Bloomberg News

Megaupload.com Founder Dotcom Wins N.Z. Warrant Dispute

June 28, 2012

Kim Dotcom, the Megaupload.com website founder accused of orchestrating the biggest copyright infringement conspiracy in U.S. history, had his home searched illegally by police, a New Zealand judge ruled.

Helen Winkelmann, the chief justice of the High Court of New Zealand, which is an intermediate court, today ruled warrants used by police to search Dotcom’s rented mansion on the outskirts of Auckland, and seize his property, including a pink Cadillac, were overly broad and invalid.

“Police relied on invalid warrants when they searched the properties and seized various items,” Winkelmann wrote in a 56- page decision today. “The search and seizure was therefore illegal.”

Winkelmann ordered the New Zealand’s Attorney General to notify U.S. authorities of her decision and request the voluntary return of copies of Dotcom’s hard drives that were removed from New Zealand. She also ordered the return of all computer hardware to Dotcom that was seized by police and remains in New Zealand.

Dotcom, 38, was indicted in what U.S. prosecutors dubbed a “Mega Conspiracy,” accusing his file-sharing website of generating more than $175 million in criminal proceeds from the exchange of pirated film, music, book and software files. He faces as long as 20 years in prison for each of the racketeering and money-laundering charges in the indictment.

Luxury Vehicles

An extradition hearing is scheduled for August in New Zealand.

German-born Dotcom was arrested at his residence in late January and spent four weeks in jail before being released to await the extradition hearing. When police raided the mansion in Coatesville, north of Auckland, they seized 18 luxury vehicles, including a Rolls Royce Phantom Drophead Coupe and a 1959 pink Cadillac.

The Dotcom mansion is valued at NZ$30 million ($23 million), according to an article on the stuff.co.nz website. The property is also known as the “Chrisco mansion,” because it was built by the founders of the Christmas hamper company.

Officials from the New Zealand Justice Department didn’t immediately respond to a request for comment. New Zealand police said in a statement the judgment is being reviewed and no further comments will be made until discussions with prosecutors are concluded.

New Zealand police sought and executed the search warrants at the request of the U.S. and the FBI under a treaty allowing for mutual cooperation in criminal investigations.

A broad category of items was covered and the FBI intended to determine if they were relevant to the investigation offshore, according to Winkelmann’s ruling.

The U.S. “is not entitled to irrelevant material seized during the search,” Winkelmann wrote, noting computers and mobile phones contain personal property including family photos.

The case is between Kim Dotcom and Attorney-General. Civ 2012-404-1928. High Court of New Zealand (Auckland).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

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


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