In early 2011, the FBI contacted New Zealand police. It wasn’t a casual call to catch up on international policing issues – the FBI wanted the New Zealand police force’s help in bringing down what it claimed was a “Mega Conspiracy”. Today, all that came to a head, as Megaupload founder Kim Dotcom was one of four people arrested for copyright infringement and conspiracy, with three others still at large.
The news has sent the internet into turmoil. Self-appointed internet justice league Anonymous has lobbed DDoS attacks at the US government agencies and copyright lobby groups, bringing their websites to a halt.
But how did this all go down in New Zealand? Why is one of the biggest cases of alleged copyright infringement from the US happening on the other side of the planet?
The answer – or at least part of it – lies behind the rounded cheeks of Megaupload’s founder, Kim Dotcom.
Born in Germany as Kim Schmitz in 1974, Dotcom gained infamy in 1998 when he was busted for selling stolen credit card numbers. a Two year probationary sentence wasn’t enough to keep his nose clean, however, with him being busted on numerous occasions for crimes like insider trading and embezzlement. He moved around the world, being arrested and deported from Thailand, before eventually setting up the “Mega” franchise of websites in Hong Kong in 2005 under the name “Kim Tim Jim Vestor”.
The Mega franchise took off. It’s estimated that the company made $150 million from premium subscriptions to its didgital locker service, while copyright holders claim it has cost them $500 million in piracy.
In 2010, Dotcom was granted residency in New Zealand, where he leases what is considered to be the country’s most expensive house. Valued at $30 million, Dotcom actually applied to purchase the mansion, but was turned down by Associate Finance Minister Simon Power, who claimed he failed a character test. WHile unhappy about it, it wasn’t enough to turn Dotcom away from our Kiwi neighbours.
According to an article last year in the New Zealand Herald, Dotcom decided to move to the land of hobbits and orcs to raise his three children in a safe and healthy environment.
“We have three young children … and we want them to grow up in a safe and healthy environment far away from the troubles of the world.”
Dotcom said as a “former hacker”, he had an analytical mind and had formed a view on the direction of the world.
“I am not optimistic about the long term and believe we will see an increase of international conflicts and pollution with a growing population and drastic reduction in resources.
“New Zealanders might not yet understand how fortunate they are, but when the time comes New Zealand will be one of the most desired countries to live in and its wealth could reach unexpected highs.”
While in New Zealand, Dotcom contributed largely to the economy, donating significantly to the Christchurch earthquake appeal and putting on a half a million dollar fireworks display for New Years Eve a few years ago.
But despite his apparent passion for the country and his investments in its economy, it wasn’t enough to stop law enforcement from raiding 10 properties in Auckland this morning by 76 police and armed officers. Three people were arrested in the mansion, including Dotcom himself.
According to the NZ Police, the group is also implicated in money laundering, which potentially played a large roll in the scale of the operation:
Four people have been arrested in the Auckland area today as part of an operation led by the US Department of Justice targeting large scale criminal copyright infringement and money laundering around the world.
The arrests, carried out by the Organised & Financial Crime Agency New Zealand (OFCANZ) and New Zealand Police, follow a mutual legal assistance request from the United States to arrest of individuals for the purpose of extradition.
The Federal Bureau of Investigation is investigating a group of people who are alleged to be engaged in and facilitating criminal copyright infringement and money laundering on a massive scale.
The group, known as the “Mega Conspiracy” allegedly operates Megaupload.com, an Internet website that offers file hosting and distribution services. This site has been accused by the U.S. Department of Justice of reproducing and distributing infringing copies of all types of copyrighted works, including movies, television programmes, music, software and books.
Given that this all comes a day after major websites blacked out to protest new copyright laws giving even stronger powers to copyright holders with less due process, expect this situation to heat up dramatically. Copyright is a complicated issue, and while the massive entertainment companies are continuing to take the litigious road, more and more consumers around the world are going to become unsatisfied with the way American corporations are trying to control the world.
Barry
Friday, January 20, 2012 at 3:42 PMWhat happens if he is found not guilty?
Bear
Friday, January 20, 2012 at 3:58 PMOh Come on you know that is not going to happen.
He has weapons of mass destruction after all. they know they have seen them>
Justin
Friday, January 20, 2012 at 4:02 PMHe won’t be, the shadow gov that controls the FBi won’t let him.
Does make one wonder about: hotfile, sonic files, file serve, file jungle etc….
crystal
Friday, January 20, 2012 at 4:38 PMHow stupid is New Zealand!! Why bend over for the US when this guy actually contributes to the country! NZ is so POOR they need him & everything MEGA.
Universal disgusts me I will boycott everything they create, puke.
Mandroid
Friday, January 20, 2012 at 5:53 PMObviously you havent been keeping up on matters in your home country.
Australia wiilingly sent one of their own countrymen to spend time in a US gaol, despite already spending three years at Silverwater.
Thanks to the odious toadspawn that is John Howard, it is now much much easier for US enforcement to prosecute Australians, and the US used that opening as leverage to push the same legistation through NZ Parliment.
Besides, you seem to be confusing economic donations with morality.
By your logic, all organised crime heads shouldn’t be prosecuted because they are providing jobs.
NZ may be financially hardened, but that doesnt equate to a compromise of ethics.
Telextial
Saturday, January 21, 2012 at 12:26 PMIt’s fascinating that you used the spelling “gaol.” In both dictionaries I have (an old learner’s dictionary with many word origins and a brand-new Oxford), neither classify “jail” as an American spelling, wereas for every other word (such as tyre, mould) the “AmE” sign is shown. However, “gaol” is instead listed under “jail” as a “BrE” or British English spelling. Thus it would seem the majority of the world, except for Britain (rather than the majority of the world save America) spells it “jail.”
MD
Saturday, January 21, 2012 at 4:16 PMLet up mate……
Jail, Goal, we can have an argument as to the merits of Oxford, Cambridge, Yale Harvard, general US versus British English…
“gaol was a loanword from Norman French, while jail was a loanword from central (Parisian) French.”
As the English NEVER were occupied by the French from Paris (but by the Norsemen of Normandy), the only reason Jail was ever adopted was because of the Sophists in the aristocracy, practising their Court French.
In nearly every case, the US adopted the French variant for Everything (not just spelling), or reverted to the German Latin or Greek roots of Words rather than the French Loan words….Mostly to be different from the Hated Over taxing opresssor…. we could all go back to Shakespearian Spelling Gaole, Baille, before the standardisation of English…. Remember English was not standardised before the American revolution, and as the French Canadians insist that their French is correct, they have been left behind by the French from France…. Like the US and GB will be left behind by the English speakers from asia….
PS. Sorry for addressing this tangent, and detracting from the general discussion of the article…
Telextial
Saturday, January 21, 2012 at 9:16 PMWell, I don’t know about you, but that was pretty interesting, ignoring “…”s along the way.
Nathan
Monday, January 23, 2012 at 11:03 AMDo you like apples?………..I got her number, how do you like them apples?
WolfDog
Friday, January 20, 2012 at 5:12 PMI’m sitting here wondering why the NZ police they would help the FBI with copyright infringement, then I read the accusation of money laundering, sounds like the copyright stuff isn’t enough to do anything, but throw in some made up accusations and everyone starts kissing everyone else’s arse so the USA won’t put them in the naughty corner.
Corteks
Friday, January 20, 2012 at 5:27 PM“while copyright holders claim it has cost them $500 million in piracy”
Based on numbers they just made up to help demonize Megaupload. But hey obviously everything anyone has ever pirated is something they would’ve spent real money on, after all the opportunity was there! Guess I’ve “lost millions” from all the Nigerian scam emails I never replied to, after all I COULD HAVE made millions!
MotorMouth
Friday, January 20, 2012 at 5:35 PMThere is nothing complicated about copyright for anyone who has had their IP stolen by bastards like this lot. Our record company owns the rights to our music, no-one else. We entrusted it to them because they are are good people who work tirelessly on our behalf, in their free time (they both have full-time jobs), and they look after our best interests always. We never gave anyone permission to make our music available for free, via file-sharing or any other means. To me that is as simple as it is. OK, it is hard to see it as stealing outright but anyone can see how it would be the equivalent of taking your car for a joy ride without permission and trashing it or breaking into your house and throwing a party while you are away on holiday, leaving you with a massive repair/clean-up bill. Because that is the same sense of violation we get from seeing our music show up on torrent and other sharing sites.
Bjergi
Friday, January 20, 2012 at 6:49 PMThis is such a tiring attitude. I don’t know what kind of music you play, I don’t know if you’re popular, or if you rely on the money you make off the sales of your music, but I do know this : not everybody who has listened to your music through illegitimate means would have bought your music.
Do you hold the same resentment towards radio stations? Do you resent the exposure that you give away freely? I would say that, particularly in regards to music, piracy is not costing you anything. If people like your music, they will then go and see you live, buy a t-shirt, and bring a friend. Oh, and maybe even go back and buy your album.
The Internet and sharing music is the radio and mix tapes of the 21st century. If you stop trying to fight change, and embrace it like other musicians are doing now, you’ll find that you might even make more money.
Andrew
Friday, January 20, 2012 at 9:05 PMRadio stations have to pay to play the music they play hence advertising. If your listening to a radio station, you’re paying. Whether it’s through the mark up on shampoo or tiles or cars to pay for the advertising, or through taxes in the case of the ABC.
This is the same in shops, at a pub or at concert. Someone had to pay for that music. The only was to listen to free music is to steal it off the Internet.
And no artist is embraces piracy – they might be pushing different distribution method but no one is signing up to have their creative efforts stolen from them.
I’m not defending the record companies or studios or anyone else pushing SOPA. I’m all for anything that pushes multi-national conglemerates to provide better products but people pirate because a) they can’t afford the legimate product b) they can’t find the product legally or c) they think it’s their right not to pay for anything and it’s cool to break the law.
I’m sure I’ve forgotten a legitimate point, so my apologies and I’m getting a little drunk so pardon any lapses in coherence.
But while not wanting to prejudge the innocent until proven guilty, I’m fairly certain Kim Dotcom thinks it’s cool to steal people’s livelihood and equally certain that he doesn’t give a toss about the people who create the content he is allowing others to steal.
I believe of lot of privacy is due to technological failure – time and time again if a digital product is easily acessible at a reasonable price, customers will buy and the artist and the the multi-national conglemerate both win. So I understand people pirating AC/DC but if you pirate Metallica, apart from bad taste you’re an idiot.
Richard
Saturday, January 21, 2012 at 8:24 PM“not everybody who has listened to your music through illegitimate means would have bought your music.”
This is not and never has been a black and white debate but. At the same time, many people that did pirate music probably would have purchased it if they couldn’t get it for free.
It goes both ways, and it’s certainly not an absolute 100% towards either end of the spectrum. Really it’s impossible to gauge accurately what the effects are.
And while it’s true that the record industry can make money through tickets, shirts etc, that ultimately is fairly irrelevant. They’re still having their revenue stream in relation to CDs affected and its their choice to determine and control how the music is distributed. You probably can’t place an accurate dollar value on it, but those distributing the material are as guilty as sin.
Jeffrey Showler
Saturday, January 21, 2012 at 5:50 AMThis comment has been deemed inappropriate and has been deleted
Carl
Saturday, January 21, 2012 at 10:13 PMThe Mega franchise took off. It’s estimated that the company made $150 million from premium subscriptions to its didgital locker service, while copyright holders claim it has cost them $500 million in piracy.
didgital = typo.