The US government has won a civil forfeiture case against Megaupload founder, Kim Dotcom after he was barred from contesting the seizure of his assets. As a result Dotcom has lost an estimated $67 million worth of assets to the United States including millions in cash, property, luxury cars, jet skis, large screen televisions and art.
Megaupload.com was shut down by the FBI in January 2012 and charges were pressed against the online entrepreneur the following month. In the same year US and New Zealand authorities seized millions of dollars in cash and assets. The US government contends that the assets were obtained illegally, through copyright-related crimes and money laundering.
More than a dozen Hong Kong and New Zealand bank accounts have now been forfeited including some of the property purchased through them. The accounts all processed money that was obtained through Megaupload’s alleged illegal activities. The list of forfeited assets further includes several luxury cars, such as a silver Mercedes-Benz CLK DTM and a 1959 pink Cadillac, two 108″ Sharp LCD TVs and four jet skis.
Criticising the judgement by District Court Judge Liam O’Grady, Dotcom said: “By labelling me a fugitive the US court has allowed the US government to legally steal all of my assets without any trial, without any due process, without any test of the merits. The asset forfeiture was a default judgement. I was disentitled to defend myself.”
Dotcom has been on bail since 2012 and is fighting US charges in relation to online piracy, but the German-born businessman has continually claimed his innocence and vowed to appeal the decision.
In regard to Megaupload, Dotcom believes the company had actively tried to prevent copyright infringement – its terms of service forced users to agree they would not post copyrighted material to the website. Companies or individuals with concerns that their copyright material was being posted on Megaupload were given direct access to the website to delete infringing links. Megaupload also employed 20 staff dedicated to taking down material which might infringe copyright. In addition, US privacy laws, such as Electronic Communication Privacy Act, prohibit the administrators from looking into the accounts of the users.
The memorandum issued by Judge O’Grady repeats many of the allegations in the original indictment. It lists links to infringing materials that could be found on the site and claims that Megaupload purposefully obfuscated its illegal intent.
Kim Dotcom said he would appeal the latest finding. “First the US judge ruled that I can’t mount any defense in the asset forfeiture case because according to him I’m a ‘fugitive’. Think about that for a moment. I have always said that I’m innocent. There was no conspiracy. I have done nothing wrong.”
He claimed the US government acted to spare the New Zealand government the embarrassment of having to return all of his assets mid-April based on a ruling by the Court of Appeal.
” They would have had to return everything. Imagine all of the New Zealand media at the mansion when the police has to return everything, all my cars, my TV’s, my servers and me directing them where to put my stuff.”He said the injustice of the forfeiture attempt showed how desperate both the United States and the New Zealand government were.
Last month Megaupload computer programmer Andrus Nomm pleaded guilty to internet piracy in a plea bargain deal which would see him serve minimal jail time in exchange for testify against his former colleagues. The successful forfeiture request is the U.S. Government’s first major victory against Megaupload.
Things are set to get even tougher for Dotcom and the other defendants in the Megaupload case who will face an extradition hearing in June, after Dotcom’s request to postpone the hearing was rejected earlier this week.