Megaupload Co-Founder Kim Dotcom Remanded in Custody After Dramatic New Zealand Arrest

12:07 AM PST 01/23/2012 by Pip Bulbeck

The FBI has accused Dotcom and others involved in the “Mega conspiracy” of receiving over $175 million in criminal proceeds from worldwide online piracy.

SYDNEY - The co-founder of internet filesharing service Megaupload, Kim Dotcom was remanded in custody for four days by a New Zealand judge on Monday after his arrest in a dramatic FBI-led sting on Friday, during his 38th birthday party being celebrated inside his rented $30 million Auckland mansion.

Dotcom, a German native who reportedly changed his name legally from Kim Schmitz in the last decade, has been charged with criminal copyright infringement and conspiracy to commit racketeering.

He appeared in the North Shore District Court today. for a bail hearing, with the Crown asking that bail be refused on the grounds that he is an “extreme” flight risk and risk of reoffending.

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During the raid on Friday Dotcom was reportedly found in a “panic room “ inside the mansion with a gun ,which it was revealed today had been illegally modified.

Arrested at the same time were Bram van der Kolk, 29, from the Netherlands but is a New Zealand resident, and Finn Batato, 38, and Mathias Ortmann, 40, both from Germany..

Computers and documents were also retrieved and more than NZ$10 million ($8 million) was seized from financial institutions.

Luxury cars including a pink Cadillac and a Rolls-Royce Phantom Drophead Coupe, were removed from the property, which Dotcom had been blocked from buying by NZ authorities last year as he did not meet a “good character” test.

The FBI said that those arrested are accused of “running an international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works through Megaupload.com and other related sites”.

The alleged copyright theft generated more than $175 million in criminal proceeds and caused more than half a billion dollars in harm to copyright owners. “This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime,” the FBI said.

The FBI shut down the Hong Kong-based website, megaupload;com, posting an anti-piracy notice on the site which says that the domain name has been seized and a federal grand jury has indicted several individuals and entities  and is charging them with conspiracy to commit racketeering, conspiracy to commit copyright infringement, conspiracy to commit money laundering and criminal copyright infringement.

According to the NZ Herald Dotcom’s lawyer Paul Davison told the ourt today that Dotcom will not try to restart Megaupload or any other website while he is on bail and the matter is before the courts.

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