Kim Dotcom - Dotcom's Arrest in New Zealand

Dotcom's Arrest in New Zealand

Main article: Megaupload See also: Megaupload legal case

In February 2003, at the same time he registered Trendax, Dotcom set up another company called Data Protect Limited, but changed the name to Megaupload in 2005. Megaupload is a file hosting and sharing business. In 10 Facts about the Megaupload Scandal, Dotcom describes the company like this: "Megaupload is a provider of cloud storage services. The company’s primary website, Megaupload.com, offered a popular Internet-based storage platform for customers, who ranged from large businesses to individuals. This storage platform allowed its users to store files in the Internet “cloud” and to use, if needed, online storage space and bandwidth." The company was incredibly successful. Millions of people from across the globe used Megaupload to store and access copies of TV shows, feature films, songs, porn, and software. Eventually it had over 150 employees, US$175 million revenues, and 50 million daily visitors. At its peak Megaupload was estimated to be the 13th most popular site on the internet and responsible for 4% of all internet traffic.

On 5 January 2012, indictments were filed in Virginia in the United States against Dotcom and other company executives with crimes related to online piracy, including racketeering, conspiring to commit copyright infringement, and conspiring to commit money laundering. Two weeks later (20 January), Kim Dotcom, Finn Batato, Mathias Ortmann and Bram van der Kolk were arrested in Coatesville, Auckland, New Zealand, by New Zealand Police, in an armed raid on Dotcom's house in which the police came in by helicopter. Assets worth $17 million were seized including eighteen luxury cars, giant screen TVs and works of art. Dotcom's bank accounts were frozen denying him access to US$175m (NZ$218m) in cash, the contents of 64 bank accounts world-wide, including BNZ and Kiwibank accounts in New Zealand, Government bonds and money from numerous PayPal accounts. According to Dotcom, about 80 police officers were involved in the operation; the New Zealand police claimed it was between 20 and 30.

Dotcom was remanded to Mt Eden prison. The first night he was not given toilet paper or other basic amenities and said: "Every two hours, they would wake me up. I was deprived of sleep. I wrote a complaint. I said, 'This is torture, this is sleep deprivation'." He said he was treated like a convicted criminal and was "stunned to be locked up in prison over claims of criminal copyright infringements when accused murderers were bailed to await trial". On 22 February, Dotcom won the first round in his legal battle when North Shore District Court Judge Nevin Dawson overturned previous rulings and had him released on bail. The judge considered there was no real flight risk because his assets had been seized and he had “every reason to stay to be with his family and fight to keep his assets.”