By Gyles Beckford
WELLINGTON, June 29 The suspected kingpin of an
Internet piracy ring still faces a battle to avoid extradition
from New Zealand but the case against him has likely been
weakened by a ruling that search warrants used by police were
illegal, experts said on Friday.
New Zealand's High Court ruled on Thursday that warrants
used to search the home of Megaupload.com founder Kim Dotcom
were invalid and the seizure of evidence, including computer
hard drives, was illegal.
It also ruled that the copying of the evidence by the U.S.
Federal Bureau of Investigation (FBI) and sending it to the
United States was also unlawful. The case is the FBI's highest
profile action against global copyright theft.
While the ruling did not kill the extradition case against
German national Dotcom, also known as Kim Schmitz, one legal
commentator said it had likely made it more difficult.
"If the major plank of the extradition argument relies on
the evidence obtained from the searches, then I would have
thought there's a problem," Jonathan Krebs of New Zealand's Law
Society told Reuters.
"That's not to say the case will fall over, it may be
there's a lot of other evidence that the authorities can put
before the court arising from the United States or somewhere
else in the world," he said.
Dotcom, 38, was one of four men arrested during a dramatic
raid on his luxury country estate, outside New Zealand's largest
city, in January as part of FBI-led investigations.
Prosecutors say Dotcom led a group that had netted $175
million since 2005 by copying and distributing music, movies and
other copyrighted content without authorisation.
His lawyers say the company simply offered online storage.
Megaupload moves to kill piracy charges [ID:nL4E8GV36L]
COLUMN-Megaupload, meet Morrison [ID:nL2E8CO6S3]
NEWSMAKER-Dotcom's boom and bust [ID:nL4E8CN1HM]
ANALYSIS-Shutdown unlikely to deter piracy[ID:nL2E8CO024]
Online tycoon kept low profile in rural NZ[ID:nL4E8CO35Y]
The High Court said the search warrants were too vague and
did not properly spell out either the offences or the evidence
being sought, but has left it to a hearing next week to decide
on what further steps will be taken.
New Zealand police have said they are discussing their next
step with prosecutors, while the FBI said it would respond in
court at the appropriate time.
A U.S.-based lawyer for Megaupload said the rulings were a
"tremendous blow" struck in his client's defence against the
"The government was engaged not only in wrongful conduct but
in double wrongful conduct: they weren't allowed to go ahead and
do the initial seizure ... (and) they violated the law again by
bringing them (hard drives) offshore when they weren't allowed
to," lawyer Ira Rothken told Radio New Zealand.
A U.S. Federal Court will hear several motions later on
Friday that the company cannot be charged with criminal
behaviour because it is Hong Kong based and that no papers have
ever been served formally.
"The court may hear a motion to dismiss Megaupload, we also
have in the queue a motion to release funds," Rothken said.
The extradition hearing for Dotcom and his three co-accused
on copyright theft and money-laundering charges is set for
August. Under New Zealand law, the alleged offences must be an
offence in both countries punishable by a jail sentence.
"The judge didn't comment on the admissibility of the
evidence for the extradition hearing," said Otago University law
lecturer Kevin Dawkins.
The judge in the extradition hearing would have to "go
through a balancing act" when considering what evidence to
accept, he said.
A public interest group, the Electronic Frontier Foundation,
will also ask the U.S. court to free the private and legal data
of people who stored material with Megaupload.
Before it was shut down in January, Megaupload was one of
the world's most popular websites, where millions of users
stored data, either for free or by paying for premium service.
Authorities say megaupload.com and related sites cheated
copyright holders out of more than $500 million.
Dotcom mocked U.S. and New Zealand authorities in a Twitter
post after Thursday's court ruling, showing a computer monitor
encased in police 'crime scene tape' and asking if any of his
40,000 followers had a pair of scissors.
Dotcom was originally denied bail after the raid and jailed
for a month, but the courts have progressively eased the
conditions on him, allowing him back into his mansion, giving
him access to hundreds of thousands of dollars for living and
legal expenses, and removing travel and meeting restrictions.
(Editing by Paul Tait)
((Gyles.Beckford@thomsonreuters.com)(+64 4 802 7977)(Reuters
Keywords: NEWZEALAND DOTCOM/RULING
(C) Reuters 2012. All rights reserved. Republication or redistribution of
Reuters content, including by caching, framing, or similar means, is
expressly prohibited without the prior written consent of Reuters. Reuters
and the Reuters sphere logo are registered trademarks and trademarks of
the Reuters group of companies around the world.