Police in New Zealand raided homes and businesses with links to the founder of Megaupload.com, one of world's biggest Internet file-sharing sites U.S. authorities shut down Friday. U.S. official sources say the site earned $42 million in 2010 alone.
U.S. authorities are accusing Megaupload.com of facilitating illegal downloads of films, music and other copyrighted content making owners lose at least $500 million in revenues. New Zealand Police, according to Huffington Post, served 10 search warrants at several businesses and homes connected to Megaupload.com.
Daily Mail reports that the raid on Dotcom's luxury home outside Auckland was by helicopter, with police having to cut their way into the house after Dotcom locked himself up in a safe room. New York Times reports that when Dotcom saw the police, he ran inside his house and activated electronic locks and barricaded himself in a safe room.
According to Daily Mail, a neighbor said about the police raid: "I thought it was his private helicopter, which is parked up behind the trees, and I thought he was going out for breakfast, as he sometimes does. I thought this is going on a bit long and it was a bit annoying at that time of the morning and so I got up and realized it was a police helicopter. It was there for about an hour and then my friend texted me that a lot of cops had arrived."
A Life of Luxury
New Zealand police spokesman Grant Ogilvie, said that police seized cars including a Rolls Royce Phantom Drophead Coupe worth more than $400,000 and several Mercedes. Police also seized two short-barreled Shotguns and valuable artwork. Among cars seized, according to Daily Mail, were "top-of-the-range Mercedes cars" with number plates such as "STONED," "HACKER," and "GUILTY." The fleet of cars also include a vintage pink Cadillac and Maseratis. Dotcom's Rolls Royce had a number plate, "God."
Past criminal record?Globe and Mail reports Dotcom had been convicted for computer hacking and later insider trading in Germany in the late 1990s. But in an interview with TorrentFreak, according to Globe and Mail, Dotcom said: “For your information, my criminal record has been cleared under Germany’s clean-slate legislation. Officially, I can say I am without convictions. I know that I am not a bad person. I have grown and I have learnt.”
An indictment from a Virginia court described Dotcom as member of the "Mega Conspiracy," an alleged worldwide criminal organization engaged in piracy and money laundering. Daily Mail alleges that Dotcom was granted New Zealand residency after investing millions in government bonds and making donations to the Christchurch earthquake fund.
Megaupload: One of the world's biggest file-sharing sites
Megaupload.com, according to Huffington Post, has 150 million registered users and about 50 million daily hits. The site has been endorsed and supported by music stars and celebrities such as Kim kardashian, Alicia Keys and Kanye West. According to Globe and Mail, Dotcom sought to bolster the reputation of his site by sponsoring a promotional music video featuring hip hop stars such as Kanye West and P. Diddy, who sang declaring support, saying: "M-E-G-A, upload to me today, send me a file," and "When I gotta send files across the globe, I use Megaupload."
The site was once ranked as the 13th most frequently visited website on Internet, but before its shutdown, it was rated among the top 100. The site is described as a "cyberlocker" that facilitates transfer of files too large to send by email, and allows users to download some content free. It makes money by charging subscription fees to users who want access to wider download services, and advertising.
The company is based in Hong Kong, but the owner Kim Dotcom, lives in the New Zealand. Some of the alleged pirated contents on his site were hosted on leased servers in Virginia, allowing grounds for U.S. prosecutors. Dotcom, according to Huffington Post, has dual citizenship. He is a citizen of Finland and Germany, but he lives in Hong Kong and New Zealand. Before he had his name legally changed to Kim Dotcom, he had been known as Kim Schmitz and Kim Tim Jim Vestor. Three German citizens and a Dutch were arrested along with him. Huffington Post reports that police are also looking for a Slovakian and an Estonian connected with his business.
Before the arrests, Megaupload had posted a statement saying that allegations of breaches of copyright laws against it were exaggerated. The statement said: "The fact is that the vast majority of Mega's Internet traffic is legitimate, and we are here to stay. If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch."
The extradition process has begun with four defendants appearing in court. Dotcom's lawyer, according to Huffington Post, objected to media request to take photographs and video. But Dotcom intervened, saying he did not mind photos taken "because we have nothing to hide." The judge allowed the media to take photographs and ruled that the defendants remain in custody till the next hearing on Monday.
Megaupload is being represented by attorney Bob Bennet, who represented former President Bill Clinton in the Monica Lewinsky scandal.
ProtestsHuffington Post reports that the Electronic Frontier Foundation, which defends free speech and digital rights online, has criticized the arrests as setting a "terrifying precedent. If the United States can seize a Dutch citizen in New Zealand over a copyright claim, what is next?"
Dotcom's arrest follows the blackout protest by Wikipedia and Craiglist against new online anti-piracy laws being considered in the U.S. Media reports suggest that the attacks by "Anonymous" on the Justice Department's website and the site of the Motion Picture Association of America were likely in retaliation for the crackdown on Megaupload.com and sister sites.
The five-count indictment against the company alleges copyright infringement, conspiracy to commit money laundering and racketeering.