Megaupload founder Kim Dotcom held in N. Zealand, home raided

Jan 21, 2012 |

Wellington (New Zealand)

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New Zealand police seized a treasure trove of luxury goods from the founder of file-sharing site Megaupload.com Friday as four suspected Internet pirates wanted in the United States appeared in court.

Armed officers swooped on an Auckland mansion occupied by "Kim Dotcom", whose website was shut down by US authorities on Thursday accusing it of one of the largest cases of copyright theft ever.

The police seized luxury cars worth NZ$6.0 million ($4.8 million), including a 1959 pink Cadillac and a Rolls Royce Phantom, as well as "a firearm which had the appearance of a shortened shotgun".

NZ$11 million in cash held in New Zealand financial accounts was also frozen pending the outcome of legal proceedings, police said.

Dotcom, also known as Kim Schmitz, a 37-year-old German citizen with New Zealand and Hong Kong residency, was denied bail with three other men on Friday when they appeared in an Auckland district court, police said.

He had tried to evade capture by hiding behind an elaborate network of electronic defences in his mansion.

The dramatic raids came after Megaupload went offline as US officials and the Federal Bureau of Investigation detailed what they described as "among the largest criminal copyright cases ever brought by the United States".

Washington wants to extradite the Auckland quartet to face prosecution for online piracy, on charges of racketeering and money-laundering that could carry jail time of up to 20 years.

The Justice Department and FBI indicted a total of seven people who they said were "responsible for massive worldwide online piracy of numerous types of copyrighted works, through Megaupload.com and other related sites".

The accused generated more than $175 million in criminal proceeds and caused more than $500 million in harm to copyright owners by offering pirated copies of movies, TV programmes and other content, according to a statement.

The indicted seven, all European, include the four arrested in New Zealand. The other three remain at large.

Megaupload itself is registered in Hong Kong, but checks by the media appeared to show only a shell company with a post office box address in the Chinese city.

The dramatic raids came amid a fierce debate in the United States over a proposed bill before Congress aimed at cracking down on online piracy.

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