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Grouper Fish

Demand for good fishing spots leads to federal extortion conviction.

Demand for good fishing spots leads to federal extortion conviction.

In U.S. v Smith, Case No 20-12667, the United States Court of Appeals for the Eleventh Circuit issued a very interesting decision in a criminal theft of trade secrets and extortion count. You can read the decision here: https://media.ca11.uscourts.gov/opinions/pub/files/202012667.pdf

The court framed the issue as “whether an accused can be tried in a venue where he did not commit any of the conduct elements of the charged crime,” and answered that question no.

The more surprising holding of the case was the determination that demanding the location of good grouper fishing spots can be the basis of a federal extortion conviction.

Background:

StrikeLines sells the coordinates of artificial reefs placed in various locations in the Gulf of Mexico by commercial and recreational fishermen. The reefs create attractive fishing locations, the coordinates of which are usually not shared to prevent overfishing. It is important to note that the reefs were not placed in the Gulf by StrikeLines.

StrikeLines obtains the coordinates for the non-public reefs by having boats equipped with sonar equipment trowel through the Gulf of Mexico. After processing the raw data collected by sonar, StrikeLines offers the private reef coordinates on its website, where each coordinate is sold only once, for between $190 and $199.

Timothy Smith was a software engineer and avid angler. Smith used a debugging and troubleshooting application called Fiddler to download the coordinates of private artificial reefs that StrikeLines had gathered and placed on its website. Smith contacted the owners of StrikeLines and advised them that he had obtained the private reef coordinates that StrikeLines sells on its website. He refused to tell StrikeLines how he had accessed the data.

Smith posted on Facebook that he possessed all of StrikeLines’s coordinates. In one post, Smith said that he “would like to give anyone who has paid to have [artificial reefs put out the opportunity] to look and see what reefs [StrikeLines] has for sale or has sold in the past” and that “[s]everal of [his] friends [had] dozens . . . of [artificial reef locations that were] for sale or [that had] been sold by [StrikeLines].” He invited viewers of the post to “direct message” him.

In response to reports of the Facebook posts, StrikeLines’ owner texted Smith that the posts were “creating a lot of trouble” by “causing actual harm to [StrikeLines’s] reputation” and “livelihood.”

Smith responded by texting, “How about this, I’ll delete the post, won’t ever say anything else about it, even to those that have contacted me. I need help with one thing, though.”

StrikeLines’ owner replied, “What’s that?”

Smith also texted “I need deep grouper numbers, div[e]able, 160 to 210. I’ll also help you fix your problem free of charge. But me fixing your problem has to remain strictly between me and you, and I mean strictly.”

StrikeLines’ owner responded that if Smith deleted his Facebook posts that they might be able to talk about Smith’s proposition.

Smith responded, “I’ll delete the post in good faith, but I’m not sure I’m really interested in side [coding] projects. I’m really just interested in deep grouper spots. I mean, I’ll listen to what you’ve got, though. We have a deal?”

They exchanged more texts about the type of grouper spots that Smith wanted, but communications broke down and because Smith did not receive the deep grouper numbers, Smith texted the owners of StrikeLines that the “[p]osts are going back up.”

StrikeLines then contacted law enforcement, which executed a search warrant for Smith’s home and computers.

During questioning Smith told law enforcement that “he wrote a ten-line code to decrypt the information” from the StrikeLines website and admitted to most of the allegations.

Criminal Charges and Conviction:

A federal grand jury indicted Smith on three counts in the Northern District of Florida. The first count was a violation of the Computer Fraud and Abuse Act, 18 U.S.C. §1030(a)(2)(C), (c)(2)(B)(iii), for knowingly and intentionally accessing a computer without authorization and for obtaining information with a value exceeding $5,000 from a protected computer. The second count was for theft of trade secrets. See id. §1832(a)(1). The third count was for transmitting a threat through interstate commerce with intent to extort a thing of value. See id. §875(d).

The jury returned a verdict of not guilty as to count one and guilty as to counts two (theft of trade secrets) and three (extortion).

Venue Issue

The essential conduct element of count two, the theft of trade secrets, is that the defendant must steal, take without authorization, or obtain by fraud or deception trade-secret information so that conduct must have taken place in the same geographic location as the trial, also known as proper venue.

Smith was a resident of Mobile, Alabama, which is in the Southern District of Alabama, and resided there during all the events relevant to the indictment. And although StrikeLines was headquartered in Pensacola, which is in the Northern District of Florida, its servers, where the coordinate data was stored, were in Orlando, which is in the Middle District of Florida.

Smith was prosecuted for theft of trade secrets in the Northern District of Florida, but there was no dispute that Smith remained in Mobile, Alabama during the commission of the crime and the servers were located in the Middle District of Florida.

The Eleventh Circuit found that the venue was not proper in the Northern District of Florida, where StrikeLines was located, because Smith never committed any essential conduct in that location.

Because the venue was improper in the Northern District of Florida, the Eleventh Circuit held that the conviction should be vacated. The court also noted that Smith could be retried in the Southern District of Alabama because the Double Jeopardy clause was not implicated. The court also expressed no opinion on whether there was sufficient evidence to support the conviction.

Fishing Locations And Extortion

Smith also challenged the extortion conviction. The Eleventh Circuit held that the jury had sufficient evidence to support the guilty verdict based on the Facebook posts and Smith’s text messages.

Federal extortion law simply requires a threat through interstate commerce with intent to extort a thing of value. With very little analysis, the court determined that deep grouper numbers are “thing[s] of value” and that because Smith texted the owner of StrikeLines that his Facebook posts, which offered to let people see what reef locations StrikeLines had for sale or has sold in the past, were going to be reposted on Facebook he was guilty of extortion.