FBI Seeks Extradition of Alleged Internet ‘Pirate’

January 20, 2012
Megaupload Kim Dotcom
Alleged Megaupload boss Kim Dotcom. Photo: Reuters

The Sydney Morning Herald on January 21, 2012 released the following:

“Kirsty Johnston

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
International Extradition Lawyers Videos:

International Extradition – When the FBI Seeks Extradition

International Extradition – Wire Transfer – Email – Telephone Call


We previously discussed the extradition treaty between the United States and New Zealand here.


To find additional global criminal news, please read The Global Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

U.S. Extradites International Hacker; More Extraditions to Follow

August 9, 2010

In November 2008, a group of international hackers allegedly infiltrated the computer network of a major financial services company in what authorities describe as one of the most sophisticated attacks ever concocted.

Around the time Barack Obama was securing his White House win, the hackers allegedly entered RBS WorldPay servers, accessed prepaid payroll card numbers, cracked their encrypted PIN codes, raised the balances on the cards and distributed dozens of them to a team of people around the world.

It is further alleged that in the span of 12 hours around Nov. 8 of that year, the group hit 2,100 ATM terminals in 280 cities spanning the world, from the United States to Russia to Italy to Japan. Prosecutors say they withdrew $9 million — a haul that rivals 1,000 typical bank robberies in the United States.

Despite the technical and international challenges of the case, U.S. investigators believe they were able to trace the scheme back to its origin. On Friday they brought one of the accused ringleaders from Estonia to Atlanta to face arraignment on several fraud charges — a rare appearance in U.S. courts for an accused international hacker.

Sergei Tsurikov, 26, of Tallinn, Estonia, pleaded not guilty at his arraignment to conspiracy to commit computer fraud, computer fraud, conspiracy to commit wire fraud, wire fraud and aggravated identity theft.

With such an increasing need for cyber defenses, the FBI has ramped up its focus, training some 900 agents in how to handle such crimes. In the RBS case, they sent a group of FBI experts to Atlanta, where RBS is based, to investigate.

While U.S. authorities have been able to crack down on cyber crimes originating in the United states, the FBI has had to increasingly rely on foreign partners to restrict attacks coming from overseas, in places like Egypt, Turkey and Hong Kong. Estonia assisted in both the investigation and extradition in the hacker case.

Tsurikov was indicted last year in the case along with Viktor Pleshchuk of St. Petersburg, Russia, Covelin of Chisinau, Moldova, and three others from Estonia. The three leading suspects have been convicted in Estonia. In the United States they face up to 20 years in prison for wire fraud charges and between 5 and 10 years for computer fraud charges.

Tsurikov is the first to face his U.S. charges. Officials said extradition of the others is in progress.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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British Computer Hacker May Avoid US Extradition

July 21, 2010

The computer hacker Gary McKinnon could avoid extradition to the US by serving time in a British prison, David Cameron has suggested after raising the issue in talks with Barack Obama.

Following his meeting at the White House, the prime minister told BBC Radio 5 Live that the government has discussed with the US ambassador the possibility of a prison sentence, but that the sentence be carried out in British prison.

Officials are nearing a deal to avoid McKinnon’s extradition to the US, where he faces up to 60 years in prison. Obama said a solution should be found within the law but in the context of the “co-operative relationship” between the US and the UK. Cameron and Nick Clegg, the deputy prime minister, have publicly criticized plans to extradite McKinnon.

McKinnon claims he only hacked into US systems in 2001-2002 to search for evidence of UFOs. Campaigners for McKinnon, who has Asperger’s syndrome, an autism spectrum disorder, said they were “overjoyed” and hoped Cameron’s comments signaled a resolution to their eight-year campaign.

Last year Alan Johnson, the former home secretary and Theresa May’s predecessor, ruled that McKinnon could face extradition and trial in the US, but his lawyers were granted permission for a judicial review into whether the decision breached his human rights.

The case took another turn when May stepped in to adjourn the review days before it was due to start, to consider whether McKinnon is fit to stand trial in the US. The home secretary is still considering the issue.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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