That's the line that stood out to me. If so, the threat sounds like they could turn it off or reveal everyone at once, not so much a selective attack (why announce it like that then? Certainly not if you were going to use parallel reconstruction to keep the fact secret).
However, the line:
> 34 servers located in nearly 20 countries
Doesn't describe tor. You don't use that many servers (nodes). And it's strength isn't based on number of hops. That's more old school hack a box and put in a chain.
Then what's the cloak? Is their ability that they can easy "go around" somehow any X number of connections right to the source?
If the prosecutors were to do so knowingly, the prosecutors would be breaking their oath to the Constitution (and simultaneously obliterating their case/perhaps committing crimes of their own).