Bloomberg News

Kim Dotcom’s Megaupload Co-Accused Granted Bail in N.Z. Court

January 26, 2012

Jan. 26 (Bloomberg) -- Two men accused alongside Megaupload.com founder Kim Dotcom of the biggest copyright infringement in U.S. history were granted bail in a New Zealand court because they were unlikely to flee the country.

The risk of Bram van der Kolk and Finn Batato trying to escape from New Zealand was low and both were of good character, North Shore District Judge David McNaughton wrote in separate rulings released by e-mail today. A bail hearing for the fourth man arrested in New Zealand on Jan. 20 was adjourned until tomorrow, according to a court spokesman.

Dotcom and his colleagues are sought in the U.S. where they were indicted on charges that the file-sharing website was part of a $175 million copyright infringement conspiracy with pirated film and music files being exchanged. He was arrested at his leased New Zealand mansion on Jan. 20, and the U.S. has 45 days from that date to file a formal extradition request.

“I am mindful of the scale of the offending described in the indictment and that this is the biggest case of its kind prosecuted in the United States,” McNaughton wrote. “It is safe to assume that substantial terms of imprisonment would be imposed.”

Van der Kolk and Batato were remanded in custody for a week while their homes were assessed for electronic monitoring, according to stuff.co.nz.

Batato is a German citizen who lives in Munich and was only in New Zealand to attend Dotcom’s 38th birthday party, according to his bail ruling. He has no criminal convictions and, like Dotcom and van der Kolk, denies any part of the alleged conspiracy.

Lead Programmer

Van der Kolk is a Netherlands citizen residing in New Zealand and is the lead programmer for Megaupload Ltd., according to his bail ruling. He also has no convictions.

Dotcom was yesterday denied bail as flight risk remained a “real and significant possibility.” He had access to 23 separate bank accounts in Hong Kong that held more than NZ$26 million ($21.3 million), according to his ruling. The FBI said his earnings for 2010 were $42 million and he had NZ$10 million in New Zealand government bonds.

When police arrived at Dotcom’s house on Jan. 20, he activated electronic locks and sought refuge in a safe room, New Zealand police said in a statement. Police neutralized locks and cut their way into the safe room, where Dotcom was sitting cross-legged on the floor near a safe that contained a loaded shotgun.

Dotcom’s unlawful possession of the gun “suggests a level of criminality which to my mind could easily extend to exploiting criminal connections to obtain false travel documents and leave the country undetected,” McNaughton wrote yesterday.

Pink Cadillac

In the raid, police said they seized 18 luxury vehicles, including a Rolls Royce Phantom Drophead Coupe and a 1959 pink Cadillac. The vehicles are valued at NZ$6 million. The U.S. received restraining orders for assets valued at $175 million, including some in New Zealand.

The U.S. indicted Dotcom because some of Megaupload’s servers were based in that country. Other servers were based in Canada and the Netherlands, according to the ruling.

Megaupload was advertised as having more than 1 billion visitors, more than 150 million users, 50 million daily visitors, and accounted for 4 percent of Internet traffic, U.S. prosecutors said. New Zealand prosecutors must show Dotcom is accused of an offense that would be punishable by at least 12 months in jail in both the U.S. and New Zealand, according to the 1999 Extradition Act.

--Editors: Edward Johnson, Brendan Murray

To contact the reporter on this story: Chris Bourke in Wellington at cbourke4@bloomberg.net;

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net


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