Kim Dotcom offers developers early API access to the upcoming Megaupload reboot

 

Megaupload founder Kim Dotcom has had a bone to pick with authorities since the service was shut down and he was arrested earlier this year. It looks like he’s going to be a thorn in the side for them for some more time, as he just put out the call to developers who are interested in early API access to the upcoming relaunch.

Dotcom teased the service on Twitter earlier this month, before providing more details today. He told developers to get ready because the “Mega API will provide incredible powers” that, together with the resulting tools, will “change the world.” Developers of “up/download and file managers, email and fax tools, VOIP and video apps” were instructed to contact him to get access to the API.

The new Mega will offer one-click-encryption of ALL your data transfers, on the fly, easy to use, free of charge, TOTAL PRIVACY!

His arrest may have motivated him to work even harder at his service, as Dotcom said in a message that authorities had “abused the wrong guy” and he is going to “turn this world upside down.” According to him, the rebooted global network will allow all “non-US hosters” to connect servers and bandwidth.

Dotcom is also working on a Megabox music service that he has promised will arrive later this year.

Police raided Dotcom’s New Zealand mansion in January, but they were later found to have acted on invalid search warrants. Dotcom has since been released on bail while he awaits a US extradition hearing, which has been pushed to 2013.

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This is Kim Dotcom’s new Megabox 

service

MegaUpload founder Kim Dotcom may have had most of his assets seized as part of his indictment for criminal copyright infringement in January, but that apparently hasn’t stopped him from working on his next venture. Dotcom gave a first peak at Megabox, which is supposed to become a kind of cloud music service, on Twitter Wednesday, sharing a photo of what looks like a mobile app. Check out the photo below:

 

He teased the new service with the following words:

“The major Record Labels thought Megabox is dead. Artists rejoice. It is coming and it will unchain you.”

The photo seems to show a website that advertises an Android app, which in turn promises “unlimited space for all your music.” The app seems to offer a music player, search, a shop and some kind of social component, and states that unlimited music uploads will be free.

Dotcom’s team was working on Megabox before the shut-down of MegaUpload, but details of the new service remained scarce. Dotcom has said that it will allow artists to sell their music directly to consumers while also earning money from free downloads. This was supposedly being facilitated through MegaKey, an adware service that swapped ads on third-party websites for MegaUpload’s own display advertising. It’s unclear whether this ad swapping scheme will still be part of the upcoming Megabox service.

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Megaupload Asks Court to Dismiss The Criminal Case

 

For the first time Megaupload has filed a motion in response to the U.S. indictment. Kim Dotcom’s legal team has asked a Virginia federal court to dismiss the criminal case the U.S. Government started in January. The defense argues that the U.S. violated Megaupload’s due process rights by destroying its business, without having properly served the company. If granted, this means the Megaupload case will be over.

In January, the U.S. Government announced that it had initiated one of “the largest criminal copyright cases ever brought by the United States.” That case was brought against Megaupload and its key employees, including founder Kim Dotcom.

The authorities seized domain names, servers and personal belongings, and asked for the extradition of the defendants who were all arrested abroad. Since then, Kim Dotcom and his colleagues have been fighting against extradition in New Zealand. Today, the focus is shifting to the U.S. case.

Megaupload’s lawyers just filed a motion to dismiss at the District Court for the Eastern District of Virginia. Their argument is simple. The U.S. authorities failed to serve Megaupload as is required in a criminal case. Because of this failure and the fact that the company was effectively put out of business, Megaupload’s due process rights have been violated.

To claim a due process violation Megaupload has to shows that a liberty or property interest which has been interfered with by the State and that the procedures attendant upon that deprivation were constitutionally sufficient.

According to Megaupload’s lawyers this is certainly the case here.

“Both prongs of the procedural due process test are plainly met here. The Government has seized Megaupload’s property and domain name, ruined its reputation, and destroyed its business pursuant to an indictment which is fatally flawed as a jurisdictional matter. Megaupload now finds itself in a state of abeyance, with no end in sight,” they write.

“As a result of the Government’s inability to properly serve the summons on Megaupload, this Court lacks jurisdiction over the company. In the absence of effective service of process, criminal proceedings against Megaupload cannot commence, and as the Court has aptly noted, we ‘frankly don’t know that we are ever going to have a trial in this matter’.”

Megaupload’s legal team therefore concludes that, “Megaupload is thus deprived of any procedure to clear its name or recoup its property, in clear violation of its due process rights.”

The crucial issue in the motion to dismiss is that Megaupload was never served. The origin of this problem is not merely a matter of oversight. Megaupload’s lawyer Ira Rothken previously noted that unlike people, companies can’t be served outside US jurisdiction.

If this issue indeed prevents Megaupload from being tried in the US, it would be a blunder of epic proportions. And the fact that District Court Judge O’Grady previously acknowledged that this “issue” warrants further investigation, suggests that the motion filed by Megaupload could be the beginning of the end for the Megaupload case. 

Mega Dismiss

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US Govt. Objects To Megaupload Hiring Top Law Firm

 

Last week it was revealed that Megaupload had retained the services of Andrew Schapiro, the lawyer who led YouTube to a summary judgment in its copyright trial against Viacom. But now the US government has filed papers objecting to Schapiro’s law firm working on Megaupload’s defense, citing conflicts of interest involving Google, YouTube, Disney, Fox and other movie, TV show and software companies.

Following the raids on Megaupload in January, tens of millions of dollars in assets and funds belonging to the company were seized.

Initially a law firm called Sidley Austin LLP had been negotiating on Megaupload’s behalf for the return of such assets and funds held in Hong Kong, New Zealand and Canada. Funds were indeed released from Hong Kong in February (to pay Mega employees) and from New Zealand in March (to pay for Kim Dotcom’s living expenses).

At the end of last month, Sidley Austin LLP and Rothken law firm filed a motion in the US to have more funds released to cover Mega’s legal fees. Later Sidley Austin withdrew and a new law firm called Quinn Emanuel Urguhart & Sullivan took their place.

The addition of the Los Angeles-based company to Megaupload’s legal team was widely considered a great asset for Kim Dotcom and his co-defendants to exploit. Andrew Schapiro, a partner at Quinn Emanuel, had previously represented several technology and media companies including Google and YouTube, leading the latter to a summary judgment in its $1 billion lawsuit against Viacom.

In a new court filing the US government complains that Schapiro’s past record in copyright cases, and that of Quinn Emanuel as a whole, present a series of conflicts of interest.

The government says the first conflict concerns YouTube. Last week the U.S. Court of Appeals in Manhattan reversed a lower court’s decision to issue summary judgment in the Viacom v YouTube case, so now that battle is back on. YouTube is also listed as a victim and potential witness in the criminal indictment against Megaupload. Quinn Emanuel can’t have interest in both cases, the government says.

The second claimed conflict concerns Google, a company represented by Quinn Emanuel on a number of occasions including some involving the company’s AdSense advertising service. According to the Megaupload indictment, Google withdrew its Adsense service from the now-defunct file-hosting service in part due to copyright infringement concerns. The government intends to call Google as a witness in the Megaupload case.

But it doesn’t stop there. The government goes on to list several companies that have been represented by Quinn Emanuel in copyright matters who are also alleged victims in the Megaupload case and who could be called as witnesses.

The list includes a who’s-who of Hollywood and TV companies including Disney, Fox, Time Warner, Warner Bros. and HBO, in cases dating between 2006 and 2009. Another, a trademark dispute involving the company Danjaq LLC (holder of copyrights and trademarks relating to James Bond) and Sony dates back to 1998.

Software companies make an appearance too. Quinn Emanuel represented Brøderbund Software back in 1986, Intuit (the company behind Quicken) in 1997, and at some point Bulletproof Software. It is claimed that all of these companies had their products distributed unlawfully via Megaupload and could be called to give testimony.

“It is unclear how Quinn Emanuel intends to zealously represent defendants Megaupload Limited and Kim Dotcom while also protecting confidential attorney-client information gained in the course of representing other clients [...] particularly where those clients’ interests are directly opposed to those of the defendants,” the government writes.

But according to the government the conflicts go even deeper, particularly since Quinn Emanuel are now applying for funds seized from Megaupload to be released in order to pay legal fees.

“The possibility of a conflict of interest raised by Quinn Emanuel’s proposed representation of Megaupload Limited and Kim Dotcom is not limited to mere subject matter. The assets seized by the government from defendants may eventually be restored to victims – including possibly the current and former Quinn Emanuel clients listed above – as restitution,” the government adds.

In any event, the US government believes that the amount of money already released by New Zealand to Kim Dotcom ($240,000 to be released in monthly installments of $32,000 until the funds are depleted then indefinite monthly payments of $16,000) will not prove restrictive when it comes to hiring a “competent” legal team, “..even if such funds prove insufficient to pay Quinn Emanuel’s billing rates.”

The government’s complaints pose a real problem for Megaupload. Will it ever be possible for Kim Dotcom and his co-defendants to recruit a high-quality copyright specialist law firm that hasn’t ever represented any of the potential witnesses in the case? It seems unlikely.

Meanwhile, the fight for legitimate users of Megaupload to get their data back continues.

“The Electronic Frontier Foundation (EFF) will ask a federal judge on Friday to establish a process that would allow lawful users of Megaupload’s cloud storage service to get their files back,” the EFF reports.

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Kim Dotcom granted three basic human rights: can now swim, prep debut album

 

A New Zealand court has granted embattled MegaUpload founder Kim Dotcom three basic human rights while out on bail awaiting a United States trial for racketeering, copyright infringement, and money laundering charges, Torrentfreak has reported.

The eccentric Dotcom has obtained access to the Internet and can now use the swimming pool in his mansion to alleviate his back pain. An aspiring musician, Dotcom may also travel to Auckland twice a week to finish work on an album that he'd been working prior to his January arrest.

Dotcom, 38, was arrested on Jan. 20 by the New Zealand government after United States authorities seized control of MegaUpload, a cyberlocker site that allows users to store files that other individuals can then download via a URL. The site is ostensibly legal and purely for storage purposes, though the indictment brought against him stated that the site was a facility for money laundering and copyright infringement.

Dotcom was released on bail on Feb. 22, but his freedom came with a number of stringent restrictions. Among them, Dotcom was forbidden from landing helicopters on his property, had to give police 24 hours notice before he left his home, and was not allowed to travel more than 80 kilometers from his primary residence.

Speaking before a North Shore District Court on Monday, Dotcom's legal team requested that their client receive Internet access so that he could properly mount his defense in the U.S. trial. (At his bail hearing in February, Dotcom's lawyer Paul Davison argued that restricting Internet access was "like saying he shouldn't have access to a telephone, it's such a fundamental means of communication.")

Obtaining permission to work on his album—which Dotcom has tried to justify as an exercise of his fundamental right to generate revenue however he can—proved slightly more difficult. The prosecution immediately objected to the request, saying that it was unlikely to achieve commercial success. After hearing arguments, the court ruled that Dotcom had behaved properly while on bail and could resume operations in Auckland's Roundhead Studios.

Dotcom's aspiration of profiting off album sales is an ironic one. As the CEO of one of the largest cyberlocker sites on the Internet, Dotcom was largely responsible for facilitating the cost-free sharing of over $500 million in online content, a legitimate portion of which came at the expense of musicians whose materials were being illegally uploaded onto the site and transferred from one party to another.

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Police court order Dotwrong

 

Internet tycoon Kim Dotcom's cash, cars and property were seized using a court order which should never have been granted.

A judgment from Justice Judith Potter on Friday declared the restraining order "null and void" and having "no legal effect".

The blunder might now lead to the beleaguered internet mogul getting back everything that was stripped away in the surprise dawn raid on his mansion eight weeks ago.

Police commissioner Peter Marshall and the Government's legal advisers at the Crown Law Office have admitted making an embarrassing "procedural error" when filing documents to seize Dotcom's property.

Potter said Marshall's application for the restraining order had "confused" legal moves by opting for one in which Dotcom was not given a chance to mount a defense. It meant Marshall applied for the "incorrect order".

Potter said he had sought to correct the mistake after the raid by applying for the proper order, retrospectively listing assets already seized.

The new order had been granted on a temporary basis, but Potter said she would soon rule on whether the mistake meant the internet mogul should get his property back.

A briefing on the mistakes has been made to Attorney-General Chris Finlayson - who is also the minister in charge of the Crown Law Office.

It was his legal authority that was used by Crown Law to authorize the seizure of the goods, which was undertaken by police and the Official Assignee.

The raid led to Dotcom's Megaupload sites - which carried 4 per cent of internet traffic - being pulled down and $200m in assets seized. A fascinated public watched as officials took a string of luxury cars from the $30 million mansion in North Auckland where Dotcom, wife Mona and their three children lived.

The seizure left Dotcom with no finances to mount a legal challenge against claims he had overseen the biggest criminal copyright operation in history.

On January 30, Crown lawyer Anne Toohey wrote to the court to explain the wrong sort of restraining order had been applied for, saying a "procedural error" had occurred.

Toohey enclosed new legal papers to seek a replacement restraining order and outlined five errors with the initial application.

Court papers showed Marshall accepted the initial order "may well be a nullity".

However, the Crown submitted that new orders granted meant the previous errors didn't matter as the property was still restrained.

Dotcom's legal team, including Simpson Grierson senior partner Willie Akel, challenged the error, stating the seizure of the property was "unlawful".

Court papers show Akel stating Dotcom's belongings and fortune "must be released" because it was "unlawfully seized and restrained under the order".

A spokesman for the Attorney-General said Finlayson was briefed on the issue, apparently in early February.

Dotcom's legal team were unwilling to comment on the decision.

The move would be seen as a new victory for Dotcom. Earlier, Paul Davison QC had successfully over-turned the insistence Dotcom should be held in jail, rather than bailed, before an extradition hearing expected within six months.

But Dotcom is not guaranteed to get his property back.

Canterbury University professor Ursula Cheer said the law made allowances for mistakes and the case would only be fundamentally affected if Dotcom's lawyers were able to produce evidence showing a lack of good faith.

This was "so high profile, anything like this looks extremely bad," she said.

A hearing to decide if the assets will be returned will take place next week.

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Kim Dotcom: Many Megaupload Users at the US Government

 

Aside from preparing the cases of the Megaupload defendants, a team of lawyers is working hard to grant the site’s users access to their personal data. The cyberlocker is working out a deal with the Department of Justice to allow users to download their personal files. Interestingly enough, Megaupload founder Kim Dotcom reveals that these users include many high-ranking US Government officials.

In the wake of the MegaUpload shutdown many of the site’s users complained that their personal files had been lost due to collateral damage.

From work-related data to personal photos, the raid disabled access to hundreds of thousands, perhaps millions, of files that were clearly not infringing.

With most of the news coverage focusing on Megaupload founder Kim Dotcom and the racketeering, copyright infringement and money laundering charges, the fate of these users hasn’t received the attention it deserves.

By taking down Megaupload many of the site’s users were directly harmed. To resolve this matter Megaupload has been talking to the Department of Justice.

“Megaupload’s legal team is working hard to reunite our users with their data. We are negotiating with the Department of Justice to allow all Mega users to retrieve their data,” Kim Dotcom told TorrentFreak.

Over the past weeks Megaupload has been looking into the various options they have to grant users temporary access. Interestingly enough, this quest revealed that many accounts are held by US Government officials.

“Guess what – we found a large number of Mega accounts from US Government officials including the Department of Justice and the US Senate.”

“I hope we will soon have permission to give them and the rest of our users access to their files,” Dotcom stated.

Megaupload itself is not the only outfit concerned about the lost data of the site’s users. The Electronic Frontier Foundation (EFF) took up the issue as well and launched the MegaRetrieval campaign to make an inventory of disadvantaged users.

Thus far EFF hasn’t made a decision on how to move forward, which will in part depend on the outcome of the negotiations between Megaupload and the Department of Justice.

“EFF continues to identify more people who have lost access to legitimate personal files. Our goal is to help them get their files back as quickly and efficiently as possible,” EFF staff attorney Julie Samuels told TorrentFreak.

Megaupload users who’re missing vital data, including US Government officials, can contact the EFF at megauploadmissing@eff.org.

Aside from securing user data, EFF is extremely worried about the consequences the Megaupload case has on other file-hosting services.

“In general we are very concerned about the implications the ‘Mega conspiracy’ indictment has for the future of cloud computing and file-hosting services, and innovation more generally. It’s hard to imagine how the nature in which this went down won’t have a chilling effect going forward. We hope to come up with processes for future cases that will counteract that,” Samuels said.

It is expected that in the coming week more news will come out about an eventual resurrection of Megaupload, so users can download their personal files. 

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Update: 

Court Filings Suggest Google Fighting Feds Over Megaupload Emails 

 

[Update: Australian paper The Age reported that US prosecutors have drawn up a secret indictment against Wikileaks’ founder Julian Assange; it is possible that Wikileaks, not Megaupload, is the subject of the Google dispute.]

A pair of cryptic court filings surfaced in Virginia this week that suggest Google is in a fight with the federal government over Megaupload, the file-sharing site that was shut down in a dramatic raid in January.

It appears that the FBI likely demanded that Google turn over Kim Dotcom’s email account and any related information, and then forbid the company to notify him of the investigation. In the past, companies—notably Twitter—have been aggressive in challenging gag orders so that they can notify customers about government searches. Such notification gives subscribers the option of challenging the searches in court.

The new filings are two orders in which U.S. Magistrate Judge Thomas Jones Jr. refuses to extend a gag order that the government has imposed upon Google.

The gag order forbids Google from telling a subscriber that an account has been the target of a search warrant and subject to a § 2703(d) investigation—a controversial search procedure that gained attention when the Justice Department used it to obtain the Twitter accounts of people tied to WikiLeaks.

The judge does not identify the Google subscriber but there is strong circumstantial evidence to suggest the case is tied to Megaupload and its controversial founder, Kim Dotcom who is currently facing extradition charges in New Zealand.

First, the orders came from the US District Court for the Eastern District of Virginia which is where an indictment was unsealed against Dotcom and Megaupload in January. Secondly, the two-page orders refer to recent events to explain why the government’s investigation will not be compromised by a disclosure:

The sole potential problem that notification might create that was raised by the government with specificity in its unredacted brief has now been eliminated by subsequent events. [...]

The existence of the investigation in issue and the government’s wide use of § 2703(d) orders and other investigative tools has been widely publicized now. It is difficult to imagine circumstances in which this Google subscriber, as described by the government in its brief, has not assumed government access to this account and acted accordingly

A connection between the Google court orders and Megaupload is for now entirely speculative, but it is hard to think of another secret investigation that has recently been “widely publicized.”

Christine Chen, Senior Manager for Global Communications and Public Policy, said by email that Google does not comment on specific cases.

The court papers also show that federal agents began their search of the suspect’s Google accounts in July of 2011. The Megaupload investigation reportedly began in 2010.

The seizure of Megaupload’s servers and the arrest of Kim Dotcomreports about the gun). The Megaupload episode also led the hacking collective Anonymous to launch a wave of retaliatory attacks that temporarily took down the websites of the FBI and the Justice Department. and other company executives made global headlines in January. The case received additional attention due to the outlandish character of Dotcom, an enormous man nicknamed Dr. Evil who was reportedly found in a panic room clutching a shotgun at time of his arrest in New Zealand (there are conflicting

Today’s orders also states that Google may notify its subscriber unless the government appeals within 14 days. The rest of the case for now remains under seal.

Here is a copy of one of the orders:

Court Order Lifting Google Gag Order

Court Order Lifting Google Gag Order

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Megaupload Founder Defeats US Govt Attempts To Put Him Back In Prison

 

After being granted bail last week, Kim Dotcom went home to spend some quality time with his family. The Megaupload founder had been in prison for little over a month after his arrest in January. Upset at the decision to grant Dotcom freedom, the US Government, argued yesterday in an appeal hearing that he should be put back in jail. Today they failed in that attempt and Dotcom remains a free man – at least for now.

On February 22nd, Megaupload founder Kim Dotcom was released on bail by North Shore District Court Judge Nevin Dawson.

Dotcom had been held in custody since an anti-terrorist police squad raided his Coatesville mansion in January following a lengthy FBI investigation.

The prosecution, acting on behalf of the US Government, argued that Dotcom had hidden resources that would enable him to flee the country should he be granted bail. Although four additional bank accounts in the Philippines were discovered, all of them were empty, and the Judge concluded that there was no evidence of significant funds elsewhere

As a result the Megaupload founder was released from prison, free to continue the fight against the US authorities who want him extradited to face racketeering, copyright infringement and money laundering charges.

When TorrentFreak spoke with Dotcom yesterday he was in high spirits but the Crown, acting on behalf of the US Government, had already appealed the decision to free the Megaupload founder.

Crown prosecutor Anne Toohey told the court yesterday that since Dotcom’s release last week two further banks accounts had been discovered – one in the Philippines and another in the British Virgin Islands containing $2000.

She said that this, along with allegations that Dotcom might have access to forged travel documents, was enough to have the 38-year-old put back in prison.

Representing Dotcom, Paul Davison QC argued that it made no sense for his client to try and flee the country, not least because his wife Mona will shortly give birth to twins.

Today Judge Tim Brewer agreed, denying the prosecution’s appeal and allowing Dotcom to remain a free man pending an extradition appeal in August.

Also in court today, Dotcom and his wife had asked for access to around NZ $220,000 (US $185,130) to cover their living costs including rent of their mansion, security guards and other household staff. The amount would also cover substantial telephone costs incurred as Dotcom prepares his defense, fuel and tutoring for Dotcom’s children.

Previously, Judge Judith Potter agreed to release NZ $74,000 from one of Dotcom’s seized bank accounts to pay creditors left out of pocket after the shutdown of his companies.

It also emerged that US authorities are now investigating Mona Dotcom on suspicion of being involved in Megaupload.

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Megaupload Founder Kim Dotcom: “We’re Going To Win”

 

After several failed attempts, last week Megaupload founder Kim Dotcom was finally granted bail and freed from prison. After initially spending time with his wife and children, Kim agreed to share his thoughts with TorrentFreak. For a man whose just had everything he owns taken away from him, he is effortlessly composed and quietly confident.

The Internet. We take this astonishing network for granted as we send our daily emails and catch up on the daily news.

Many of us can’t handle being offline for more than a few minutes. An ISP outage or cellphone breakdown often signals furious nail biting and a unique technological form of isolation anxiety.

For Kim Dotcom, the founder of the now-defunct Megaupload file-hosting service and a man whose fame and fortune was largely made online, communicating via purely AFK methods is now a fact of daily life.

After being denied bail on several occasions, at the North Shore District Court on February 22nd Judge Nevin Dawson finally agreed to Kim’s release. Although he is allowed to have a computer, the strict terms of Kim’s bail dictate a total ban on Internet access.

A few hours ago, armed with a good old-fashioned telephone, TorrentFreak spoke with Kim at his New Zealand home. So how is he bearing up after the ordeals of the past few weeks?

“I’m fine thanks,” he reassured us in a cheerful tone. “I’m only just catching up.”

During the days since his release Kim says he’s enjoyed spending time with his wife Mona and their children – a quiet family time in stark contrast to the events of January 19th.

“You should have been here, it was amazing, it was like a war zone. Armed police everywhere….two helicopters,” Kim recalled. “The New Zealand authorities certainly put on a show for the FBI.”

But if the dramatic events of that morning – elite anti-terrorist police running around with assault rifles and shouting about bombs – are bothering Kim inside, he certainly isn’t letting it show.

Mirroring the tone of the discussions TorrentFreak had with the larger-than-life entrepreneur last year, the Mega founder was as calm and considered as ever. For a man who has not only lost everything (not least all of his companies and tens of millions of dollars) but also faces extradition to the United States, he’s amazingly positive that the battles ahead are winnable.

Those battles, however, will initially have to be fought in New Zealand courtrooms and if the extradition is successful, back in the United States too. Kim is naturally cautious about us revealing too much about Megaupload’s strategy and how the company’s owners intends to counter the claims being made against them, but it’s safe to say that it’s underpinned by a firm belief that on the best legal advice, the business operated legally.

This confidence, Kim says, is shared by his co-defendants – Mathias Ortmann, Bram van der Kolk and Finn Batato.

“We’re going for this and we’re confident we’re going to win. It [the heavy handedness] went way too far, it was out of all proportion,” Kim told TorrentFreak. “We feel that the action taken against us was political.”

 

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Internet 'scammer' freed in surprise move

 

German Megaupload.com boss Kim Dotcom was freed on bail in a surprise move Wednesday, after a New Zealand judge dismissed fears he would flee the country to escape US online piracy charges.

The 38-year-old German national said he was happy to be released following a month in custody after New Zealand police, cooperating with a major US probe, raided his sprawling "Dotcom Mansion" in Auckland.

Dotcom's lawyer Paul Davison said his client remained determined to fight US allegations that he masterminded "massive worldwide online piracy" through file-sharing webite Megaupload and associated sites.

"My client's proposition is that the case they have presented doesn't have any substantial basis at all and when it is analyzed and revealed for what it is, that will be the view that prevails," he said.

The bail decision is a setback for US authorities, who are seeking to extradite Dotcom and three others arrested in the January 20 raid.

Two previous bail hearings had accepted the prosecution case that the Internet millionaire was an "extreme flight risk" because he had the wealth and possible criminal connections to slip out of the country if he wanted.

But Judge Nevin Dawson said the danger of Dotcom fleeing had diminished because all his funds had been seized and investigators had not uncovered any new bank accounts or assets in his name since his arrest.

"It would seem that he has every reason to stay to be with his family and to fight to keep his significant assets," Dawson said.

He granted Dotcom bail but barred him from accessing the Internet and booking helicopter flights, ordering him to stay in his Auckland property unless there was a medical emergency.

Dotcom, who allegedly earned $42 million from his Internet business in 2010 alone, declined to comment on his case, aside from saying his treatment by New Zealand police "resembled an audition for American Idol."

"I'm relieved to go home and see my family, my three little kids and my pregnant wife," he told reporters.

The US Justice Department and FBI allege Megaupload and related sites netted more than $175 million in criminal proceeds and cost copyright owners over $500 million by offering pirated copies of movies, TV shows and other content.

Megaupload was founded in 2005 but shut down last month when its assets were frozen as part of the US probe.

A US application for Dotcom's extradition is expected to be heard on August 20. US authorities have said they will seek the maximum penalty of 20 years in jail if he is brought before a US court.

The three other Megaupload executives arrested with Dotcom, who legally changed his name from Kim Schmitz, had already been granted bail.

The raid on Dotcom's home netted a 1959 pink Cadillac, numerous other luxury cars and valuable artworks.

Since his arrest, there has been a steady stream of media revelations about his extravagant lifestyle, including claims his mansion had a swimming pool filled with imported spring water and gold toilet roll holders.

The portly millionaire also reportedly had a butler in his mansion whose duties included retrieving stray ping pong balls when Dotcom was playing table tennis.

Prime Minister John Key said this month that since Dotcom's arrival in New Zealand in early 2010, his office had received complaints from the public about loud parties and cars speeding around the mansion, which is in his electorate.

Key said his staff had passed the complaints on to police.

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

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

 

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Megaupload's Kim Dotcom faces more charges

 

More charges of copyright infringement and fraud have been brought against Megaupload founder Kim Dotcom and several of his associates.

The German national, who is also known as Kim Schmitz, faces extradition to the United States for his role in megaupload.com, which US Federal prosecutors say has cost copyright holders more than $620 million in revenue lost through pirated material.

Dotcom and three others were arrested in January after police raided his rented mansion in Coatesville, Auckland, at the request of the FBI. Police cut Dotcom out of a safe room he had barricaded himself in.

Dotcom was remanded in custody until February 22 after a bail hearing this month.

In revised US court documents additional charges of criminal copyright infringement and wire fraud have been made.

The document filed in Eastern District of Virginia court alleges that the defendants reproduced copyright works directly from third-party websites, including from YouTube, and made them avaliable on Megaupload.

They are now also accused of creating a false impression that Megavideo.com hosted primarily user-generated content instead of copyright-infringing content.

It's the latest in a series of charges brought against Megaupload and Dotcom.

The original charges include conspiracy to commit racketeering, conspiracy to commit copyright infringement, conspiracy to commit money laundering, and two substantive counts of copyright infringement.

Mathias Ortmann, Bran van der Kolk and Finn Batato have been granted bail, leaving only Dotcom in jail.

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Megaupload Programer Calls For Dignity In US Extradition Battle

 

The lead programmer of the now-defunct Megaupload file-hosting service says that he hopes New Zealand will keep its dignity in its extradition dealings with the United States. Bram van der Kolk, who was released on bail last week, says that New Zealand should remember it is a sovereign state with its own justice system. Today, Megaupload’s chief marketing officer was also released on bail.

Following his arrest along with the rest of the Megaupload management team on January 19th, Bram van der Kolk endured three weeks in the custody of New Zealand authorities.

Der Kolk, a Dutch citizen who oversaw programming and network issues at the Hong Kong-based company, appeared in court several times in an attempt to obtain bail. Last week the 29-year-old was finally allowed to join his family on the outside, although Judge Pippa Sinclair imposed a number of restrictions including a complete Internet access ban.

Despite Der Kolk having his communication options reduced, at the weekend he managed to speak with the Sunday Star-Times from his home in Auckland.

The network expert said that although he was “flabbergasted” by the raids, he remains in love with New Zealand. Der Kolk hopes, however, that the country maintains its poise and self-respect in dealing with the United States and their extradition requirements.

“I really hope New Zealand will keep its dignity and can show that it is a sovereign state that has its own justice system,” he said.

While authorities in New Zealand insist the raids and arrests last month were carried out by the book, questions have been raised over the massive show of force. As revealed last week, the New Zealand government sent in heavily armed anti-terrorist police to detain the management team of Megaupload, none of which have any history of violence.

Der Kolk told the Star-Times that he’d never even been in trouble with the police before and that being held in prison for 3 weeks was a new and harsh experience, fortunately made easier with help from sympathetic guards.

Previously, Finn Batato, a citizen of Germany and Mega’s chief marketing officer, was granted bail but his release was delayed due to technical issues surrounding his bail monitoring. Those were eventually overcome and the 38-year-old, who also has no criminal record, was released today to live at the same location as der Kolk.

Megaupload founder Kim Dotcom and co-founder and director of Mathias Ortmann remain in custody.

 

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Did someone park a tank on Kim DotCom's lawn?

 

Would you have been fooled? A life-size inflatable balloon designed to look like a Soviet-era tank, was parked on Kim DotCom's lawn this week

Days after police in New Zealand arrested Kim DotCom, the founder of cyberlocker service MegaUpload and accused pirate, journalists were chasing reports that a tank was parked on the front lawn of his Auckland home.

"National Radio (New Zealand) called me about a half hour ago because someone texted to say that there's an army tank on Kim's lawn that is aimed at the front gate," France Komoroske, an attorney and DotCom neighbor, wrote CNET. "They asked me to go take a look."

Now, before we go on, put yourself in the position of DotCom's neighbors or reporters covering this story. Ask yourself this: Why wouldn't there be a tank?

DotCom is the 6-foot-7, 300-pound former street racer and convicted felon who is relatively new to the area and known for driving around in exotic automobiles. The 38-year-old referred to himself as "God" and "Dr. Evil" and lived in a massive $24 million mansion. Only a week earlier, more than 70 police officers had stormed the home by helicopter to arrest him on charges of operating a massive Internet piracy empire.

Police hauled away millions in cash and had to remove DotCom from a specially designed safe room, where they discovered he owned specially designed semi-automatic shotguns.

After all this, what's too far-fetched? Who would blink if DotCom had built a secret underground lair beneath a volcano, or equipped his cars with ejection seats or defended his house with a tank?

That's the kind of thing criminal masterminds do in the movies, and for many years that's the image that DotCom went out of his way to construct for himself.

Nonetheless, the tank was a fake--albeit a good one. What people saw on DotCom's lawn was an inflatable, life-size balloon made to look like a Soviet-era T-72 Russian battle tank, reported the New Zealand Herald. A party was held for one of DotCom's children and an inflatable castle was also at the home but set up in the back, according to Komoroske. 

The tank balloon looked real enough to fool a host of neighbors and some journalists. Inflatable tank models were used in battle to deceive foes.

What I'd like to know was, while the other inflatable toys were stationed in the back of the home, how come the tank was left in the front? One has to wonder if DotCom, who was born Kim Schmitz, is still having fun at the expense of his neighbors and the media.

He remains in police custody until an extradition hearing is held. The United States wants to bring DotCom and three associates, two of which have been released on bail, back here to stand trial.

Odds are this story is going to play out over a long period and won't be boring.

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Why was MegaUpload really shut down?

In December of 2011, just weeks before the takedown, Digital Music News reported on something new that the creators of #Megauploadhttp://goo.gl/A7wUZ)
were about to unroll. Something that would rock the music industry to its core. ( I present to you... MegaBox. MegaBox was going to be an alternative music store that was entirely cloud-based and offered artists a better money-making opportunity than they would get with any record label.

"UMG knows that we are going to compete with them via our own music venture called Megabox.com, a site that will soon allow artists to sell their creations directly to consumers while allowing artists to keep 90 percent of earnings," MegaUpload founder Kim 'Dotcom' Schmitz told Torrentfreak

Not only did they plan on allowing artists to keep 90% of their earnings on songs that they sold, they wanted to pay them for songs they let users download for free.

"We have a solution called the Megakey that will allow artists to earn income from users who download music for free," Dotcom outlined. "Yes that's right, we will pay artists even for free downloads. The Megakey business model has been tested with over a million users and it works."

MegaUpload Is Now Launching a Music Service Called MegaBox...

 ( December 21, 2011)

There's another gigantic wrinkle in the MegaUpload drama.  Not only is MegaUpload fighting tooth-and-nail against Universal Music Group, but they're now planning the launch of a cloud-based music locker, download store, and do-it-yourself artist service.  It's called MegaBox, and it's already up in beta with listed partners 7digital, Gracenote, Rovi, and Amazon MP3. 

  

Actually, this is technically a relaunch of an earlier concept, and a perfect re-stab at major label opponents.  "UMG knows that we are going to compete with them via our own music venture called Megabox.com, a site that will soon allow artists to sell their creations directly to consumers while allowing artists to keep 90 percent of earnings," MegaUpload founder Kim 'Dotcom' Schmitz told Torrentfreak this week.     

In other words, another entry into the very crowded DIY space.  But there's a lot more to this story.  Instead of charging artists, Schmitz wants to pay artists - even for free downloads.  "We have a solution called the Megakey that will allow artists to earn income from users who download music for free," Dotcom outlined. "Yes that's right, we will pay artists even for free downloads.  The Megakey business model has been tested with over a million users and it works." 

And there could be more mega-artist deals ahead, of the will.i.am variety.  "You can expect several Megabox announcements next year including exclusive deals with artists who are eager to depart from outdated business models."

The rest looks like a combination platter of cloud-based music storage, download sales, and discovery, though the elements may still be coming together.  In a test-drive this morning, we also found lots of major label content, but only managed to stream 30-second clips (we'll leave that discussion to the various armies of lawyers...)     

MegaUpload has the capital to do this, but they are also pushing some emotional capital as well.  That is, a stark juxtoposition between them and traditional media interests, ie major labels like UMG.  "These guys think an iPad is a facial treatment, the internet is the devil, and wired phones are still hip," Schmitz blasted.  "They are in denial about the new realities and opportunities.  They don't understand that the rip-off days are over.  Artists are more educated than ever about how they are getting ripped off and how the big labels only look after themselves."

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The indictment

The indictment suggests that Megaupload hid its agenda behind allowing users to upload files of any type or size and profiting off of copyrighted materials:

Though the public-facing Megaupload.com website itself does not allow searches,it does list its “Top 100 files”, which includes motion picture trailers and software trials that are freely available on the Internet. The Top 100 list, however, does not actually portray the most popular downloads on Megaupload.com, which makes the website appear more legitimate and hides the popular copyright-infringing content that drives its revenue.

Here is the full 72 page indictment in all of its glory:

Mega Indictment

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