Megaupload Founder Deemed a Low Flight Risk, Released on Bail

Megaupload founder Kim Dotcom was granted bail on Wednesday in a New Zealand court after a judge found he is not a flight risk, disagreeing with two previous rulings that kept him in jail.

Dotcom and several others ran Megaupload, a now-defunct file-sharing site that drew the ire of the entertainment industry for its alleged illegal trade in material under copyright protection.

The U.S. is seeking to extradite Dotcom, who was indicted along with six others by a U.S. grand jury in January on copyright infringement, racketeering and money laundering charges. The U.S. Department of Justice alleges Megaupload collected US$175 million in criminal proceeds and caused more than $500 billion in damages to copyright holders.

Dotcom was arrested during a dramatic raid last month at his rented mansion near Auckland, where law enforcement officials extracted him from a special safe room.

He was denied bail in two previous hearings after U.S. government representatives contended that he was a flight risk, arguing that he holds German and Finnish passports and possibly still had access to other secret funds.

But District Court Judge N.R. Dawson wrote in a Wednesday ruling that by fleeing, Dotcom "would be abandoning his expectant wife and three children, and he would effectively lose all the considerable assets and bank accounts in a number of countries that have been seized or frozen."

The Megaupload founder is "an extremely wealthy man," but the U.S. government has not shown since Dotcom's arrest that he has access to any money, Dawson wrote.

The judge considered a sworn statement from Bonnie Lam, Megaupload's chief financial officer in Hong Kong, who said she took care of Dotcom's personal finances, saying he was "not a well-organized person," according to Dawson's ruling.

Law enforcement officials found that Dotcom held 59 credit or bank cards in 13 different names, of which only 21 were still valid. Dotcom's former surname was "Schmitz," but he had also gone by the names "Kim Vestor" and "Kim Tim Jim Vestor."

Since Dotcom's arrest, four bank accounts set up for the benefit of his wife's family in the Philippines were revealed by the U.S., but those accounts appear to be empty, the judge wrote.

If Dotcom were to flee to Finland or Germany, he could be prosecuted in either of those countries, Dawson wrote. "Absconding to either of those countries would not result in an immunity from prosecution," Dawson wrote.

No date has been set for Dotcom's extradition hearing. According to the court ruling, the hearing is likely to take four days but not begin until July.

Send news tips and comments to jeremy_kirk@idg.com

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