March 22, 2023

Digital Daredevil Behind Megaupload Has a New Venture

AUCKLAND — At 6:48 a.m. Sunday, the Internet tycoon Kim Dotcom opened his new file-storage Web site to the public — one year to the minute after the police raided the mansion he rents in New Zealand.

The raid was part of a coordinated operation with the F.B.I. that also shut down Megaupload, the file-sharing business he had founded.

Mr. Dotcom faces charges in the United States of pirating copyrighted material and money laundering and is awaiting an extradition hearing in New Zealand. But on Sunday, his focus was on the new site, which was already straining under heavy traffic within two hours of its introduction. In the first 14 hours of the site’s operation, more than half a million people registered to use it, Mr. Dotcom said.

“This should not be seen as the mocking of any government or Hollywood,” Mr. Dotcom, 39, said Sunday at a news conference at the Auckland mansion. “This is us being innovators and executing our right to run a business.”

The event marking the introduction of Mega, held at the same property that had been raided by the police, was designed to be a spectacle. As Mr. Dotcom addressed a large crowd of journalists and guests, actors dressed as armed police officers rappelled down the sloping roof of the main house and shouted that all those present would be detained. A helicopter emblazoned with “F.B.I.” hovered overhead.

Mr. Dotcom, a German citizen and permanent resident of New Zealand who was born Kim Schmitz, was arrested Jan. 20, 2012. During the raid on his home that day, the police seized vehicles worth about 6 million New Zealand dollars, or $5 million, and froze about 11 million dollars in bank accounts, according to a news release issued at the time.

Over the past year, Mr. Dotcom has become an ever-prominent figure in New Zealand as the legal and political saga surrounding his case has played out in the public sphere.

In June, a High Court judge ruled that the police had used the wrong type of search warrants to enter Mr. Dotcom’s property, meaning that the raid had been illegal. In September, Prime Minister John Key of New Zealand apologized to Mr. Dotcom after it was disclosed that the country’s intelligence agency had acted illegally by spying on him, even though he holds a permanent resident’s visa.

Mega, Mr. Dotcom’s new Web site, is a file-storage and sharing system that encrypts files on one’s computer before they are uploaded to the site’s servers. Files can then be downloaded and decrypted. This means that files on Mega’s servers cannot be read by anyone, including by the company itself, without the user’s decryption key.

The allegation that Mr. Dotcom’s previous venture, Megaupload, knew its users were illegally uploading copyrighted material — and indeed sought to encourage the practice — is a crucial part of the U.S. Department of Justice’s indictment against the site and those who operated it.

In contrast, the new site appears to distance Mega intentionally from any legal responsibility for the content on its servers, although the terms and conditions of the site do explicitly forbid uploading copyrighted material.

“What he’s trying to do is give himself a second-string argument,” Charles Alexander, a lawyer in Sydney who specializes in intellectual property law, told The Associated Press. “‘Even if I was wrong before, this one’s all right because how can I control something if I don’t know that it’s there?”’ he imagined the new company thinking. “I can understand the argument; whether it would be successful or not is another matter.”

U.S. prosecutors declined to comment on the new site, The A.P. reported, referring only to a court document that cites promises Mr. Dotcom made while seeking bail, including one that he would not start a Megaupload-style business until the criminal case was resolved.

“Legally it’s probably the most scrutinized Internet start-up in history,” Mr. Dotcom said. “Every pixel on the site has been checked for, you know, all kinds of illegal — potential legal challenges. We have a great team of very talented lawyers that are experts in intellectual property and Internet law, and they have worked together with us to create Mega.”

The Motion Picture Association of America, which has filed complaints about alleged copyright infringement by Megaupload, told The A.P. that it was skeptical that Mr. Dotcom’s new site was harmless. “We are still reviewing how this new project will operate, but we do know that Kim Dotcom has built his career and his fortune on stealing creative works,” it said in a news release.

The Mega site offers 50 gigabytes of storage free; additional storage and bandwidth can be purchased at three tiers of monthly fees.

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Greek Editor Not Guilty in Publishing Names With Swiss Accounts

The verdict came four days after a phalanx of police officers arrested the editor, Kostas Vaxevanis, as his magazine, Hot Doc, hit newsstands with the list. Before a packed court, Mr. Vaxevanis and his lawyers portrayed him as the target of a politically motivated campaign aimed at damping the public anger at Greek officials.

The list that Mr. Vaxevanis obtained and published was handed to the Greek authorities two years ago by Christine Lagarde, then the French finance minister and now the head of the International Monetary Fund, to help Greece crack down on tax evasion as it was trying to mend its economy. The list held names of 2,059 Greeks who held accounts at a Geneva branch of the British bank HSBC, which includes a former culture minister, several employees of the Finance Ministry and a number of business leaders. “The court finds the defendant innocent,” Judge Malia Volika said in handing down the decision.

Mr. Vaxevanis emerged from the packed courtroom to cheers from a large crowd. He hailed the “courage” of the judge, adding: “Journalism for far too long has been a hostage to political forces that don’t allow it to work. This decision sets a precedent that allows my colleagues to do their jobs without political handcuffs.”

In his testimony, Mr. Vaxevanis accused politicians of sitting on the information to protect powerful interests. He charged that Greece was governed by a small coterie of business elites protected by politicians and by news organizations owned by a handful of influential Greek magnates.

“Greek people have known for two years now that there is a list of people who are rich, rightly or wrongly, and they are untouchable,” Mr. Vaxevanis told the court. “At the same time, the Greek people are on the other side, they are suffering cuts.”

“The political system has been hiding the truth for so long,” he said.

At times, the courtroom took on a chaotic atmosphere, with a court-appointed interpreter botching the Greek translation for a British journalist testifying for the defense, and Mr. Vaxevanis’s lawyers shouting in protest. Cellphones rang and cigarette smoke wafted through the standing-room-only chamber as the judge, sitting beneath a Greek Orthodox painting of Jesus, banged the table with her hand to restore order.

The prosecutor, Iraklis Pasalidis, called no witnesses and sat stone-faced during most of the trial. He submitted a blank witness list to the judge, a move that one lawyer deemed “an analogy of the blank nature of the allegations.”

Mr. Pasalidis nevertheless argued strongly that Mr. Vaxevanis should be found guilty for defaming people without determining their guilt. “These are the culprits, take them and crucify them,” Mr. Pasalidis told the court. “Is this a solution to the country’s problems? Cannibalism?”

The argument did not prevail.

To support his case, Mr. Vaxevanis cited one of those named: Lavrentis Lavrentiadis, a Greek oligarch and the former chairman of Proton Bank.

Proton received a bailout of $129 million arranged by Evangelos Venizelos, a former finance minister.

A financial prosecutor is now examining whether Mr. Venizelos and George Papaconstantinou, another former finance minister, told Greek tax authorities not to investigate those on the list. On Thursday, the prosecutor asked Parliament to investigate whether any politicians should face criminal charges for failing to determine whether any of the individuals on the list were guilty of tax evasion.

Defense lawyers disputed the charges that Mr. Vaxevanis violated privacy laws, noting that none of the people named had filed a complaint over privacy violation.

Dimitris Bounias contributed reporting.

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