It feels like they're dropping the charge because there's no reasonable prospect of a conviction. After twenty years all the employees, and records, for the video shop have gone. There's no evidence.
This does make me wonder how many other similar cases are floating around.
As the article correctly notes, the criminal case was dropped. Also, the law parts of the case was based on was practically forgotten for a few decades now and will be removed soon.
In this case, the charges were clearly bogus, and they were dropped in the end (except for 1). It's not the same as facing a real conviction threat for something you are clearly guilty of.
The main bit of evidence, the surveillance tape, was thrown out because they seized it without warrant (out of concern it'd be destroyed while waiting for one). That's why the felonies went away.
See http://news.ycombinator.com/item?id=1583135; not surprisingly based on your and adam_lowe accounts the Feds have filled a motion to drop all charges (I hope with prejudice). See the link for a bit more editorializing by various people including me, but when you compare this to their usual behavior it's very clear the Feds never had a case.
This does make me wonder how many other similar cases are floating around.
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