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  1. Kim Dotcom Begins Final Supreme Court Battle to Avoid US Extradition More than seven years after the dramatic arrest of Kim Dotcom and several of his former Megaupload colleagues, the quartet are making a final plea to New Zealand's Supreme Court. The hearing, expected to last five days, will determine whether an earlier decision to extradite the men to the United States should be upheld. For them, the stakes could not be higher. When file-hosting site Megaupload was shut down in 2012, few could have predicted the events of the years to follow. The arrest of founder Kim Dotcom and colleagues Mathias Ortmann, Bram van der Kolk and Finn Batato in New Zealand, triggered dozens of legal processes, many designed to expedite, delay or indeed avoid the quartet’s extradition to the United States. Before it was closed, Megaupload claimed responsibility for around 4% of global Internet traffic. Much of this, the United States government claims, was pirated content, particularly movies, TV shows and music, costing US companies around US$500 million. Dotcom has persistently argued that as an online service provider, Megaupload should receive safe harbor protections in respect of the activities of its users. US authorities, on the other hand, see a massive criminal conspiracy for which the four should face justice on the other side of the world. At every step thus far, the New Zealand legal system has found in favor of sending the men to the United States. In December 2015, Judge Dawson in the District Court found that Dotcom and his associates were eligible for extradition. That decision was subsequently appealed to the High Court, with Dotcom and his now former colleagues launching an appeal alongside a demand for a judicial review. During February 2017, the appellants discovered that both of those efforts had proven unsuccessful. However, the men were granted leave to appeal to the Court of Appeal on two questions of law, including whether the High Court was correct to find that their alleged conduct amounted to an extradition offense. In July 2018, the Court of Appeal upheld the earlier decision that Dotcom and the others were indeed eligible to be extradited. Importantly, the Court considered whether copyright infringement can be a criminal offense in New Zealand and the United States. It was ultimately found that the alleged conduct of the men would breach various offenses under the Crimes Act 1961, meaning that extradition would be permissible. But this wouldn’t be a typical Dotcom matter if a final chance of appeal wasn’t grabbed with both hands. As a result, the case headed to the Supreme Court, where the final hearing is taking place over five days this week, beginning today. “In 2005 I created a website that allowed people to upload files to the cloud. At the time only small files could be attached to emails. Megaupload allowed users to email a link to a file. That’s it,” Dotcom wrote on Twitter this morning. “In 2019 the NZ Supreme Court decides if I should be extradited for this ‘crime’.” While lawyers for the accused are set to pick at every available thread in order to unravel the decision against their clients, early reports from the Supreme Court suggest already familiar themes. Grant Illingworth, representing Mathias Ortmann and Bram van der Kolk, told the Court that he would be arguing that the alleged offenses did not amount to a crime in New Zealand, meaning that they could not be extraditable offenses. But, even if they were, insufficient evidence had been produced to show that offenses had even occurred. “The district court judge misapplied the law at every stage of the judicial analysis,” Illingworth said, as quoted by RNZ. “That constituted a serious miscarriage of justice. No higher court could have justified a finding of that kind, no matter how much they agreed with the outcome.” Interestingly – or perhaps worryingly – it appears that discussions over how Megaupload operated were conducted via analogies this morning. At issue was Megaupload offering content for download and, in some cases, rewarding uploaders for putting that content there in the first place. Justice Susan Glazebrook asked Illingworth whether it would be a breach of copyright if she photocopied a novel hypothetically written by one of her fellow judges and then sold it on a street corner. Illingworth said Megaupload didn’t make the copies, its users did. “They’re providing the photocopier, someone else comes along and uses the photocopier. They’re [Megaupload] not putting up a sign saying, ‘Please come and use our photocopier for illegal purposes,'” he said. Justice Joe Williams then elaborated on the analogy, alluding to Megaupload’s reward program. “What if I get a wheelbarrow and I convey the copies [of the novel] to the street corner, knowing that she’ll be selling them, and she and I have some kind of agreement to share the profits?” he said. Illingworth responded by saying it was never Megaupload’s intention to reward people for illegal behavior, it was all about rewarding them for increasing the site’s traffic. While the hearing is set to run until Friday, any decision will take months to reach. Even if extradition is upheld, it will still need the approval of New Zealand’s Minister of Justice Andrew Little to take place. His signature would mean that the men would be shipped to the US to face charges of copyright infringement, racketeering, and money laundering plus the possibility of years – even decades – in prison. Source
  2. Supreme Court Denies Kim Dotcom Permission to Appeal In 2016, Megaupload founder Kim Dotcom filed an eight-point statement of claim for judicial review in an effort to attack the underpinnings of the extradition process. A year later, the High Court struck out the first seven and a subsequent appeal by Dotcom failed. In a judgment handed down today, Dotcom was denied permission to appeal to the Supreme Court. In 2012, file-hosting site Megaupload was shut down by the United States government and founder Kim Dotcom and several associates were arrested in New Zealand. For the past seven years, the US government has been engaged in a battle to extradite Dotcom, so that he can face trial in the US on several counts including copyright infringement, racketeering, and money laundering. Dotcom has fought back every step of the way and in 2016, filed an eight-point statement of claim for judicial review, aimed at “attacking the underpinnings of the extradition process” by filing an eight-point statement of claim for judicial review. In a 22-page High Court ruling (pdf) handed down in December 2017, Justice Timothy Brewer sided with the US and rejectedseven out of the eight causes of action, stating they were either not reasonably arguable or were abuses of process. The eighth point, which wasn’t challenged by the US, concerns the decision by the Deputy Solicitor-General in June 2017 to direct that clones be made of the electronic devices seized from Mr Dotcom’s homes so they could be sent to the US. Dotcom appealed but the Court of Appeal dismissed the action. Dotcom then sought permission to appeal that decision at the Supreme Court. In a judgment handed down this morning by Justices William Young, O’Regan and Ellen France JJ, the Supreme Court denied leave to appeal. “The applicant [Dotcom] argues that the criteria for the grant of leave to appeal in s 74 of the Senior Courts Act 2016 are met in relation to the present application either because the application raises matters of general and public importance or because a substantial miscarriage of justice may occur if leave is not granted,” the judgment reads. “We are not persuaded that the proposed appeal raises matters of general and public importance.” Dotcom argued that a miscarriage of justice would take place if he was denied permission to appeal. However, the Supreme Court said that was not correct. “The applicant is seeking to challenge concurrent findings in the Courts below on almost every point that would be in issue if leave were granted. We do not see the arguments foreshadowed by the applicant in his application for leave and the submissions in support of that application as having sufficient prospects of success to justify the grant of leave,” the judgment adds. After dismissing Dotcom’s application for a hearing at the Supreme Court on the matter, the Court then ordered him to pay $2,500 to the US Government to cover its costs. Thus far, Dotcom hasn’t commented publicly on the judgment but did find a report published here on TF yesterday darkly amusing. Safe harbor for YouTube, but not him, apparently. Source
  3. Mega.co.nz, the cloud storage company founded by Kim Dotcom, has announced its intention to go public with a backdoor listing on the New Zealand stock exchange. The deal, worth a cool NZ$210m ($179m), will be actioned via a reverse takeover of a local investment shell company. Kim Dotcom isn’t known for doing things ‘small’ and that was underlined today with news that the cloud storage firm he founded last year will hit the New Zealand stock exchange. In keeping with the complex life of the entrepreneur, the plans for the listing aren’t completely straightforward. Mega.co.nz says it will achieve a backdoor listing on the New Zealand stock exchange via a reverse takeover of an existing company. Earlier this morning TRS Investments, an inactive investment company valued at NZ$2.2m (US$1.88m), said it had reached an agreement to buy Mega Ltd through a share issue to Mega shareholders. TRS will acquire the shares for NZ$210 million via the issue of 700 million new shares to the shareholders of Mega at a price of 30 cents per share. This will result in those shareholders owning a 99 percent share of TRS. Once the deal is completed, TRS will change its name to Mega. While Kim Dotcom himself is longer a director of Mega having stepped down to concentrate on his extradition battle, musical career and political party, his wife Mona owns 26.5 percent of the company. The acquisition requires TRS to obtain shareholder approval and necessary collateral on or before May 30, 2014. “The rapid global growth of Mega has generated significant interest from potential investors. Listing on the New Zealand Stock Exchange will allow investors to participate in the ongoing growth of Mega,” said Mega CEO Stephen Hall in a statement. Perhaps unsurprisingly, the deal already has its controversy, with a report this morning that Paul Choiselat, a major TRS shareholder, is facing charges of concealing his interest in listed companies and alleged market manipulation. Nevertheless, shares in TRS Investments soared to a seven year high, up 600 percent, following news of the takeover. Mega reports that since its launch in January 2013 it has signed up around seven million users and is currently bringing on board more than 20,000 new ones every day. With encrypted chat video conferencing scheduled for the second quarter, Mega has big things ahead in 2014. The full NZX announcement can be found here. Source: TorrentFreak
  4. Days after the Supreme Court denied Kim Dotcom access to evidence held by the FBI, the Megaupload founder's legal team were back in court seeking other documents in connection with a compensation claim. During the hearing, however, a Crown lawyer took the opportunity to complain about Dotcom's use of Twitter. Last week the Supreme Court handed a significant blow to Kim Dotcom and his associates with a ruling confirming they would not be entitled to receive any more than a summary of the claims in the extradition case against them. Just days later and the Megaupload and Mega.co.nz founder’s legal team were back in court in connection with their huge compensation claim against the New Zealand police and the government’s GCSB spy agency following the raid on Dotcom’s Coatville mansion in 2012. The claim, for breaches of the Bill of Rights Act and the Government Communications and Security Bureau Act, spans not only Kim Dotcom but also his wife Mona, three of his Megaupload associates, plus one of their wives. On the basis that the surveillance leading up to the raid was carried out illegally, and that the raid itself was executed by the police using excessive force, the claim for compensation has reached around NZ$5m (US$4.27m) In the High Court in Auckland this morning, Dotcom lawyer Paul Davison said that he believed that additional documents being held by the government should be revealed as part of the discovery process. Should such documents exist, Davison said, then he would ask that Justice Winkelmann orders their disclosure. However, Crown lawyer David Boldt said there was nothing left to hand over. “The defendants at least have discovered thousands of documents in this proceeding and have been extraordinarily diligent in scouring records for relevant material,” Boldt said. “What I can say is, if that material existed, it would have been discovered, and we’ve sworn affidavits to the effect that this is all there is.” The Crown also took the opportunity to attack Dotcom’s use of Twitter, a service used by the Megaupload founder to give his followers a window into his private life. Dotcom posts tweets several times every day, sometimes giving his 350,000 followers updates on his family but on other occasions referring to his ongoing legal battles with both the United States and New Zealand governments. That has included the posting documents connected to his case Crown lawyer Kristy McDonald said that through his actions on Twitter, Dotcom had demonstrated “considerable disregard” for court processes and suggested that any documents obtained by Dotcom might end up getting published on the social networking platform. “Is this about obtaining documents so they can be put out in the public arena?” McDonald questioned. The notion was dismissed by Dotcom’s lawyer. This is the second attack on Dotcom’s use of Twitter. In December 2013, the U.S. Government claimed that the entrepreneur’s use of the social networking site made his defense less credible. Dotcom’s legal team, however, suggested that government attempts “to widely disseminate a one-sided, cherry-picked set of facts” threatened to “infect the jury pool before defendants are afforded any opportunity to present their side of the story.” In the meantime, Dotcom’s tweets continue. Although not mentioning anyone by name, Dotcom today criticized former security staff for “leaking family secrets” and demanding large sums of money. He said that rumors suggesting he treats his staff badly are untrue. The compensation hearings, which will continue in the High Court tomorrow, will see Dotcom’s lawyers argue that the manner in which the 2012 raid was carried out breached his human rights. Earlier this year the Court of Appeal decided that the warrants used in the raid were not in themselves unlawful. Dotcom’s appeal to the Supreme Court in that matter is pending. Source: TorrentFreak
  5. A few minutes ago a panel of judges at the Supreme Court of New Zealand announced that Kim Dotcom and his former Megaupload colleagues can indeed be extradited to the United States to face copyright infringement charges. However, in an unexpected twist, the Court has granted the defendants the ability to challenge the decision via a judicial review. Ever since Megaupload was raided in 2012, the US Government has been trying to ship Kim Dotcom, Mathias Ortmann, Bram van der Kolk, and Finn Batato out of New Zealand but the path has not been smooth. The process in New Zealand begins when a country, in this case the United States, asks a local court to determine whether the people to whom it desires access are eligible to be extradited under the Extradition Act 1999. In basic terms, this means that the US needed to show that the alleged offenses would result in a trial in New Zealand if they had taken place there, i.e the offenses were crimes in both countries. Dotcom has long argued against this assertion, insisting that his long-defunct Megaupload service enjoyed “safe harbor” protections under New Zealand law. Extradition Hearing at the Supreme Court After several lower courts determined that the Megaupload defendants can indeed be extradited to the United States, in June 2019 the New Zealand Supreme Court heard the hugely controversial matter. The ‘Megaupload Four’ were hoping that a panel of judges at the country’s highest court would see things in a different light and deny the United States an opportunity to try the men on US soil. Dotcom previously predicted that the Supreme Court would return a 3:2 majority in favor of extradition but what has transpired today does not provide the absolute finality many observers expected. Dotcom Can Be Extradited But Can Challenge This Decision In a decision handed down minutes ago, the Supreme Court confirms that Dotcom and his Megaupload colleagues can technically be extradited to the United States to face charges of criminal copyright infringement. However, the Court has also granted the quartet permission to challenge the decision via a judicial review. The issue lies with a 2015 decision at the District Court which ruled that Dotcom could be extradited. The Megaupload founder’s legal team argued that the court had made errors in its judgment but their calls for a judicial review fell on deaf ears at the High Court and Court of Appeal. In its judgment today, the Supreme Court said that those higher courts were wrong to determine that Dotcom’s application for a judicial review was an abuse of process. This means that yet more legal arguments will have to be heard. If Dotcom and his colleagues fail at that stage, they will be eligible for extradition. However, any extradition would only take place on copyright grounds since the Supreme Court has ruled that the men are not eligible to be surrendered in respect of money laundering since there is “no matching New Zealand offense.” Statement From Dotcom’s Lawyer Describing the judgment as a “mixed bag”, Dotcom’s lawyer Ron Mansfield says that the judgment gives no final answer to the question of whether his client should be extradited. He also notes that the Supreme Court did not accept the defense’s safe harbor copyright arguments, something which could have “an immediate and chilling” impact on the Internet. “It will be interesting to see how the challenges now faced by Internet Service Providers are responded to. Can they live with it? Will it result in access restrictions and further costs that we will all incur as a result? Or will our Government be lobbied to intervene and provide real and workable protections for them?” Mansfield questions. On the plus side, Mansfield appears satisfied that the Supreme Court has determined that the defense should be able to address the “serious procedural issues” that have arisen in the case. “This means there will be further argument in the Court of Appeal and/or the Supreme Court regarding these significant concerns that are well established in the evidence. This is significant and means that nothing further can happen until the further required hearings take place. “Kim stays here, at home, with his family,” Mansfield concludes. Source: TorrentFreak
  6. After New Zealand's Supreme Court handed down a "mixed bag" decision this week which allows Kim Dotcom more time in the country to fight extradition, former colleague Mat­hias Ortmann is now under the spotlight. Police in Australia are reportedly preparing to seize the assets of the Megaupload co-founder in response to a forfeiture order issued by the United States. Earlier this week attention turned to New Zealand’s Supreme Court as a panel of judges prepared to publish their decision in the extradition case of Kim Dotcom and several of his former Megaupload colleagues. In their ruling, a panel of judges at the Supreme Court confirmed that Dotcom and former Megaupload colleagues Mathias Ortmann, Bram van der Kolk, and Finn Batato, can technically be extradited to the United States to face charges of criminal copyright infringement. However, the Court also granted the men permission to challenge the decision via a judicial review. Mathias Ortmann Now Under the Spotlight Just days after Dotcom’s legal team welcomed the chance to have their say on the alleged deficiencies in the case thus far, all eyes are now turning to Mathias Ortmann. While all of the defendants are facing extradition and serious criminal charges in the United States, as Megaupload co-founder and Dotcom’s former right-hand man, Ortmann is one of the more important pieces in this constantly shifting puzzle. Like Dotcom, Ortmann helped generate significant sums of money for Megaupload and indeed himself, something that didn’t go unnoticed by authorities in the United States who are now trying to get their hands on his assets overseas. Police Are Preparing to Seize Assets in Australia According to a report in The Australian (paywall), the Australian Federal Police (AFP) are preparing to seize assets in the country attributable to Ortmann. The precise nature of those assets is unclear but back in 2015, an asset forfeiture complaint (pdf) filed by the US Government as part of the action against the ‘Mega Conspiracy’ listed Ortmann as the account holder for several Megaupload-related bank accounts in Australia. Huge volumes of cash, vehicles and other assets were originally seized by the authorities following the 2012 raid on Megaupload. Dotcom was subsequently able to claw back some of these after legal processes in New Zealand and Hong Kong. However, after being branded as fugitives by the US Government, Dotcom and his co-defendants were still denied access to millions of dollars. An appeal failed, as did further action at the Court of Appeals for the Fourth Circuit. Authorities Obtained Order to Seize Ortmann’s Australian Assets In 2017, the US Supreme Court refused to hear a further appeal by the defendants. As a result, the authorities obtained an order from a court in Virginia to use the Australian Federal Police to seize Ortmann’s Australian assets. On the back of the US foreign forfeiture order, the AFP is now pursuing Ortmann through the Supreme Court of New South Wales. According to The Australian, Ortmann – who together with co-defendant Finn Batato still works at Megaupload successor Mega in New Zealand – is yet to respond to the forfeiture attempt. Source: TorrentFreak
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