That's an excellent point that's not been addressed, what if they simply store private keys in safety deposit box and refuse to hand over details, as long as they were careful nothing was left on their hard drives then they could simply serve their time for the punishment and come out, retain the private keys and have control once again over the BTC, mix them up then use them right?
I believe this is essentially what Dread Pirate Roberts is doing right now minus the safety deposit box part since the feds could simply force or smash their way into that if they really wanted to. Those bitcoins that the feds auctioned last year weren't actually DPR's personal bitcoins that he earned from his website. They were the coins owned by his customers which were kept unprotected and unlocked. His personal stash was and still is encrypted and the feds don't have access to it (yet).
So as long as DPR doesn't crack under pressure and I'm sure they would try to make things very uncomfortable for him, he could serve his time and then come out the other side with access to the coins that he didn't give up right?
I don't really know the specifics of his particular case but if he used a brainwallet then yes, he could do that. If he had any paper wallets stashed away in a secret hiding place, then the answer is also yes. Same goes for if he had backed up his wallet.dat in an encrypted archive in the cloud. However, if the only place where he kept his encrypted wallet was in his hard drive and the feds don't give this back to him then it won't be possible for him to retrieve his coins.
