New Zealand Court Denies Kim Dotcom Bail In Extradition Battle

Megaupload founder Kim Dotcom has been denied bail by a New Zealand court after being declared a flight risk. He is to remain in custody until 22 February when the US Department of Justice’s application for his extradition will be heard.

Dotcom, a German national formerly known as Kim Schmitz, was arrested last week amidst the FBI’s crackdown against the file-sharing website.

Significant flight risk

A 72-page indictment, naming the founder as well as six other men, alleges that Megaupload caused more than $500 million (£323m) of damage in copyright infringement. Dotcom denies all charges of racketeering and piracy.

District Judge David McNaughton suggested the fact that Dotcom has passports and bank accounts under three different names and his unlicensed possession of a gun factored into his decision to deny bail. He said to Reuters: “With sufficient determination and financial resources, flight risk remains a real and significant possibility which I cannot discount.”

Dotcom’s lawyer, Paul Davidson QC, said Dotcom was “very disappointed” in the judge’s decision and argued that due to the government’s seizure of his assets and his wife’s pregnancy, he was not a flight risk. Davidson stated he would appeal the bail decision at the high court.

The US Department of Justice is also seeking the extradition of the three other men arrested in connection with Megaupload last week. Finn Batato, Mathias Ortmann and Bram ver der Kolk will hear their bail decision on Thursday.

Richard O’Dwyer, the student who may soon become the first UK citizen to be extradited to the US for copyright infringement may serve as an example should Megaupload’s operators lose their appeals. The 23-year-old creator of TVShack.net may receive a jail sentence of up to five years based on the allegation that the site earned over $230,000 (£150,000) before the domain name was seized in 2010. In comparison, the FBI claims Megaupload accumulated more than $175 million (£113m) in illegal profits for the founder and operators, with assets including 15 Mercedes, a Maserati, a Lamborghini and a Rolls-Royce.