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New Zealand Judge Rules Kim Dotcom Eligible for Extradition

The Megaupload founder and his three co-defendants are one step closer to a US jail cell.

A New Zealand court has ruled Megaupload founder Kim Dotcom can be extradited to face criminal charges in the US—but the German millionaire's legal team will fight on.

Dotcom is accused of running an illegal piracy empire in file-sharing site Megaupload. The larger-than-life entrepreneur was arrested in a dramatic raid by NZ police in 2012, as they executed search warrants related to attempts by American authorities to extradite him. His assets, valued at around NZ$11.8m, were frozen, bar a monthly dividend of $60,000 for living expenses and staff wages. US prosecutors say that Megaupload, owned by Dotcom, raked in $175m mainly from illegally downloads. If convicted in the US, he faces up to 20 years in prison.


In a ruling released yesterday, Justice Gilbert decided Dotcom and his co-defendants are indeed eligible for extradition.

But Dotcom and co aren't laying down easy. His legal team put out a statement yesterday, saying they will continue to fight the case in the Court of Appeal.
"This case is no longer the "largest criminal copyright case", at least as far as New Zealand is concerned. As we have said all along, there is no such offence under our Copyright Act. We were right. However, this afternoon the High Court judgment was issued and, ultimately, although it concluded we are right, the Court concluded that Kim is still eligible for surrender.

"To win the major plank of the case but to get that outcome is extremely disappointing. However, we are far from defeated. It is hard to accept the logic that, if the conduct that all accept at its heart relates to assertions of breach of copyright is not an offence under that Act, how it can nonetheless be massaged into a general fraud offence."

At the heart of Dotcom's case is the fact breaches of copyright are not a criminal offence in New Zealand—and so are not covered by extradition. But the other charges Dotcom faces—specifically fraud—are. In this case, Justice Gilbert notes that copyright isn't covered, but essentially rules that fraud is at the heart of the case.

He writes: "The core of this case involves allegations of copyright infringement. I have accepted one of the main planks of the appellants' argument that online communication of copyright protected works to the public is not a criminal offence in New Zealand." But then: "However, I have concluded that the appellants are not correct in asserting that the general criminal law fraud provisions in the Crimes Act cannot apply in cases of copyright infringement and that such cases can only be prosecuted under the Copyright Act. This largely explains why I have reached the same overall conclusion as the District Court."
You can read the full 363–page ruling here.


But Dotcom's lawyer is still hopeful:
"Whether Kim has committed an offence under New Zealand copyright law has finally now been answered in his favour; he has not," he says in a statement. "Whether our law should still permit him to be extradited to the United States under an Act that has no interest in copyright, is the question that remains now to be answered by our Courts. We say no and we are confident that this must be right."

Meanwhile, Dotcom himself says he won't be losing sleep over the defeat.

In October 2013, VICE News was invited to visit the infamous tech mogul and creator of Megaupload, Kim Dotcom, at his palatial property in New Zealand. At that point Dotcom was still under house arrest, and all his assets were frozen. You can watch the documentary here.

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