Kim Dotcom Tells Judge He Can't Afford to Fight His US Extradition Case

Nearly four years after he was arrested at gunpoint, indicted on criminal copyright charges and saw his assets seized, Kim Dotcom testified Thursday he is too poor to pay his legal bills.

Dotcom, the founder of the once highly popular file-hosting service Megaupload, told a New Zealand judge that he needs the United States to release some of the money it took from him or else he can't properly defend himself.

He made the statements inside Auckland District Court, where a judge is holding a hearing to determine whether Dotcom and six other former Megaupload execs will be extradited to the US to stand trial.

Dotcom says he's innocent. Ira Rothken, his attorney, told the judge that for Dotcom to mount a proper defense, one that addresses all the complex legal and technology issues involved, he would need to spend about $500,000 on legal experts.

In 2012, New Zealand police, at the request of the US Department of Justice, raided Dotcom's mansion and accused him of masterminding a massive online piracy scheme. Founded in 2005, Megaupload was one of the internet's most visited sites, a colossus that claimed to account for an estimated 4 percent of all internet traffic. People would go there to stash pirated copies of films, TV shows and songs and then share them with others. The major Hollywood studios and music labels say Dotcom's success was built on enabling copyright infringement and that cost them hundreds of millions of dollars in lost sales.

Under questioning by prosecutor Mike Ruffin, Dotcom acknowledged he contributed maybe as much as $4.8 million in New Zealand dollars to a political party he helped form. He also said that he earned roughly $20 million through the sale of shares of Mega, a cloud-storage service he co-founded a year after his arrest.

Ruffin tried to show that Dotcom had access to millions, and it's his own fault if he didn't save. Dotcom explained that he would have saved had he known the Motion Picture Association of America, the lobbying group representing the six top Hollywood studios, would file a civil claim in late 2014 and freeze the money he made on Mega.

When Ruffin noted that Dotcom could have used the money that the New Zealand courts have allowed him to pay living expenses, Dotcom said "If I wanted to be homeless and fire all my staff and take my kids out of school, I could have done that, yes."

Dotcom, 41, is a strong witness. He's articulate and has strong command of the facts.

Rothken, Dotcom's lawyer, also made for a good witness.

That's right. In an unusual move, the judge allowed Rothken to take the stand and testify about Dotcom's legal expenses and the DOJ's refusal to release funds. An attorney testifying in a case he or she is involved in is rare in the United States and unusual even in New Zealand, lawyers in attendance said.

No doubt that Rothken saw it as an opportunity. Time and time again, he was asked to answer "yes or no" questions. Time and time again, he would answer yes or no only after talking up his client's actions or criticizing the DOJs. The judge asked him to be more direct in his responses. Rothken agreed and then went right back to lawyering from the stand. It appeared like he couldn't help himself.

Dotcom said after the hearing he thought Rothken was "brilliant."