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Outsized Megaupload founder mega-defiant in the face of piracy arrest

File picture shows German Internet millionaire Kim Schmitz during his trial at a district court in Munich May 27, 2002. Internet content hosting website founders Schmitz, also known as Kim Dotcom and Kim Tim Jim Vestor, and Mathias Ortmann were arrested with two other company executives in Auckland, New Zealand, by local authorities on January 19, 2012 and will face extradition hearings, the U.S. Justice Department said. They were charged by U.S. authorities for a massive copyright infringement scheme, the latest skirmish in a battle against piracy of movies and music. Picture taken May 27, 2002.

Tobias Schwarz/Reuters

Kim Dotcom, the 37-year-old man behind, was already a notorious figure in the online file-sharing world before he was forced out of the "panic room" of his $24-million New Zealand mansion and arrested, in one of world's largest criminal copyright cases.

Despite being convicted for computer hacking and later insider trading in Germany in the late 1990s, the man formerly known as Kim Schmitz has always denied any wrongdoing.

But since moving to Hong Kong – "an awesome place to do business and to host my new phantom persona", he said in one interview – and then to New Zealand, he has never been shy about flaunting his success either.

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His home in Auckland is one of New Zealand's most expensive properties. To celebrate his move there last year, he sponsored a $500,000 New Year's Eve fireworks display and told the New Zealand Herald that he had donated generously to the country's earthquake relief fund.

Videos of the outsized millionaire posted on YouTube show him racing a Mercedes at 200mph across European public highways as part of the Gumball 3000 race, and posing with bevies of bikini-clad women beside a large yacht.

Mr. Dotcom also sought to bolster the reputation of Megaupload late last year with a promotional music video featuring hip hop stars including Kanye West, P Diddy and The musicians are shown declaring their support for his site, singing "M-E-G-A, upload to me today, send me a file" and "When I gotta send files across the globe, I use Megaupload."

In a December interview with TorrentFreak, a popular news site in the file-sharing community, Mr. Dotcom said he was now married with three children, including twin girls.

"For your information, my criminal record has been cleared under Germany's clean-slate legislation. Officially, I can say I am without convictions," he told TorrentFreak. "I know that I am not a bad person. I have grown and I have learnt."

But, in the same interview, he also lambasted the music industry for its failure to get to grips with the digital revolution, after Universal Music attempted to have the "Mega Song" pulled from YouTube.

"You need to understand that some labels are run by arrogant and outdated dinosaurs who have been in business for 1,000 years," Mr. Dotcom said. "These guys think an iPad is a facial treatment, the Internet is the devil and wired phones are still hip. They are in denial about the new realities and opportunities. They don't understand that the rip-off days are over."

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According to the U.S. Department of Justice, however, it is Mr. Dotcom and his "Mega conspiracy" that is perpetrating the rip-off, costing content owners more than $500-million by disseminating pirated content through Megaupload and its associated sites, such as Megavideo, a YouTube-style instant streaming site, and Megarotic, which offered "adult" content.

A list of property subject to forfeiture, contained in the DoJ's indictment of Mr. Dotcom and seven other individuals, included more that 20 sports cars, including several Mercedes, a Maserati Gran Cabrio and a Rolls Royce Phantom. Many of the cars featured personalized numberplates reading GOD, EVIL, HACKER, MAFIA and GUILTY. Other items seized include three 82-inch TVs, a statue of sci-fi character Predator, and 60 Dell computer servers, alongside $175-million in what the DoJ alleges are "criminal proceeds," spread across more than 60 bank and online payment accounts, registered from New Zealand, Hong Kong and the Philippines to Germany and the Netherlands.

According to The Associated Press, New Zealand police served 10 search warrants at several businesses and homes around the city of Auckland.

Police spokesman Grant Ogilvie said the seized cars include a Rolls Royce Phantom Drophead Coupe worth more than $400,000 as well as several Mercedes. Two short-barrelled shotguns and a number of valuable artworks were also confiscated, he added.

After being denied bail at an Auckland court on Friday, Mr. Dotcom and his alleged co-conspirators will spend the weekend in jail, as the US seeks his extradition. As he appeared before the court, Mr Dotcom said he did not mind the press attending, saying: "We have nothing to hide."

With files from The Associated Press

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