Megaupload's Kim Dotcom Could Get Seized Property Back

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A New Zealand judge has ruled that law enforcement's efforts to seize some $200 million in assets from Megaupload is "null and void," the result of a procedural mistake. As a result, Megaupload founder Kim Dotcom could get back his $30 million mansion, luxury cars and other cash assets needed to mount a vigorous defense to allegations he participated in massive copyright infringement and racketeering.

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Justice Judith Potter made the ruling on Friday, according to The New Zealand Herald.

She determined that the police commissioner and the New Zealand-based law firm that's representing the U.S. government applied for a foreign restraining order, which didn't allow Dotcom to contest the action, instead of a preferred temporary restraining order.

Efforts by local authorities to correct the "procedural error" were made as far back as January 30, but the judge says that the original restraining order now has "no legal effect."

Dotcom won't get his property back right away.

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The judge has granted a new order on a temporary basis, but has scheduled a hearing to figure out whether the procedural errors were sufficient to allow Dotcom to regain his property.

In legal papers, Dotcom's lawyers say the unlawfully seized assets "must be released."

Since the January raid that shut down one of the Internet's most popular sites and caused the arrest of its leader, Dotcom has been challenging one of the largest international anti-piracy efforts in history. He's now out on bail, awaiting an extradition hearing that tentatively is scheduled for Aug. 20. The return of property would allow him to access funds for the fight.

Canterbury University professor Ursula Cheer told the local paper that Dotcom's lawyers would need to produce evidence showing a lack of good faith in the restraining order application in order to prevail over the law's allowances for mistakes. Still, the development is being seen as an embarrassing blunder in the run-up to the big decision over whether Dotcom will be sent to the U.S. to face prosecution on criminal copyright infringement charges.

E-mail: eriqgardner@yahoo.com

Twitter: @eriqgardner