Alleged Megaupload boss Kim Dotcom. Photo: Reuters
The Sydney Morning Herald on January 21, 2012 released the following:
AN INTERNET multimillionaire accused of online piracy who allegedly headed up the global file-sharing website Megaupload.com from his luxury mansion north of Auckland faces extradition to the US after he was arrested yesterday by armed police at the request of US officials.
The FBI yesterday shut down Megaupload.com, one of the world’s most popular file-sharing websites, after filing an indictment in a US court earlier this month alleging its founder, Kim Dotcom, 37, (also known as Kim Schmitz) and six others, dubbed the ”Mega Conspiracy”, engaged in racketeering, copyright infringement and money laundering.
Schmitz, a former computer hacker, and six others were arrested on five charges laid in an indictment by a US grand jury in the state of Virginia.
The US Justice Department and the FBI who led the crackdown said Megaupload.com and other related sites generated more than $US175 million ($A168 million) in criminal proceeds and caused copyright holders more than $US500 million in lost revenue from pirated films and other content.
Megaupload is based in Hong Kong, but some of the alleged pirated content was hosted in the US on leased servers in Ashburn, Virginia, which gave US authorities jurisdiction, the indictment said.
Megaupload has boasted of having more than 150 million registered users and 50 million daily visitors, according to the FBI indictment. At one point, it was estimated to be the 13th most frequently visited website on the internet.
Schmitz founded the Hong Kong-based Megaupload website in 2005, which distributed a myriad of copyrighted works including movies, television programs, music, software and books. Megaupload also offered financial incentives for users to upload popular content and drive web traffic to the site.
Schmitz made $US42 million from Megaupload and other associated websites in 2010, according to the FBI’s indictment.
Despite opposition to the site’s operations from record labels and other copyright holders, many celebrities and artists backed its work – with chart-toppers Kanye West, Will.i.am and P. Diddy starring in a support video last year.
The US indictment paints a picture of a sprawling multinational operation, with more than 20 search warrants executed in nine countries, including New Zealand and the US.
When he appeared in Auckland’s North Shore District Court yesterday, Schmitz, a flamboyant German computer hacker who has past convictions from his home country, said he ”had nothing to hide” when appearing alongside three of his co-accused. ”We don’t mind if there’s press coverage if people want to photograph us, let them,” he said, overriding his lawyer, Auckland QC Paul Davison.
Detective Inspector Grant Wormald said it was ”likely” the men had also breached New Zealand copyright laws, although police had no intention of laying charges in the country.
The men face copyright infringement charges in the US which carry sentences of up to 20 years.
Schmitz is no stranger to being on the wrong side of the law, with a list of convictions including insider trading, credit card fraud, hacking and embezzlement. Schmitz also holds Finnish citizenship, and has Hong Kong and New Zealand residency.
Schmitz was granted New Zealand residency, reportedly after investing $NZ10 million ($A8 million) in government bonds and making a generous donation to the Christchurch earthquake fund.
Possessions taken from his $30 million mansion yesterday provided a hint of the extravagant lifestyles of the accused men.
More than 20 luxury cars worth a combined $6 million were taken from the site, including a 2008 Rolls-Royce Phantom Drophead Coupe, with the licence plate ”GOD”. Others including Mercedes Benzes, a Maserati and a Harley Davison motorbike.”
Douglas McNabb – McNabb Associates, P.C.’s
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