11:52am PT by Eriq Gardner
U.S. Government Turns Attention to Kim Dotcom's Wife
In the two years since United States authorities caused the shutdown of Megaupload and lodged a criminal indictment against Kim Dotcom for allegedly aiding and abetting massive copyright infringement, the case has taken many twists and turns. But perhaps nothing is as shockingly personal as court papers filed by the U.S. government Dec. 30 in ongoing efforts to seize some $67 million in assets tied to Megaupload's operation. The newest court papers talk about Dotcom's financial condition, his efforts to start up new businesses and, most especially, his relationship with his wife, Mona Verga Dotcom.
Kim Dotcom is still holed up in a New Zealand mansion and fighting extradition. A hearing is expected to occur later this year. Meanwhile, the U.S. Department of Justice, tired of waiting, last July filed a civil complaint to firmly establish hold over seized assets, including money from bank accounts around the world, luxury cars, big televisions, watches, artwork and other property. The U.S. asserts that Dotcom is a "fugitive" while his lawyers are fighting back.
But the founder of Megaupload isn't the only one making a claim to seized property. So is Mona, who reportedly became estranged from her husband last year. In September, she asserted that she held a "50% marital interest" in the various assets seized.
This has provided the U.S. government with an opening to delve into the personal life of the Dotcoms to explore whether she really has a property interest and whether she's already received more than she deserves from the marriage. According to the latest court papers, "The Dotcoms have clearly made a strategic choice to delay the proceedings in the United States as much as possible while attacking the criminal restraints in New Zealand and elsewhere, so as to continue to enjoy the extravagant lifestyle funded by Kim Dotcom and his codefendants’ criminal offenses."
Who is Mona Dotcom? According to press reports, she is a Filipina ex-model who now lives apart from Kim.
In a sworn statement, she said, "I am entitled to at least 50% of the relationship property as I began a de-facto relationship with Kim Dotcom in November 2007 and I married Kim Dotcom on 10 July 2009. My 'marital interest' in the relationship property began in November 2007."
The U.S. has some doubts, pointing to Kim Dotcom's divorce from his first wife.
According to a motion to strike, "Divorce records from Guam pertaining to Kim Dotcom’s first marriage to Lovely Roann Ronda Vargas show that the then-Kim Vestor and Lovely Vargas married on 25 August 2007, just a few months earlier; had a child with Lovely Vestor in 2007, shortly before Mona Dotcom claims that she first met Kim Dotcom; and did not separate from his first wife until September 2, 2008."
The U.S. also points to interviews that Mona has given about resisting her future husband's initial entreaties. In one statement to the press, Mona said about her early days with the Megaupload founder, "I didn't want it. I walked away. He had a girlfriend and she was my friend."
Eventually, the two got together anyway. They formally married each other in the middle of 2009, as Mona admits, but if the clock begins then, Dotcom may have already made his fortune.
According to the justice department's interpretation of New Zealand law, it's her burden to prove that the seized assets are "relationship property as opposed to separate property," and absent any New Zealand court order quantifying her property interest, she lacks standing to make a claim to the luxury cars and other property. She'd also need to establish dominion and control over the properties. "But Mona Dotcom cannot even drive," the government remarks. "Without that ability, it would seem nearly impossible for her to establish that she had dominion and control over the vehicles."
What's more, the U.S. government says that under New Zealand law, Mona would have to establish her "complete ignorance of Kim Dotcom's illegal activities" to establish an interest in untainted assets. But the government sees her name in the Megaupload paper trail and more. "Her claim that she did 'not have a Mega account' may be technically correct, since she actually had six separate accounts associated with two of her personal email addresses," write justice department lawyers. "But these facts, which suggest that she was in fact an avid user of the Mega sites, makes any claim that she did not know the illegal nature of her husband’s business difficult to sustain."
The exploration of the relationship could mean something more. The U.S. government isn't explicitly suggesting that the marriage nor its possible dissolution is a sham, but in the course of talking about her "lavish lifestyle" and raising doubts about the origins of her relationship with Kim Dotcom, it does raise some points about how she has been transferred significant unrestrained assets by her husband.
"Kim Dotcom, like several other fugitive Claimants, has long been trying to convert the intellectual property of the charged Mega Conspiracy into unrestrained assets," writes the government. "For example, Mr. Dotcom converted the Megabox.com project [aka Baboom], that was part of the criminal charges in the indictments before this Court into payment. Similarly, Mr. Dotcom and other defendants have created a web-based service Mega.co.nz that provides similar operations to Megaupload.com with some technical provisions, installed at the apparent direction of legal counsel, that Kim Dotcom apparently believes will make it more difficult to prove the knowledge of the fugitive Claimants, but that have apparently contributed to it becoming a 'piracy haven.' Kim Dotcom has apparently sold many millions of dollars in shares in this business to at least eight different shareholders."
This appears to be the U.S. government's first public comment about Kim Dotcom's post-Megaupload business — the newer storage site he founded.
Government prosecutors have apparently seized upon reports about piracy on the service as well as Mr. Dotcom's public statement about a family trust controlling Mega shares. Kim Dotcom has stated that he is broke, while the government brings up a report that the trust controls a 17 percent stake in Mega Limited — reportedly worth NZ$35 million — plus the proceeds of previous sales of stock in Mega Limited and Baboom. Allegedly, she's been gifted all of this. "Because [Mona Dotcom] has already been provided those assets, her claim that she is still owed half the interest in Kim Dotcom’s restrained assets cannot be established under New Zealand law," says the U.S. government.
Responds Ira Rothken, attorney for the Dotcoms, "At the appropriate time, Mona Dotcom and her counsel will respond in court."