July 27, 2021

Web Site’s Founder Held in Custody by New Zealand

AUCKLAND — The founder of Megaupload, the file-sharing Web site, was ordered held in custody by a New Zealand court Monday, after he denied charges of Internet piracy and money laundering and said the authorities were trying to portray the worst picture of him.

A prosecutor, Anne Toohey, argued at a bail hearing that Kim Dotcom, a dual German-Finnish citizen also known as Kim Schmitz, was a flight risk “at the extreme end of the scale” because it was believed he had access to money, had multiple identities and had a history of fleeing criminal charges.

“The F.B.I. believes the sums located are unlikely to represent all the overseas bank accounts owned by Mr. Dotcom,” she said.

But Mr. Dotcom’s lawyer said he posed no threat of absconding or restarting his businesses, arguing that his client had cooperated fully, his passports had been seized and his money frozen, and also that he had a distinctive appearance.

“He is not the sort of person who will pass unnoticed through our customs and immigration lines and controls,” the defense lawyer, Paul Davison, said of Mr. Dotcom, who is reportedly 2 meters, or 6 feet 6 inches, tall and weighs more than 130 kilograms, or 285 pounds.

Judge David McNaughton said the bail application was too complicated for an immediate ruling, adding he would issue a written decision no later than Wednesday. “Given the breadth of issues covered in this bail application and the seriousness of the issues, I am going to reserve my decision,” the judge said.

The U.S. authorities want Mr. Dotcom extradited, accusing him of masterminding a scheme that made more than $175 million in a few years by copying and distributing music, movies and other copyrighted content without authorization. Megaupload’s lawyer has said the company simply offered online storage.

Ms. Toohey, the New Zealand prosecutor, said two other men sought on global warrants for involvement in Megaupload had been arrested in Europe.

Mr. Davison, Mr. Dotcom’s defense lawyer, said in court that Megaupload’s business was being misrepresented and that the authorities were being aggressive to add drama to the case.

“His business did not reproduce or copy material as alleged,” he told the court, adding that copyright holders had been given access to Megaupload to identify improper posting of material. He likened the site to the popular video site YouTube, where people “promoted their creativity.”

The shock waves of the case appeared to be spreading among Web sites that offer file sharing. FileSonic, which provides online data storage, said in a statement on its site that it had halted its file-sharing services.

“All sharing functionality of FileSonic is now disabled,” it said. “Our service can only be used to upload and retrieve files that you have uploaded personally.”

Mr. Dotcom, 38, and three others, were arrested Friday after the New Zealand police raided his country estate near Auckland at the request of the U.S. Federal Bureau of Investigation. The police cut their way into a safe room where Mr. Dotcom had barricaded himself. He had retreated there because, according to Mr. Davison, his lawyer, he was frightened and panicked.

Presenting the case for flight risk, the prosecutor said that 45 credit cards in three wallets had been found in the mansion under Mr. Dotcom’s various names and that three passports had also been found. Mr. Davison said of the credit cards: “My client collects them. Most of them are out of date.”

Mr. Dotcom smiled and waved at about 20 supporters who filled the courtroom and spoke to them after the judge’s decision.

“Hey, guys, thanks for turning up, I appreciate it,” he said, wishing a female supporter a happy birthday.

Mr. Davison said Mr. Dotcom was “realistic about what is happening.”

“He would obviously prefer to be at large,” the defense lawyer said outside court. “He doesn’t want to be there any longer than he absolutely has to be.”

The F.B.I. estimates that Mr. Dotcom personally made $115,000 a day during 2010 from his network of Web sites.

The list of property to be seized includes nearly 20 luxury cars, works of art, and 10 million New Zealand dollars, or $8 million, invested in local finance companies.

Article source: http://www.nytimes.com/2012/01/24/technology/web-sites-founder-held-in-custody-by-new-zealand.html?partner=rss&emc=rss

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