Hong Kong a key battle ground in US copyright case: Kim Dotcom
Megaupload founder plans to try to prove in HK that US had no jurisdiction to freeze his assets
Renegade internet entrepreneur Kim Dotcom says Hong Kong is a key battleground in his fight to stop the US government extraditing him from New Zealand to face charges of mass copyright infringement.
Dotcom's now-defunct file-sharing platform Megaupload, which is at the centre of the case, never had a subsidiary in the United States, Dotcom said. That means US prosecutors have their hands tied as they can not indict an exclusively foreign company.
"If we can establish this fact in Hong Kong courts, then the entire destruction of Megaupload Limited and 220 jobs was unlawful," said Dotcom, who once lived in a luxury penthouse at the Grand Hyatt in Wan Chai.
"Customers, former employees and shareholders of Megaupload could then seek damages from the US Government. But one step at a time,'' Dotcom told the .
Earlier this month, German-born Dotcom won the right to renegotiate a restraint order on millions of dollars seized in January 2012 when Hong Kong customs raided offices and homes linked to Megaupload.
In the Court of First Instance, Deputy High Court Judge Mr Justice Garry Tallentire said the US government made a "serious and demonstrable error of judgment" when it failed to tell its Hong Kong counterpart about the legal hurdles it faced in pursuing Dotcom. Key among the errors was the inability to serve him with a summons.
"We are pleased that the judge found the US Department of Justice misled the court in freezing Megaupload's assets and issued a judgment to hold them accountable for their misconduct," said Dotcom, 40.
Dotcom, who changed his name from Kim Schmitz, called the decision a "victory" even though the judge immediately reinstated the restraint order, while allowing Dotcom to seek to place different conditions on the asset freeze.
Dotcom, a vocal thorn in the side of the US government since a dramatic raid on his New Zealand home in January 2012, said the Hong Kong decision "sends a message globally that you cannot blindly trust the US DOJ".
Dotcom - who moved to Hong Kong in 2003 and also has residency in New Zealand and Finland - is now on bail in Auckland ahead of an extradition hearing next year.
US prosecutors claim Megaupload, a Hong Kong-registered company, and its founders engaged in mass copyright fraud for more than five years, earning upwards of US$175 million.
They want Dotcom and his associates to face trial in the US on charges of internet piracy, copyright breaches and money laundering.
Dotcom said his next step would be to try to regain access to assets so he can fund the costly legal battle.
"It will likely involve taking action to unfreeze funds so Megaupload and the rest of the accused can have the resources to defend the largest criminal copyright case in history," he said.
Accessing the money is crucial as legal costs are mounting.
"This case is expensive to defend. The US is fighting a war of attrition. We need the funds in order to try to get due process so we can pay e-discovery vendors, law firms, and expert witnesses."
On January 20, 2012, more than 100 customs officers raided the homes and offices in Hong Kong, seizing computers and servers as well as HK$300 million in bank savings and investments.
Customs started working on the case against Dotcom in late 2010, when the FBI first approached it for help.
A spokesman for the Hong Kong Department of Justice said it was acting in the proceedings against Dotcom "on behalf of the United States Government pursuant to a bilateral agreement on mutual legal assistance in criminal matters and in accordance with the laws of Hong Kong".
The spokesman said: "As the case is still under legal proceedings, we will not comment further."
Dotcom has rarely been far from the headlines since his arrest. He has funded a political party and built a new business, Mega, from scratch.
