News Column

Megaupload Founder Rises as a Cult Hero

July 3, 2012

Jonathan Hutchison

Megaupload

While Kim Dotcom's lawyers have been making steady progress in court, he has been gaining the public's favor in New Zealand.

Last month, a New Zealand software developer, Ben Gracewood, replied to a Twitter post from the Internet tycoon Kim Dotcom, founder of the Megaupload file-sharing site that had been shut down by the FBI.

He asked whether "you guys just drive around in modified electric vehicles and pose for photos," referring to an image Mr. Dotcom, 38, had just posted showing three of his associates with golf buggies and a Segway. "I could live like that," Mr. Gracewood wrote.

Twenty minutes later he got a surprising response: "Come over now!" So he took a friend and went to the most expensive house in the country -- a mansion worth 30 million New Zealand dollars, or $24 million, rented by Mr. Dotcom, a German citizen -- for a swim and some cupcakes. Twitter users across New Zealand watched with fascination as the group posted updates and photos of the visit.

That evening, which was followed on Twitter under #swimatkims, was just the latest in a series of at times bizarre developments in a case that has turned Mr. Dotcom into something of a cult hero since his arrest.

In January, two police helicopters landed on his lawn to raid the property just north of Auckland. At that time, most of the country had never heard of Mr. Dotcom, despite his flamboyance and wealth. He had kept a low profile in the two years he had been living in this country of about 4.4 million people.

The police operation -- carried out under New Zealand's extradition treaty with the United States -- seemed designed to attract attention. It was accompanied by uncharacteristically detailed news releases describing the operation, including how officers had cut their way into a panic room to arrest Mr. Dotcom, who, they said, was found sitting near a shotgun.

Mr. Dotcom and three others connected with Megaupload were arrested in connection with U.S. indictments on charges involving copyright infringement and money laundering. At the time, the U.S. Department of Justice said that in all, seven people had been arrested around the world in connection with the alleged online piracy of numerous copyrighted works, including music and films.

The Justice Department said the individuals and two companies -- Megaupload and Vestor -- had been charged with "engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement."

This month, Mr. Dotcom's U.S. lawyers are set to appear before a Virginia judge in a bid to have the criminal case dismissed. According to a document on his lawyers' Web site, they will argue, among other points, that the indictments are invalid because they must be submitted to a company's U.S. office, which Megaupload has never had.

The four men arrested in New Zealand are still free on bail, awaiting an extradition hearing, which is scheduled to begin Aug. 6.

Among the items seized by the police in the January raids were 18 luxury vehicles worth 6 million dollars -- including a Rolls Royce Phantom Drophead Coupe and a 1959 pink Cadillac -- computers and as much as 11 million dollars in cash.

In an e-mail interview, Mr. Dotcom said he had been treated badly

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