Megaupload founder arrested in Auckland

By Hannah Lynch

Jan. 20 (BusinessDesk) – Kim Dotcom, the founder of file-sharing site megaupload.com, has been arrested in Auckland this morning as part of an operation led by the US Department of Justice targeting large scale criminal copyright infringement and money laundering.

Dotcom, born Kim Schmitz, was arrested along with four others by the Organised & Financial Crime Agency New Zealand and the New Zealand Police, after a request was made by the United States to arrest extradite the parties. Dotcom was granted residency, but the Overseas Investment Office last year declined his bid to purchase property in Coatesville.

The file-sharing co-founder is wanted by the United States Federal Bureau for allegedly facilitating and engaging in criminal copyright infringement and money laundering of more than US$500 million. US Federal authorities have charged seven people and two corporations in the US with running an international organised crime enterprise, and the remaining three people are still at large, the FBI said in a statement.

“The FBI contacted New Zealand Police in early 2011 with a request to assist with their investigation into Mega Conspiracy,” said Grant Wormald, detective inspector of the New Zealand Police. “All the accused have been indicted in the US. We will continue to work with the US authorities to assist with extradition proceedings”

The other people arrested were Finn Batato, megaupload’s chief marketing officer, Mathias Ortmann, the company’s chief technical officer and co-founder, and Bram van der Kolk, who oversees the company’s programming and underlying network structure.

Those arrested have German, Dutch and Finnish citizenship, with some holding New Zealand residency.

Graphic designer Julius Bencko, head of business development Sven Echternach, and head of software development Andrus Nomm are still at large.

The four parties will appear in the North Shore district court this afternoon.

The megaupload.com website is currently down.

More than 20 search warrants were executed across eight countries, and some US$50 million in assets were seized.

New Zealand police seized luxury cars with an estimated total value of about $6 million. More than $10 million has been seized from NZ financial institutions.

Among property named subject to forfeiture in the FBI Indictment include local accounts with Bank of New Zealand, Kiwibank and HSBC.

Megaupload.com, is an online storage and file delivery service it was previously the 13th most visited website on the internet, claiming to have more than one billion visitors.

The arrest comes against the backdrop of an attempted crackdown on copyright infringement with the Stop Online Piracy Act currently in the US House of Representatives. The proposed legislation sparked a backlash from internet users, including a black-out on the Wikipedia website yesterday, and prompted US President Barack Obama to say he wouldn’t support the bill.

New Zealand’s own copyright infringement legislation was passed last year, with the so-called ‘Skynet’ law giving internet users ‘three strikes’ before giving copyright owners the right to ask Internet Service Providers to terminate a person’s service.

(BusinessDesk)

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