Megaupload founder denied bail in New Zealand

25 Jan 2012

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Kim Dotcom, otherwise known as Kim Schmitz, the founder of the file-sharing site Megaupload, that the FBI swooped in on last week, has been refused bail in New Zealand as he has been deemed a “flight” risk.

Last week, the FBI charged Schmitz and six other people for running an "international organised criminal enterprise", the Hong Kong-based file hosting and sharing site Megaupload and other related sites.

It was one in one of the largest-ever criminal copyright cases ever brought by US authorities.

As well as 38-year-old Schmitz, the other six who were charged include 38-year-old Finn Batato from Germany, 35-year-old Julius Bencko from Slovakia, 39-year-old Sven Echternach from Germany, 40-year-old Mathias Ortmann from Germany, 32-year-old Andrus Nomm from Estonia and 29-year-old Bram van der Kolk from the Netherlands.

Schmitz was arrested at his luxury mansion in Coatesville, Auckland, on 20 January by armed police, who were acting on behalf of the FBI and the US Department of Justice. At the time Batato, Ortmann and van der Kolk were arrested, while Bencko, Echternach and Nomm were not found. Earlier this week, another man was found in the Netherlands.

The US Justice Department claimed these individuals are responsible for "massive worldwide online piracy of numerous types of copyrighted works," generating more than US$175m.

The FBI seized US$50m in assets and law-enforcement authorities executed more than 20 search warrants in the US and eight other countries. The US District Court in Alexandria, Virginia, ordered the seizure of 18 domain names associated with Megaupload.

US extradition application

Today, Auckland Judge David McNaughton remanded Schmitz in custody until a US extradition application is formally launched on 22 February.

However, the lawyer acting on behalf of Schmitz said this morning he will appeal today’s decision to deny him bail.

Schmitz founded Megaupload in 2005.

Carmel was a long-time reporter with Siliconrepublic.com

editorial@siliconrepublic.com