http://www.tcpalm.com/news/2007/sep/11/man-facing-250-years-child-porn-charges-strikes-pl/ Here someone got busted for child pr0n, but there are perhaps Japanese import shops with affiliate schemes who sell these sorts of things. Could an affiliate based in the US, or with a server based in the US, be held liable for something if it were revealed that this person purchased their dodgy DVDs through a particular affiliate?
I would assume that it would depend entirely on the situation. If you were advertising it as a child pornography source, then you would definitely be liable. It is also the affiliate's responsibility to check any legality issues if they are going to directly link and sell merchandise. I'm not sure about affiliates though. If you are deceived about the legality of any images then I think you would be pretty safe. An adult affiliate needs to hold documentation proving that they're over 18, and if you are deceived I don't think that they would hold you liable. That said, I don't think you'd want to even risk dealing with any shady vendors for the moral issues and legal risks.
I just came to this forum to seek advice about a similar topic, because I just received a legal notice from a major company that has problems with affiliates selling illegal products. In my case, counterfeit products. A little backstory. I am an affiliate with a variety of programs, and have never had any legal problems. However, I am being accused of counterfeit trafficking because of one of the affiliate programs that I am a member of (eBay Partner Network). In short, my site does put affiliate links up that link to various products on eBay, some of which this company alleges is counterfeit. I do not knowingly promote counterfeit products on my sites, but this company is trying to hold me liable for linking to eBay auctions where counterfeit items are allegedly being sold. This company is faced with a problem, however. Tiffany's recently tried to sue eBay for "allowing" counterfeit products to be sold through the site. eBay, however, was victorious. If eBay is not liable for counterfeits being sold on its site, then it follows that affiliates are also not liable. The case illustrated that it is the job of the company that owns the trademark (Tiffany's) to police eBay auctions through eBay's VeRO program, rather than hold eBay liable. Unfortunately, I am now being targeted and intimidated as an affiliate for allegedly trafficking counterfeits. The company that has this claim against me knows that I can't fight back like eBay can (Or maybe I can, any IP lawyers here???), so they are intimidating me into doing something that I don't believe they have the right to force me to do. If you are an affiliate and you promote products that may be counterfeit, use extreme caution. Also, pass this story on.
Affiliates can't escape from there responsibility. They have to do lawful work otherwise they will penalise by law.
Sorry to hear about your situation. It doesn't sound like you did anything wrong, and were not knowingly trafficking counterfeits. From what I can tell, they would have to have proof that you knowingly were, otherwise, how can they build a case against you? I think you're right that they presume you don't have the capability of fighting back as eBay did, but this is something you should definitely look into. Keep us updated on what becomes of it. I think everyone has a responsibility to do their part to not get involved in shady activities, but there's always special circumstances where you do everything you can to avoid it and can't for a reason or other. The story above, to me, would be a special circumstance.