just ran their Music City servers. Or even the spyware-less Kazaa.

  • I-K-RICO (Score:2, Insightful)

    by lohphat (521572)
    What's the point of the RICO statutes if it's randomly enforced?

    The Catholic Church knowingly traffiked paedophiles interstate and internationally. Why wasn't it invoked then?
  • Mother of God, is this the end of Rico?
    • The founders of Skype previously set up Kazaa, and ran it until they sold it to Sharman Networks.

      Streamcast started life as the largest alternative Napster network. When that was shut down by the courts, they launched a rebranded version of Kazaa.

      Kazaa a bit later on released a non-compatible version of their software which had the effect of kicking them off the network. Apparently they hadn't paid their bills for the use of the software, but Streamcast deny this.

      They then relaunched as a spyware infested

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