In the wake of the now-famous 2012 raid, the U.S. government has done everything in its power to deny Kim Dotcom access to the assets of his former Megaupload empire. Millions were seized, setting the basis for a legal battle that has dragged on for more than three years.
In a July 2014 complaint submitted at a federal court in Virginia, the Department of Justice asked for forfeiture of the bank accounts, cars and other seized possessions, claiming they were obtained through copyright and money laundering crimes.
“Kim Dotcom and Megaupload will vigorously oppose the US Department of Justice’s civil forfeiture action,” Dotcom lawyer Ira Rothken told TF at the time.
But in the final days of last month Dotcom received a blow when a ruling from the United States barred him from fighting the seizure. A Federal Court in Virginia found that Dotcom was not entitled to contest the forfeiture because he is viewed as a “fugitive” facing extradition.
“We think this is not offensive to just Kim Dotcom’s rights, but the rights of all Kiwis,” Rothken said.
Wasting no time, yesterday the United States went in for the kill. In a filing in the District Court for the Eastern District of Virginia, the Department of Justice requested an entry of default against the assets of Kim Dotcom plus co-defendants Mathias Ortmann, Bram van der Kolk, Finn Batato, Julius Bencko, and Sven Echternach.
The targets for forfeiture are six bank accounts held in Hong Kong in the names of Ortmann, der Kolk, Echternach, Bencko and Batato. New Zealand based assets include an ANZ National Bank account in the name of Megastuff Limited, an HSBC account held by der Kolk and a Cleaver Richards Limited Trust Account for Megastuff Limited held at the Bank of New Zealand. Two Mercedes-Benz vehicles (an A170 and an ML500) plus their license plates complete the claim.
The request for default judgment was entered soon after.
Tag: Kim Dotcom
US Court Rules That Kim Dotcom Is A ‘Fugitive’ And Thus DOJ Can Take His Money
In the long, convoluted and complex legal battles facing Megaupload founder Kim Dotcom, there was some bizarre stuff that happened late last year. As you may recall, early on, the US government seized basically all of his stuff and money. Dotcom has made efforts to get some of it returned, as it’s tough to fight the most powerful government in the world when it’s holding onto all of your money. Keep in mind from our previous discussions on asset seizure and forfeiture, the government can basically seize whatever it wants, just by claiming it was somehow related to a crime, but the seizure is only a temporary process. If the government wants to keep it, it then needs to go through a separate process known as civil asset forfeiture, which is effectively the government suing the assets. Back in July, the US government moved to forfeit everything it had seized from Dotcom in a new lawsuit with the catchy name USA v. All Assets Listed In Attachment A, And All Interest, Benefits, And Assets Traceable Thereto. As you may have guessed, Attachment A [pdf] is basically all of Kim Dotcom’s money and posessions.
Back in November, the DOJ argued that it should get to keep all of Kim Dotcom’s money and stuff because he’s a “fugitive”, which is a bizarre and ridiculous way to portray Kim Dotcom, who has been going through a long and protracted legal process over his potential extradition from New Zealand (though he’s offered to come to the US willingly if the government lets him mount a real defense by releasing his money). Dotcom’s lawyers told the court that it’s ridiculous to call him a fugitive, but it appears that Judge Liam O’Grady didn’t buy it.
In a ruling that was just posted a little while ago, O’Grady sided with the government, and gave the DOJ all of Dotcom’s things. You can read the full reasoning here and it seems to take on some troubling logic. Dotcom’s lawyers pointed out, as many of us have, that there is no secondary copyright infringement under criminal law, but the judge insists that there’s enough to show “conspiracy to commit copyright infringement.” But the reasoning here is bizarre. Part of it is the fact that Megaupload did remove links to infringing content from its top 100 downloads list. To me, that seems like evidence of the company being a good actor in the space, and not trying to serve up more infringing downloads. To Judge O’Grady and the DOJ, it’s somehow evidence of a conspiracy. No joke.
Paypal Cuts Off Mega Because It Actually Keeps Your Files Secret
The world could really need a credible alternative to PayPal
There are way too many stories of Paypal unfairly and ridiculously cutting off services that rely on it as a payment mechanism, but here’s yet another one. Mega, the cloud storage provider that is perhaps well-known for being Kim Dotcom’s “comeback” act after the US government shut down Megaupload, has had its Paypal account cut off. The company claims that Paypal was pressured by Visa and Mastercard to cut it off:
Visa and MasterCard then pressured PayPal to cease providing payment services to MEGA.
MEGA provided extensive statistics and other evidence showing that MEGA’s business is legitimate and legally compliant. After discussions that appeared to satisfy PayPal’s queries, MEGA authorised PayPal to share that material with Visa and MasterCard. Eventually PayPal made a non-negotiable decision to immediately terminate services to MEGA. PayPal has apologised for this situation and confirmed that MEGA management are upstanding and acting in good faith. PayPal acknowledged that the business is legitimate, but advised that a key concern was that MEGA has a unique model with its end-to-end encryption which leads to “unknowability of what is on the platform”.
MEGA has demonstrated that it is as compliant with its legal obligations as USA cloud storage services operated by Google, Microsoft, Apple, Dropbox, Box, Spideroak etc, but PayPal has advised that MEGA’s “unique encryption model” presents an insurmountable difficulty.