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Megaupload Founder At Center Of Internet Copyright Infringement Case


Internet millionaire Kim Dotcom pictured during his trial for insider trading and embezzlement in 2002

Internet millionaire Kim Dotcom pictured during his trial for insider trading and embezzlement in 2002

Kim Dotcom, the founder of one of the world's largest file-sharing websites, is accused by U.S. authorities of being a money launderer who built up a fortune through Internet piracy.
The German-Finnish computer programmer and businessman is the creator of the Megaupload empire -- a file-sharing service that includes Megavideo and 17 other domain names. Dotcom denies the charges.
The case against the enigmatic 38-year-old is so complicated that a New Zealand judge on January 23 said he needs up to two days to determine whether Dotcom should be eligible for bail.
When Dotcom was arrested in New Zealand on January 20, police who raided his country estate at the request of the U.S. FBI had to cut him out of a safe room where he was barricaded.
Dotcom's lawyer said he sealed himself in the room because he was frightened and panicked. Police found he had 45 different credit cards under various names as well as three different passports. Dotcom reportedly also goes by the names Kim Schmitz, Kimble, and Kim Tim Jim Vestor.
The 72-page indictment against Megaupload charges that his site has earned more than $175 million since it was founded in 2005 -- most of it from copyright infringement.
Two corporations -- Megaupload Limited and Vestor Limited -- are named in the indictment. Charges include "engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering" and two counts of "criminal copyright infringement."
Precedent-Setting Case
That has led U.S. newspapers to refer to the case as "the Mega conspiracy."
Before they were seized by U.S. authorities, Megaupload sites had no search function or catalog where copyright holders could check its content directly. Users would find links to content by searching the Internet for specific software, television program names, or film titles.
The indictment says this was done to "conceal the scope" of the firm's copyright infringement.
Advocates for copyright holders say that when they complained about a specific Mega link, the firm would remove that link. But material often would be left online "in the cloud" and could still be accessed later through other links.
Analysts predict the Megaupload case will set a precedent for similar so-called "cloud-hosting" Internet services.
Some $50 million in Megaupload assets seized by U.S. authorities appear to include a fleet of luxury cars -- among them, 14 Mercedes-Benzs, a 2010 Maserati, a 2008 Rolls-Royce, and a 1989 Lamborghini.
Dotcom has been photographed with a shotgun and a black Mercedes-Benz bearing the license plate "GUILTY." License plates on other cars in the fleet include "POLICE," "MAFIA," "STONED," "CEO," "HACKER," GOOD," and "EVIL."
Dotcom was convicted of insider trading and embezzlement in Germany in 2002 and 2003 following the collapse of the so-called dot-com bubble.
Rob, a neighbor of Dotcom in rural New Zealand, recalls rude behavior by the 140 kilogram, two-meter tall Dotcom. "He just about ran me off the road in a big black Mercedes Benz," his neighbor said.
The U.S. indictment alleges other Megaupload employees were well paid. The site's 35-year-old graphic designer Julius Bencko -- a resident of Slovakia named in the indictment -- was said to have made more than $1 million during 2010 alone.

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