US extradition hearing for Kim Dotcom ends, decision pending

German tech entrepreneur Kim Dotcom © Nigel Marple
The fate of internet millionaire and Megaupload founder Kim Dotcom hangs in the balance, as the hearing on his extradition to the US ends. The charges against the German-born mogul were filed by the FBI in 2012.

Fraud, copyright infringement and money laundering are included among the 13 charges, and if the Kiwi court deems that any of those constitute a case to answer in the US, Dotcom and his three partners - Mathias Ortmann, Bram van der Kolk and Finn Batatocould – could be extradited and face long prison terms.

Dotcom’s lawyers objected to the latest evidence, saying it was obtained by the US only a day ago, but the prosecution argued the US had the right to reply with new evidence, and that most of it was simply a rehash of materials previously submitted.

On Monday, the Crown lawyer Christine Gordon, acting on behalf of the United States, told the court the four obtained the majority of their profits from the illegitimate use of their Megaupload service.

READ MORE: Mega downer: Kim Dotcom loses $67mn of assets to US govt

The prosecution alleges Megaupload was used as a sort of internet hard drive for material violating copyright laws. It made up four percent of the internet’s entire traffic attracting 50 million daily visitors. The site also made $25 million from advertisers, according to Gordon, who added that its main source of revenue were small payments from the millions of users, which totaled $150 million, the NZ Herald reports.

Some of the proceeds, Gordon argues, went toward rewarding those who would direct more traffic to the online service, while publically, Dotcom tried to convince the public that Megaupload was doing everything in its power to remove the offending content.

There is a problem, however, according to the defense. Dotcom’s lawyer Ron Mansfield has accused the court of “cherry picking” evidence, adding that much of it was out of context. He argued that Megaupload is first and foremost an internet service provider, which means that it’s protected by safe harbor provisions under the Copyright Act. As such, Mansfield argued that Dotcom and his partners should be exempt from all charges brought by the Crown.

Recordings of conversations between the four men were played in court, allegedly proving their awareness of the illegality of their operation. "If copyright holders really knew how big our business is they'd surely try to do something against it. They have no idea we are making millions in profit every month," Dotcom’s co-accused van der Kolk allegedly said.

Dotcom’s own explanation was that Megaupload was simply a “dream idea” created to counteract the problem of slow attachment-sharing over email, and that it was always “copyright neutral.”

"What the US is effectively saying to internet service providers is: 'you need to actively investigate copyright infringement and stop it, because if you don't you'll not only be civilly liable but criminally liable'," Mansfield said.

The accused has maintained all along that the charges are political, and that the New Zealand government was pandering to US interests.

The judge now faces the task of sifting through hundreds of pages of evidence and recordings to reach a decision.

In March, Dotcom lost tens of millions to the US, which came as a shock to him, as there was no trial. A legal precedent condoned that, as well as denying him the chance to mount a legal defense.

"By labeling 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,” he said in late March, vowing to appeal the decision, which his legal team says would likely not hold up in New Zealand or Hong Kong courts. 

The 40-year-old’s legal troubles started in January 2012, when a police raid on his home in Coatesville, near Auckland, led to the shutdown of his file-sharing service MegaUpload. An FBI-led investigation resulted in charges laid against him and his partners.

WikiLeaks founder and whistleblower Julian Assange has been a vocal critic of the US’ tentacle approach to exercising its authority overseas, in places where the military can’t reach. He believes it is no coincidence that the cases of Edward Snowden, Kim Dotcom and his own are all being tried in Alexandria, Virginia, by the same prosecutor.

Alluding to similarities with the Megaupload trial, Assange argues: “It’s something quite interesting. Alexandria, Virginia, is picked in all national security cases. Now, I’m an Australian. WikiLeaks is not a US-publishing organization… so, what the hell is the United States doing trying to bring an espionage case against me? Well, you can ask yourself a similar question about what is it trying to do in relation to extraditing Kim Dotcom from New Zealand and his Hong Kong operation,” Assange said in a phone interview with Radio New Zealand early in October.