Cyberlocker Owner Laundering Cash & Buying Gold Bullion, Court Hears

The battle between the owners of the currently offline Oron cyberlocker and adult movie studio Liberty Media continues, despite a judge ordering a $550,000 settlement. Lawyers for Oron have asked the court to unfreeze the company's assets so it can take the case to appeal, but Liberty Media has objected, noting that the cyberlocker still hasn't given a full accounting for its worldwide assets. Furthermore, the studio's lawyers accuse Oron of laundering money through Hong Kong and converting almost $3m into gold bullion.

In June through owners Liberty Media, adult studio Corbin Fisher sued the operators of file-hosting service Oron for $34.8 million, claiming that they induce the sharing of copyright infringing files via their service.

After a fiery start, with Liberty Media’s lawyer Marc Randazza describing Oron as ‘criminals’ who do not qualify for safe harbor under the DMCA, earlier this month a judge forced a settlement in the case. Oron will now have to pay Liberty Media at least $550,000.

But despite the ruling this is not the end of the road for the case. Last week Oron asked the court to unfreeze its assets over and above the $550K judgment plus $200K in attorney’s fees and costs. Oron said that $750K could remain in its US PayPal account and there was no reason to freeze any more of its funds.

“Oron desires to file a post-judgment motion or motions in this Court, and if necessary an appeal in the Ninth Circuit. Oron requests that the Court stay execution on its judgment until after Oron’s post-judgment motions can be decided and after Oron has the opportunity to ask the Ninth Circuit to stay execution on the judgment,” the file-hoster’s lawyers wrote.

Oron’s lawyers also asked the court to consider a second option whereby $200K of the company’s funds would be released to pay for post-judgment motions and an appeal.

Almost immediately Liberty Media’s lawyers objected, noting that simply asking for $200K isn’t enough, a detailed breakdown is required. Furthermore, Oron still had not fulfilled its standing obligation to provide a detailed account of its worldwide assets, the studio argued.

The Oron service has been offline for some time now with no sign that it will return. Liberty Media lawyer Marc Randazza argued that lack of funds is not to blame and it is Oron that has caused the demise of its own service. Access to money, he argues, is something that Oron has in spades.

“[Oron] has nearly three million dollars in gold stashed away. Presumably, if the Defendant needed money to run its business, it would liquidate or sell a portion of this bullion. It could presumably do the same to pay legal fees,” Randazza wrote. “However, if it did so, it would be spending funds that were not traceable, and as a practical matter, were not likely to be seized.”

“This is presumably why the funds are laundered in this manner,” he continued. “First the funds are collected through PayPal, then wired to Hong Kong, then converted to gold, and then they are stashed away, free from the eyes of judgment creditors and other authorities. In this case, Oron only wants to spend the money that it most easily stands to lose in this very case. Even if it were not sitting on nearly three million United States dollars in gold, Oron’s troubles would be self-inflicted.”

The collapse of Oron is down to the company itself, Randazza argued, going on to suggest that its demise is “part of an overall scheme to try to manufacture an additional dispute.” In support, Randazza filed with the court a copy of an email sent to him by a tipster providing information on Oron and its alleged owner. In the email it’s claimed that Oron’s operators deliberately killed their service in order to show “loss of business” in court.

“Their servers with data are still in LeaseWeb data center,” the tipster explained, adding that the owner of Oron is also behind another site, NovaFile.com.

The email signed off with an apparently futile request to remain anonymous – while the tipster’s email address was redacted, his full name wasn’t.

“Oron has nine known accounts and a stash of gold bars. Nevertheless, Oron believes that this Court should only Order disbursements from the one U.S.-based account, the one account where this Court’s jurisdiction can have immediate effect,” Randazza concludes. “If Oron needs $200,000, then it should use, or borrow against, the three million dollars worth of gold bars it has stashed away.”

The battle continues…..

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