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Wouldn't the monitoring software capture any application's network activities, including a client for a Remote VM? I'm imagining something like Wireshark?
A remote VM would combine both of these things, where the device/computer is in a location that isn't monitored and accessed by means aimed at bypassing controls in place. Activities carried out from the remote VM are then not monitored.
User + Devices -> VPN/other -> Remote VM -> Unmonitored Activities / Network Access
^ Monitoring is here, but may not capture the rest of the chain
Law enforcement would need to monitor the VM itself to monitor those activities, or I guess request logs from the provider if at all possible.
There's a limit to how much you can monitor someone and I assume there's a degree of good faith in cooperation with these controls. Failure to comply, seemingly, has severe consequences.
Also that it occurred right after the search mentioned on Page 28. It's a really bad look.
Not really, no: a VM is just another userspace application and a monitoring software should be able to capture its traffic just fine. If he was also using a VPN, tor or conneting to a remote machine that's another story, but only saying he was using a VM doesn't really mean much.