Monday, January 23, 2012

Megaupload founder had 'lavish' lifestyle's German detained founder Monday denied wrongdoing after US authorities shut down his file-sharing website, as new details emerged of a rock-star life featuring "fast cars" and "hot girls."

Appearing in a New Zealand court, Kim "Dotcom" Schmitz demanded to be freed from police custody and denied doing anything illegal, rejecting US claims that he had overseen one of the internet's biggest and most lucrative piracy rackets.

The judge reserved a decision until at least Tuesday on a bail application filed by the German businessman who faces extradition to the United States to answer charges of rampant copyright theft.

He is among seven people indicted by the US Justice Department and FBI, which said they were "responsible for massive worldwide online piracy of numerous types of copyrighted works, through" and other sites.

They generated more than $175 (€135.2 million) in criminal proceeds and caused more than $500 (€386.4 million) in harm to copyright owners by offering pirated copies of movies, TV programs and other content, according to Thursday's indictment.

Schmitz has vigorously denied the allegations, and his lawyer Paul Davison told the bail hearing that the 37-year-old German, who has New Zealand and Hong Kong residency, had not been involved in any criminal activity.

"This is not a case where there will be any concession by Mr. Dotcom," Davison told the North Shore District Court in Auckland.

The lawyer said Schmitz had no intention of fleeing if granted bail as he wanted to stay in New Zealand with his pregnant wife and family, and had no incentive to re-start the business as all his servers had been shut down.

However, prosecutor Anne Toohey described the imposing Schmitz as an "extreme" flight risk and said that he had fled to Thailand when he was previously wanted on charges in Germany.

She also opposed electronic bail as it would likely give Schmitz access to telephones and the internet.

Toohey told the court that more than 30 credit cards in a variety of names were found in Schmitz's mansion and he also had passports in three different names.

The Megaupload founder was arrested during a raid Friday on his "Dotcom Mansion" in Auckland. Police said they seized a 1959 pink Cadillac among other vintage cars, along with a sawn-off shotgun and valuable artworks.

The New Zealand Herald detailed new claims about Schmitz's lavish lifestyle including how he had filled a swimming pool with imported spring water.

And a documentary uploaded online shows Schmitz, surrounded by topless women, spraying champagne on board a superyacht during a "crazy weekend" in Monaco that reportedly cost US$10 million.

"Fast cars, hot girls, superyachts and amazing parties. Decadence rules," said the blurb accompanying the documentary, which Schmitz dedicated to "all my fans."

The FBI estimated that in 2010 Schmitz personally made around $115,000 (€89,000) a day from his Megaupload empire.

Megaupload Ltd and another company, Vestor Ltd, were indicted by a US grand jury and charged with racketeering conspiracy, copyright infringement and conspiring to commit money laundering.

Vestor's sole shareholder is Kim Schmitz. His six fellow accused come from Estonia, Germany, the Netherlands and Slovakia.

Schmitz and three associates arrested with him in Auckland do not face charges in New Zealand and following the bail hearing, US authorities have 45 days to file extradition documents. The other three indicted people remain at large.


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